Valuation Concerns Rise… And A Technical Take On Stock Gaps 11/4/25

0:02Live from the Danzak Market site in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. A Palantir plunge. Shares of the software company dropping even after a solid earnings report. Was the sky-high valuation finally too much to handle? We'll debate that and what it means for the rest of the market. And mind the gap. Oracle's nearly erased all its gains since it flirted with a trillion-dollar market cap. What's it mean? And what fate awaits other stocks in similar situations? Plus, AMD and Kava on the move after earnings. Shares of Uber stole out on its latest report.

0:33And is energy basing why one top technician who happens to be sitting here says these things might be ready to outperform through year end? I'm Melissa Lee, going to be live from the studio B at the NASDAQ. On the desk tonight, Karen Feiderman, Dan Nathan, Guy Adami, and Katie Stockton, founder and managing partner at Fairleaf Strategies. We start off with the latest blows to the risk-on rally, with investors seeming to grow increasingly concerned over steep valuations. Major averages all in the red and closing near-session lows. A tech-heavy Nasdaq leading the declines as some of this year's highest flyers take a hit.

1:03Palantir dropping 8 percent, its worst day since August, even after the software company topped third-quarter estimates and lifted full-year guidance thanks to growth in its AI business. Before today's move, Palantir had ripped more than 170 percent higher this year. It went into last night's report with a P.E. ratio of more than 278 times forward, but now that valuation stands at roughly 214 times. A bargain. And in yet another sign of risk-off sentiment, Bitcoin pulling back sharply, briefly dipping below 100K for the first time since June. So why are markets suddenly seeming to pay attention to valuations now?

1:39And where do we go from here, Guy? Well, this is a special day for a myriad of reasons, which we'll discuss later. And it's great to have Katie here on a technical day. But we have been pointing out, I think now correctly, that Bitcoin has been trying to tell the broader market something. You obviously saw what happened there. And we have thought collectively that the volatility X was going to continue to be a thing. And here we are at 19, a little bit north of 19. And again, a down day, yes, but not in a historically bad day. So I think the VIX is quietly making move to the upside as well. Now, you mentioned valuation seemingly matter now.

2:11Yeah, I do think they seemingly matter. And what we didn't talk about last night but is worth pointing out, I think, tonight, that Warren Buffett now quietly has north of$370 billion on their balance sheet. So they're clearly preparing themselves for something. Yeah, I mean, I don't think it has much to do with valuation because the whole way up over the last few months on any of these names that have gone up, doubled and then doubled again. And there's plenty of them, right? And if you think about the market cap that a lot of these companies have accrued, no one's cared about valuation. So the one day that we have an earnings report from a company that was trading nearly, I don't know, 115 times sales, at least on this year, had nearly a half a trillion dollar market cap.

2:46That's obviously Palantir. You know, it's kind of priced for perfection. And again, I don't mean that in valuation terms. I mean that in sentiment terms. I mean that in, you know, you get this news flow. And then the question is, who's the incremental buyer, right? Because we've actually known this. We've known that the quarter was going to be a beaten race. And if it wasn't, the stock would be trading at$150. So when you think about the stock being down 8 % or whatever it is today, that's like a round year. I mean, that's like nothing. I mean, we talk about it. You just use the term plunge. I know you didn't use it.

3:14Somebody wrote that. You know what I mean? But my point is, that's the farthest thing from a plunge. It just actually took back about half of the gains that it made over the last week and a half or so. So I just think that when you hear their CEO on CNBC this morning screaming about short sellers, when you hear Sam Altman last week on Brad Gerstner's podcast screaming about short sellers. Non-existent short sellers. And he's in a private. You have to ask yourself, these people, they can't just appreciate that they have a trillion dollars of supposed value in their two companies and they're doing all this amazing stuff.

3:47They can't just appreciate that. They have to start looking around and talking about the naysayers. You guys won. But here's the only thing that, to me, that's important right now. You better win. Because if you don't win, it's taking the whole tech sector down with it. It's taking part of the economy down with it. If you think about how much of this capex spend, how much of this circular sort of investment is pushing our GDP right now. So I hope you guys can actually do all the things you say you're going to do. And it actually has nothing to do with market cap or valuation in the private markets.

