The Ultimate Would You Rather… And Trade or Fade Stocks At Records 6/25/25

0:02Live from the Nantac market site in the heart of New York City Times Square this is fast money Here's what's on tap tonight. Titanic tech surge, shares of NVIDIA and Microsoft hitting fresh all-time highs. Is this a good sign for the health of the bull market or a new reason to worry? We'll debate that. Plus, a record-breaking edition of Trade It or Fade It, the desk set to break down the big moves in Big Blue, GE Vernova, JP Morgan, and more. And later, inside a soggy session for General Mills, the CEO of Tech Unicorn tied to the stablecoin boom and Meta's massive Louisiana purchase, one it hopes will power its AI ambitions.

0:36I'm Melissa Lee, coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Steve Grasso, Guy Adami, and Dan Nathan. We start off with the ultimate game, ultimate game of Would You Rather. You say so. We're starting the show with this? Right off the top. If you have to build it up that much, though, I worry that anything that's had, you know, when you say this is the ultimate game, I feel like this better be good, Guy. This better be good. We are pitting the three biggest companies in the world against each other. Okay. Both NVIDIA and Microsoft setting intraday and closing records today while Apple's gain helped it climb back into the trillion dollar club.

1:11But these stocks have had very different runs so far this year. Microsoft has been in stealth rally mode for more than two months and has set nine record closes just in June. The stock is now up more than 16 percent this year, second only to meta among the so-called Magnificent Seven. NVIDIA, meantime, hitting a record today for the first time since late January. It's up more than 4%, and that move helped it reclaim the top market cap spot from Microsoft, bringing it within spitting distance of the$4 trillion mark. But then there's Apple, the only company that's come close to the$4 trillion level before, but that was way back in December, and the stock is now down 20 % since then.

1:50It is the worst performer in the MAG 7 year to date, the only one with a loss in Q2. So when you take a look at the performance of these three tech titans, Would you rather stick with the stocks on top or bet on the laggard? I mean, it is ultimate because we are talking about big capital companies. You're right. And it's also not just would you rather. It's would you rather, rather. Rather. Yeah. Okay, now, Guy, can you process that? Maybe you should start with Tim because I've got to think about the rules of the game. Think about the rules and how to play it. Well, hold on. So you have three stocks.

2:18You're picking one. Yeah. Okay, I figured it out. I'm smarter than I look, which is not a high bar. So in terms, you would think the answer is Apple, the underperformer. It's going to play a little catch up. Then you'd think maybe Nvidia has all this. I'm going to take Microsoft, which is odd. But at 32 times, it's where it's trading. I mean, it's expensive, but not expensive to itself over the last couple of years. And I think, in my opinion, they probably still have the widest and the deepest moat. So in this game of would you rather rather that I just played correctly, it's Microsoft. Do either of you agree with Microsoft, Tim?

2:52I'm afraid I do. And by the way, when we're done with this, you're going to have the ultimate game of Would You Rather Rather guide Tim or Steve. Forget Dan. Well, if Dan was here in person, it would be the greatest game of Would You Rather Rather Rather. But it's definitely Microsoft to me. Because relative to itself, this valuation, Guy's saying on a forward basis, actually looks the most interesting. Certainly relative to Meta, which would be my number two, and Apple would be number three. I think I just Would You Rather, because I don't even think you had Meta in there. You just like told in something that wasn't there.

3:22So when Guy didn't know how to play by the rules of the game, he was really talking about Tim. I think if you look at Microsoft from a year-over-year perspective, it's only up 9 % on a rolling one-year basis. That doesn't have to mean anything except for the fact that this was dead money for a year and a half. I think what we've done is we've rekindled the concept around both the margin around software, Microsoft's leadership in terms of AI, their partnership with ChatGPT. GPT. And if I'm going to pay up for growth here, I actually think on a relative basis, it's Microsoft. It seems to be the most defensive.

3:53But again, it doesn't mean I don't like NVIDIA. Don't tell me you're going to say Microsoft. I was, but I'm not going to say it because I don't want to have a triple. But your gut instinct is Microsoft. My gut instinct was where Guy was going secondarily to Apple because it's been the underperformer. But I will tell you that NVIDIA, I would pick that last out of the whole group. I think that everyone's working on their own chips. Got to take away from revenue from NVIDIA. That's got to be a headwind. So every one of the MAG7 names are all working on their own specific chip. Having said that, Microsoft has done the best job at working at it.

