In short
Fast Money episode recap: It opens with the “best first half ever” for semiconductors. The SMH ETF is up over 80% in the first six months, while software lags badly (IGV down ~14% YTD; Oracle/Palantir/ServiceNow/Salesforce cited down 20–40%). Mega-cap tech also underperformed at times (Microsoft worst start since 2000; Amazon lagging; Mag7 pressure). Guests debate whether the AI-driven semi rally can keep running or whether hyperscaler capex will trigger a “reckoning,” arguing ROI may lag as compute commoditizes and memory/storage may be priced in. Dan Ives (Wedbush) says demand from Taiwan/Korea is accelerating, favors hyperscalers then software (Palantir, Microsoft, Oracle, Alphabet; cybersecurity), and is least bullish on stock-specific software like Adobe/Intuit. He also initiates coverage on SpaceX (Outperform, $190 target), framing it as an AI/compute play. Next, Nike earnings: EPS beat (20 cents vs 13), revenue $10.97B, but China down 12% YoY and guidance absent; executives cite weaker traffic/discretionary and deceleration mid-April. Bitcoin/crypto discussion highlights ETF outflows/inflows and “FTX moment” fears. Anthropic launches Claude Science for drug discovery, positioning it as an AI workbench connecting to genomics/structural biology tools and starting neglected-disease preclinical programs.
Guests
Tim Seymour, Dan Nathan, Steve Grasso, Marta Norton (Empower chief investment strategist), Dan Ives (Wedbush), Eamon Javers (Trump disclosures), Brandon Gomez (Nike coverage), Kevin McCarthy (Newburgh Nike analyst), Angelica Peebles (Anthropic product), Scott Cohn (CNBC Top States/defense in New Mexico).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOSemiconductors' First Half Surge
1:35 to 2:26
Discussion on the significant rise of semiconductor stocks in the first half of the year.
“and Marta Norton, chief investment strategist at Empower.”
Market Trends and Broader Implications
2:26 to 3:42
Exploration of market trends impacting tech stocks and the overall economy.
“It was actually ended up being a decent quarter for U.S.”
The Future of CapEx and Memory Stocks
3:42 to 6:10
Analysis of capital expenditure trends and the impact on memory stocks.
“Well, I mean, I think the backdrop really is favorable.”
Valuation and Market Dynamics
6:10 to 9:21
Debate on stock valuations and their relevance to market performance.
“And it does feel like we're at peak investment and that usually rolls over.”
NVIDIA and the AI Revolution
9:21 to 14:00
Discussion on NVIDIA's role in AI and its stock performance amidst market challenges.
“And to me, if you're buying this thing and to Marta's point up, you know, 300, 400 percent, just kind of doing it wrong.”
NVIDIA and the AI Race
14:00 to 16:26
Discussion on NVIDIA's stock performance and its significance in the AI market.
“But when you look at NVIDIA, you look at Broadcom, I mean, these stocks are massively underperforming, right?”
Breaking News on Trump’s Finances
16:26 to 18:00
Report on President Trump's recent financial disclosures and key findings.
“Breaking news on President Trump's latest financial disclosures.”
Nike Earnings Report Reaction
18:00 to 19:22
Analysis of Nike's earnings report and its implications for the market.
“Let's get to an earnings alert here on Nike.”
Concerns Over Nike’s Market Position
19:22 to 23:09
Discussion on Nike's challenges in the current retail environment and competition.
“But meantime, your initial, I mean, I don't know what there is to like in this quarter at this point, Tim.”
Global Market Trends and Consumer Spending
23:09 to 24:10
Exploration of current trends impacting global consumer spending and retail.
“We're getting the comments from the conference call.”
Show all 22 chapters
Global Market Trends and Consumer Spending
25:05 to 26:04
Exploration of current trends impacting global consumer spending and retail.
“Chasing deadlines, writing status reports, updating stakeholders.”
Anthropic's Claude Science Product Launch
26:08 to 28:00
Overview of Anthropic's new AI product aimed at drug discovery.
“Anthropic, the latest innovator looking to get in on the AI drug discovery gold rush.”
AI's Impact on Healthcare and Pharma
28:00 to 29:52
Explore how AI is affecting drug development and the pharmaceutical industry.
“So they think that that'll make, you know, make it easier and faster to see what you're building and how it might work.”
Introduction to Crypto Market Challenges
29:52 to 30:13
Discuss the current state and challenges facing the cryptocurrency market.
“Coming up, Bitcoin bruised and battered but does a reversal of misfortune.”
Introduction to Crypto Market Challenges
30:48 to 31:12
Discuss the current state and challenges facing the cryptocurrency market.
“The Same Monday.com helping people worldwide getting work done faster and better.”
Bitcoin's Unstable Landscape
31:49 to 33:59
Analyze the factors contributing to Bitcoin's decline and market instability.
“It has been a brutal first half of the year for Bitcoin.”
Nike's Market Performance and Consumer Behavior
33:59 to 41:25
Examine Nike's recent performance and the implications for the consumer market.
“And so, like, I think about it, I say to myself, this can only go one way.”
Defense Industry Innovations and Economic Impact
41:25 to 42:00
Learn about the defense industry's growth and its competition among states.
“Coming up, we're counting down to CNBC's annual list of top states for business.”
New Mexico's Defense Industry Growth
42:08 to 44:48
Discussion about New Mexico's appeal for defense contractors and the startup Castellan.
“The Trump administration's defense buildup, which includes a$1.5 trillion budget request, has opened a new front in the battle between the states for business and jobs.”
Focus on the Yen's Decline
44:48 to 45:00
Discussion on the implications of the yen's historic decline against the dollar.
“Tell me, I'm more paying for the yen as the currency slumps to 40-year lows against the dollar.”
Opportunities in Japanese Stocks
45:00 to 46:26
Exploration of the investment landscape in Japan amid currency challenges.
“The Japanese yen tumbling to its lowest level against the dollar in 40 years.”
