Fast Money 8/27/26

Life of the Nasdaq Market Sight, this is Fast Money, here's what's ahead. The Jackson Hole Countdown, Fed Chairman Worsh on the clock, sets to deliver. What we'll arguably be the most important speech is becoming head of the Fed a couple months ago. Plus the sizeable software surge sales force, fueling a rip-roaring rebound with the best day ever but is that revival for real. And then, inside Inbidious, half a trillion dollar day, breaking down the dollar store to Lama and we'll have a rather meaty beefy conversation about Big Macs and McDonald's, Big Blues. Hi everybody, I'm Brian Sullivan, in from Alyssa once again coming to you live. From Studio B right here at the Nasdaq, and on your desk tonight, we've got Dan Nathan, God Valley, and Tim Seymour, welcome everybody, it's gonna be a big show, a ton to do, let us jump right in. And begin with the Fed, the chairman on the clock, Kevin Worsh, just hours away from delivering his highly anticipated keynote at the officially named Jackson Hole Economic Symposium. It is arguably, as we said, the most important speech since he took over as head of the Fed, we're gonna get the Steve Lee Smith in a moment, but Guy Hadamie, you guys are throwing me off here. You're right there, Tim Seymour's remote, so I'm trying to figure it out. Is it that difficult? No, it's a little bit odd. By the way, the folks in the radio audience have no idea what you're talking about. What do you want to hear from Kevin Worsh tomorrow? Stay in the course. Stay in. Stay in your ground and stay the course, that's what I want to hear. He's been hawkish, he's been sort of dug in on this, it's a new Federal Reserve, I'm sort of on board with all this stuff, again, he's been hawkish, good for him, but does what's happened over the last week and a half in terms of what Treasury Secretary Besson has done, does that change in narrative? I hope that it does not, and I hope to hear that tomorrow. Tim Seymour, how about you? Well, I don't think we're gonna get a whole lot from him. Jackson Hole, historically, at least under the power gene, was a place for big headlines, and possibly policy changes, and I just don't think that's where we are. Not only is the communication salvo, not a salvo, but I think there's a sense that the Fed really is watching data that on different parts, the labor market is not getting away from us, but inflation is absolutely above. We're hearing from multiple Fed governors now that they believe the time to act is now, these are quotes out of today's, Fed, you know, regional Fed headlines. So I think a market that is looking for the Fed to be aggressive against inflation is probably not going to get that, but I don't think the Fed is gonna give reasons for to call it bond bulls to give the market a reason to actually rally. I don't think rates are coming down here. I feel like Daniel in the streets of Pamplona, 'cause all the bulls are running, right? You got the bond bulls running, you got the stock bulls running, energy's running, crypto's running, gold's running, are we running on empty? That's why they pay you the big bucks here, Brian. I mean, that's some good stuff. I don't know. I'm in like a slightly different camp. I'm not like some great Fed watcher, I'm certainly not an economist. I kind of feel like, you know, Worsh comes in, he kind of sets this kind of new tone about how they're gonna communicate, you know, Fed policy. And you know what I mean? I feel like he's gonna actually get painted into a corner a little bit. I think the market may do a thing. It might be the bond market, it might be the stock market, it may be all the markets. And you know, I go back guy to Q4 of 2018, you know, which Fed share Powell was in the seat for what about a year. He was kind of raising interest rates coming off that zero interest rate bound. And what happened in Q4 guy? The stock market dropped 19.9 percent, Brian, from Halloween until Christmas Eve. Right. And it forced Fed share Powell to pivot. I mean, and this is not something he wanted to do. And so from, you know, like the last year or so, we haven't minded rates going, or at least, you know, inflation causing the rate picture to stay bid higher for longer. And you know, we went from this kind of, you know, dovish stance of the prior few years to this hawkish stance. And you know, here we are, nothing's been done. And I don't think there's going to be anything done until after the midterms, but I do think there's a really good chance that the stock market, the bond market, maybe all of the above kind of forces hand to give a bit more guidance and maybe actually do a pivot. And that's the point I was making about that. What was it that Christmas Eve, I think, where there was this big Fed pivot? And then the market just took off. So guess what? So we're talking about stances. Right. We've got the hawkish stance. We've got the dovish stance. We don't have the Nina Cherry Buffalo stance, although that was a quality song for