4:36And they also cut back on data centers. So they seem to think they've got it pretty well covered with the CapEx that they've already spent. So it would be Microsoft, but I do like the catch-up play with Apple. So I'm going to go Apple. I do. I'm going to go Apple with the install base. Apple's install base. It's like a utility. Margins on Apple. Exactly. Margins on Apple, the services revenue. You have over 2.3 billion users. Got to be able to continue monetizing that. Everyone's bet against Apple, and I think Apple's going to pull a rabbit out of a hat, whether it's perplexity or whether it's something else.

5:12I think that they will catch up in the stock. Dan, you're in San Francisco, and I feel like you have said negative things about all three of these stocks at some point in recent history. So where do you stand here? Yeah, I think for Apple, that installed base is actually a problem because I think that they will not have a phone in 2025 that is going to be attractive to those folks who want some sort of integration. integrated AI experience. Apple intelligence was a total bust. Siri has not kept pace. So as far as I'm concerned, this is a company that spends low single digits of their revenue on CapEx and R &D.

5:47I think that's correct for both of them. And it's way below all of those names in the hyperscaler space that have actually been making these investments for a while. So Apple, to me, is the dead bang loser. And I think you can continue to bet against it, especially as you get into 2026 because they're not going to have products that folks want right now. So Microsoft, go back to that quarter they just reported. They had their cloud was better than expected. They guided cloud up for the current quarter a few percentage points. AI is making up a greater percentage of that cloud revenue. That's the story right now.

6:20And to the point about CapEx, it's like, yeah, they were growing CapEx at a massive pace, double digits percent of their revenue, but that's coming down now. They just said it's going to be in line basically with their revenue growth. So hopefully they start to get some leverage on that spend. And when you think about their install base and their ability to kind of cross sell these products, but I'm not buying it here and I'm not buying Nvidia here and I'm not buying Apple here and I'm not buying Meta here because the market feels like it's kind of taken in all of this good news about this trade right here and some of these stats, the way they performed up the lows, I just don't think the valuations right here and the optimism as we go into the second half, I think it's going to be a bit misplaced.

7:02Okay, so that is a fair option, which we did not include in the original game when we were blueprinting the game. But I mean, another option could be, as Zan had said, none of them. None of them look good. And that is a valid point, especially as we sit here, basically within 1 % of all-time highs. I don't think that's a valid option, by the way. That's I make it a valid option, though, by entering it into the game. Don't mess with Melt tonight. I'm not getting a noise cross-airs. So, if given that new option, would that be it? I mean, are the market levels here worrying to you? Okay, I'll answer that honestly.

7:38I mean, they've been worrying to me for quite some time now. I thought, listen, off the April low, we all collectively thought the market could bounce. I thought it would stop at 5 ,600. Tim, Steve thought it would go to 6 ,000. Here we are. So, you know, that excess to me is exactly that excess. It's all multiple expansions, which might be fine. I mean, maybe you're willing to pay more for a dollar's worth of earnings. But if I were to add that little nuance into the game, I think it does change it. You know, I do think it changes it a little bit. You're not chasing necessarily here, but I want to play by the original rules and say I think Microsoft is the best of the three.

8:11So I'm a buyer of the market here. And, Guy, hold your ears because you're not going to like this term. But hold your ears. All right. I don't. Powell gave a Goldilocks signal today. What did he say? Oh, really? Yes, that's right. Because he looked he he pointed out that the U.S. economy is the strongest economy in the world, while at the same time saying, you know, we need to wait for tariff dynamics before we do anything. If you have the perfect storm of an economy that's not slowing down, that's the strongest in the world, that has inflation relatively under control, but a Fed that just has to be on hold because they have to be on hold.

8:44And we have a place here where the Nasdaq's at all-time highs. It's within a whisper of making a new relative high to the S &P. Semis have actually outperformed even that. The market leadership you want is exactly the market leadership you have, with lower oil prices, lower dollar, heading into the best month of the year for equity performance. I don't know why you'd not buy this market here. Yeah, Guy. Why are you on the meet? I'm sitting here holding my ears. I didn't even hear what Tim said. You agree. Well behaved. I'm glad you followed the rules. I 100 % agree. If you look at what matters on multiples, it matters beat rates, right?

