Stocks Rally As Iran War Continues… And Salesforce CEO On The Software Slump 3/4/26

19:07Tim Seymour:The Senate voting on whether to block the president from using further military force against Iran. Emily Wilkins got the details on this. Emily. Hey, Melissa. Well, as we expected, the Senate did not have the votes needed to pass this War Powers Resolution, continuing to allow Trump to move unilaterally when it comes to actions in Iran. Now, we are expecting to see another similar vote in the House tomorrow. We expect a similar outcome. But I think, Melissa, the big question at this point, is the White House going to wind up sending Congress a request for additional funding that would have to come from Congress?

19:43And it's not clear at this point if that would have the support to pass both chambers or exactly what that request would be.

19:50Tim Seymour:But at least at this point, it doesn't seem like Congress is going to try to put a check on Trump's power, at least when it comes to Iran and when it comes to what we've already seen. Melissa? Emily, thanks. Emily Wilkins. Coming up, a number of names on the move after hours, including Broadcom, the latest numbers out of the quarter, the results moving American Eagle, StubHub, and Okta as well. And Salesforce CEO Mark Banioff will join us in just a few minutes for an exclusive interview, how that company is navigating the recent moves in software stocks. Straight ahead, do not go anywhere. Fast Money is back in tune.

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21:57Tim Seymour:Welcome back to Fast Money. We've got an earnings alert on Broadcom, the chipmaker beating estimates but giving light guidance. Shares poppy in just the past few minutes. Our Christina Parts Nevelis has been listening in on the call. She's here on set, up 4 % now, Christina. Yeah, and it has to do with Broadcom CEO Hawk 10, who just really gave the market what they needed. The bigger number for 202710 says Broadcom has a line of sight to AI chip revenue. Just chips in excess of$100 billion. Wall Street's buy side was modeling roughly$90 to$95 billion. So that's a meaningful beat on forward expectations.

22:29The customer story is also getting better. Google is expected to see even stronger demand from next generation TPUs in 2027. Anthropic is scaling from one gigawatt of custom TPU compute this year to more than three gigawatts in 2027. Meta's custom chip roadmap, which there was a report some analysts, the market had kind of written off as, quote, according to Hawk Tan, alive and well. Some were worried about Meta signing chip deals with AMD and NVIDIA, that's why. And Broadcom now has a sixth customer, OpenAI, so they're finally admitting that too. On the software business, one of the bear's concerns heading into the print was quite direct, just a concern about software weakness.

23:09But Tan said, quote, infrastructure software is not being disrupted by AI. However, software did fall a little bit lower than what estimates were expecting. And lastly, on supply, the key overhang heading into this print 210 said Broadcom has fully secured capacity in leading edge wafers as well as advanced AI memory through 2026 to 2028.

23:32Tim Seymour:So that's a lot of memory that they've pre-bought in some way or contracted for. I was taking a look at NVIDIA in the after-hour session because, you know, if you're thinking that Broadcom is gaining and TPUs are the ticket custom chips, then maybe Broadcom could be seen as like being left out of the party for custom chips as opposed to Broadcom. What's the read on that? But they are creating custom chips for Google, and they just listed all their customers that that is growing exponentially. For Broadcom. Broadcom, yeah. Yeah, yeah, yeah. No, I mean, but is that a bit negative for NVIDIA? I guess not when you look at the four guidance for NVIDIA and the fact that that pie keeps on growing.

24:09So then that's the argument that all of these CEOs keep making right now is that the pie just keeps getting bigger and bigger and bigger. And that's why our CapEx for a lot of these hyperscalers keeps growing. There's just enough room for all of us at the moment. And these numbers are actually showing that, right? They are showing that, to answer your question.

24:26Tim Seymour:Yeah, yeah. Okay. Christina, thank you. Christina Parts-Nevelis.

24:30Melissa Lee:$10 billion stock buyback is not relevant at all in a trillion and a half dollar company. The guidance I thought was actually good, the revenue guidance, and the margins are hanging around. And this stock, since it's 415 all-time high in December, has sold off pretty significantly. So this, what you're seeing, is a relief rally. And I will tell you that at a market multiple, often next year's numbers, 22 and change, it's still a reasonably priced tech stock, in my opinion. What about below market multiple for NVIDIA that's expected to have 65 % earnings in sales growth? By the way, GAAP is going to equal adjusted.

24:59Melissa Lee:You saw that announcement here today, which I think is interesting. I think it's going to put pressure on a lot of high-growth tech stocks. But you have a 74 % gross margin. I'm just saying, you know, if we want to compare the two.