the mid '90s, you do probably knows. Steve Lee Smith. Steve Lee Smith. Steve Lee Smith. Steve Lee Smith. Because he's actually there in Jackson also Steve. Here we go. So Tim said he didn't expect his own view. He didn't expect a whole lot from Chairman Wars. But I also know that Chairman Wars is not going to get to the podium. I think and go, Hi, I'm Kevin Wars from the Fed chair. Thanks for coming. Goodbye. I mean, he's going to say something. Best guess? I think he's going to give the market more than it expects, but not as much as it wants. That would be the thing I would make. The best guess I would make. I've got three options where I think he could come out. One is he could sort of stick to his old guns and that didn't work very well for the market. If you think about the options that he has, we're calling them for better or worse in terms of his options that he has just because the pun was there to be had. And what you come up with, he could give a little bit more affirming that he would handle inflation with rate hikes, the market wanted to hear that last time. And he can give views on the economy, but no policy outlook. My guess, guys, is he's going to basically make a distinction that, hey, I'm not going to give you all that stuff after a press conference, speaking for a committee, but I can give more here when I'm speaking for myself. What markets want and what they expect to get, though, take a look here at our CMBC Fed Survey. 32% thought he'd be hawkish, 19 neutral, zero dovish and 45% I guess they sided with Tim Seymour, thought I'd give no guidance. Here's the danger, guys, Worsh's colleagues and CMBC interviews and other media have not been shy about offering their outlook. So the danger for Worsh, they end up driving market expectations rightly or wrongly and not the chairman. That means greater uncertainty, Brian. If you're going to go into that trade at section, you've got to have more wider uncertainty bands up. What the Fed's going to do? Okay, so let's dig into that a little bit more because I get, we get it. He's not going to go up and say what, you know, I want to raise rates and I'm calling on everybody to raise rates or cover rates, whatever it might be. But in giving his economic outlook, I mean, your job, sort of all of our guests on CMBC's job is kind of to try to parse through that riddle and figure out where the policy position may be. Is it not? Yes, that is absolutely what we try to do and we get more or less information and look, Brian, I've talked to people who say, you know, there's all this talk about everybody's like whining. They don't give us the information we have, but that's not what's happening. All they're saying is, if you want me to price something this narrowly, give me the information I need to price it. If you don't give me the information, I'll price it this narrowly. It's not whining, it's not a motion, it's just pay me if you don't actually give me the information, if that's the world we want to live in, if that's where Kevin Worsh thinks he has a better beat on policy, he should do that. That's fine, but the bond market is just going to react, the stock market is going to react. The problem is, Brian, as you know, the world is a very uncertain place. One of the things we thought we could do is game out what the Fed would do with power with interest rates. Well, if that's going away, well, that's just another uncertainty we have to deal with. And Worsh is not Powell and we had a rather, you know, fiery but a substantive debate on Powell lunch with you and Rick and Jeff Kilberg earlier, Steve, about what, I guess, what Worsh will be different or how Worsh will be different than Powell and everybody. By the way, every Fed chair is going to be different from Bernanke to Yellen to Powell to Worsh, but Worsh is a market's guy originally, right, working in the financial markets. Brian, when an anchor prompted the debate like you did, you should take a victory lap. That was one heck of a debate and you did a good job fostering it. And if you take a step back from that debate, which I think is a fascinating one and my colleagues Rick and Jeff have good points and I think they were wrong, but I'm not going to belabor that point, the real question gets down to this. Is the Fed need a major overhaul or not? Is the process broken? Do we need regime change and has Worsh made the point for the need to it? That's one of the things I'm reporting here. With the elite of the central banking monetary policy, economic community here has, as Worsh convinced them that this regime change program that he's on is one that is needed and one that will lead to better monetary policy. Because if it's better monetary policy, I think you'll sign up every one of the attendees at this conference. If it's not, he's going to have continued opposition. Steve, you might have said this, so I apologize, but what are the thoughts on the following? Typically, the markets have been reacting to federal reserve