Final Trades Discussion
46:26 to 47:20
Participants share their final investment recommendations.
“International investing, and because I think it would be tacky to recommend my own ETF, Idevo, I'm going to tell you to buy ACWX.”
Transcript
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0:57Tim Seymour:Logs in the NASDAQ market site in the sweltering heart. New York City's Times Square. This is Fast Money. Here's what's on tap tonight. A first half chip rip. Semi-stocks soaring but leaving software and some mega cap names in the dust. So will this trend of tech have and have nots continue or is now the time to bet on this year's laggards? We'll debate that. And Nike results are out. The sneaker giants conference call kicking off right now. Details and instant analysis straight ahead. Plus, investors keep hanging up on telecom stocks. Cryptos crush its Bitcoin again. And is now the time to get into Japanese stocks as the yen hits 40-year lows against the dollar?
1:30Tim Seymour:We'll ask the ambassador. I'm Melissa Lee, coming to you live from the studio, be at the NASDAQ. On the death tonight, Tim Seymour, Dan Nathan, Steve Grasso, and Marta Norton, chief investment strategist at Empower. Great to have you, Marta. And we start off with the first half chip rip, semi-stocks soaring in the first six months of the year with the SMH ETF jumping over 80%, its best first half ever, while the stocks ETF more than doubling. But the soaring semis seem to leave a lot of tech behind. Check out software Super stocks, they underperformed in a major way. IGV down 14 percent so far this year with Oracle, Palantir, ServiceNow, Salesforce adding to the pain, all down 20, 30, 40 percent.
2:07Tim Seymour:Some mega cap tech also failing to keep up. Amazon lagging the broader market while Meta and Microsoft pulled down the Mag7 trade. Microsoft, in fact, having its worst start to a year since 2000. So what do we think will happen for the rest of the year? Do we continue investing this way? It's semiconductors world, Tim. Well, investing this way means also a broadening market and investing this way means lower oil, lower interest rates. At least that's the trend coming out. It was actually ended up being a decent quarter for U.S. Treasuries and for rates markets. But investing the same way to means also that the broadening of the market that has been banks, health care, transports, industrials is very real.
2:49and I think we talk about this almost every night. What underpins this is that you've got EPS growth through the second quarter of, I don't know, 21 percent. Full year is expected to be possibly 25 percent, depending who you're talking to. That will underpin anything. We had some decent data today, which showed that the consumer, both consumer confidence, still worse than expected, but still better and an improving trend at a time when also the Joltz data shows that the labor market is incredibly resilient, you know, because we hate the term Goldilocks on the show. We never use it. Of course, I'm not going to be that guy today.
3:19I'm going to tell you that the trends that worked in Q2, I think, outside of euphoric or parabolic moves in memory, I'm not going to tell you to stand in front of a memory trade. I'm going to tell you that I think I don't think Intel is going to do in 3Q. I think I feel pretty comfortable being out there saying that. But I do think that the broadening of the market is something to stay with. And it's exciting.
3:42Tim Seymour:Do you agree, Marta? Well, I mean, I think the backdrop really is favorable. The earnings are there. The valuations have improved since the start of the year. They're a little bit worse than they were at the start of the second quarter. But that has not been, the broader market has not been the source of strength. It has been the memory area. I guess that does make me nervous, whether it turns immediately or not. It does feel like there's a reckoning coming, not necessarily fundamentally, at least not immediately. But from a price perspective, we've seen soaring triple-digit returns. It's just hard for me to believe that we're seeing another triple-digit return in the near future.
4:17Tim Seymour:Right. I mean, to the extent that the hyperscaler stock remains under pressure because of CapEx spend, you have to wonder whether CapEx spend will keep up at the pace that analysts are thinking. Morgan Stanley just said raising what they think Alphabet will spend in 2027 to$350 billion. It's doubling what they spend in 2026.
4:35Melissa Lee:Well, I think it's a double-edged sword right now. I mean, there was times where certain hyperscalers, when they were announcing big increases to their CapEx over the last few years, they were rewarded. And then in other instances, and you could use Meta as a great example, and Microsoft of late, that they're not particularly being rewarded. And a lot of that has to do with what are the other products that they are going to leverage off of this huge spend, right? Meta does not have, you know, a data center business right now. So they're talking about it or thinking about it a little. But I think by the time they get there, I just think that, you know, token prices are going to collapse.
5:04Melissa Lee:I think that, you know, this is something that Torsen Slok from Apollo was referencing today that just the long tail it's going to be for the customers of this technology to get that return on investment. And you were just talking about it with Mike Santoli in the prior hour here. I mean, the thing is, and there's a chart right there, it's just like if you're heavily regulated, and we've been talking about this for years now, right? And if there's mission critical sort of data that you have to punch out, I mean, if you look at just the success right now and hallucinations, I think if you're us and you're going to one of these things, you're going a cloud, you're going to GPT, it's fine.
5:37Melissa Lee:It's great. You know, there's a whole host of things that it can do really well. But if you're thinking about in health care, you're thinking about, you know, in financials and there's a lot of other industries, it's just not there yet. So the matching up of the spend right now, the cost of compute, the commoditization of the underlying product, it's going to take a bit here. So I think there will be, to Marta's point, there will be a reckoning at some point because the trade's gotten really narrow. The hyperscalers have all intents and purposes rolled over. If all of your hopes for this trade to continue to play out in the back half of the year into 2027 is in memory and storage.
6:07Melissa Lee:I think they priced in a lot of that good news right here. I think it comes down to the CapEx reconciliation of how that ends up. And it does feel like we're at peak investment and that usually rolls over. So the ROI is not going to be there. So if you look at Morgan Stanley on Alphabet, they're investing right now a ton of money growing in single digits. There's no way that you could keep that up. So I think it looks great right now. And Dan used the meta analogy. I think that's awesome. Meta has been rewarded and then meta has been has been punished. And I think where we're at with the market right now is CapEx is probably going to be punished at this point.
