Retail Earnings On Deck… And Alphabet About To Breakout? 8/18/25

0:02Live from the Nasdaq market site in the heart of New York City's Times Square. This is Fast money. Here's what's on tap tonight. Retail on deck reports from Walmart, Target and Home Depot headlines the week. What they'll have to say about the state of the consumer and what it could mean for the stocks and a big tech breakout. Well, the chartmaster at least says one mag seven stock is primed for a pop. We'll tell you what it is and how to trade that name now. Plus, Intel on the outs after its recent run. Healthy gains for Novo Nordisk after its own struggles and Citi going on a hiring spree, where it's poaching new talent and how it's impacting the banking space.

0:41I'm Courtney Reagan in for Melissa Lee coming to you live from Studio B at the NASDAQ on the desk tonight. We have Tim Seymour, Courtney Garcia, Dan Nathan and Guy Adani. But we start with the countdown to the huge slate of retail and consumer names rolling through this earnings season. Home Depot kicks things off before the bell tomorrow, followed by Lowe's and then Target and then Walmart. But That's not all. There are several others to go. Investors are going to be keyed in, of course, to what these companies have to say about the impact of what else? Tariffs. It was a mixed bag for the names today.

1:13Target and, excuse me, that's not where we're going to go actually with that one because we haven't even gotten there yet, at least for the reports. But for the actual movements of the stock, Target and BJ's Wholesale were leading the way. Over the last month, though, those names have lagged their peers. So what we could hear in the reports that could change the momentum. I don't know. We'll see. Guy, what do you make? Target's been really the big laggard that we've been focusing on so much, especially when you look at the divergence between Walmart and Target. We know that we like to compare them, even though we also know that the mix is different.

1:47But if you were to look at these two names now, do you see opportunity before we hear the results? First of all, welcome. Thanks. You're on Worldwide Exchange this morning. You're here now. Yeoman's work, number one. Number two. I think if you want help in Target being long the stock, I think you're hoping for some change in terms of the C-suite, because this administration over the last three and a half, four years has not done a good job. You know that better than anybody. You're not at liberty to say, I will say that. And I think that's what people might be waiting for. Valuation has been compelling for Target for the last three and a half years.

2:20It's been a foolish avenue to go to. Walmart's doing everything right. Target's doing everything wrong. I think if you want to be long the stock, you're hoping to do some sort of shakeup. Yeah, I just add that, you know, none of the big box retailers, Walmart, Costco, you could throw like Best Buy and Dixon there. I mean, none of them have confirmed the new highs in the S &P 500. Right. So if you think about some of the headwinds that, you know, some of these retailers have had as it relates to the potential for a protracted trade war. These, I guess, investors are not saying that they're out of the woods just yet.

2:49We knew there was a pull forward, a lot of inventory, right, stocking up against those potential tariffs here. But I do think, you know, over the last two months, we've had numerous new highs in the S &P 500. And none of these stocks have really participated. I'm having a hard time just looking at any major retailers that have actually confirmed the new highs in the S &P 500. So to me, that places potentially an opportunity, like if you have beats and raises across the board. I just don't see that happening. And I think that if you do have this better than expected Q2, it's likely not too different than what we saw in Q1.

3:20Again, about to pull forward a little bit. And some of these names, you know, you mentioned Target. Walmart's an expensive stock. Costco's an expensive stock. You'd say, well, they're always expensive. They always have been. But right now, I think they face a very different challenge than they have over the last couple of years. And it might not be too different than some of the supply chain issues they had during COVID and right after. Cordy, when I'm thinking about a name like Home Depot, it's an important stock. It's obviously part of the Dow. But it often doesn't move that much on earnings, not as much as maybe some of the other retailers do.

3:49But we love to read through the details to see what they're talking about for the housing market. And, of course, we have this very tight supply. So if you're going to play a name in housing, do you want a home builder or do you want a home improvement retailer like a Lowe's or Home Depot? Yeah, and it's going to be interesting to see how this plays out, right? Because interest rates are still high and a majority of homeowners have mortgages under 4%. So even if rates come down a little bit, there's just no moving on those existing homes. And so what Home Depot has been saying is this is actually good for us because you are going to see more people improving their homes.