and the rhetoric around it. Now he's saying, you know what, we're going to sit back and we're going to let you figure things out and we'll sort of react to markets, is there some sort of truth in that? And by the way, I'm all for it if, in fact, that's what's going on. So people do think that's a good idea. I have a hard time figuring it out because it's the Fed that has to set the overnight rate. That's how the system works. I can't think of a market guy that would do the one that would do the setting. Which market do you want it to be? The tips market, the bond market, is it the overnight rate market, is it the gold market? Who should set that overnight rate? And which market? Get Guy, you have to ask yourself, will incorporate the Congressional mandate of price stability and low unemployment. That is not any market that would do that. And plus Guy and Tim and all the people around the table there and Dan, they have different interests. You guys don't have the same interests. Dan wants to go to more rock and roll shows. Tim, he wants to play drums. Guy, I'm not sure what it is you do for your hobby, but you have different interests and you would invest differently along that way. Brian wants to drive sports cars, right? So you all have different things you want to do. Are you going to set the rate at what level for that purpose? It's fair. I do like it. Yeah. And he's not wrong. Well, we didn't get to Guy O'Donnell. I like to. No. You drive a ball. I don't drive a ball. I like to fish like Steve likes to fish. I like to fish. I think Steve is probably a much better fisherman. I mean, fishing. It's not about being better at something. Yes, fishing is actually. It's much. Ash. No, no. No, I think Steve is a better fisherman. Tim, see more. If you were going to put the hook in the proverbial water. It's screaming in the back. If you're going to put the hook in the proverbial fed water, Tim Seymour. And I know you said you're not expecting a whole lot of firm headlines from Chairman Worsh. What would you want him to say that would keep this stock market rally going? What would be the best bait he could do for this market? Don't you know what I'm trying to do here? Yeah. I'm not taking your bait. I don't want him to spur this stock market on the top. I don't need him. I don't need him to light a fire under the equity market. It's got its own fire. In fact, if anything, I think that's what he's trying to stay away from. What I do want him to acknowledge somehow is that we live in a unique time in terms of global capex and the inflationary impacts of that. And I understand that we tend to strip out food and energy and commodity volatility. But you can't tell me-- we're going to talk about NVIDIA a lot tonight. And we're going to talk about what essentially means it-- 1.3 trillion in capex around AI next year. That to me is inflationary. And so I think there's that entire dynamic and the fact that we've been above the Fed's target for five years. So I want to hear recognition of that. I think the bond market wants to hear recognition of that. And I don't care about the equity market. I care about the equity market. And I'll just tell you-- I care about it, but I'm not looking for him to do that. I know. You care about the small caps in the equity market, Tim. But I'm looking at a mix at 14 and 1/2. And I'm looking at the S&P. If I look at the spy, the options market is applying less than 1/2% move tomorrow in either direction. I think that's really interesting, the level of complacency. I think the market is actually in Tim's camp right there, because you would think that the market would be pricing higher volatility, especially if you consider how important this speech is, Brian, how you staged it versus his last speech. And the last speech, there was volatility after that. Steve? Yeah, just real quick. Everybody I talk to-- just another answer to Guy's question-- everybody I talk to says, no matter what the Fed does, they will still try to price not what they think the Fed should do, but they think the Fed will do. War said the market is now looking at the ball, not the referee. Well, my argument with that is the Fed is the ball, not the referee. Well, I would say they're looking for maybe wars to be an estimated profit, but I will say this, that based on your backdrop, Steve, and lighting a fire out of the market, we definitely have a fire on the mountain. That's much more fun than that. So Steve, let me go-- Steve Lee's been despite that, have a good night. Steve, thank you. Thank you. All right. Joining us down here on set, Robert Tip. He is PGM Credit's Chief Injustice Strategist Head of Global Bonds. Robert, good to have you on. Good to be here. Thanks very much. Is there anything-- I know you're the debt market guy, but you're macroeconomist. You can talk to this. Is there anything that Worsh can say tomorrow? I guess there is. But do you expect them to say something that could derail everything? Oh, and I don't expect them