4:17It has to do with executing. It has to do with investors believing you can do it. And it also has to do with your whole ecosystem, your supply chain and the customers and all that sort of stuff, believing you can do it and you better execute on the stuff that you're delivering. Because if not, the repercussions are a lot more than one day with the NASDAQ down 2 % from an all-time high. It goes all the way to Main Street. Correct. Which are overexposed to this trade via ETFs and in their retirement funds. Whether they realize it or not. Whether they realize it or not. But it's not just Palantir.

4:46And yes, let's put it into perspective. It is an 8 % plunge. if you'll indulge me that, pullback. But we also had Meta, which had good earnings, but it was the CapEx. So are we starting to sort of doubt this story or think twice about what they are telling us and if it is worth it? If it is worth it. That is a great question. To Dan's point, though, I mean, NVIDIA is back to where it was the middle of last week and Palantir a day or two around that. So, yeah, so I take the plunge thing with a grain of sand. But I think that the promise is still there. It has never been, though, that the market would perfectly track the promise and the growth of AI.

5:30And, you know, clearly this is since all of them are trading down and not all of them had news today. It's a sentiment thing and it's a risk off and a fear thing. And that could who knows how long that could go on. So I think, you know, if you're the new retail investor and you're recently into this trade and you see this happening tonight, I don't know, what do you do? Do you get scared enough to sell? Or are you so new to it like, oh, it was at this price last week. It has to get back there. It will get back there. I don't know how they deal with it. You know, to me, like a day like today, not great for the P &L, but I think that there is the story is still intact in many ways.

6:14Are the valuations out of whack? Yeah, maybe. The one that concerns me the most is Meta with the valuation that is the lowest, because we really haven't been able to see as much of the monetization. We know their business is better. We know that they're offering products that are better. We also know that they do get some monetization from LAMA, some revenue sharing from AWS, from Azure, from Google. We don't know how much. If they don't break it out, that's not delightful. I'd like to hear it. But I do think that this one concerns me because the amount of the spend is so big now. The balance sheet now going from a cash hoard to a not cash hoard, in fact a little bit of a debt, is concerning.

6:57So this one I'm the least comfortable with. Where do you stand on where we are and whether valuations are starting to matter? Yeah, I would say it's definitely a sentiment shift. In our work, that's what we care most about, of course, but it's just short term. The impact is really pretty minimal after today, even to Palantir's chart. But what it does do, it leaves a breakout that was pending confirmation unconfirmed. It had broken out above 190. Now it's right back below, comes back into some gaps on the chart. We'll talk about gaps later. So we're seeing the same from the S &P 500. It had some gaps up that are now closing.

7:33So usually that is a short-term setback, but it's not enough to impact the intermediate or long-term gauges. So while it seems to be maybe the start of a pullback or the start of consolidation, the sentiment can be worked off pretty quickly. And already the fear and greed index is down to 23%. So that's an extreme level. It takes usually maybe a couple of weeks for it to resolve, but short term is the emphasis. Goldman Sachs and Morgan Stanley's CEO saying 10 % to 15 % pull back from here. So that's certainly fueling the concern over valuations and where we are in the markets. Agreed. We've heard that from a number of different people.

8:10It has not come to fruition. It would make sense. It's not like it's, you know, it's not without, it's happened historically. It's not like it shouldn't happen again. And I do think valuations matter at some point. Katie's right. I mean, it's seemingly go from an overbought condition to oversold within a day or so. But it can also work itself out, as she will tell you, if we go sideways for a period of time as well. So the only thing that feels different to me is the following. Bitcoin is clearly trying to tell us something. That's a risk-off trade without question. And the fact that the volatility index continues to sort of peak its head up, I think that's going to be a story towards the end of the year.

8:42So I always like to buy when there's real fear and, you know, blood on the streets, even if it is my own, as Rothschild said. But the VIX here at 19 is really that's no man's land. Right. It needs to be materially higher to have that sort of panic that I mean, this was, you know, not delightful, but not a panic at all. Yeah. So NVIDIA reports on the 19th. And I feel like we've spent a lot of time talking about this over the last few quarters, like this past week when we've had like, you know, 65 percent of their revenues of the companies reporting. Right. A big concentration there. But my question is, what the heck are they going to say?