6:48Tim Seymour:I mean, I think that this is a really good debate to have, because what do you consider as a return on that investment? So in this Morgan Stanley note annual raises because it came out today and they outlined what they get in terms of revenue growth for cloud versus revenue growth overall. So the CapEx increases to 350 in 2027. Revenue growth overall is up 4%. Right. So I think we had this conversation last night in terms of you bring in a weighted average of what the gross margin looks like. It takes it down. OK. The fastest growing business has actually got a low margin profile and it goes down.
7:23So, yeah, I mean, it's right to be skeptical. The good news, though, is that Microsoft's trading at 21 and a half times. I mean, Google's trading at 22 times and Google was a rocket ship on a relative basis to these other things. So I'll just say I don't think the semi trade is going to slow down. I think it's going to rotate a little bit. But again, I continue to expect semiconductors are going to make new relative highs to the S &P between now and the end of the year. It doesn't go on forever. But again, the fact that this was the best quarter ever for semis and all we do is talk about semis for the last three years.
7:53I don't think it's ready to end. I also think that if you're a market player and you're just playing the indices and a lot of folks at home are smart, by the way, to just go with ETFs and things that actually give them some of that exposure. It's hard not to feel good when Microsoft's down 23 percent, Meta's down 15 percent. Amazon, you know, these these names that are still the lion's share of the index have had such poor first halves. Apple's flat. So, again, I think the themes that are here, the secular themes are alive and well. Everybody's right to say these things don't go on forever. But the market right now had an extraordinary quarter.
8:30By the way, risk adjusted returns. It wasn't a great quarter. We had a lot of chop. We had a lot of volatility. And I bet a lot of people got chopped up. But if you stay in the game, I think it's going to be OK.
8:39Melissa Lee:Yeah, I wonder how much is window dressing if you just look at like the semi equipment stocks and the way in which they moved over the last couple of days. And they've gone up in a parabolic manner. And, you know, you think about this. These are all down the chain of a data center. Right. And if you think about what we heard from Apple last week, raising prices, this is obviously consumer oriented, but raising prices to deal with these rising memory costs. I mean, ultimately, it'll go down the chain. It'll go down the chain. And we'll just get to a point where these commoditized businesses, for the most part, you know, if the idea if you start to get worried that there's going to be this overcapacity in a year or 18 months, you're going to start selling these stocks.
9:11Melissa Lee:I mean, that's how it goes in semiconductors, semi-equipment, memory storage, that sort of thing. So to me, I just think that when you see these parabolic moves and Intel is a great example. Here's a company. It's all on the come. I mean, it's all on the come what they're going to be able to do. And to me, if you're buying this thing and to Marta's point up, you know, 300, 400 percent, just kind of doing it wrong.
9:30Tim Seymour:It's up 279 percent year to date. I mean, that's a crazy. And you're buying a commoditized product.
9:38Melissa Lee:So I know we talk about that with the memory stuff. It's easier to see. But these chips are going to be cheaper, more efficient going forward. and they're buying everything. They're investing in it now. That, to me, is idiocy.
9:50Tim Seymour:So what do you do? Let's say you want to say, do you rotate into some of the MAG7 names that have underperformed and arguably have better valuations today than they did three months ago? Well, it's that word. It's the valuation word that I think we want to introduce to the conversation. And I do think, I mean, when we're talking about memory and semi, we're looking at cyclicality. We know that denominator is moving around. But when you look at some of these hyperscalers or some of these Mag-7, it's hard for me to believe that some of that skepticism isn't already in the price. And so if you're looking, hey, how do I get a piece of this AI trade?
10:22I don't think it's an unreasonable choice to think I can do this with some of these big names at the top of the food chain because of where their prices are today. I think they've discounted a lot of skepticism.
10:34Tim Seymour:Well, let's bring in Dan Ives, Wedbush Securities Global Head of Tech Research at Wedbush. Dan, we know you have a new call out on SpaceX, which we do want to get to. But we want to sort of fold you into this conversation that we are having since we are at quarter end. We're at, you know, first half end. What do you foresee in terms of the second half of the year? Do we still see the semi trade win out? Do we still see the software trade as a losing one? I mean, where do you think are the best opportunities in tech? I mean, it starts off, I mean, our checks from Taiwan and Korea, they're showing demand accelerated.
11:04So I actually think going into this earnings season, it's going to be a catalyst for the hyperscalers relative to what we see from a cloud growth perspective. And then I think it spreads to software. When I look at names from Palantir to some of the cybersecurity names, and especially names like Microsoft, Oracle, I think Alphabet, in terms of the way it's sold off here, those are the names where I would rather be focused. Now, I still believe chip names continue to go higher just because the demand in the spot is 12 to 1. and those numbers will continue to go higher. Memory, that's obviously sort of foundational to everything we're seeing, but we are very bullish going into the second half of the year.
11:41Tim Seymour:All right, let me put the question this way. Is there an area? Sounds like she doesn't like your answer. No, no, no. But is there a subsector in tech that you don't like? I mean, are you just bullish across the board? Because it does feel like you come on, you're like, I love this, I like software, I like chips, chips will go higher. I mean, what don't you like? What do you like the least? To me, it's really within software and it's like Adobe. I think it's more stock. So I view it stock specific as names like Adobe, Intuit. I look at names on the wrong side. Some of the IT services players, because I view those as essentially those are shared donors.
12:14So to me, it's very hard to just say, OK, I'm negative on software, because I actually view that that will be some of the hearts and lungs of the trade. It's really a stock pickers market to some extent when you actually buy. So that's I think it's fascinating to bring up software because we know they've been in the eye of the storm and at different times. And suddenly that that that market, that that sector had a lot or subsector had a lot of volatility. But talk about Adobe, because Adobe's been dead in the mud for four years or at least depending on where you're picking your chart. I would make an argument that they didn't even get thrown out the minute software stocks got thrown out.