9:19So the last earnings season that we had, there was a beat rate of 78%. That's above average for the longer-term average of beat rates. And that's with tariffs factored in as well. Earnings will push the market higher. Deregulation will push the market higher. The market is climbing that wall of worry. It's done so in the past. I think we're going to move dramatically higher. and it will be led by tech and growth. I think those numbers are interesting. But at the same time, in the last earnings season, we also didn't have the impact of tariffs on anything. I mean, Fed Chair Powell said yesterday, June and July, is when we'll see the impact.

9:53So it's really the next earnings season, the one coming up where we'll start hearing the guidance and the tariffs will actually be factored into the guidance in a more meaningful way. And Waller did say it could be a one-time effect. Go ahead. Yeah, yeah. Dan? I think your point. All right, guys, whenever you're ready here, some of us are on a schedule. Q2 earnings are going to be good. The guidance is probably going to be clear as mud. There's a tailwind about the U.S. dollar. You know, 40, 45 percent of U.S. stocks in the S &P 500 get their sales from overseas. The average of the U.S. dollar in Q1 was basically, I don't know, 106, 107 or something like that.

10:36It was basically 100. That's the U.S. dollar index. the Dixie, in Q2. So you're going to have good Q2 results. And I guess the question is, is like, what is the environment for the economy? I kind of disagree with Tim a little bit. It's like if the Fed chair was basically saying we have this Goldilocks situation, or at least the way you're interpreting it, they just kind of ratcheted down growth for the year to 1.6%. And to me, I think that there's more potential downside once we get through Q2. And I know we're going to talk about housing. And I know we're going to talk about the labor market.

11:08The Fed seems to be worried about the labor market. If the economy starts to slow, both of those things are going to be negatively impacting the market, in my opinion. And then you have a situation where Q2 earnings might be as good as it gets for the back half of the year. So you might see a material slowdown. And I think the stock market will sniff that out. Yeah, I think we're on a schedule here. So, you know, I think I heard you say a weaker dollar is good for earnings. And I'm not saying the economy is the market. In fact, I'm saying the market's the market. And I'm saying that the Fed is giving you reason to believe that if anything, they will be supportive to the market and reaffirming that the economy is not falling apart.

11:45I don't believe we have a great economy here. And I think it's all on a relative basis. And I think we do have still to pay the piper on tariff. And it'll be interesting to see now that we've split up the screens. Yeah, split them up. Exactly what tariffs impact will be. But more importantly, what companies will do in terms of guidance. They completely had a mulligan to throw guidance out the window. And in fact, on some level, the market almost is ready for that. The market is ready to get guidance that says, if we have no tariff or policy or political interruptions, we think things could be X versus if those things happen, we think things could be Y.

12:19We never did that before last quarter. They're going to have to do it again. And we've had a big move. Yeah, but Tim, the only thing is when these companies gave Q2 guidance, they were basically five weeks into the quarter. They had some pretty decent visibility, right? And when you think about it, like the base case for tariffs, you could have worked that in. And you just said that the Fed is going to lower interest rates to accommodate what? The market. No, they're going to be accommodating the economy. And that's what they did last September, November and December when they cut interest rates.

12:48They were worried about the labor market. So to me, I think the optimism in the market right now is that you think that they're going to be able to cut interest rates because they can, because inflation is where it needs to be, because the economy is going in a direction where they can bring the yield or the Fed funds rate down. And I think just that's where the debate is about the market. I think it's as good as it gets as we get into Q3. But if you guys are calling for 7 ,000, the S &P 500, you sort of have rates. Who's calling better than 7 ,000 on the S &Ps? I mean, what are you talking about?

13:18I just heard you guys say it's taken off. It's off to the races. Not that we have a great economy and not that we're going to 7 ,000 tomorrow. I mean, and ultimately, again, if the Fed is not cutting, they're not cutting because they and we all acknowledge that they're overly that there's the interest rates are overly austere. And that, in fact, they probably are holding back on cutting. And that's something they're only doing because they're worried about inflation. Well, we have a schedule, so we're going to move on. By the way, we'll be taking a look at a few other stocks at all-time highs and what you should be doing with the moves later on in the show.