9:18in two weeks. Like literally, what are they going to say? Every one of their customers has risen or raised their capbacks. Some were punished for it, like Meta, right? People are kind of diversifying away, whether it's Google's TPUs, whether it's AMD, whatever they got. Qualcomm even went up, remember that day, went up 20 % because they announced that they're going to do something. Now, obviously, they're not going to do it. I don't know if you guys have seen Broadcom. That thing has been trading like they're going to change the world, that sort of thing. So at some point, the NVIDIA thing, it was underperforming before it broke out relative to the S &P, relative to many of its, you know, semi large cap tech peers.

9:54But what are they going to say? Like if they raise their guidance, OK, fine. We already saw all that. You know what I mean? The China thing, they'll say, oh, we're not in China right now. Well, they're going to be selling some of the hoppers. That's what I don't know. I mean, let me just push back on Dan for a second if you don't like. So just just to play devil's advocate, is there no guidance that they could give that would be worthy of the stock trading up. Last quarter, they missed on their data center number. I mean, think about that. And no one cared because it was like a sentiment thing.

10:21So if you're telling me now if the sentiment is shifting a little bit, then they might care for the first time. They might care when we've seen hundreds of billions of dollars of CapEx and contracts that are being doled out that we actually know are very unlikely. The Oracle deal, look at Oracle. Pull that thing up. That filled in the entire gap. How about the AWS OpenAI deal, which is NVIDIA GPU specifically, not Tranium. Okay. NVIDIA. So let me ask you this. So supposedly that$38 billion deal, they are basically going to be able to just start using that compute right away. So does that mean that AWS had a bunch of XS compute just sitting around there?

10:55Satya Nadella, again, on Brad Gerster's podcast last week, he said, I got GPUs lying around. I got racks. I got this stuff. I can't put them to work because I don't have the energy. This is the second time he's said that on Brad's podcast in the last six months. So you think there's an overbuild? There's overcapacity right now. I think it's obvious. So if you tell me that, like, so Palantir is up 500 % in a year because enterprises and government are buying their crap. They just guided this year to$4.5 billion in revenue. And maybe they'll do$6.5 next year. So they're growing at 50 % off a tiny base.

11:29So you tell me why that makes any sense. So there's a big splash today about Michael Burry of Big Short fame having a large put position in both NVIDIA as well as another stock, but NVIDIA pertinent to this conversation. Would you be inclined to make such a – in the past you have done that, and this is years ago, so I want to make that clear. But is now the time to rethink that trade? It's going to be the fattest pitch in the market at some point. It just will, because we've never seen a stock go from$300 billion in market cap and two years later be at$5 trillion. Nothing to that scale ever. So at some point, it's just not going to work anymore.

12:04It's going to go from being the massive outperformer, just the massive one that's consumed every bout of just, I don't know what you want to call energy or excitement or euphoria in the space. And sometime it'll go the other way because it overshot, obviously, to the upside. And then it's going to do so to the downside at some point. Yeah, I mean, we'd never advocate shorting stocks at new all-time highs. It's just a good rule of thumb. So we want to wait to see when the momentum shift is more meaningful. I think investors should actually welcome a pullback in NVIDIA here ahead of earnings because then it won't be coming in so hot.

12:36It'll tee it up for something that's a bit more positive in the reaction. We've certainly seen some very dramatic reactions from earnings reports, including Meta. Meta is probably one to worry about in terms of the reaction. It's a breakdown. It's meaningful. And we haven't come back into the gap over the coming days or recent days. Sorry, one last thing. All right. You're on fire tonight. Yeah. Yeah, by the way, in case people were doubting it. Some people on Twitter, they think he's melting down. No, that would be if I was long them today. Okay, just really quickly. NVIDIA went down 67 % from its 21 highs to its 22 lows.

13:12And I know it's so different this time. I know that was just crypto mining and, you know, all this other crap. Well, so did Meta, so did Netflix, and so did I'm missing one more, whatever, Tesla. They all went down 70%. And then this spring, they all went down 40%. So the idea that they couldn't be cut in half is ridiculous. Because actually, like if you think about it, the stakes are so much higher now. And everyone is so much more concentrated. And everyone is so focused on the same exact thing. So the idea that it couldn't happen again is one of the dumbest things that anyone could say in this market right now.