to say anything. He's going to say something. He's going to be there, but you know-- What's he going to say that if everybody says he's not going to say anything? He has to say something. Yeah, he's in a tough spot. Inflation has been high for five years. So people don't realize it's the rate of job growth in this economy. He's decelerated from 5% year-over-year growth to 4% to 3% to 2% to 1% and now it's at 0%. That's over the last five years. The other thing that's not appreciated is when you look at the CPI, core CPI, it has decelerated a lot. It was above six. It's come down. And by some measures the last few months, I mean, we had a negative reading. It's extremely low. Now, so he is resetting the table. This was an easy job. Inflation would be down. The economy would be doing great. But he wants to come in there, get his committees, regroup. This will also get him past the election, maybe. And then start setting policy aggressively if it needs to be changed next year or not. Well, he's in that-- that Sillin Caribd is sort of rock in a hard place moment. Right? You see what their reference are? It does, yeah. It's an educated reference. Where he's stuck between those rocks. How does he navigate those two mandates? Sure. Well, I think he's going to wait six months, you know, or a few months, a few more months, and see how things shake out. I mean, you've got negative job numbers from positive. And the inflation numbers have dropped. So is this temporary, I think the World Cup has possibly introduced some noise here as well as Amazon month? The stats are very difficult. So the economy is doing very well. Inflation is decelerating, but Sillin's job growth, he could easily knock this thing down into the recession, and there are always a surprise. So one of his committees is on productivity, job growth. We all know the AI things out there. It's going to make sure that what we're seeing in decelerating in jobs is something to do with what's going on with all the Quebec. So what you're seemingly saying, correct me, please, as most people do. I mean, inflation's a problem, albeit seemingly getting better, and the labor market is deteriorating. That's not a good place to be in, as Brian just said. That is the word stagflation that nobody seems to want to say, but apparently is not that far away if you sort of look at the numbers. Yeah. The headline. The top line growth in this economy is really good. The profit growth is phenomenal. AI capital doesn't usually go negative. Well, even away from the AI, it's still extremely solid. And you usually don't get a job market recession when profits are rising strongly. So I don't think it's a risk of that. The market now is already braced for a couple of few Fed rate hikes. That's totally different than where we were for a year. March the last year, through March of this year, Mark was looking for the Fed rate to go down to three. It's braced for a couple hikes. So I think we're in for a consolidation in the next six months. It should be okay for the markets. And then we'll find out next year what the real plan is. But we'll also know more about the economy. How big of a very quickly, how big of an event is September 9th with the Treasury? That's when the Treasury's going to be buying, right? That's their next operation. That's when they're going to set the schedule for the next quarter. Yes. And everyone wants to know what are they going to do? Given Besson's recent announcement. Yeah. And you know, everybody likes to be a critic. I'm just watching what's going on out there. And I'll tell you, for the last year or two, the U.S. long bond has been the best performer, relative France, relative to Germany, certainly relative to Japan, the UK, relative to whether you're looking at interest rate swaps or an absolute basis point changes. So I think the Fed has held off on issuing more Treasuries. You can argue about whether you like that or you don't like that. But they haven't successful. They saw some rise in interest rates. They've stepped in to boost this program and uncap it, right? They're going from zero to two billion max to what could be a four billion floor for each of the purchase. So, you know, he could be successful in continuing the long rates. Robert Tip, Pee Jim. Robert, really appreciate your insight and your time. Thank you very much. Thank you. Yeah. I think something Tip said is really important. It's kind of focused on enough, you know, think about all this cat-backs. It was kind of reinforced today by the numbers that we saw obviously out of Nvidia, but it was also the security guys, it was also out of software. You might see like a ramp up in software cat-backs too, right? In the SaaS enterprise space, very inflationary, right? And if I look at the market and I look at what's performing and I look at that earnings growth that, you know, he just mentioned here, think about how many different sectors in the market now are being driven in and around this AI cat-backs