Tech Leads Market Bounce… And The Next Move In Rates 3/12/25

0:01Live 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. A tech-led rebound on Wall Street with a number of beaten down names like NVIDIA and Tesla leading the charge. One mega cap did not come along for the ride. Why the divergence and what it means for the future of Apple? Plus, inside Intel, the embattled semi-stock finally tapping a new CEO. Shares are soaring after hours. All the details straight ahead. And easing inflation, CPI coming in cooler than expected in February. But what will more tariffs mean for pricing pressures?

0:31We'll debate that. And later, Adobe on the move after earnings. How do you know when it's time to buy Novo Nordisk and Target at 15-month lows? What's next for the retail giant? I'm Melissa Lee. I'm with you live from Studio B at the NASDAQ. On the desk tonight, Zee Grasso, Karen Feinemann, Courtney Garcia, and Guy Adami. We'll get to Wednesday's tech turnaround, boosting the markets in just a moment. But first, we want to start with Intel shares. They are soaring after hours. The chipmaker naming a brand-new permanent CEO. It's fourth in the last seven years. Our Christina Parts Nevelis joins us now with the details.

1:02month long or several months, I should say, they've been searching for a CEO. They found Lipu Tan. He's no stranger. He's, you know, he's a tech investor. He's worked at Cadence Design, which is a chip automation software firm. He used to be on Intel's board, but stepped down back in August. Rumors were that he clashed with former CEO Pat Gelsinger. So now he's back. The current or the co-CEOs, you have David Zisner. He's going to keep at it as CFO. And then Michelle Holthaus will remain the CEO of Intel products. But I guess that's one bright spot for Intel, given the other issues. They've had product delays with their AI chip.

1:39We know the spending. I think they're burning through about$25 billion a year on the foundry business. And then competition. They're losing continued market share to AMD and even to the likes of NVIDIA at this point. I mean, it seems that if you wanted to pick the perfect CEO for Intel at this moment in time, Lip Bhutan is the perfect guy because he's like the anti-Pat Gelsinger. I mean, he left in August reportedly because he clashed with Gelsinger. He said that Intel didn't have a clear AI strategy. Its workforce was bloated. He just disagreed with management style. And so those are exactly the things shareholders want addressed.

2:15Precisely why they're reacting more positively to this news as opposed to somebody like a David Zissner. No offense. Like, he's worked with the company, but his background is finance. It's not necessarily semiconductors. And Pat filled that role, but maybe not strategically, trying to do too much all at the same time. So let me ask you, what is the mandate, do you think, for his CEO-ship? You know, we have lots of discussions of looking to sort of carve up intel by various buyers looking. Is it custodian until that happens, or is it something very different? Excellent point. I think with lots of buyers referring to the foundry business and whether TSMC is going to be less than 50 % owner, AMD, Broadcom, those rumors have been milling.

2:56I know it came out today, the stocks for all of those shares popped, but those rumors have been milling about for quite some time. It seems like something has to happen with the foundry business. I don't know what 10's role would be in that case, but something needs to, especially with President Trump really pushing for more help specifically to that business that's burning cash, burning cash, and they're still not getting the number of customers up there to even compete at the same level as TSMC. Not saying that they can't eventually and that they have, you know, the know-how and all the wonderful talent here in the United States, but they're still so far behind.

3:27And that is a big drag on margin. So it's a possibility of a separation. Christine, I don't know the answer to this. You may. I mean, they're supposed to report the end of April. Any chance that they sort of in the next couple weeks come out, pre-announce, kitchen sink, clean slate? We've seen things like that before. I don't. There's an Intel Foundry Day at the end of April. So I wonder if they're going to hold off on doing something that drastic, given the proximity to the Foundry Day, we probably, you know, there's a lead up, you know, with like NVIDIA, for example, GTC, they waited, or they're going to wait to announce products and stuff like that.

3:59So to your point, it may not be beneficial to jump the gun with their earnings report just so soon, given they have that update. They have an AI event this month, but a Foundry one that should be bigger at the end of April. Intel has an AI event. Yeah, something I saw more at the end of March, which I'm not going to, but I should be going into the foundry run because I was expecting some news coming out of that at the end of April. Right. So another catalyst for the stock. Potentially. Potentially. Christina, thank you. Good point. Christina Partsinevelis. All right. So the biggest overhang in the stock, no CEO.