12:48They got thrown out two years ago and it became an underappreciated stock. Is there something that you think Adobe has intrinsic to, you know, they have a very wide subscriber base, but it's not growing very fast? Yeah, but you can't be going 30 miles an hour in the right lane. And the reality is strategically, you've had some changes in terms of CEO. They need to do some major strategic changes, whether it's acquisition or selling off pieces of the business. I think until investors see that, a lot of these are melting ice cubes. And I think that's the reality versus, let's take a Microsoft. When I look at Microsoft, that's an example where I think streets way mispricing what Azure growth is going to be.
13:25I'm sorry. So you said you didn't like Adobe. No. To me, Adobe is one where that is hard to bring up a scenario where I see Adobe in a positive way. Are we going to do a little who we're best or no?
13:41Melissa Lee:I mean, I know. I think that's better. Can we split them up with a split screen? I actually did. I thought Nathan in there. It'll someday. All right. So let's go back to the semi-trade. We see the parabolic nature and then ones that we really haven't seen the product yet. We haven't seen the build out yet. We have seen the orders and people are taking that to the bank and they're giving a multiple to those orders. But when you look at NVIDIA, you look at Broadcom, I mean, these stocks are massively underperforming, right? The stocks and also the broad market. And so what does that say about it?
14:09Melissa Lee:Because those those they're defensible. I mean, those valuations, that sort of thing. So and NVIDIA's numbers, they're just going higher and they keep getting revised higher. but the stock can't get out of its own way. Does that go back to like Alphabet's narrative a year ago? Right. Like it's done DOJ. AI is going to ruin search. Now look at this year. NVIDIA is one like we're only halfway through where I believe the godfather Jensen is going to take it because physical AI. There's one there's one chip in the world fueling the AI revolution and it's NVIDIA. And I think that is not fact in the street numbers.
14:42Now, investors clearly discounting it. You see how the stock trading. But I think we look out the next two, three quarters. I think it's a different story for NVIDIA. And I do think memory, obviously I spent a lot of time in Korea. That has gotten maybe a little ahead of itself just given what we saw. But it doesn't speak to where we are. We're still third inning, one out in AI race. How do custom chips eat away at NVIDIA GPUs? I mean, look, I don't see that that's something that will really be a threat for another three to four years. Now, at one point it will. You're seeing the arms race. You'll see the competition.
15:19But for now, I mean, that's why even in China, they would rather have a third rate NVIDIA chip. It's still a year and a half, two years ahead of Huawei. And I think they right now, the competition will continue to increase. But the spillover effect for AMD, just like we see with Alphabet. And I think that's going to continue to play out. But in terms of the AI revolution, only 15 percent through overall spend.
15:43Tim Seymour:I do want to ask you about SpaceX. You're initiating coverage, outperform rating,$190 price target. At least in the first few paragraphs, you don't mention Mars. It's all about being a hyperscaler. So how do they compete against the ones that exist? Look, I mean, we view it as some of the parts valuation. When you look on the compute side to AI to space, it's much more of an AI play. And that's our whole view from a data perspective. This is one like today from a revenue. Is this super expensive? Of course. When you go out in the next two, three years, if they execute, I can argue this becomes one of the best AI plays in the market.
16:17And that's why we're bullish here. I think you've got to see around the corner rather than just look at an evaluation over the next six, 12 months.
16:24Tim Seymour:Dan, great to see you. We have to leave it there. We've got some breaking news. Appreciate it. Dan Ives of Wedbush. Breaking news on President Trump's latest financial disclosures. Eamon Javers got the details. Eamon.
16:34Melissa Lee:Melissa, that's right. The financial disclosures just out within the past couple of minutes, And we are going through them. 927 pages here of documentation. So it will take a while. But a couple of tidbits just so far that we and other reporters going through this have discovered. One is that President Trump is reporting receiving over 500 million dollars in proceeds from crypto token sales by World Liberty Financial. That's one line item in here. He's also reporting over 80 million dollars in income from settlements with media firms, which is obviously a point of interest for us and others. And another item I found in here, Melissa, he's under the heading for gifts and travel reimbursement.
17:14Melissa Lee:The president is reporting a gift from FIFA lead Gianni Infantino, and he's been given 10 tickets to the World Cup finals. That's valued at$15 ,000. So I guess we are assured here that the president is going to go to the final.
17:31Tim Seymour:The 10 tickets total are worth 15 or they're 15 grand each.
17:35Melissa Lee:It looks like the 10 tickets total are being valued at 15 grand. It's an interesting valuation question because I'll buy him for 20. I mean, I'll buy him for 25. I bet you could resell tickets in Gianni Infantino's box for a lot more than$15 ,000.
Read the full transcript
17:53Tim Seymour:We will see that in the next disclosure. Eamon, thank you. Keep going through 927 pages. That's a big job ahead. Let's get to an earnings alert here on Nike. Shares down over 3 percent in the after-hour session. The company beat on the top and the bottom lines. There is continued weakness in China. Cautious commentary about headwinds ahead. The conference call kicked off at the top of the hour. CNBC's Brandon Gomez is here with the latest. Brandon.
18:16Melissa Lee:Hey there, Melissa. Yeah, down even further, 7 percent now. EPS coming in at 20 cents ahead of the 13 cents expected. Now, that's excluding a 52-cent gain related to expected tariff refunds. Revenue was at$10.97 billion, down a percent from the year prior. Also a beat, but remember, expectations were significantly slashed. Now, gross margin increased 8.9 percentage points during the quarter. That was largely due to an expected tariff refund of nearly$986 million. North America, short of expectations. That's weighing on shares here, too. As for greater China, revenue beating estimates at$1.3 billion, but that's still a 12 percent drop year over year.
18:52Melissa Lee:The call is just getting underway. CEO Elliott Hill kicking it off, saying some of the highlights you already mentioned. Overall, the results aren't there yet, he says. He says, we know we're not living up to our full potential, seeing more pressure on traffic, discretionary spending, challenged sell-through trends affecting current discounting, future orders and bookings. No guidance quite yet on the call. We'll see how that impact shares. But right now down, I think it was around 7 % last I checked, Melissa.
