Stocks Tumble To Wrap Up Week… And Tim Cook’s Last Developer’s Conference 6/5/26

22:28Mike Schumacher:So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy. On any journey using Uber, it helps to know you're getting into the right car. Pin verification adds an extra step to make sure your ride is your ride. Before the trip begins, your app gives you a unique pin. Just tell it to your driver, and they'll enter it in their app before the ride can start. Hey, what's your pin? Mm-hmm. 2538. That way, you know you're in the right car taking the right trip, and your driver knows you're the right passenger. Make sure your ride is your ride with pin verification from Uber.

23:04One more way Uber is putting safety at every turn. Learn more on the Uber app. I got a news alert on some S &P 500 changes. Pippa Stevens, what's going on? Well, Brian, take a look at shares of Marvell Technology and Flex because they are higher. They will be added to the S &P 500 prior to the opening bell on Monday, June 22nd. They are replacing Pool Corp and the Campbell's Company, which are being booted down to the S &P Small Cap 600 index. So really here, Brian, a sign of the times with Marvell set to join the S &P and now up some 5 % here after hours. Back to you. All right. Pippa Stevens, thank you very much.

23:44Let's move now from soup to space. We are a week away from SpaceX's market debut here at the NASDAQ. SpaceX, we don't need to tell you, but we will. It's expected to be the biggest IPO ever. And none other than Elon Musk making a surprise appearance at a J.P. Morgan event for potential investors last night, raising a lot of eyebrows and some hackles. Leslie Picker has more. Leslie. It was a rare appearance, Brian. He hasn't really, you know, he wasn't in the retail roadshow video. So seeing him at this event that JP Morgan was hosting, it was live streamed over X as well. And that conversation opened with a question about why SpaceX is going public now.

24:27Musk, who joined virtually, summed it all up in this exchange. We're embarking on a massive new growth phase, and we need capital for that.

24:39Okay.

24:44Okay, number two. Another thing is the revenue, like, I also feel pretty good about, like, the revenue projections. Like, before, like, revenue was a little unstable. But now I feel like the revenue is, like, much more predictable. We were able to get an exclusive sneak peek at how J.P. Morgan really decked out, went all out with its new headquarters. They had moon rocks, literal moon rocks, 40-foot rockets in the elevator banks. They had space-themed sculptures and other types of art. However, there was another surprise that dropped last night. S &P Global said it would not change the rules for entry into the S &P 500, which was seen as a blow to SpaceX by preventing it from the fast entry into the benchmark.

25:33And that decision stands in contrast to what the Nasdaq did for quicker inclusion into the Nasdaq 100, which is seen as a tailwind creating a cohort of forced buyers who track the index. However, the S &P has about 20 times as many assets tracking its benchmark than the Nasdaq 100, Brian. All right, Leslie, pick her on that. Leslie, we know you've got a big week next week as well. It's going to be a big deal. And Steve Grasso, first off, some people were up in arms saying, well, why is Musk talking to the CEO of a bank? Either way, and by the way, he's leading, I think, or one of the lead guys on the cover of the book.

26:05Why would people have the problem with that? Well, the CEO of a bank talking about a stock that they're helping represent at the IPO. Okay, go ahead. It rubs some people along. Who's the gazelle on this one? I'm just kidding. Move on. But I will say this. Is SpaceX's own thing or does it represent in any sense the macro market? It's always its own thing when Elon Musk is involved. Right. So this is a personality. I want to get an allocation. Most people want to get an allocation. Some people in the institutional world have an allocation already. But what's interesting about this one is the retail investor is going to get 30 percent of the allocations.

26:41That is historic. That's never happened before. That's high. Really high. That's really high. And if you think about it, he's a cult like. So if they're going to follow him, they're going to follow him into this as well. And you've always been taught never bet against Elon Musk. This is a thing where you'd never put it on valuation. You're not going to buy his stocks on valuation. You buy it on an idea. And if you buy it on an idea, then if you look at these IPOs historically a year out, terrible, terrible performance. But if you got an allocation, you look great. And I think that's this stock will look great regardless of what happens a year out.