4:28That's now resolved. Courtney, does it look interesting? Well, I think that's the one overhang. But the other thing is just the foundry business, right? I mean, they're expected to still be showing losses there through 2026. And that's the question is when that can happen. In the meantime, you know, when is that turnaround going to be there. So I would actually still be cautious. I think this is good news, like maybe a reason to dip a toe in. I wouldn't be going in with two feet at this point in time. Where he came from, Cadence Design was one of the most innovative companies or seen as one of the most innovative companies when he was there.

4:58If you look at a stock chart, he's coming in at just the right time. It ran up, dipped, now it'll pop again. It already popped today. I would be a buyer. It's interesting. Pull up a long-term Cadence Design since we're talking about it. This stock did nothing for 20 years. I think he stepped in in January of 2009, got a year or so under his belt, and the stock went parabolic over the next 10 or 15 years. I think he stepped down in 18 or 19. So this is the right person for the job. And if I could change my acronym and jam an eye into my tube. Would you? Would you put the eye in the tube? Sounds painful.

5:32But it is extraordinary. But tweeb is not a word, so I want to play by the rules. That doesn't stop anybody else. No, it stops me, though. All right. And I do. Okay, we'll leave it at that. Meanwhile, stocks rebounding off today's lows. The S &P whipsawing in early trade, but ending the day up half a percent, leading the charge. Not banks. Nope. Not health care. Not utilities. It was technology. The Nasdaq surging almost one and a quarter percent with big moves higher in Tesla, Micron, Palantir, and NVIDIA. All but one member of the MAG-7 was up today. Some investors seeing recent weakness as an opportunity to buy up bargains.

6:06Take a listen to Altimeter Capital founder Brad Gerstner on Squawk Box this morning. We've seen the markets come back in, and I have to tell you, we were buying some yesterday because now you see Nvidia 18 or 19 times next year's earnings. Now you're getting paid. So do you believe the bounce? Do you think the tech trade was de-risked? And do you think things like financials and transports have not been in this route? Yeah, so it's interesting. I think Brad's got a much longer-term view than this show probably. So he looks at this move and like, you know, if I'm bullish Nvidia for the next couple of years, this is as good an entry point as any.

6:41And it's probably true. I don't think it's over, though. And still with the VIX north of 24, even with today's sell-off in the VIX, it suggests we're going to see some more volatility. I mean, just look at the intraday chart of the S &P 500, probably at 150-handle move up and down and closed slightly higher on the day. So I get the bounce. We actually discussed there potentially being a bounce in the space over the next couple days. So it's not surprising. But to answer your question, I don't think the downside is over. That may be. I mean, I don't really trade around, so I'm not trying to pick the bottom here.

7:11And I've sort of held going down, held going up. I am looking to find some places to add. I did add some banks, right, add some J.P. Morgan call spreads. I had been thinking that the banks at the moment, now that we're into March, are out of the market in terms of buying back their own stock if they were inclined to because we're getting too close to the end of the quarter. But I agree with you on the VIX. I wish it had gone a lot higher and then come down and not settled in here because I find it doesn't really live at 24, 25. Right. It goes somewhere else. And so I don't think the end is I don't I could think we could see more pain, but I'm not going to sell and then try to buy back later.

7:52I look I look at the tech stocks through the prism of where were they pre deep seek. And if you go back to the pre-headline, that was January 24th. Apple is only 2 % lower and was 10 % higher than where it started before the deep seek headline. If you look at NVIDIA, 18 % lower. Microsoft. So all these are somewhere between 12 % and 18%. Even Netflix is down 6%. Apple has had the best turnout of all those names. If you look at one other one, Meta, Meta is down 6%. There's no reason why any of these stocks, or I should say half of them, should be down what they are. But we have to reassess. I'm big on they spent too much for AI.

8:41They're trying to spend too much more on AI. 80 to 105 billion, way too much. It's got to be reassessed. Apple's not doing that. Apple is working on AI in a different way. Apple's looking at it through a device prism. and they'll figure it out. It's more of augmented reality versus AI. They might be using AI to do it, but they're spending$5 billion,$10 billion max, where the other ones are spending$85 to$105 billion. So I don't think it's over. I think they're going to be penalized and they're all going to have to come up with a couple of years of efficiency led by NVIDIA. I think NVIDIA still goes much lower.