19:16Tim Seymour:Yeah. Brandon, thanks. Brandon Gomez. We'll have more analyst reaction on Nike later on in the show as the conference call continues. But meantime, your initial, I mean, I don't know what there is to like in this quarter at this point, Tim. Well, but the thing that concerns me about Nike is what should really have you concerned if you own anything else in the space. Because, you know, added pressure on discretionary spend in traffic is not a Nike story only. I understand, Nike, this has been a disaster. And this is now, this almost feels, but I'm not going to tell you this is the day. This almost feels like washout day, especially because you actually now even have a somewhat interesting valuation.
19:53It wasn't interesting yesterday. I mean, you know, yesterday, even before after all this move, it was trading somewhere around 26 times forward. So I just worry about discretionary. I worry about athleisure. I worry about all those sneakers Dan buys. I worry about, you know, the dynamics here that, you know, I think are left over from covid. And I don't think they're coming back anytime soon.
20:13Tim Seymour:Yeah. Yeah. Lulu cited a weakness in North America as well. So then you have to wonder when you put the two together, what does that say about North America in terms of just being inherently a weak market at this point? Again, does it speak to the consumer here? Yeah. I mean, it's a multivariable analysis. There are company-specific issues. There's secular fashion trends that are occurring as well. But I do think today serves as something of a consumer checkpoint. And when we have things like Nike that suggest weakness and traffic, And then we combine that with, I think, a resilient labor market, but not necessarily something that's accelerating when you take a look at, say, quits and the jolts data today.
20:51I mean, I think there's a sign that the consumer is, you know, maybe not necessarily putting its pennies to work in the market.
20:59Tim Seymour:Yeah, it's down 10 percent right now as we are talking. We were talking to Barclays analyst, Adrienne Yee, yesterday in closing bill overtime, and she had actually upgraded the stock in March, which is terrible timing. But she was saying that on three different fronts, Nike's facing very stiff competition from three different players in Europe, in China, as well as in North America.
21:20Melissa Lee:Yeah, and there's a lot of players that doesn't cost them a lot to get on the same stage with Nike. It used to just be Nike or Adidas. Lulu is the only chart that makes Nike chart look good. It's a bifurcated retail market. Look at Tapestry. Look at Ralph Lauren. Those are outperforming. Look at the Raw Stores, TJ Maxx. If you look at all these names, Nike has to do something where they can scale that others don't compete in. Maybe more technology, maybe more technology with the shoe. They've got there's too many people who could make a shoe and put it on social media and be on the same stage and compete with Nike.
21:55Melissa Lee:They need a fresh brand. They need a fresh edge.
21:58Tim Seymour:Guidance is going to be key. Josh Brown was making the point earlier today that Nike has beaten an eight of the last quarters, and the stock has done nothing because of the guidance. And here we are awaiting the guidance at this point. Well, I mean, I think I know where the guidance is going. And again, I heard about traffic concerns and discretionary spend trends. So I will say they should be hurt the most on some level if they are the biggest. No one's even close to the size of Nike. I mean, and I still think they have an enormous brand power. And maybe I'm wrong, but I'm not looking for a technology company in my sneaker.
22:32I mean, I understand innovation is important in running shoes. By the way, I think they've taken a lot of market share back there. I think this is a macro story as much as this has been what happened to LA Hills. It's down 35 percent, though.
22:42Melissa Lee:I get what you're saying, but it's down 35 percent. At this point, they've got to throw everything out, rip up the script, start again. China's pushing their home domestic brands. There's too many brands here. Airbirds. Would you ever think 15 years ago, Airbirds? Allbirds. That one, yeah. Yeah, no, there's actually a new one. There's a new one. Airbirds was the video game. Anybody can compete with Nike now. They've got to do something where they corner the market in something that others can't do. Very deep pockets. Use the deep pockets.
23:11Tim Seymour:We're getting the comments from the conference call. The CFO is saying that they saw deceleration in mid-April after a strong start in March. So something happened where the consumer got weaker. He also says Nike's consumers are under pressure around the world. Certainly, these are not comments that are positive in any way in terms of a backdrop or a turnaround. This is perhaps why we're seeing the stock pretty much trade right now in the after-hour session lows.
23:34Melissa Lee:Yeah, we might see that, right, as we get into earnings season for U.S. multinationals. But if you go back here, I mean, you think about what happened to a gallon of gas at the pump. That's what happened in April, right? And so, but, you know, this is not just domestic. I mean, think about China. We saw Apple. They were up 20 percent plus year over year in China, right? And this is down 12 percent. And so, you know, China's been a big growth era. It's not anymore. And the fact that it's, you know, declining double digits is a real problem. And it does speak to whatever they have going on relative to, let's say, Apple.
24:06Melissa Lee:But we're going to see probably those price increases that are not going to be just here. They're also going to be around the world.
24:10Tim Seymour:All right. We will keep track of what's going on in the conference call, bringing you up to date. In the meantime, the shares are down about 8 percent right now. Coming up, Anthropix bid to win over Big Pharma inside the company's brand new Claude Science product. and how it could shake up the drug discovery space. Plus, Bitcoin's brutal start to the year, the crypto putting in its third straight losing quarter, dragging proxy trades down with it. What it means to reignite the rally, straight ahead. Do not go anywhere. Fast Money's back in two.
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26:07Tim Seymour:Welcome back to Fast Money. Anthropic, the latest innovator looking to get in on the AI drug discovery gold rush. The company today unveiling Claude Science, its first dedicated product for scientists. Angelica Peebles joins us here on set with all the details. This is fascinating, Angelica. Yeah, it's really interesting, Melissa. You know, they had this big event today. And what's happening is that Anthropic is calling this an AI workbench for scientists. And this platform connects to tools like research databases. And it actually analyzes data with specialties like genomics and structural biology.