27:22OK, Michael Coe, I don't think you're the gazelle, but Michael, you've seen all that stuff going on the Internet about how bad IPOs have done a year out. People are saying don't buy these IPOs. Well, I would agree with Steve that betting against Elon Musk has been a big mistake. I will also say that saying you should ignore valuations right at the time that we're having the biggest IPO in history and we've had a tremendous run like we have. It does feel a little bubble troublicious, I have to say, that all of that language and price action being combined together. But, yeah, racing out to buy it on the very first day hasn't generally proven to be a great investment strategy generally.

28:04A lot of people are going to want to do it. Just to preface, I'm sorry. If you get an allocation, that's my point. If you're getting it at the true IPO price, that's where you make money on these deals. And for the first time ever, 30 % is given to the retail audience where they're usually left out in the cold because they're paying that spike first print.

28:24Mike Schumacher:I don't know how they're going to do that. I don't know how retail, like, you know, people are trying to get on their Fidelity account and buy it now. And it's not happening. I mean, I hear you. I know that's the headline. This is a, you know, again, it's a great headline, but I'm not sure how people on a retail platform are accessing this deal. Well, you know what else hyenas do? They laugh. There's a lot more fast money to come. Here's what's ahead. Max production getting unlocked. What Boeing CEO had to say about the new 737 assembly line and the impact it could have on the stock. Plus, the cook is hanging up his apron.

29:02Apple CEO Tim Cook getting ready for his last developer conference, the legacy he's leaving, and whether the tech giant can transform Siri into a real AI contender. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.

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30:55All right, welcome back to Fast Money, everybody. And just a word of warning, If you do not like the color red, you might want to look away. A lot of red on the screen today. Stocks sinking in a big way to close out the week. The Dow dropping about 700 points. That really wasn't the story. The S &P 500 posting its worst day of the year. It broke a nine-week win streak. So we're coming in off a red, red, red-hot market. The Nasdaq had its biggest point drop ever, percentage-wise, down 4%. All right, a big headline happening right now. A group of states reportedly preparing to sue to block Paramount Skydance's purchase of Warner Brothers Discovery.

31:33Both stocks with the market taking a leg lower on that report. Shares of Lululemon dropping nearly 9 % after cutting its annual outlook in its latest earnings report. The interim CEO blaming negative media commentary over its recent proxy fight with Lululemon founder Chip Wilson, as well as recent failed product launches. That would probably be a bigger deal than a media fight. Lulu now is down more than 65 % in the past year and hit its lowest level today since 2018. Stock looking a little Under Armour-ish. Meantime, Boeing CO Kelly Ortberg speaking to Phil LeBeau this morning about ramping up production of its 737 MAX jets.

32:17Company plans to begin to assemble a new line of planes in July, helping increase output from 47 planes to 52 a month. Tim, Boeing stock, listen, fell today. The entire market fell today. But I think a positive sign for Boeing.

32:33Mike Schumacher:Yeah, I mean, the improvement in May over April, the max planes, they make more of their money in the 787s and the bigger planes. But this has been a one steps forward, two steps back, three steps forward, two steps back. I mean, that's been the move in Boeing. It is a free cash flow story. Here we are talking about companies that are issuing debt. This is a company, I think, that's seen the worst of at least the negative free cash flow. And that's why I'm a long term believer in the story. I think there's never an easy path forward. You speak about the regulatory environment. I mean, it's it's it's it's choppy.

33:06Mike Schumacher:But I'm long Boeing and I expect to stay long, long Boeing and staying long. All right, Tim, thank you very much. Coming up. Forget Mary Jane's last dance. Tim Cook's last dance. of what we care about on this show, what to expect from Apple's big developers conference next week or fast money back at two.