9:19I mean, the thing that we have not talked about head-on within this tech discussion, whether or not these names have been de-risked, because the overlay of the increasing recession odds that Wall Street is starting to price in. I mean, you have Goldman Sachs coming and saying it's about a 40 percent chance of recession, up from 30 percent, which they estimate at the end of 2024. So three months ago, I mean, it wasn't too long ago where they're saying 30. Now it's 40 percent. So, I mean, that's got to put some concern. And there's an asterisk, I think, next to all of those CapEx plans that were outlined in January.

9:47It's a very different environment. I mean, CEOs, right, we talk about it all the time. CEOs, they feel very differently now versus the beginning of January when a lot of those CapEx plans were unveiled. Well, let me ask you. We were playing the game. Sure. We are playing a game. It's not a would you rather. I'm playing the game. If I had told you that Microsoft's CapEx numbers were too high, they're bringing them down. And Meta rallied on its CapEx news. But the other ones did not. Amazon and Microsoft. If I told you, all right, their CapEx is coming in by 15 percent, would the stocks rally or not?

10:26Are they doing the same thing that they were doing with the 15 percent higher? Are they doing the same? Are they cutting back on spending just to cut back on spending? Or were they able through efficiencies, through DeepSeek, through the idea of DeepSeek, are they able to get to the same end goal? If you're getting through a recession question, right, then it would be that we're not sure that the opportunity is as big. we're going to decrease our spending by 15%. I don't know. I don't play games. I'll pose it to you guys. I would think that there is a decent chance that a stock like a Microsoft would in fact go higher on a pullback in CapEx because the narrative could be we're in uncertain times.

11:05We just think it's prudent to do that and in the future we can ramp that number back up easily. What she said. I think that you can make that argument. I don't know if that would be the case, But I think there's an argument to be made. Yeah, I think that is the question. But what's happening is as more and more people are talking about recession, it's not just CEOs who are getting nervous about the economy. It's consumers and investors who are also pulling back and getting nervous. And that's where you're seeing this big trade kind of a rotation happening into your defensive names and your value names out of the U.S.

11:32and into abroad. So I think days like today shows people are willing to come in and buy these dips, which probably means, yeah, it might not be over. You're not seeing this mass selling that's been happening. But I would make sure you stay diversified here. I still own the tech names, but I'm not, like, jumping in, you know, with Sufi right now. A few things. I think our audience has gotten to know you over the last 16 years. By the way, it's almost your anniversary. That is true. 16 years on Fastball. And I think they realize that you're an avid game player. But I will play your game and say, you know what, if CapEx is going down.

12:05When I was a kid, I used to watch the Flintstones, and Fred used to get his contracts in, like, a big slate. But these CapEx numbers are not etched in that same stone. And if they feel there's a slowdown coming, they will ratchet it back. And Karen makes a good point. What will happen to the stocks? I think in this scenario, it's going to hurt a lot of these AI names. Well, let's dive deeper into Apple. That was the one Mag7 stock in the red today. The iPhone maker is down 9 % already since Monday, pacing for its worst week since November 2022. Morgan Stanley lowering its price target on the stock from$275 to$252, citing the delayed rollout of a more advanced Siri.

12:41For more, let's bring in Fast 20 friend Gene Munster of Deepwater Asset Management. Gene, after Apple revealed Apple intelligence at WWC last June, here's what you had to say. This is about getting people to recognize that their current phone isn't nearly good enough, and I think that they hit it. This is the biggest day for Apple since the iPhone, a full stop. Do you feel the same way? I think the biggest day is coming, Melissa, and ultimately this has been a disappointment in terms of the rollout of Siri. It's as big of a disappointment as covering this company and investing in it for 20 plus years that I've seen a one-year delay on something that's so critical.

13:26And so I don't want to pile on to the naysayers related to where this product ultimately can go. But to answer your question, as we stand here today, a very different place than what I thought we were going to be at back at WWDC. At the end of the day the question still is relevant is will they get Apple intelligence right and as it stands they're essentially just holding on too much to how the whole ecosystem that's powered by Apple intelligence is put together. They really need to expand it, allow developers more to build on to it, to accelerate the features. When I made those comments before it was a belief that these they would be in a unique place to bring personalization and automation to a device that are over 2.3 billion active devices.