25:10Tim Seymour:Are you saying you would rather invidia 21 forward? I didn't hear him say that.

25:17Melissa Lee:And, you know, I haven't heard a lot of people talk about this, but they announced, I think it was on Monday, like an inference chip. And, you know, this is one of the things where people are like, well, why would I upgrade to the next thing if I can, once we get done training the models and then all is going to be as inference and this and that. So they seem to be like plugging every hole to the bear story. And the growth just keeps, I don't know, it's accelerating year over year. I know they had those years of 100 percent, you know, year over year growth. But, you know, I mean, the stock doesn't reflect it, though, does that?

25:43I do really believe the pie is growing. I mean, I don't know what inning of pie we're in to mix a few metaphors. But I do think it is growing. So, I mean, they delivered anything a shareholder would want this earnings release. I'm not long, though. I am long. NVIDIA. With Dan or not with Dan?

25:59Melissa Lee:Ish, maybe. Soon. In December, they reported a good quarter, too, and it went from$425 down to$320. So I think it's just a point of entry where it's being viewed. After they reported, it traded down 11%. So I think it's been re-rated. I think the AI growth is there, and margins have been sort of incremental at that point.

26:19Tim Seymour:Coming up for retail run-up, the upbeat results pushing shares of Roth stores higher. And whether the traders are giving this one a try-on, plus more earnings action to bring you, the details and the numbers from American Eagle, StubHub, and Okta. That's next. You're watching Fast Money live from the Nasdaq Market Site in Times Square. Back right after this.

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28:15Tim Seymour:Welcome back to Fast Money Stocks. Jumping as investors seem to look past the ongoing conflict with Iran. The Dow jumping 238 points, ending a three-day losing streak. The S &P up three quarters of a percent. And the Nasdaq leading the gains up 1.3 percent, now positive for the week. Shares of Ross stores jumping more than 8 percent after topping earnings and revenue expectations. Sales rising more than 12 percent year on year. The stock now up nearly 20 percent this year. And some more after hours action. American Eagle and Okta both topping EPS and revenue estimates. And StubHub dropping after coming up short on revenue expectations.

28:49Tim Seymour:What do you want to trade? Ross stores. Okay. So I'm long TJX. Raw Store is a really, really impressive beat there, and guidance is good. I think similarly to TJX, which also had inventory up, which normally you don't like to see in a retailer, but you do like to see in a retailer that's doing well. So there's a lot to like here. It's not cheap. Neither is TJ Maxx. I think they're both good, but I'm just long TJ.

29:12Melissa Lee:25 times is not cheap, but it's not absurd either. I mean, TJ Maxx is probably incrementally more expensive, and it's exactly the same chart. So I'm not going to do it because it's not fair of me to do the would you rather game. But you've got to stay with TJX. It's not fair. It's not allowed. What's not fair about it? Because I don't do that. Melissa puts the rules on it. Did you get a lollipop with that haircut? Uh-oh. All right. So just for the... I just want to know. That's a badass haircut. Is it, though? Now, I have a saying for it that I can't use on network TV. But that's a good cut. It's like a summer cut or something.

29:46Tim Seymour:It's very close.

29:47Melissa Lee:America wants to know. America does want to know.

29:50Tim Seymour:Not really. Coming up, Salesforce CEO Mark Benioff will join us for an exclusive interview as the company looks to continue recent software comeback, how he's navigating the company through all this volatility when Fast Money returns. Missed a moment of fast? Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.

30:17Tim Seymour:Welcome back to Fast Money Software, outperforming the broader market this week. The IGV ETF jumping more than 5 % since Monday. The group, of course, has been lagging year to date. For more, Sarah Eisen joins us now with the head of one of the biggest companies in the space and in the IGV, Salesforce. The chair, co-founder and CEO, Mark Benioff, joins us. Sarah. Hi, Melissa. Good to see you. And Mark Benioff, welcome to the show. Thanks for coming on. Hi, Sarah. How are you? I'm doing well. I know you have some issues. Look, the market's been paying close attention this week to, of course, geopolitics and Iran.

30:49Tim Seymour:But you saw this AI question hanging over the overall market and software. What is the biggest issue that you think the market has wrong right now? Well, Sarah, you saw we had a phenomenal quarter at Salesforce and we're giving incredibly strong guidance for the year. You know, we finished the year ahead of our expectations, and we're giving guidance for about$46.2 billion in revenue this year with over$16 billion in cash flow. To put that in perspective, Sarah, I don't think there's ever been an enterprise software company that has given this level of growth and this level of guidance, both in absolute numbers and also relative numbers.