boom. There's energy components of it. There's industrial components of it. I mean, the list keeps going on and on. And so, to me, I think that, yes, this feels great today, but at some point in the not-so-distant future, if there is a rate shock, like Guy has been suggesting, if there is a continued energy shock, if there continues to be this bipartisan political backlash against, you know, creating these data centers, I just think there's a lot of things that people are not pricing in right now. And I do think that it's taken up a good bit of the economy and some of the growth that we're seeing right now, which make no mistake about it, is extraordinary. Well, by the way, not only is that extraordinary, we're going to take a break and talk about all the other extraordinary stuff that's going on coming up the next trillion dollar chip maker. That's what Nvidia's Jensen Wong said about Marvel earlier this year. What the just reported numbers could do for the stock, speaking of Nvidia, that stock having its best day in more than a year, adding an intel and value today. We're back at two minutes. All right, welcome back to Fast Money. Marvel, the semiconductor company, taking a leg lower in the last few minutes, that's not about 4% of the earnings call coming out. It's ongoing. Christina Parts, the numbers here to take us inside the numbers, take us inside the call. Same message we're hearing everywhere. You know, this AI buildout is accelerating, not cooling off, stock still falling, actually down 6% now. The good. CEO Matt Murphy raised the company's revenue target for next year to roughly 18 billion. You actually saw the stock turn around after hours when he said that on the call. And to roughly 50% growth next year. The engine is the data center. Again, this company makes custom chips also does networking. Murphy says that the business is now growing more than 60% driven by the optical parts that connect AI servers and by custom chips, which he expects to more than double. Why is the stock falling though? I got asked that from a producer. I know, it's very dramatic. But why did you just sing that? I don't know. It's been a long day. It comes back to that big, worn deal with Google from last week. The one Wall Street treated as upside on top of everything else on the call. The CEO said the revenue from that deal for next year is already baked into Marbelle's numbers. It's not exactly extra. The bigger payoff, he says comes the year after. And that's what cooled things off. Wall Street heard already included. And some of the excitement around the deal came right back out of the stock. The sell-off also a case, as we've seen with a lot of these names, of high expectations. It was very owned, or I should say, this run up by 184% to your to date into the print today, into the clothes, almost 30% just in the past month. Don't forget, CEO and Vidya also called it a future $1 trillion company. We'll see how long that takes. Why? I mean, maybe you can't ask this. Why would Jensen Wong want to call another company, a trillion dollar company? And other partners, I guess, but like. He's hyping up all of the suppliers, and so keeping the good relationship. He did that with the quantum names several years back at GTC, talks about Nebias, he talks about Delhi, does that all the time? Yeah, but you just don't hear other companies ever talk about other companies like that. And why is it such a successful CEO? Well, I guess I'm just curious. You just don't hear it. God, do you hear this guy? No, you don't. You're Chevron being like, well, axons on a trillion dollar company. They're fantastic. But there's much better than happening in the tech world. It's very different. They work together, and then they also all are competing with each other. Co-option? enemies. Did you just make that up? No, it's very good. No, that's a thing. Well, I mean, it goes back to that diagram that we've seen on Twitter now for the last year or so. You know, that diagram, which puts, again, everything in the middle between OpenAI and Viddy and the circular nature of all these different things. So, as Christina just correctly said, it's in his best interest for all of these companies to do well, it seems like. Tim, see more your take on Marvel. I think where they sit also in between the chip makers and the hyperscalers and certainly networking and data center are hot areas and they tend to be more on the picks and the shovels than the ending. I mean, yes, it's part of the rotation we've seen. We don't know what the multiple should be on this name. We know what it looks like in the last trailing months. We know what the guidance is going forward. That guide was fantastic. It's not a name I own. It's not a name that I feel I need to own. Why not? I just don't invest in that part of the tree. I mean, to me, I'd rather own Nvidia here at a much more attractive valuation. I agree with Tim. I mean, if you're looking at where Nvidia is trading given that guidance, and again, you