13:50Meantime, let's talk new home sales down nearly 14 percent in May. It was the biggest month-over-month decline in three years as buyers continue to grapple with stubbornly high mortgage rates. Today's data sending housing stocks lower with the ITB home construction ETF down over a percent and snapping a four-day winning streak, which had been its best stretch since January. For more, Zillow senior economist Orfei Dibongui joins us right now. Orfei, great to have you with us. Thanks for having me. I was actually enjoying the debate there. That was great. Really? I'm glad there's at least one person out there.

14:22All right. Let's get to housing, Orfei. What are you seeing on the site on Zillow in terms of listings? I mean, we know that home builders are under pressure to make it work, and the numbers work for potential buyers who are on the sidelines. But how about existing homes? Is there movement in the market? Yes, although housing affordability has improved slightly from a year ago, home sales continue to bounce along the bottom. On the demand side, of course, we were hit hard with consumer confidence dropping drastically in April. We have a frozen labor market, and I think that's still a headwind for housing demand going forward.

15:01The unemployment rate is poised to move higher. You're seeing it in continued claims. labor market tightness is linked to residential mobility. People move for jobs, right? And so you're seeing kind of that pressure on the demand side. But ultimately, existing home sales still managed to increase slightly in May, despite those headwinds. And so I think that's a positive. Builders are now facing more competition from homeowners that are basically coming back on the market. A resale inventory is up 20 % compared to last year. So, Orfei, in your world, what's more important, what's more dangerous for the industry, higher rates or an unemployment rate that starts to sort of creep higher in a noticeable way?

15:49Look, you can't get a mortgage if you're unemployed. And I think that the labor market is really what I'm paying attention to. And that's why I was enjoying the discussion earlier. I think the Fed, everyone is kind of paying attention more so to the labor market. Inflation is roughly, what, 2.1 percent. We're going to get PCE this week. So we're not far off, right? And some research also shows that some of the impact of tariffs is already kind of playing itself out. So, yeah, I think the Fed will probably be looking at the unemployment rate and the labor market that's cooling maybe faster than expected.

16:27In terms of seller mentality, Orfei, I'm curious to know whether or not sellers are now saying, you know what, mortgage rates are going to be where they are. The economy is a little bit iffy and I'm going to cut my price. Are we at that point where you're seeing more price? I mean, just as an observer, recreational observer of Zillow listings, I've noticed that there are a lot more price cuts recently. Yes, we have the most price. We have the most price cuts for any May since 2018. Sellers and buyers are kind of coming back together. There was a big gap between sellers and buyers. We've been talking about a rebalancing for the last three years.

17:04I think the rebalancing is finally here. According to the Zillow Market Heat Index, the bargaining power between buyers and sellers is the best for buyers it's been since 2018. So I think sellers now facing more competition means they're going to have to be a bit more strategic. work a little bit harder and making sure their listing reaches the most potential home buyers. So, Orfei, when you look at it, how much of this really is accounted for seasonality as well? When you look at the spring selling season, summer selling season, is this something we're all getting excited that existing home sales finally starts to tick up and it could peter out as well?

17:45Do you classify that on a percentage basis at all? So, you know, we talked about a kind of a delay because of the headwinds that we were facing at the start of the home shopping season, right? Everybody knows what's going on with tariffs, et cetera, et cetera, the big stock market correction that we had in March and April, right? So we talked about a delay. Our forecasting team still believes, you know, home sales could increase slightly, right, modestly increase and finish the year slightly higher than in 2024. Orfei, we got to leave it there. Always great to speak with you. Thank you. A pleasure.

18:21Orfei Divan-Ghi. All right, so what do we make, Guy? Well, I mean, as many lagging indicators are out there, one of the most important leading indicators, I think, is housing, and things are absolutely slowing down. Now, if housing slows down, if that's a leading indicator, it stands to reason the economy might be slowing down. So the economy at some point has a bearing on the multiple of the S &P 500. So if you're in this sort of, I don't know, prolonged, but if you start to get yourself in a slowdown, A 23 multiple I don't think makes a lot of sense. I think it comes down to interest rates, which is tying people into both the houses they're in, the mortgages that they're in, their inability to buy more house for the money.