14:16So that that central view is unchanged but it's gonna take much longer than what I thought. I do stand by this belief that a year from now we're gonna see meaningful acceleration in iPhone on the back of these new features getting rolled out. I was curious about how Apple was valued because I think there's a question here in this kind of market environment. Are you overpaying for Apple given its delay in AI features? Pre-WWDC, so just before June or so, it was trading at a 30 PE. Right now it's trading at a current 34 PE, not forward PE, just PE. So I mean just on that basis, how should we think about it.

14:57Is Apple still worth more than it was worth before the announcement? Should it actually have even more of a discount than being four turns, you know, having to go four turns lower to go back to pre-WWDC? Because it's sitting out as, for instance, its competitors in China are launching phones that are, you know, the same price point or lower with AI features. So I think the multiples in the right place and I think investors are still giving Apple the benefit, largely the benefit of the doubt in terms of how they can roll this out. So I think an above average multiple is justified just given how important these products are.

15:36They're not going anywhere. People are not going to get rid of their iPhones, for example, if an Android phone comes out with some impressive AI feature. And so that lock-in is really valuable to investors. They can sleep well at night knowing that the flywheel is in place. And so the multiple makes sense to me the move higher in the stock here has to come from the substance of these features driving revenue and ultimately earnings. And when I look at that, I mean, that's the question. I'm still optimistic, still positive, still own this stock on a belief that the iPhone estimates for this year are conservative, the streets looking for about 1 % growth steps up to 6 % for calendar 26.

16:16So it's a nice step up. I think that those are probably conservative. But to answer your question, I do think there is some benefit of the doubt that's being given right now. But I think the upside in the stock comes from earnings upside based on in part these features. But also keep in mind, there is this huge upgrade pool that is ultimately going to have some positive impact this year and next year. Hey, Gene, it's Courtney here. So just geographically, where should we see that growth coming from for Apple? So there's been a lot of disappointment when it comes to China sales. And I know there is some optimism with some other emerging markets like India, or hopefully we'll see that pick up in the U.S.

16:53But also with tariffs ongoing, like is that going to be an effect for Apple? And how should you look at that as an investor? So a couple topics on the, maybe start with the latter on the tariff side is I think that they're going to sidestep these tariffs. I think Apple's announcement about this$500 billion dollar investment into the U.S. It wasn't all incremental. It was probably more like 30 billion was incremental. But I think that was the politicking around this. And I think that Cook and Trump are in a good spot. So I think that Apple will find a way to avoid these tariffs. As far as where the growth comes from, the China piece, there is, it just doesn't impact Apple.

17:28It impacts Tesla, too. I mean, those two hardware companies, you're seeing this move to buy China, this nationalism consumer behavior that is, I believe, in part fueled by some of the messaging from Chinese leadership. And so I think that that's going to be a harder one to turn. Where the upside comes from, it's the old strengths of the U.S., Europe, and to a lesser extent, India. It's about 3 % of revenue today. I think longer term, that can be 10 % of revenue, and that's just kind of a slow build. Gene, we're out of time, but I got to ask you this one question. This is the question that we you're sort of bandying about on the desk just before going to you, and that is if the MAG7 came out and said, we're going to trim our CapEx spend for the year because of macro uncertainties, et cetera, it's just a prudent thing to do at this point.

18:14Do the stocks go higher or lower in your view? I think measurably lower. That would be a very bad day for these companies and a bad day for the broader AI trade. I think it would take many quarters for investor psychology to recover from that. All right. Gene, always great to speak with you. Thank you. Thank you. Gene Munster. Lots on the shoulders of the CEOs of the big tech companies. Well, I admire Gene coming on to take, you know, take a bullet, right? He's been writing this for a really long time. I just, even though it's down somewhat, it's still not close enough for me to buy it. All right.

18:52Coming up way off target, shares of the retailer hitting levels not seen in over a year. What is weighing on shares and how tariff turmoil is impacting the retail space ahead. But first, some after hours action to bring you Adobe on the move on its latest results, the details and numbers from that quarter next. Do not go anywhere. Fast Money's back in two.