33:28All right, welcome back. Apple's annual developers conference kicking off on Monday. This will be Tim Cook's last WWDC as CEO. Investors closely watching for that, but also, more importantly, any updates on a revamped Siri and their AI strategy. Mackenzie Segal is joining us now. Mackenzie, what can we expect from the Worldwide Developers Conference on Monday? So on Monday in Cupertino, Apple investors will decide whether Tim Cook's contrary AI bet is starting to pay off. While Apple's Mag7 peers have collectively committed to spending a trillion dollars on AI infrastructure, Apple stayed out of that CapEx race, betting that it doesn't need to own the best model if it owns a device where consumers actually use AI.

34:13But that only works if Siri can become useful when paired with ChatGPT or Google's Gemini. Investors I've been speaking with say that Monday has to show tangible, personalized AI products that people actually want to use, including some sort of agentic experience where it takes action across apps. And even if that bull case comes true, Wall Street's already given Cook a lot of credit. The stock's up 15 percent this year. A strong memory chip supply chain has flipped China into a growth story. and Apple's trading at more than 32 times forward estimates on 10 % growth. So heading into WWDC, we'll be looking at whether this will be a buy the rumor, sell the news event for Apple or if Tim Cook can deliver on Apple's lofty AI promises as he hands the reins over to John Tarnas.

35:01Brian? Great stuff. I know a busy week for you as well. Mackenzie Sigalos, we appreciate it. Thank you very much. Mike Coe, what are you looking for from Apple next week and do you have a take on the stock? Yeah, I mean, the valuation is obviously getting at the upper end of its own historical range, and that part is a little bit troubling. But what doesn't seem to be so troubling is the sentiment in the stock. Obviously, it was down today, but not nearly as much as a lot of the rest of the names in IT. And as we look at the options market, actually, we saw slightly more bullish bets than bearish ones, about 4 % more.

35:32And that may not sound like much, except that IT generally saw 20 % more bearish bets than bullish ones today in the options market. So it was a standout on a relative basis. I think people are reasonably optimistic. And if you are looking to press a bullish bet here, the fact that options premiums are not that high make that the way to play it, I think. All right. Good stuff, Mike Coat. Thank you very much. Apple, meanwhile, one of the relative ports in the proverbial storm today, but there were a few others. Consumer staples, the top performing S &P 500 sector today, up about one and a half percent.

36:03Not a big move, but in a market like today, any up move is good. Utilities, real estate, health care also ending higher. Question, Michael Schumacher, and I feel kind of silly asking this one day. That's not helpful.

36:17Mike Schumacher:No, but I mean, you don't need to feel silly about anything around here. We're all friends. We're all hyenas or gazelles or something like that. Is there today a reason to make any kind of major rotational decisions? How about that? I'd like that. Thank you. I don't think so. U.S. economy still looks good. Global economy looks good. That was the news, not just from here, but from Canada. Yeah, the policy backdrop's a little bit worse, but so what? I mean, it's a down day. It's a painful day. A lot of red. You're down a couple percent. I don't see why people would change their overall view based on what happened.

36:45I'm not saying they should, which is why I didn't want to ask the question, because I knew you were going to answer that way. But now we got that. You're not helping. Are you here to help? Always. You know, but the idea is that and I think on a serious note, Tim Seymour, the market day like today, there's been you know, this people see I see they stop you out here, You're a global celebrity. And they say, Tim Seymour, I love this market. I own this market. I'm waiting for it to fall. People have been jumpy for months as the market has kept going up. And some people will use a day like today and be like, see, I told you.

37:16Mike Schumacher:I look at the industrial sector. I look at the transports. I look at the financials. I mean, this is not a market that's been lacking for breath outside of the tech space. And I think the economy we have is going to embolden people or just encourage more rotation. There have been a couple of really obvious rotation days this week. How about that, you know, it was two days ago when the Dow was up, you know, one and a half percent while everything else was down. Maybe that was even yesterday. It's been a long week. But I guess. Are you saying you mentioned the Dow earlier in the show? Do you think the market's almost been kind of quietly rotating this week anyway, ahead of today?