know, it's one thing to kind of start to discount and see the disseleration. I've been saying this for a while, but this is a company now that keeps beating and then raising. You know, when you consider where 27, 27 calendar year was for estimates for, you know, EPS and sales, I mean, they just rate it. Now it's like 70% or something like that. The one thing I'll just say about Marvell, and I'll say about Jensen and, you know, the investment they're making, you know, they have their three top customers, both of them. It's Microsoft, it's Google, and it's Amazon. Like they're Nvidia's three top customers, and they're Marvell's three top customers. And I think what it says is that, you know, Jensen don't care. He's just going to keep throwing money in and around. What did we start the show? He's going to buy a hugging phase, he's going to buy a pool set. He's going to do all this stuff. It doesn't matter. You just create a start tonight's show with that. I think Mike, that was the end of the show. That was Mike's story. More on Martin, the great Need a Man list, who's been on the show many times. He's been on the set many times. Super smart. You know what she said, Christina? One of every four hyper-scaler investment dollars is going to Nvidia. One in every four. That's incredible. So there, I guess we've come for a surplus to why he can say this. You can speak positively about whoever because the money keeps going back to him. For those wondering about Marvell though, another big catalyst would be October 6th. They're investor day on the call right now. He's mentioned it many times. They're long-term strategy. So perhaps they'll be sharing more details of Google and what that'll mean for the following year. And maybe that would help anybody that gets in, you know, tomorrow morning with the sell-off. Nvidia added what an Intel. Oh, in a day. A value today. Yeah. Today. Why are you yelling at her? I'm not yelling at her. I'm yelling with her. She's smack in the table. This goes back to the way we started last night's show. Why? In case you forget. Marvell trades it twice the valuation. 50 times forward earnings. I have it a little less. It doesn't matter. It doesn't matter. The point is it's trading a twice the valuation of Nvidia with not nearly the metrics of Nvidia. So what is the market see that I don't see? Yeah, and what I have one other thing. So one in every $4 from the hyper scale is going to Nvidia. Well, you know where that's coming from? It's coming from free cash flow. It's coming from cash balances. It's coming from the debt markets. It's coming from private credit. It's coming from all this stuff that you can't see. And I think that's something that's not appreciated on a day like today. Because if you do ultimately see a pullback, who knows when that's going to be selling? Maybe 29 or something like that. I mean, that's where this all, I think the rubber hits the road a little bit. Because it's really easy to say that they're taking 25% of the hyper scale or spend. But they're also back stopping 25% of the spend going forward. And they're throwing out tens, if that hundreds of billions of dollars to keep this ecosystem going. See, we got it. No one did we get Dan worked up. He's smiling. Look, we got Dan's all happy now. Diesel is happy. Everybody's happy. Diesel. That's it. Diesel. Cristina, thank you very much. I guess I missed the diesel. No, no, you made Dan's smile. That's a nice thing. There's a lot more fast money. Here's what's ahead. Novo Nordisk takes a sick day. The Wall Street downgrade weighing down shares today. And how does size up weight-loss drug competition now? Plus, sales force up in the clouds. The software giants soaring after earnings. One fund manager makes the case. It's still seriously undervalued. You're watching Fast Money. Live from the Nasdaq Market site in Times Square. We're back right after this. [Music] All right, welcome back to Fast Money. The GOP weight-loss drugs, they may be hot. But one stock related to them apparently is not. Deutsche Bank, downgrading Novo Nordisk. They are worried about growth. Shares down about 7% in the past month. Tim, you own this one. What's your take on Novo? I get the disappointment or the lack of excitement around where revenues are. Right now, a lot of the street has revenues anywhere from flat next year to kind of four or five percent cager over the next few years. Still, the number one GLP maker, less generic erosion. The oral will go the launch has been, I think, exceptional. So, I just, you know, at 12 times, which is trading cheap to peers, cheap to itself. I don't know what you need to do. You know, I don't know why you have to downgrade it here. I realize I sound like, you know, how dare you. But I just don't see the downgrade. I see that there's not a reason to drive it higher if that's your view. I wouldn't be downgrading here. Isn't this in your acronym, guys? Let me just say that in your ear. No, it's in the prompter. Oh. It's