19:16Welcome back to Fast Money Canada and the European Union imposing new taxes on U.S. goods in reaction to the Trump administration's levies on aluminum and steel imports. CNBC's Megan Costello's got the latest. Hi, Megan. Hey, Melissa. So those sweeping 25 percent tariffs on all imports of steel and aluminum took effect first thing this morning. And with that, take a look now at all of the tariffs now actually in effect. Besides the metals tariffs, we have the 25 percent duties on Mexican and Canadian goods that are not USMCA compliant. A White House official told us that's about half of what we buy from Mexico, two thirds of what we buy from Canada that will still see those tariffs.

19:52We also have the lower 10 percent tariff on Canadian energy and the extra 20 percent tariff on all Chinese imports. And it's hard here to estimate the total value of goods being hit. But by one analysis, more than 30 percent of all U.S. imports have seen tariffs added in the last month. Another analysis put that at well over a trillion dollars worth of goods. And there's more to come. April 2nd is the next date to watch. That's when the White House says they'll start rolling out customized reciprocal tariff rates on a country by country basis. And the sky seems like the limit from there. The Commerce Department, we know, is investigating imports of copper and lumber for national security threats.

20:28That paves the way for additional tariffs there. And we've also heard the president threaten tariffs on cars, semiconductors and pharmaceuticals. No details on any of those yet. But the only certainty, it seems like from here, is that the level of uncertainty is likely to stay elevated for what could be months to come. Melissa. All right, Megan, thank you. Megan Casella. So let's overlay that with what happened in the markets today in terms of that tech rebound guy. For that reason, the certainty of uncertainty, was this just a one-off rally? No, I think the market's learning how to deal with the – I think they understand there's going to be ebbs and flows of this.

21:03The rhetoric's going to get ratcheted up, ratcheting down, depending on where the market is. And at a 25 VIX, you understand that you're going to see rallies of this magnitude or even greater. But with that said, none of this is particularly bullish, I think. And if you want to look at one thing today, I still think it's the bond market in the form of yields. You saw that CPI number today. A lot of people said it was cool. That's what the market needed. One would think, given the trajectory of yields recently, yields would continue to go down. They're actually about 21 basis points higher than they were about a week and a half or so ago.

21:34That's what you have to be watching, I think. All right. Meantime, we've got an earnings alert on Adobe. Shares are sinking despite a beating the top and the bottom line. Conference calls underway. CNBC's SEMA Modi is dialed in. joins us now for all the details. Hey, Seema. Melissa, a slightly weaker second quarter guide from Adobe. That's why the stock is down right now. CEO Shantanu Narayan, he's on the call, but he also joined CNBC's John Ford in the last hour and said that Adobe's artificial intelligence products are creating new revenue streams from AI assistants, Acrobat readers that are also creating new subscription tiers.

22:06Narayan also downplayed any signs of a pullback, reaffirming Adobe's targets for the rest of the year. The question is whether the street is convinced Adobe is an artificial intelligence software winner and should be in the same category as Salesforce and ServiceNow that are deploying these AI agents or even Oracle that is standing up AI data centers. You'll see that shares have underperformed the broader IGV software ETF over the past six months. Morgan Stanley's team says competition is to blame, but they do think that the company's upcoming summit next week will give the street better read on enterprise demand and maybe more metrics as to how AI is playing out for this company.

22:40Melissa. Seema, thank you. Seema Modi. So that's a good question. Should it be in the same category as an Oracle, as a Salesforce? I think the key for them is Photoshop and their whole digital revenue sector. And the problem is, will open source take that away from them? I think they should be in the same category, but they should have a bigger tailwind because it's hard to replicate the benefits of Adobe. Guy? I think valuation, you can make a case for this stock, and it's nowhere, not that it matters, by the way, but, I mean, this stock was north of$600 a couple years ago. I mean, valuation has gotten reasonable.

23:18I didn't think it was a bad quarter, and I didn't think the guidance was particularly draconian either, so I'm surprised at the move. I think you're looking for a place to buy Adobe, not sell it. All right. There's a lot more fast money to come. Here's what's coming up next. Retail feeling the tariff impact. Target trading at more than 52-week lows. and Walmart looking to offset supply costs in China. What will trade talks mean for the space? Next. Plus, the next move in rates. Treasuries whipsawing this week on recession fears, tariff pressure, and the latest inflation report, where our next guest sees the bond market heading and what it'll mean for the Fed.