37:52Mike Schumacher:Yes. And I also would argue that we've had days this week where the indices were up 40 bips, but because they were pulled up by a handful of memory and AI and CPU stocks. And the rest of the market was really pretty ugly. So I think we've started to see, we had seen this earlier in the week. And they came out of software. They went into, they went into, they came out of software, went into semis, came out of semis, went back into software. So they're rotating within the tech complex. But every stock is using technology. So the broader it gets, you could have a Caterpillar or a John Deere be an AI stock.

38:30Everything will filter through to the names that haven't been affected so dramatically as the semis. Not only a great point, but a great segue to our tease. All right. So you're here to help. That's right. I'm doing this. Sappho. Sappho. Because coming up after the break, I got to switch to decaf. We are going to have a guest who will say there are retailers who will benefit from the AI data center build out. We're going to connect data centers to retailers. Fantastic. We hope. Next.

39:13All right. So you know this, folks. Data center build out right at the forefront of the AI investment. Boom. And UBS says retail could be an underappreciated beneficiary. Analysts writing that the gains in the local economies could ripple through the retailers with brick and mortar stores that are near, near data centers. Jay Sol is behind that call, behind the research, joins us now. I love what you did, Jay. Welcome, by the way. You looked at retailers that I think were within a 10-mile radius of data centers. Right. Why? Right. Right.

39:46Mike Schumacher:Data centers under construction, because when data centers are being constructed, you take a midsize county, it can raise the GDP in that county by one to three percent. When that happens, typically that creates economic growth broadly, which ultimately helps retailers. Now, the key is the data centers aren't being built evenly across the U.S. Some localities are in favor of it and some are not. Right. It's a nimby world. Some people don't like it. So there are some some. Go ahead, Ryan. No, no, I know. I was thinking I agree with what you're saying. having been to data center sites, the amount of money truck drivers, concrete electricians, the built, the construct, you know, there's no doubt there's a ton of money, but it feels like the money is temporary.

40:23So how long does this, this, this effect Jay last?

40:27Mike Schumacher:Right. Well, it's a topic that we'll revisit because if you take the data centers that are under construction now, we're basically saying, look, for the next year, here are the retailers that have outsized exposure to where data centers are being built. Now, probably data centers continue to get built. I think data center construction is up 20%, 30 % last two years. It's up that again this year. If you go beyond 2027, it's going to continue to get built out. Then we'll look at who has the exposure at that point as well. So when a couple percent change in comps really comes in, that can really change the fortunes of a stock.

40:56Mike Schumacher:But ultimately, you can't buy a nice house in a bad neighborhood. So I'm just curious where you're marrying your thesis on data centers with a Macy's or someone who actually may have had pretty good comps in Q1. and actually there's an overall benefit maybe even for their business from AI. I'd love to hear about that too. Sure. Well, I'd love to address both of those. So take department stores because you mentioned Macy's. Macy's and Bloomingdale's, remember, have actually really nice exposure to the places where the dentist centers have been constructed. On the other hand, they do. Kohl's does not.

41:28If you would have asked me, I would have inverted that in my mind.

41:30Mike Schumacher:Right? That's the thing about the analysis. Did you get that tie, Kohl's? Sorry. It's a beautiful tie. And Kohl's sells beautiful ties, by the way. I just want to say that. But I think, you know, the other point about retailers are benefiting from AI. You know, the retailers are using it. One thing I found very interesting, we looked at proxy statements of how management teams are being compensated. What we found out is Ralph Lauren is actually the only name in Softline that's basing their management compensation on how well their companies are integrating AI across the organization. Now, they're an AI leader.

41:59Mike Schumacher:That's one reason we have a buy rating on that stock because they're really ahead of the game and they're getting great benefits from it already. Well, we showed a chart earlier, a graphic. We had pretty high-end names, Arcterics, that's not cheap, on running, right, on cloud. Is it? There it is again. Okay, you know, Canada Goose, I mean, those$1 ,000 jackets. Are those the names we should be buying? Well, I think that if you look at a name like Aritzia there, so if you take an Aritzia and you pair it up with, like, say, a retailer that doesn't have a lot of exposure, say, like a Bath & Body Works, you know, that's a nice trade to be able to put together.