4:20They have a lot more of the professional business. They call that their pro business, which really should benefit them. They're expecting actually that to return back to growth here in 2025. So I think the hope is that you start to see that translating. But in the overall housing market, I do think that higher interest rates are still a good thing for your home builders because those existing homes aren't coming on, which means those younger people who want to buy houses, those new homes are what are going to fill the void. At some point, you want to see rates come down because that's really what's going to bring more people into the market.

4:47But in the meantime, Home Depot is saying it should be a good thing. We want to see when earnings actually come out. Tim, there's so much focus on tariffs and the impact of tariffs on some of these stocks. I think we're really only going to see it for maybe half the quarter and certainly not to the degree that could have been when we heard those first levels from April 2nd. what do you think investors need to understand about what we're going to hear and what the stocks are already pricing in now as it pertains to tariffs? They need to feel comfortable with the merchandise mix. So those retailers that don't have the milk and eggs component are the ones that I think we're most concerned about.

5:27Now, we have to have some understanding also from the retailers. And I actually think this group is going to surprise in terms of where at these consensuses and what this quarter was like. And there are dynamics especially related to some pull forward. The interest rate sensitivity around Home Depot, I think, is something that's moved the stock. It hasn't necessarily brought more people into the stores. But I think what I want to hear about is that business in between back to school and Christmas, because that's the most important dynamic for the next four or five months, because that's the part where tariffs will really see people fall off the cliff in terms of demand or where high credit card bills that we, you know, Guy talks about this all the time.

6:07I mean, there are dynamics on the credit side. I'm worried about everything other than back to school and Christmas. And I think the places that you stay are the places that have proven to be resilient in the face even of tariff conjecture. That is Walmart. That is Home Depot. And I'm going to pay more for them. All right, Dan, I've got a nerdy question. We were talking about this before the show. So Walmart is one of the retailers that warned, look, we use the retail inventory method of accounting because of that. And there's a ratio involved with how we get to profitability. It could take some time for the impact of tariffs to go all the way through.

6:45So as costs go up, our profitability might be temporarily inflated. Do you think investors understand that? And do you think we're going to see higher profitability, call it false profits from some of these retailers? a Walmart, a Home Depot, a Target, that use REM accounting that isn't actually showing us the true profit story? Well, I think most investors have become really sophisticated about this sort of stuff, right? You'll hear this all the time on earnings calls. Like, you know, the management kind of suggests that this is maybe not apples to oranges right here or the way analysts kind of break it down.

7:17So I think those are really important metrics to keep an eye on. It definitely gives a sense of, like, what sort of goalposts they're using in different parts. But generally, this would play out over a long period of time. I think oftentimes when you see big currency moves, for instance, for multinationals who are kind of expressing what their profits look like in a certain environment, they often will say constant currency. Right. And so it gives analysts and investors the opportunity to compare things apples to apples. But it's a great point. And I think that, you know, oftentimes in different market environments, you will see some investors or some managements kind of use data or use metrics that kind of suit their outlook for a company or an industry.

7:57Cordy, we always talk about the forward-looking guidance more important potentially than the quarter just reported for any industry, right? Because it's backward-looking. Even more important now as we're looking into the back half of the year with maybe a little bit more clarity on where tariff rates are now, ex-China, since that's still an extended deadline? Yeah, and I think that's the hope is you do hopefully get some clarity when you actually hear guidance. Because when you looked at last quarter, these tariffs were so new and so uncertain that people were either pulling guidance or just not giving any sort of indication of how this is going to affect them.

8:28And I think at this point, there's hopefully been enough time and enough certainty in place they can give that guidance moving forward. And we've really had a really positive earnings season. I mean, coming into this, analysts were expecting earnings per share to come in like 3.5 % increase year over year. It's on track for over 10 % year over year. I mean, it has been a really good earnings season. So I think to see how the retailers come out and how that shows the consumer's been holding up, even with any potential increases, I think that's going to be really important to see with the overall economy.