26:37And the idea here is to use AI to accelerate drug development, so making drugs better and making them faster. And Anthropic was rolling this out, like I said, this event today in San Francisco. And they had executives announcing that Anthropic is also going to start its own drug discovery program. And the executives were careful to position this as a way for Anthropic to make sure that it's building the best models, tools and products for the drug makers that it's trying to sell the Claude Science product to. And they said that Anthropic will focus on neglected diseases that traditional biopharma companies wouldn't find attractive and that this will be an early stage preclinical work.
27:13And what happens if they actually come up with a promising drug? Well, we asked Anthropic, and they said that they're at the early start of this and that they will share more as the work progresses. But that's the question, right? And we've seen plenty of other tech companies try to get into health care. You have Alphabet, Amazon, Apple, all those come to mind. So it's not unusual, but this certainly could be an interesting one to watch, guys.
27:35Tim Seymour:So does Claude Science, is it a tool of, let's say, Merck scientists to discover? Do they license the model? I mean, how does it model? So it's a product. So it uses its existing models. But basically, it has everything you might need. So it has, you know, the databases of the existing studies that are out there that you can, you know, reference. But then you can also take your data, plug it in, look, you know, analyze it. How is it binding? What's actually happening? So they think that that'll make, you know, make it easier and faster to see what you're building and how it might work. You know, what we saw with so many different cloud releases is you see an entire sector just immediately react.
28:10Tim Seymour:And so when I heard this news, I immediately went to the likes of a Charles River Laboratories. There was no reaction pretty much in the stock. Does this displace anybody? You know, I don't know if it displaces anyone. It will have to see. I mean, I think they actually had a bunch of companies there. So they had the CEOs of Bristol. They had the CEO of Novartis, who's also on their board. And they had all of these other companies, I was told, in the audience. And so I think you're seeing a lot of interest from pharma. Is anyone doing that today? It's hard for me to say, you know, some of those CDMOs.
28:39But clearly, I think the part about them actually wanting to get into drug development is interesting. And I, too, thought maybe we would see some more reaction. And so we'll have to see tomorrow if anything happens. But remember, Amazon wanted to get into health care and all of the noise around that and people wondering. So it'll be interesting to see how this conversation takes shape.
28:56Tim Seymour:That's true. But I mean, it's always I mean, health care is always a space that's named. It's one of the biggest potential beneficiaries of AI. Without question. And what I'm understanding is that, you know, AI, at least driven, phase one trial success rates are so much higher than what they have been historically, right? And it depends on what it is for. But that, to me, already has some proof of concept. But I think the efficiency, just in terms of R &D alone for big pharma, I mean, this has to be major margin improvement in the short term, even without success. Right. Yeah, and you're already seeing it, whether it's this model today.
29:32One of the companies we talk about all the time, Lilly, I mean, they've been all over AI. You talk to anyone there and they say they use it throughout the business, whether it's R &D, whether it's different parts of the business. And again, these companies today, Bristol, talking about manufacturing. And so there could be so many pieces where they could use it. But will they use cloud science? TBD.
29:52Tim Seymour:Right. Angelica, thank you. Angelica Peebles. Coming up, Bitcoin bruised and battered but does a reversal of misfortune. Fly head in Q3. We'll debate positioning in the crypto complex next and later. What Nike's results are signaling about the consumer? Top analysts will join us straight ahead with his takeaways from the conference call. You're watching Fast Money live from the Nasdaq Market Site in Times Square. Back right after this.
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31:05TheSameMonday.com that your team will actually love using. TheSameMonday.com with an easy and intuitive setup. Go to Monday.com and try it for free. Yes, TheSameMonday.com. Yo, it's Jay Uso from WWE, and I'm Jimmy Uso. Chumba Casino and WWE are hyped for the biggest event of the summer SummerSlam I know, I can't wait There's nothing better to do while we're waiting Than playing Chumba Casino Sign up today and you can win a VIP experience With Chumba Casino and with WWE for SummerSlam So what are you waiting for? Play Chumba Casino and enter for your chance to win Let's Chumba Only available in permitted states, no purchase necessary See terms and conditions for details
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31:52Tim Seymour:Welcome back to Fast Money. It has been a brutal first half of the year for Bitcoin. Same for Ethereum, Solana and a host of other cryptos and stocks in the crypto orbit. Since peaking last October, Bitcoin has now been cut in half. Crypto proxies dropping as well. Strategy shares dropping more than 40 percent since January. Coinbase down 35 percent. Robinhood off around 11 percent. Steve, what do you do now? You've been active in the space.
32:15Melissa Lee:Yeah, the problem is there's not the environment is so negative for Bitcoin. And with IPOs coming out, used as an ATM to get money out of that and into whatever they want as an IPO. There's not a lot that has to go right. There's a lot that's been going wrong. So rates, they'll tell you. But if you just watch the ETF market, the June was the biggest month for net inflow at outflows by a large margin. And it's all from IBIT. So I don't know what you make of that. It's a bigger ETF, but it's basically 75 % of the outflows. Maybe hedges against positions, but it's a circular weakness where people sell that, then they have to sell the actual.
32:56Melissa Lee:So I think for the, you need rate cuts, I would assume, but you have mega IPOs that are coming down the pike that are still going to create a sense of cash. People look at their ETH, their ETH, or their Bitcoin and say, I'm down 50, 60 percent. I could buy this IPO and be up 20, 30, 40 percent or buy a biotech name, a small cap biotech name and be up 100 percent. So there's a lot more places that are a lot more accommodative for your money in a quicker turnaround than the hodlers had with Bitcoin.
33:30Tim Seymour:Well, speaking of hodlers, the ultimate holder is saying that they're going to sell or they are going to be allowed to sell potentially. And we're talking about strategy. I mean, it feels like until that stock has some sort of stability, you're not really going to see stability in the Bitcoin trade.