31:32So we're having a great quarter. We just had a great year, and I expect us to have a really strong Q1 as well. We talked about that last week on our call. We gave strong guidance for the first quarter. So maybe the Sasquatch ended up eating the Saspocalypse. I'm not sure. You know, it's hard to talk about when you see that AI has made all of our products better. And I think you know that I've shown you great products like Slack Bot, you know, which has made Slack a better product, even our sales product. I mean, internally, Sarah, we're qualifying 50 ,000 leads a week using our sales cloud agent.

32:09You know that we have answered millions of customer service inquiries with our service cloud agent. AI is amazing for Salesforce. We've pioneered it for more than a decade. We had Einstein. Now that we have AgentForce, customers love it. It's been fantastic.

32:26Tim Seymour:But there is, but Mark, there's this, and I know you have the growth to prove it and you're seeing it and you have accelerated that. And yet there's this narrative out there that in the future, ultimately, a lot of what you do for your enterprise customers either can be done cheaper and more efficiently by a Claude co-work, or at least it will dent the moat that you have when it comes to pricing and software as a service model. I know you're making fun of the saskapocalypse, but that's ultimately what the problem is with the market right now. Sarah, I was I saw the movie Minority Report. I get it.

33:06I, you know, I know the future. There's going to be a lot of robots around, a lot of AI talking to me. But Sarah, I don't know what it's like at CNBC today, but here at Salesforce, oh, we have no robots walking around. So, you know, So there's a lot of things, I'm sure. Not yet. You know, there's like, that is the really, Sarah, you just summed it up. Thank you. That is the whole thing. Not yet. And, you know, the future is very exciting. We've seen the movies. Incredible. But we've also used the, all of us have used the current generation of AI and we've all seen, you know, the upper limits. And there's a lot of exciting things we can do.

33:47I just went through them. I can answer a lot of my customer service inquiries, but not all of them. I still have thousands of people in the call centers and contact centers. So do my customers. I still need direct face-to-face sales. Evidently, the CEO also still needs to get on CNBC. You didn't ask for our company's AI on the show today. So there's still a job there. And we're qualifying, as I said, so many leads every single week, even closing deals autonomously. and even in the ability to augment and elevate every employee with incredible new tools like Slackbot. So there's lots of things to do with AI.

34:26There's a lot of ways to make your company more productive, more successful, do incredible new things. Even on an earnings call, and I know that you're watching it, we even had like Wyndham Hotels talking about how they've radically increased their productivity and Shark Ninja was talking about how they're selling more smoothie machines.

34:44Tim Seymour:They were all on your call. I know the examples are there, Mark, but then we get an announcement like Jack Dorsey from Block, who's going to lay off 40 % of his workforce at a company that he says is growing. And people are wondering, uh-oh, is this the future? Is this the reality that we're all facing? Listen, obviously that company has its own unique issues. Okay. We all know that. So let's put that aside. And it's not that you can't achieve more productivity with AI. you can. But these pronouncements of these mass white collar layoffs, I just do not see it. I tell people all the time, I joke with them, show me exactly what I should be doing in my company that I'm not doing because I'm running a more efficient, more effective company.

35:26Yes, I did trim some areas and move more capacity into sales. What else do you want me to do? When I talk to the world experts on how to run a really effective, fast-growing company like Salesforce, here we are delivering a quarter at 12 % growth at scale, close to$50 billion in revenue. That really goes to show you can do more with AI. And our customers are doing more with AI. But to say that there's some kind of a SaaS apocalypse going on, well, we don't see it in our pipelines, and we don't see it in our numbers. So I asked Ernst & Young, who's our accountant, I said, what am I doing wrong?

36:04They're like, you're not doing wrong. You're actually ahead of everybody else. And I'm like, Lynn, there is definitely people who have narratives who come out of a lot of movies. I get it. It's totally great. But let's come down to what reality is right now. And these numbers are the reality.

36:20Tim Seymour:Well, and I know you're putting your money where your mouth is with the$50 billion buyback mark. Well, we're going to leave it here for now. Our stock is too cheap. You know that. I know you think that, yep. Seven, over$70 billion in RPO, Sarah, unprecedented for an enterprise software company. Mark, we're going to continue the conversation, and we're going to air it tomorrow on Squawk on the Street, because we have a lot more to talk about, including Anthropic. But for now, Melissa, I will send it back over to you. Great to see you, Sarah. Bye-bye. Thanks to you, Sarah. And thank you, Mark Benioff, the CEO of Salesforce.