8:53That's a great point about earnings. Well, Ukrainian President Vladimir Zelensky meeting with President Trump at the White House today alongside seven European leaders, the group discussing options for a peace deal that would end the war between Russia and Ukraine. Coming off the heels of Trump's meeting with Russia's Vladimir Putin. That was on Friday. Remember that? Well, let's bring in CNBC's Eamon Javers for the latest. He's been following every twist and turn. Eamon, what do we know about today? Well, Courtney, what we know as of about three minutes ago is the White House official just texted me to confirm that the meeting has now ended between President Trump and those European leaders, along with President Zelensky here at the White House.

9:30So we should be starting to see pictures at some point of departures of those European leaders out on the South Lawn of the White House. Maybe not with all the pomp and circumstance that we saw the arrivals, but nonetheless, we'll keep an eye out for that. And there is a report in German media, which is unconfirmed, but German media reporting that at least their sources are telling them that President Trump stepped out of this meeting to call Vladimir Putin and put the meeting on hold, essentially, while he was on the phone with Vladimir Putin. And that is not confirmed. I spoke to some White House officials in the West Wing just a short time ago who said they simply don't know because they're not — the officials I can get to physically are not obviously in the room in the meeting.

10:12So we'll wait and see if we can get confirmation on that detail, sort of the idea being a real-time negotiation between all these parties taking place around the world and in the White House at the same time. But a real sense of optimism here, Courtney, from President Trump and President Zelensky, and a real effort by the NATO alliance and the so-called coalition of the willing to present a united front in the face of Russian aggression. And we saw the president strike this optimistic tone early on in the multilateral meeting of all the leaders. Here's what he said. The Alaska summit reinforced my belief that while difficult pieces within reach, And I believe that in a very significant step, President Putin agreed that Russia would accept security guarantees for Ukraine.

11:01And this is one of the key points that we need to consider. And we're going to be considering that at the table also, like who will do what, essentially. So we'll see, Courtney, if we can get some readout from White House officials on what was agreed to, if anything, in this session. And a lot of very sensitive details, as Zelensky said, surrounding the idea of security guarantees for the Ukrainians and what the U.S. role in that would be. The president of the United States not taking the idea of American boots on the ground off the table here, at least for today. Courtney, back over to you. A lot of action in D.C.

11:35Eamon, thank you so much for being there for us. Obviously, a lot of those world leaders, very interesting to see them all come together. Tim, I want to turn to you for a reaction. I sort of think of you as our global markets guy. Put it all together. What does it mean for us as we're watching potentially some kind of a deal begin to take shape? Yeah, and someone that lived for two years in Russia. So my perspective on this is that it is very complex. And the emotions and the history that have the reason for NATO being what it is, is exactly, you know, the dynamic with Ukraine is something that I'm just not sure Europe is ready to smile and say, OK, let alone Ukraine.

12:21But the bottom line is that the couple of things that were my first moves from a market's perspective when Russia attacked Ukraine, invaded Ukraine, were to buy nuclear and to buy gold and to buy oil. And I do think that the unwind of anything that at least anything less than the current status of where we are, I think given the rally in gold and the rally in nuclear, I think you would see some profit taking and you'd see some pullback. But let's be clear. Those are two trades that are rooted in global dynamics that I think have been at work for a long time. So you'd be buying weakness in gold.

13:01And I think you should be buying weakness in nuclear because Russian energy or any energy reliance is something. Ask Japan. Ask Germany. These are things that are really about national security. So I think it's first of all, nobody cares what I think about that. It's a brave face that the world's put forward. I think it's nice that ultimately everyone does seem to be trying to find some solutions and they're all doing it at the table together. I will not handicap an outcome here. We all care about what you think, Tim. That's why we keep asking you back and asking you questions like this. But the geopolitical backdrop obviously could have a very big impact on our next guest investment strategy.