33:44Melissa Lee:It feels like there is an FTX moment coming and there's no reason for these treasury. That's a big statement. Well, I mean, but there's no reason for these treasury companies to exist. If you look at the biggest ones, I mean, they're down 10 billion dollars on their holdings and the market caps are getting low. They have all these creative financing things. They own a bunch of crap that is worse than what they are, you know. And so, like, I think about it, I say to myself, this can only go one way. And then I think of Bitcoin in general. And I say to myself, OK, what is the only thing that's working right now?
34:12Melissa Lee:Stable coins. Maybe they are. I don't know. I feel pretty well banked. I don't need a stable coin right now. And so I just think all these conversations about DeFi and, you know, Tom Lee is on the network a lot. I mean, you know, he's the chairman of Bitmine. He's been making the case that, you know, there's still this staking opportunity. That's one way that they take this asset that they buy. They lever it up, that sort of thing. But at the end of the day, if you're down a lot in the underlying that you're levered up to kind of get that upside return and it's not working, sooner or later it's going to really, I don't know, it's going to come apart.
34:40Tim Seymour:Coming up, Nike shares are still down in the after-hours session of the conference call about 30 minutes underway. We'll talk to one analyst who says the sportswear giant's rebound still has to prove itself. We're back in two.
34:58Tim Seymour:Welcome back to Fast Money Stocks. Adding to yesterday's gains as the second quarter comes to a close. The Dow rising 130 points, closing at records. It posted its best first half in five years, up almost 9 percent. S &P gaining nearly a percent today, now up 9.5 percent year to date, while the Nasdaq rose by a percent and a half, leading the major averages this year, with a near 13 percent gain since January. Johnson & Johnson hitting fresh records, going all the way back to its IPO in 1944. Even with a 2 % pullback today, it has climbed 23 % so far this year. And Constellation Brands on the move after earnings.
35:32Tim Seymour:The beverage company beating top and bottom line estimates. That conference call kicks off 8 a.m. Eastern time tomorrow. I saw the J &J stat, Tim, and I thought of you. Yeah, I've been along J &J for a long time. And this is a stock that took a long time to get going. And it's going for, I think, three reasons. One is that I think the talc overhang. This is litigation. It's a big deal. It should be a big deal. But there's actually been developments that I think are very company friendly in the last week or so. I think that's actually what really took it to the all time high. But there's excitement around product and pipeline.
36:04And there really is a pharma story here. There's an oncology story. I think the consumer product story and kind of the innovation there is something that's been steady as she goes. So the valuation is not cheap on a relative basis, but it is a case where it's taken a long time to get this thing moving. I think he can still own it, and I think you can own it based upon the strength of pharma.
36:25Tim Seymour:Let's take another check on Nike here, making a bit of a comeback, now down under 4%. We're just getting guidance on the conference call. Newburgh's Kevin McCarthy joins us now. He covers Nike. Kevin, great to have you with us. I'm sure you saw this guidance coming out of the call. Now expect revenue to be down low to mid-single digits. It's Q2 having a sequential deceleration from Q1. What do you make of this all? You know, I don't think the results in and of themselves were Nike-esque. They, you know, essentially hit or beat everything modestly. Revenue kind of on the good end of the down 2 to 4 percent.
37:03China a little bit better. Costs were contained. Margins kind of stripping out the tariff was fine. And so but, you know, but clearly not a beaten raise. That's not what we're playing for. We're looking for a stabilization that sits above the P &L. And I think that still is taking a lot of time. The consumer is, you know, as they said, the call was about halfway through. But they did cite a kind of a deterioration in the overall consumer backdrop around mid quarter. So I think there were some redeeming aspects, but they still have some work to do.
37:45Tim Seymour:They also said we're not expecting the environment to improve meaningfully over the next six months. Is this a Nike-specific consumer that's feeling pressure, or is this a consumer in general that is feeling pressure? Well, I'd say this about Nike. Nike still dominates mindshare. They went from five years ago, 60 % mine share to the low 40s last year, and that's stabilized. That's kind of in the mid-40s now. So I think we're talking about a bigger macro concern here. But there were some redeeming aspects, some idiosyncratic redeeming aspects about what they were doing in terms of the inventory situation.
38:26This is a company that in the 18 months that Elliott's been there really hasn't been able to string together two proof points to suggest that their win now strategy is taking root. They did that with running. Now you could argue that they've done that with the inventory situation. And an important nuance here is that what we saw is we saw that units were up dollars flat. Why that matters is because you're not seeing fire sales, you know, clearances. To me, that suggests that they can go on the offense. Now, stock down$3 right now,$2 or so. I get it. You know, if we're looking at the guidance for next quarter, probably suggests a little bit of a shortfall there.
39:16relative to consensus. But that's not the story. The story is once they lap the tariff fully next quarter, then we start to see the margin. This is a margin story. And you obviously have a new CFO in there. So he's a very cost minded individual. So I think that's what that's what it's about.
39:36Melissa Lee:Kevin, when I look at China, China's headwind seemed to be increasing, not decreasing. So this is going to more and more progressively become a North America story. When you hear them report, I get all the stuff about inventories. Are we past the point where a new CEO helps? Is it a strategic shift where I said before, Nike has deep pockets. They can go on a different segment that no one else can compete on with Nike. What do you think about that? Well, so first to answer your China piece, I think that 15 % of overall earnings right now, but a higher percentage, they've seen the margins go from cut 50 % there.
40:22I think that there's going to be more changes coming there. They cited some proof points about some of the doors that they have touched up on, seeing kind of high single-digit increases in sales. But I do think the overall size of their kind of their points of distribution need need to be cleaned up a lot. As far as management in and of themselves, you know, Elliot is a tremendous asset in terms of really bringing enthusiasm to the overall organization. With the new CFO, I think you bring along some kind of cost discipline that's needed. Remember, this is a company that has got 5.5 percent EBIT margins, you know, roughly half where they were several years ago.
41:14So I think the focus is really going to be on that.