36:51Tim Seymour:The thing is that it's not just the issue of his own business being, quote-unquote, eaten by AI. But if people can, if companies can do more with less and have fewer workers, that's fewer seats to be sold by the software companies like a Salesforce or like a Microsoft. And that's the other layer of AI displacement concern. Yeah, I know. And so Sarah sort of got it with the XYZ or Square. Right. But I think his answer was, well, that's unique to Square. That may be that they were bloated. But it doesn't address your question. 9 % or 10 % that you can lay off. Right, with fewer receipts. I think we're going to see that.

37:31Yeah. Right. And that's a change to the TAM. Yes. And therefore, you would think a change to the multiple. But the stock has gotten crushed. Crushed, yeah.

37:39Melissa Lee:Listen, he was a visionary. He actually displaced a whole other way in which software was sold. And it's gone on now for 20 years. And, you know, again, I think a lot of this stuff from a price perspective is out of their control, which is one of the reasons why I think they're saying, you know what, we're going to invest$50 billion over whatever period of time. in our stock. I think everything that we know that there's going to be fewer seats for this sort of stuff, you know, they've been talking about agents for a very long time. And I think sooner or later, we're going to start to see what the benefits are within their own business, but also what the uptake is from their customers.

38:12Melissa Lee:So again, I'm kind of with him. I listened to him there and having to defend against, you know, sci-fi movies and this and that or whatever. He's like, what else can we do? Until there's a massive guy down, I think you probably say to this thing, it's probably discounting a lot in the near term right here. Yeah, I mean, we're going back to March 2023 price on this, on the stock at least. And he did say it. He did say he's laid off workers. He's cut some from certain different departments, added some to other different departments. And they have to figure out a strategy. So if you're a technician, you're going to look at the chart and say, this is probably a buyable spot where I could take a flag on it.

38:53Tim Seymour:Coming up, a multi-billion dollar change of plans, why NVIDIA might be done investing in OpenAI and what it could mean for the startup's IPO plans. Fast Money is back in two.

39:07Tim Seymour:Welcome back to Fast Money. NVIDIA CEO Jensen Huang saying its$30 billion investment in OpenAI might be its last before the AI company goes public. He added that the original$100 billion promise is no longer in the cards while speaking at the Morgan Stanley Tech Conference today. Huang also said NVIDIA's$10 billion bet on Anthropic would also be its last pre-IPO investment. For more, Gene Munster of Deepwater Asset Management joins us now. Gene, good to see you. Why do you think all of a sudden NVIDIA is showing such discipline and restraint in throwing money at OpenAI and Anthropic? Well, I think first as a perspective of when that$100 billion announcement was made, that came back from a Wall Street Journal article in September of last fall.

39:52And some helpful context here. At the time, the street had expected NVIDIA to grow at 25 % in calendar 26, and now that expectation is 70. And the reason why I want to start there is from Jensen's view, he probably didn't have clarity in terms of that 70 % number at the time, but their business is doing much better today than when those original numbers came out. So then why is this, what's this concept of kind of pairing back to your question? I think it's twofold. Number one is that they are getting closer to an IPO, and that does change the dynamics in terms of investing. They can obviously continue to invest as a public company, but that may change OpenAI's kind of paths for getting funding.

40:36And separately, this is really not at Jensen, this topic, because there is a lot of interpretation in terms of how to read the state of the current AI buildout based on their investment profiles. And so I think he is also kind of taking the temperature down a little bit and saying, back off, no need to continue to ask these questions. So I don't think it has any impact in terms of the foundation that we're still very early second inning in this AI buildout.

41:09Melissa Lee:Gene, it's Dan. Thanks for being here. You've been a tremendous resource to this desk, I want to say, for over 10 years, helping some of these companies or helping our viewers understand how these companies went from$200 billion to$1 trillion to$3 trillion to$4 trillion. This year, we might have two IPOs that literally have a trillion-dollar market cap. Obviously, the floats are going to be pretty low. What does that do to the makeup of the market? Are you going to see money come out of some of those top five names and find their way into these? And are we ready for trillion dollar IPOs? I mean, there's definitely going to be money has to come from someplace.