13:41Runs a fund rated five stars by Morningstar. Let's bring in Eli Horton. He's senior portfolio manager of the TCW Transform Systems ETF. Eli, it's so good to have you here. Welcome to Fast Money for the first time. Great to be here. So obviously we've seen a lot of world leaders meet with the president. It seems like there's some negotiations that might be happening. When we look at the markets in the last couple of days, you would see perhaps a benign reaction. But there's opportunity there that you see. Can you explain to us what you're looking at? We think the opportunities are abundant. And we're actually looking for them in, I think, places that most investors aren't.

14:16And hopefully that's a good thing, be a little different and expect different outcomes. There's a couple we'll call them mega themes we're extremely interested in. One is the transformation of the global energy system. Two is the reindustrialization of the remanufacturing of the U.S. I heard the prior comments on Ukraine and the meetings of the White House. And I think that we're migrating from a fossil fuel system to something that's close to 100 percent renewables. And geopolitical tensions, global security, that is yet another reason why this is happening. Same thing for remanufacturing. So these are themes we're really excited about in today's market.

14:53Can you give us some actionable plays there? Yeah, absolutely. And the comments on nuclear a moment ago are very relevant. We're extremely interested in the theme of power scarcity and the need for grid investment. So to set the backdrop in the U.S., electricity demand has basically been dead flat for 20 years. That is now completely flipped on its head. We believe that by 2050, electricity demand doubles. Why? A few reasons. One, reindustrialization, remanufacturing. Two, electrification of transportation and really our entire economy. Three, AI. And AI gets all the headlines, but it's only about a third of the electricity growth.

15:31I was going to say, I was surprised you said AI third. It's about a third of the growth. And even with that said, it's fascinating. We need to add something like 75 gigawatts of demand to the grid by 2030 for AI. 75 gigawatts is opaque. It means nothing. New York City has about five and a half gigawatts of capacity. So what is that, 15 New York City's worth? Wow. So a lot. That's a lot. And think about the capital goods and the CapEx to serve this. Unless you worked there or covered it, nobody ever heard of Vistra Corp over the last decade or so. Became somewhat of a household name in our world over the last year and a half.

16:03It's gone from a$40 stock, I think it's north of$200, or right around there,$68 billion. Still reasonable valuation. And the story's obviously out there. Is this a name you can still own here? I agree. We own Vistra. We've owned it for over two years. We really admire the company and their capital allocation decisions, and they have a very valuable portfolio of power generation. So they acquired a nuclear power generation business, Energy Harbor. That was incredibly value-creative. Nuclear power prices have more than doubled, as you've seen from some of the hyperscale deals like Amazon and Microsoft.

16:39They also have natural gas. And the fact remains, we cannot add enough wind and solar to the grid to solve for our electricity or power shortage. Can't do it. You need natural gas. Vistra has a very attractive net gas fleet. We think the company is going to earn more than the street does. We also think the multiple is very reasonable. And it fits right in a bottleneck of businesses that are capitalizing on this theme. And to your point, it's not a household name. Most investors haven't heard of it. Most investors aren't exposed to these types of businesses. Eli, help me out with this. Torsten Slok of Apollo had a note out today.

17:12I thought it was really interesting. We all know that 70 percent of U.S. GDP is consumer spending, consumer demand. And he highlighted the fact that in the first half of this year, that capital expenditures related to AI data center build out actually had the same contribution as consumer spending. And when you think about that, like these are some themes that you're focused on. At some point, there will be a slowdown in CapEx spend for AI. And it might come at the same time that the consumer is having a difficult time and slow down. That changes a lot of dynamics in our economy. I'm just curious, like, how do you think about that?

17:45You have to watch it. And this is a great reason to not invest passively and to invest with an active investor who's deep in the weeds and doing bottom-up work. That's what we try to do. We have a portfolio of 20, 30 stocks. We try to be in the details and have a differentiated view. With that said, if you look prior to 2023, U.S. capex to sales ratios were at 20-year lows. We have chronically under-invested in the industrial goods, the manufacturing footprint, the grid of this country, The average high-voltage transformer is 40 years old. So just as we went through chronic underinvestment, we're now on a collision course with structural CapEx needs to grow our industrial base, to rebuild the grid.