42:32Mike Schumacher:Like the off-price space, Ross Store is very popular right now. They actually have a lot of exposure to data center construction. TJX, on the other hand, does not. Now, both are great stocks, but if you want to just play the data center thing and, like, who has most exposure versus who has less, that's the way to do it. Fascinating research. Really appreciate the work, Jay, you and your team are doing on that because I would have never thought that. So, of course, that's why you're on the show. So, Jay, thank you very much. Brian, thank you. Mike Coe, pretty interesting take there, right? amount.

42:58But the storm mix was a little bit different than I might have sort of initially asked if someone just asked me about it. Your take on that note and research. Well, I mean, I think your instincts on that were probably related to, you know, which NIMBYs are actually able to influence what gets built in their neighborhood. Look, you're talking about skilled people here. That's going to have above average incomes and salaries. And I do like Ralph Lauren, actually, just to give myself a little pat on the back. That is one of my acronym names over the last couple of years, Ralph Lauren. And this is a name also that has seen double-digit adjusted EPS growth.

43:35So it has been a stable and solid performer now for several years through a pretty tough time for retail. Yeah, I still struggle with this idea that you're going to have construction workers buying fancy clothes like you, Brian, or fancy shoes. I appreciate the analysis. I think it's interesting. And also how durable is this? We talked about CapEx concerns, a lot debt funding issues, equity raises. So I'm having a little bit of difficulty, but it's a very interesting analysis, very provocative. Yeah, it is because it's a different mix. That was the only point. Not that construction workers aren't going to buy nice clothes, Tim Seymour.

44:09It's just more that. Look, I mean, I was a construction worker in a new life. Yeah. All right, coming up. Wall Street buying one food name today in a terrible tape, Chipotle robes. Talk about why coming up.

44:29All right. Inarguably, what was a very tough tape today? Chipotle, a bright spot, rising 4 % to down market. Chipotle was upgraded to overweight by JP Morgan. The analysts there are calling it a quality growth stock with an attractive valuation, following a more than 40 % drop over the past year. They got a$35 target. That implies about 20 % upside, Tim, to Chipotle today.

44:51Mike Schumacher:Well, it is. It's 45 to 50 percent cheap to its five year P.E. It is at a place that's somewhere around 26 times forward that I find it interesting. By the way, I wish the one at 73rd and Amsterdam actually stayed kept their food still. I'd say 930 at night when I go in there and they say they're open to 11. Yes, you heard that. I think the story is one. This is a growth story that really hasn't been growing. And I think it's a margin story that they need to reassert themselves on. But, yeah, I think you can start to nibble here. Nibble. I mean, if you look at the personal vendettas against specific locations.

45:25No, no, no. It's a joke. I mean, it's disappointing. If you look at the chart, I always compare the two, Starbucks and this one, right? CEO. CEO Brian Nichol, Miami-Ball, Ohio grad. And he's an operator. And when you look at the chart on Chipotle, this is one of those, it's so bad, it's good. I don't know if I'm at the it's good yet, but I think it's just a counterintuitive play. It's been down so much. But if you look at the relative performance between the two, Starbucks has definitely outperformed. If you want to give it a shot, I could see what they're saying with Chipotle. All right. Up next, it is your final trade time.

45:58Stick around.

46:03Mike Coe, kick off the final trades. Almost everything ships in a box. A very old company that works in a modern economy. Packaging Corporation of America, ticker P.K.J. Michael Schumacher. Long U.S. dollar. Long DXY. Take your pick. Dollar's going up. Steve Grasso. IJR, a small cap ETF. If you want to sleep at night, put a little money there. And before we go, Tim Seymour, I surrender my tie to you. It's yours, my gift to you. Final trade? Oh, final trade. Oh, yeah.

46:31Mike Schumacher:AEM, Agnico Eagle. Nice to have you, Michael and Brian. Thank you all very much. Have a great weekend. Go Knicks! Mad Money 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.

47:05To view the full Fast Money Disclaimer, please visit cnbc.com forward slash Fast Money Disclaimer.

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