18:57I mean, I think we're coming on one of the greatest periods of housing appreciation over the last decade for a lot of different reasons, including COVID, including some other dynamics. I'm less worried about the labor market. I mean, right now the labor market's showing a level of resiliency, and we're near record lows in terms of unemployment. So I don't want to own home builders here, and I can understand on some level where Orphe's coming from in terms of the resale market and kind of their core business is certainly one where you want to see certainly a lot of buyers and sellers out there on both sides.

19:26And I do think at some point at the right equilibrium, there will be that, but at lower prices. Coming up, a serial slump. Shares of General Mills at five-year lows. Why investors think the stock has lost its lucky charm. The first earnings alert on the micro and shares jumping after its latest results. The details and the numbers from the quarter and more on the semi-trade when Fast Money returns. Back in two.

19:56Welcome back to Fast Money Earnings Alert. On Micron, the stock surging on an earnings beaten better than expected guidance for the current quarter. The conference call kicked off in the last hour. Christina Parts-Nevelis here on set with the details. Christina. Well, not only did the largest U.S. manufacturer of memory chips beat earnings, it also provided gross margins and fourth quarter guidance that was well ahead of analysts and buy side estimates. revitalizing the AI trade right away. And you saw the stock pop about 7 percent. And it's come down since then. But on the earnings call, Micron CEO said they are seeing increasing demand for high bandwidth memory, which are used to run AI machines.

20:29Its most advanced offering is HBM4, high bandwidth memory 4, and is already shipping to, quote, multiple customers. And they're expecting a ramp of production in 2026. The company also says their bullish guidance was driven primarily because of DRAM's higher pricing and continued cost improvements, all which benefit gross margins. DRAM, I know it gets confusing, but it just means you can run more programs simultaneously without slowing your data center down or your computer. Yeah, you're listening DRAM versus NAN and HBM. But as for PCs and smartphones, management say both markets should grow in the low single digit percentage in 2025.

21:06The adoption of AI-enabled PCs and smartphones helping Windows 11 upgrade should also help. But I feel like everybody's been saying that for quite some time. Results, though, So our positive from Micron stock reaction reflecting already high expectations. We have to keep in mind the stock ran up, what, 51 percent into today's close year to date. So very high expectations for this name. There was commentary on the call, I believe, that tariffs may have caused some inventory pull in earlier. Yeah, there was a lot. So, you know, it's interesting to hear this very bullish guidance, assuming that this also accounts for the tariff impact.

21:38He also said, so I didn't add it in the script right before coming up. he did say that the guidance does not reflect any expectations. Oh, it doesn't. Yes, which is what we've been hearing and almost what does that tell us about leaders right now, that they're just, you know, Trump may say one thing, but they're really not going to put it into their guidance or have that reflected just yet because it can all just turn on a dime. Yep, yep. Christina breaking it down. And yes, I do know, Tim, and I will also say that DRAM is 70 percent of basically their business. And the margins, to me, the story, I mean, operating margins came in close to 27 percent.

22:10A year ago, they were less than 14. So to Christina's point, they're operating better. However, is this the catalyst to get it back to where we were in June of last year, which is 154, given the run that it's had? It should probably stall right around here. One of the things I just want to say is Micron doesn't have an earnings release they don't like. I feel like these become overly enthusiastic statements about their business around AI. I think this is usually when you want to sell this one. It's had a massive move. It's not cheap. I don't think that HBM is something that has enormous barriers to entry, even though they are a monster player there.

22:45So I just, you know, I listen to all this excitement. And in fact, this has been the time to sell Micron, especially after these big earnings releases, where they talk about their exposure to AI more than I think they should. You've traded Micron in the past. I have. And it's as Christina touched on this a little bit. If you chart DRAM prices, you could overlay the stock price and it really follows in lockstep. So DRAM prices go up. The stock goes up. They have about 20, 25 percent of market share. I would still think I'd be a buyer. Tim would be a seller. That's what makes markets. I'd buy it here.