the end in my junk. Now, I could have picked a better end, I guess, as it turns out, because Novo's had a terrible year. But that's where, you know, dance with the girl you brought to the prom, as they say. And this downgrade is basically saying they don't deserve a 13 and a half, 14 multiple. They deserve an 11 multiple given their growth. And given the fact that there are only so many investment dollars to go around in big cap farmers. So, I understand it. I don't agree with it because I think they're completely discounting the rest of their business. If this was just a GLP-1 company, then we can have that conversation because they're clearly losing. However, it's not. So, look, I'm biased as Tim is, and it's been a tough haul, but I still think you got to own Novo here. All right. Well, you get it for a little bit of a discount. If you liked him before, you must love him now. Coming up, a value fund trading like a growth play on deck, a money manager, whose fund has served 20% in the past three months, and some of it. Thanks to a big bet on Salesforce. All right. Welcome back. Stocks popping today led by technology that adds that up more than 1%. Along with energy, Big Tech was the only group rising today, but guess what? Big tech, more than enough. Other stocks on the move right now work day. Initially, lower, now higher, gave earnings, better than the respective numbers. You have rubric. It is down. It also had what on the surface were pretty strong results. Rubric is off today, affirming while higher after revenues came in higher than expected. Big post earnings moves in the names that we brought you last night. Octa and Crowdstrike each rallying. Double digits, by the way. Crowdstrike CEO George Kurtz will be on mad money tonight. 6 p.m. Eastern dig more into those results. And you may already know this, but if not, we're going to show you again because we have to. Salesforce posting one of, I think, its best day ever. Up 22 and a half percent. Dan, what a move you're taking on Salesforce. Well, you know what's, this is really interesting. Okay, so I talked a lot of private tech investors, VCs, right? And this is something that, despite them piloting. money after good money, after good money, after good money, and all of these AI companies for the last three, four years, they were really kind of scratching their heads about the SaaS apocalypse too. So both things could have been true. You could have been betting on what AI was going to do to the economy, what it was going to do to tech broadly, but you didn't actually have to throw out baby with the bath water, like a sales force or something like that. Sales force was routinely the name that most folks would say this is your system of record. This needs to be in almost every business that exists out there. We heard that last night when Jim Kramer was interviewing Mark Benioff and Dario and Dario said, "Listen, we have sales force in our thing, we're not ripping it out." So again, I can't, this 22 and a half percent move. It seems a little crooked. Maybe a lot. I got a great guy credit, because guy doesn't give himself credit at any time. You've been pounding the table on software. You think these things were over done for a very long time, and I think today is that reason. But if you're going to go out and try to buy every other SaaS name because of what Salesforce was just able to do, or OpenAI is going to be the next one to partner with such and such, it's probably not going to be a ticket to the bank trade. I think it was February and March, I don't remember exactly when Salesforce reported earnings announced a $50 billion stock buyback, which for Salesforce was almost a third of their market cap, and I was excited about it, and for a day the market was as well. Then they subsequently sold off in April, but I think people coming around the fact that maybe the software, again, Armageddon, whatever people are calling it, is a little overdone, and now you're starting to see, I mean, look at them moving Microsoft over the last month or so, look at this moving Salesforce, and then if you want to play the ETF, we've been talking about this, IGV at 110 still has room to go on the upside, I believe. >> Thank you for not saying SaaS Pocalypse, by the way, because I cannot stand that part of why. >> Because nobody knows what it means for you guys and eight other people. >> Eight? >> Sassational. >> Well, can I say one thing, I think this is really important. If they don't announce this deal with Anthropic today, or yesterday, this stocks up like five or six percent. I mean, it's not like those numbers were actually blow out. I just think that a lot of folks thought it was a bit of a sea change. >> All right. Speaking of Salesforce, it is the top holding of the Oakmark Select Fund, and even though that is technically a value fund, they've been boosting exposure to Salesforce for more than a year. Let's find out why I'm bringing Oakmark, Harris Oakmark, partner Bobby Bearing. He