13:44For more on overvaluation worries, let's bring in Ben Emmons, founder and chief investment officer at FedWatch Advisors. Ben, great to have you with us. I know you've been listening in on this conversation the whole time. Where do you stand? Are you in the Dan camp or are you somewhere happier? I'm in Los Angeles. I feel pretty good there, actually. But, you know, with a little bit with Dan, because, you know, this is a market that really is paying attention to the price of the stocks. And, you know, for people who don't track this closely, but there's PE multiple we'll often talk about, selling on a ratio, looks indeed on these stocks that we've really got very high on the price relative to earnings, even though the outlook for these earnings remains strong.

14:25I think that's the realization today in the marketplace that maybe this got way too overextended and you see profit taking and then people react to that profit taking in addition to the sentiment factor we talked about, like people calling for shorts. I would say, though, to people watching this, like you don't want to sell here or go short. That's a pretty specific type of trading strategy. But there is an opportunity to ultimately grab some value here once this sort of flushes out. So to me, this is like a profit-taking sort of movement. It's more like a kind of frost taking out of the market, like heat taking out of the market, than maybe seeing that the market is completely so overvalued that we're having a bubble formation as bursting.

15:05Ben, you'd say we're in nosebleed territory in terms of valuations, which we've been at for a while, as you know. What would be the thing that you're watching, the main thing that suggests people will start to focus on valuation? Today wasn't necessarily the day, but what would it look like in your opinion? I think you do get at some point the markets start to pay attention to the economy really getting more visibility I think that that I think plays a role here too because we have no data and we don't know when this government's going to reopen so to get better sense of what really is going on in the economy I think that is the other part of the story in addition to that you know there's a lot of positioning as Dan says it's super concentrated so as that sort of gets worked out a bit.

15:49I think that's the other sort of moment, technical moment that you could pay attention to, have these stocks sort of worked off this excess value against an economy that likely still looks really good, but we don't know really for sure. So I think that's the way to look at it. It's almost like we are in a blissful period of no information, Ben, in terms of the economy. And so we were able to sort of float along. But in your forecast, where will the Fed go in December? Hold? So we're getting good signals here now that the Fed wants to potentially go on hold because this is worry about inflation that's lingering in a lot of these Fed members' minds.

16:28I was kind of surprised to see Lisa Cook yesterday put in her speech a pretty strong language like, you know, if this tariff continues to go on and start affecting inflation, we have to act forcefully. Trump, one of the first ones to make that sort of statement that we heard in 2022 when they had to catch up with inflation that really brought the market into a bear market. Don't think that we're going to see rate hikes being considered, but the hold is probably appropriate for many of these members. I think it's a hold, Ken. All right. Ben, we're going to leave it there. It's always great to get your take on things.

17:02Ben. Thanks, Val. Thank you. Does this matter? I mean, in terms of hold, 25 basis points, in terms of where the markets are in valuation? Does the Fed matter? I think, well, you know, Jamie Dimon said this a year ago, and Karen knows everything that he said in the history of what he has said. But he made a point of saying people like, he didn't use my name, but people in the punditry world make way too much out of the Federal Reserve. It's not as important as people think. And I do agree with that. I think we're well past whether or not the Fed cuts 25 or not in December. although the market won't like it.

17:35I think it does come down to valuations when people start to focus on it. And I mentioned Warren Buffett before. I mean, clearly there's a reason why they're approaching$400 billion of cash on their balance sheet against a trillion-dollar market cap company. He sees something. I think the market maybe starts to sniff it out as well. All right, let's get to an earnings alert here on AMD. Shares are down after our suspect the company topping Wall Street estimates on both the top and the bottom lines. Chipmaker's conference call is underway. CNBC's Mackenzie Cigalos has got the latest. Mackenzie.

18:03Hey, Mel, so that earnings beat is being powered by stronger than expected data center revenue. CEO Lisa Su on the earnings call just now talking about momentum and that business accelerating, part of why they guided to Q4 revenue that's above street estimates. And that's what investors have been waiting for, a sign that AMD's big AI bets are starting to deliver. The company recently signed a chip and equity deal with OpenAI. You guys were just talking about that, a move that helped drive a major rally with AMD coming off its best month since 2001. and trading at about 50 times forward earnings going into the print.