41:47And I guess who are the losers? I think more broadly is that the exposure that a typical investor is going to want within AI is going to increase. I look at personally, I'm a partner at a venture fund of about 80 % of my investable net worth is within AI. It probably should be a higher number. And I don't recommend that for everybody. But the concept is I don't think it's quite sunk into the market about how big of an opportunity this is. And so if, in fact, that is the case, that we are so early and this is going to be as disruptive as I believe, then I think that there can be a lot of equity.

42:28Those are your two paths, basically. We talk about this job disruption. I'm at a conference right now. There's numbers getting thrown out of 30 % to 50 % unemployment from white collar. I mean, just really kind of show-stopping numbers. If, in fact, that's the case, investors are going to want more assets in the companies that are enabling that change. And I think that that kind of leads the way to these sustainability. These SpaceX could be a generational company to own for the next decade.

42:56Tim Seymour:Gene, we're going to have to leave it there. Thanks for joining us. Good to see you. Thank you. Gene Munster. Shares of Trade Desk are jumping after hours. The information reporting that OpenAI has held early talks with the company to sell ads. And, of course, this is a company that has been under tremendous pressure, if you want to put it that way, in recent months. Guy, you're familiar with this company.

43:16Melissa Lee:Because the CEO is a huge Fast Money fan. I am certain he's watching right now. And this stock, you talk about upper left, lower right. This has been put up a longer term chart to see what I'm looking at. I will tell you, with that announcement, I'm surprised the stock is not higher than it is given to sell off we've seen over the last couple of years. But yes, people say it's still expensive. That's true. But this should be a short term boon for the stock without question.

43:39Tim Seymour:Up 9 % after hours. Coming up, Bitcoin bounces back. The crypto trading above$73 ,000 for the first time in a month. But can the comeback continue? We'll debate that with more Fast Money in series.

43:55Tim Seymour:Welcome back to Fast Money. Bitcoin soaring today, briefly trading above$74 ,000 for the first time since early February. Crypto-focused names like Coinbase, Bullish, Strategy, Robinhood, and Circle also spiking. The latest moves coming after President Trump threw his support behind the Clarity Act, a key crypto regulation bill. The president posting on Truth Social last night, The Genius Act was the USA's first big step to make the United States the crypto capital of the world. And getting the Clarity Act done is the next step to finish the job. Bitcoin's still down about 16 percent this year and about 40 percent off of its October record.

44:30Tim Seymour:Steve, what do you think of the bounce? Yeah. So I think the fact that President Trump is backing crypto and the complex over a J.P. Morgan or a Citigroup or the traditional money centered banks is seen as extremely bullish. Problem is we were looking at Bitcoin at 126 ,000 and now it's at mid 70s. So you're going to need more follow through. We have the Genius Act. And I think the financial industries go in and try to gut it even after it's passed. So you want to see the Clarity Act pass and have some teeth to it, or else it's not going to rally and be sustained. All right. Karen? So the Clarity Act fell apart when Coinbase said, no, we no longer like the Clarity Act.

45:11It doesn't have our stamp of approval. So I don't know if we are to assume, maybe, from Trump's statements, that Coinbase is happy with whatever adjustments are. If that is the case, then I think there's still more to go on the upside.

45:26Melissa Lee:We bounced to this level a couple times over the last couple months. It's critical. And each bounce has been sold off pretty aggressively. This one maybe feels a little bit different. We will see. But in my opinion, technically, it's imperative to get this thing above 75 ,000. That would be the first time in a long time if it did that.

45:43Tim Seymour:All right. Up next, final trades.

45:59Tim Seymour:Final trade time, Stephen. Tesla was oversold. I'm still long it. I think it bounces higher. Terrible man. You know, we didn't get to, which is Versant having a nice move. Very nice. That wasn't my final trade, by the way. Although I am long. No. My final trade. We've got some more retail coming up next week. We have Ulta Beauty. I like the name. Dan.

46:19Melissa Lee:Karen, are we playing the Benioff bounce? Is that what we're doing here? A little sales force? 14 and change times 2. Let's do it. Benny Off Bounce, Salesforce. You know, sometimes companies lie in the weeds and they pounce when they have the opportunity. That came in the form of Barrett Gold, who finally got the letter B.

46:36Tim Seymour:Oh. Oh, yes. As a ticker. Not ABX. Okay. Thanks for watching Fast Money. Mad Money with Jim Cramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such.

47:12Tim Seymour:To view the full Fast Money Disclaimer, please visit CNBC.com forward slash Fast Money Disclaimer. The wrongs we must right. The fights we must win. The future we must secure together for our nation. This is what's in front of us. This determines what's next for all of us. We are Marines. We were made for this.