41:19Tim Seymour:Kevin, thank you. Kevin McCarthy, Nike Stockup, pairing its losses in the after hours by about half. It's now down 4 percent. Coming up, we're counting down to CNBC's annual list of top states for business. And this year, the booming defense industry is taking center stage. Scott Cohen is live in New Mexico with a look at the latest wave of innovation. Hi, Scott. Hey, Melissa. Yeah, the Trump administration wants$1.5 trillion for defense. Even if they get just some of that, it's going to lead to more situations like this and a new front in the battle between the states that we chronicle every year on top states for business.
41:54We will tell you about what one consultant calls the SpaceXification of defense when Fast Money returns.
42:08Tim Seymour:Welcome back to Fast Money. The Trump administration's defense buildup, which includes a$1.5 trillion budget request, has opened a new front in the battle between the states for business and jobs. CNBC's Scott Cohn is in New Mexico as we prepare to unveil this year's CNBC Top States for Business. Scott. Hi, Melissa. We'll see where New Mexico winds up in our rankings this year, but the state won a big prize here. This is a thousand acre site about 30 miles outside of Albuquerque, where a startup called Castellan is preparing to build hypersonic missiles. Castellan was founded by three former SpaceX executives trying to do for weapons, kind of what Elon Musk's company did for space that is producing fast, affordably and in big numbers.
42:52And one of the first orders of business was finding a manufacturing site.
42:57Melissa Lee:Where can we move fast? Where can we secure a large site? Because we need a lot of space to do this sort of scale manufacturing. And where can we find the right talent, the right workforce that can staff this site and bring us to scale quickly? And New Mexico really checked all the boxes, they say. A, not only did it have this shovel-ready site and a very cooperative state government, it also had talent from the nearby national labs. And site selection experts say this is going to be the kind of opportunity that comes up again and again. And it's the things that we measure in America's top states for business.
43:35You can follow our journey, read more about Castellan and everything about competitiveness, and find out where your state ranks and what is the top state for business. We will reveal it next week, July 9th. Melissa.
43:47Tim Seymour:Is there thinking, Scott, that once Castellan goes there and builds its plant, that it's going to start a whole little sort of mini space economy in New Mexico? Well, there's some of that, and they have some of that here, but it's also really just a matter of getting up and going and going fast and at scale. And that's the really impressive thing here. They only broke ground here in January, and they already have 15 buildings that are built, and they're well on their way to getting production done. And that's the change. It's not anymore the, you know, find the defense contractor, give them a fixed thing and let them build their costs and everything and subcontract and take their time.
44:29That doesn't fly anymore. This is sort of the new model that the Pentagon is putting into place. And so, yeah, more economy certainly here in New Mexico and maybe in other states as well that will try and get it on the act. By the way, the website, topstates.cnbc.com.
44:45Tim Seymour:We look forward to seeing where you'll end up next, Scott. Thank you. Okay. Scott Cohn. Tell me, I'm more paying for the yen as the currency slumps to 40-year lows against the dollar. Whether intervention is in the cards and what it all means for investing overseas. That is next. More Fast Money in two.
45:05Tim Seymour:Welcome back to Fast Money. The Japanese yen tumbling to its lowest level against the dollar in 40 years. Its lowest level since 1986. That's when the movie Top Gun hit the box office. The yen has been on a steady decline for over a year, so is now still a good time to jump into Japanese stocks, which, of course, they benefited from this weakening currency. I think it is. And just before we talk about Japan, you know, 45 percent, we're talking about the year to date, second quarter, 45 percent of all global indices in local currency terms hit all-time highs in the second quarter. This trade in this first time since 2007, which was really the last great golden period for international investing.
45:46And I think we're in the earlier stages of it. I run an international ETF. Japan, the government is investing in strategic sectors, AI growth, but also other parts of the technology chain. Very important. Government's also incenting local retail to invest in their own equity markets. I think there's a lot more of that to go. So corporate governance and corporate reform as geared towards governance has been a big deal in Japan over the last decade. And it's paying fruits now on the EPS side. I understand it could be scary to be investing there. I think the BOJ has to raise rates. It's one thing to intervene in markets.
46:18I think they have to hike rates. And I think they already have. And I think they need to go again. And I think that's something that will drive the equity market higher. All right.
46:25Tim Seymour:Up next, final trades.
46:39Tim Seymour:Final trade time, Tim. International investing, and because I think it would be tacky to recommend my own ETF, Idevo, I'm going to tell you to buy ACWX. It was Idevo, you said? Yes. Marta. Hyperscalers for the patient, long-term investor. Dan?
46:55Melissa Lee:I'm going to check out this Idevo ETF. Yeah? Sounds an interesting way to play international. It's the I in Timbo. There you go. Nike, I'm not sure there's anyone left to sell this stock. Maybe it's so bad that it's starting to be good. Steve? I'm going to give a hat tip to Scott Cohn. I'm going to go with Lockheed Martin. Stay in that defense complex.
47:14Tim Seymour:Thank you for watching Fast Marta. Great to have you. Mad Money, 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.
47:47To view the full Fast Money disclaimer, please visit CNBC.com forward slash Fast Money disclaimer. This is a Monday.com ad. TheSameMonday.com, helping people worldwide getting work done faster and better. TheSameMonday.com designed for every team and every industry. TheSameMonday.com with built-in AI, scaling your work from day one. TheSameMonday.com that your team will actually love using. TheSameMonday.com with an easy and intuitive setup. Go to Monday.com and try it for free. Yes, TheSameMonday.com.
From the publisher
The first half of the year ends with chips and semiconductors soaring and software sinking. How the Magnificent 7 can stay afloat after the major software losses, and if gains in the chip and semi space will continue in the second half. Then, Neuberger senior research analyst Kevin McCarthy lays out what’s next for Nike after its fourth-quarter earnings results, and if investors are running to other discretionaries. Plus, Bitcoin on track for its lowest levels since 2024, the trillion-dollar defense industry, and telecom trading at near-two year lows.
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