18:37But gross margins, a key measure of profitability, were only in line for both Q3 and Q4. And that may be why the stock is slipping after hours, despite all that AI optimism. Mel? And Mac, you've got more on Amazon. Does all be at stake in AMD and quantum stock INQ? Yes. So we just learned earlier today that Amazon liquidated its entire AMD stake, worth just shy of$117 million. And we saw AMD shares sell off earlier today right after that 13F filing crossed. But I did just hear back from Amazon. And they say that the reason they were holding any AMD shares to begin with was because they took a stake in a small company called ZT Systems.

19:17They manufacture and deploy servers for companies, including Amazon Web Services. And now that stake in ZT Systems was converted into AMD shares when AMD bought the server maker. So this shouldn't be read as Amazon making a deliberate choice to get out of the AMD trade. But it was pretty notable when you looked at the stock chart today. AMD is starting to move lower off that filing. All right, Mac, thanks. Mackenzie Sigalos on AMD. Isn't AMD in your acronym? I don't know if it's AMAD or AMD. I don't know. It's one of them. Yeah, yeah, I remember the confusion now. They've both been great, OK? So, no, listen, this goes back to the other thing, OK?

19:54So what? So NVIDIA, like, invests$100 billion in OpenAI. We're just going to keep unpacking this stuff because my brain is broken from this stuff, right? And then OpenAI does this six gigawatt deal with AMD, and it's going to start with one gigawatt. And they get, you know, 10 % of the company possibly in warrants. And what planet does that make any sense? That if AMD is trying to gain market share from NVIDIA, NVIDIA, you know, invests in, like, the biggest thing that's going on in AI, and it's the one in the middle of all those graphs we've seen, you know, all that sort of stuff. And then they go take the money and they do a deal with AMD.

20:30I mean, this is what we're dealing with. And so at some point, I mean, this is the Michael Burry thing. You know, there's a friend of mine who worked with, David Todd, who's watching right now from Yale University. Brilliant man. And he just texted me and he said there's another A stock that you guys and gals should be talking about. And it's Estera Labs. Pull this one up. It's A-Lab after the bell. And this is a support tertiary to the whole AI trade. And this is a stock that has not been trading well. and in the after hours, it's trading even more poorly. So you would think sort of these secondary names would be doing better than they are, but they're not.

20:59They're showing weakness around the edges. I think that's one more reason to be concerned. I think it's interesting. We all live through the dot-com boom and bubble, of course, bursting. And what we noticed about that time, we would come in every day to the office and stocks would be gapping up day after day, very consistently. And the shakeout was what's more memorable to me, where the survivors emerged, right? And we've seen so many stocks participating in this very steep up move as part of the AI trade that you have to believe that some of them just aren't going to be survivors. So I think it's going to be more about quality.

21:38I'm not a fundamental analyst, but certainly quality will probably matter more as this trade becomes more mature. Coming up, more after-hours action. Chair Zakava, Amgen, Rivian, among the names on the move, the details and the numbers from the quarters next. And speaking of results, some morning earnings results pushing shares of Pfizer and Uber into the red. While investors were paring back on these names, don't go anywhere. Fast Money is back in two.

22:09Welcome back to Fast Money. We've got an earnings alert on Kava. The stock is dropping. After cutting its full year guidance for the second time in a row, the conference call kicked off at the top of the air. CNBC's Kate Rogers has got the details. Kate. Melissa, executives sounding broadly optimistic so far on this call. It's EPS and revenues in line for Cava, but same-store sales falling short of analyst estimates. They were up 1.9 percent. As you mentioned, the company also cutting guidance for full-year same-store sales growth, now forecasting it to be up between 3 and 4 percent. That's down from a prior range of up 4 to 6 percent.

22:41This is the second cut in a row. I spoke with CFO Tricia Tolivar, who said regarding that forecast cut, quote, we were certainly taking into account the consumer pressures that many are seeing in the industry today. And as we moved into the fourth quarter, we saw a bit of a decline in overall demand and wanted to be sure that the forecast reflected that as well as the investments we believe are necessary to run the business and the trends we saw in the third quarter, particularly around restaurant level margins. Tolvar also adding there are pressures around the younger consumer. Now, I also spoke today to Wingstop CEO Michael skip worth about that company's earnings.