18:23And so, yes, we're watching it, but we think that this CapEx is very needed and very warranted. Before we let you go, some of the old economy stocks that you're interested in. Tell us about this theory and give us some names. Look, we talked about Vistra. There's a variety of businesses. GE Vernova is another interesting one. And so we've owned GE since the day it spun out of General Electric. It used to be called GE Power. No one cared about it because NatGas turbines were no one wanted one. And in 2023, they produced about half the number of turbines as the prior decade average. NatGas was left for dead.

18:56There's like three companies in the world who make these. And so we're able to find some of these old economy companies that have faced headwinds for really a couple of decades as manufacturing moved out of the U.S. that are now seeing those headwinds turned into tailwinds. That drives an acceleration in fundamentals against valuations that are attractive, and that's a nice backdrop for us, and it's a good complement to what's in the broad indices, which doesn't really look like old economy for the most part. Really interesting stuff, Eli, and your ETF up 17 % over the last three months, 29 % year-to-date.

19:27Thanks so much for joining us here on Fast Money. I appreciate it. Courtney, what do you think? Does theory make a lot of sense? Yeah, I really like the energy play. I mean, I think there's the fact that there's not enough energy to go around right now. is just not, I guess it is starting to get talked about, but it's not invested enough. I mean, when you look at the percentage of energy compared to the S &P 500, it's like, I don't know, between three and four percent of the S &P 500. It used to be a much larger share. And that demand going forward is just so astronomical. And I do think he makes a really good point where we get excited about things like nuclear, but there's just, in the short term, there's not going to be enough nuclear to fill the demand.

20:00So this is kind of an all hands on deck. So I think some of your older economies, your natural gas, your oils, like those are going to have to fill the gap, and it's going to be a benefit for your entire energy sector. That seems really fascinating. Well, coming up, we've got new details on the government's reported interest in Intel, just how much the administration is looking to buy and what it means for the semi-space. Plus, all the news out of Novo Nordisk, a new use case for its blockbuster weight loss drug, and how it's hoping a deal with the telehealth platform will help boost sales. Don't go anywhere.

20:28Fast Money, back in two.

20:33You're watching Fast Money. here on CNBC. We'll be right back.

20:46Welcome back to Fast Money. We have an earnings alert on Palo Alto Network's shares jumping after the company reported better than expected results for its latest quarter. Mackenzie Cigalas has the latest. Hi, Mac. Hey, Courtney. So Palo Alto Network's posting a solid quarter with the stock popping as much as 6 % after hours on those results. The cybersecurity firm beat on both the top and bottom line with adjusted earnings of 95 cents a share and revenue up 16 percent to 2.54 billion. Guidance was also bullish here. The company expects both fiscal Q1 and full year results to top estimates and is projecting up to 15.5 billion in future commitments.

21:25And that's a key measure of how much business it already has in the pipeline. And then there is a shakeup happening in the C-suite. Its founder and CTO is stepping down with the current product chief set to take over. It caps a turbulent stretch for the company. That$25 billion deal to buy CyberArk, which is its biggest ever, really rattled investors and shares slid on the news, haven't bounced back yet. So we'll see if tonight's gains hold at the open court. Thank you very much, Mac. Tim, what do you make of Palo Alto Networks? Do you like this bounce? It's OK. Look, it's been a middling stock.

22:00It's been range bound. it's not terribly expensive relative to itself. These were solid numbers, at least in terms of the quarter. They beat consensus by one and a half points in terms of the top line, the guide somewhere right in the middle. So maybe a bit of relief. And I think you can own it. But I'm not sure this is where if I'm going to own security, I'm going to own cyber. I'd rather be in CrowdStrike. Guy, what about you? I think you can stay with it. I mean, it sold off enough where this quarter was good enough. The guidance for full year 26 was good enough. The growth is good enough to justify the valuation.