is what Oakmark Select Fund's portfolio manages, Bobby. You have a value fund? What Salesforce a value stock? >> Great to be with you guys. I think Salesforce is very much a value stock. These SaaS fears, as you guys have been talking about, they're greatly overdone. I think people have wanted to put all of software into like an AI loser bucket, and we are big believers in the power of AI, but we think software companies can succeed at the same time. I think Salesforce is just a great example. As you mentioned, it's our largest position. One of the biggest enterprise software businesses out there. Salesforce really can integrate AI into their system of record. They can make their products more valuable to users. We think AI makes Salesforce a lot stronger. >> Hey, Bobby Tim, I saw 11% top line growth, the EPS fluid out, but that was more marked to market on investments. Isn't that appropriate for where the company was trading, either even post numbers or pre-numbers? It doesn't matter. Even after today's move, right, it's not a big multiple. Where do you see the growth line on the top line for, as you say, the largest enterprise play? >> Sure. In the first half of the year, Salesforce has grown revenues organically around 7%. We see that growth rate accelerating into the second half of this year. We think growth can get into the high single if not the low-double digits looking ahead to the next year, and margins are continuing to go up along with that. We see today's results as really a big step toward validating our thesis. If you look at what they talked about today, you can see customer retention going up. Contract, length, extending, revenue, as I said, accelerating. This is a company that saw Agent Force, ARR, increasing 240% year over year. That's a big deal. We think the excitement is very much warranted. >> What would you say, I guess, in the South Space? Thank you. What names aside from Salesforce do you think have a similar makeup that actually have that sort of durability and are going to be able to not exactly disrupt themselves, but adopt the technology and really kind of take the ability to just kind of demonstrate to clients that they are going to be able to add value because of the integration of the technology? >> Sure. Oakmark select, we're a concentrated fund, and I think it's important to be selective and be choosy, another example would be Paycom, which is a payroll software company that is buying back 20% of their shares this year. We think they're also very much a durable business that is going to benefit from some of the technology changes that are taking off right now. >> Ikevia lives in a similar world in health care, so I think that's one of your other large holdings. It's going to speak because that's at a huge run now. It looks exactly like the Salesforce chart. >> Sure, I think, I would say that we talk about the SaaS apocalypse, I know we maybe don't like that word, but that was sort of the epicenter of kind of this earthquake, but these AI fears really rippled out from there and hit a lot of information and data businesses, service companies that are kind of adjacent to software, and Ikevia as well as another farmer services company called Icon are good examples of that. They do clinical trials outsourcing, they've got a lot of data, they serve the large farmer and biotech companies, and these are businesses that are selling even still in the teams on their forward earnings, and they typically sell well into the 20s multiple. We think AI is going to lead to faster clinical trials and ultimately more drug discovery. So it's a great example of something that is perceived as a loser or has been perceived as a loser, but really is going to be a lot closer to a winner. So it's almost the exact opposite of the narrative that gets thrown around. >> And Bobby, just be honest, do you say SaaS apocalypse because before the break I said nobody knows what that means, and then you knew what it meant, so you said it? >> Trying to look smart. >> Well, you don't have to look for your smart, you have Salesforce your top pick, you've done great, you're up 20% in three months, you're going to pry out, perform everybody. >> Bobby Derek, thank you. >> We're excited about it, thanks for having me. >> All right, there we go, all right, coming up, even more earnings action. You got the gap, the clothing retailer, searching. Why, it's up 16.5%, we'll tell you right after this. [MUSIC] >> All right, welcome back, we've got an earnings alert on gap, shares are up 16%. >> It's despite an apparent miss on revenue, but they did beat on EPS, the gap announced they're going to new CEO for old Navy, not the whole company to sold Navy, instead the company continues to see a quote, resilient, but discerning consumer, it's after a mixed bag from the dollar source, this is really interesting guys. Dollar general closed up over 2% after an earnings beat, they raised their outlook on the other side of it, Dollar Tree delivered a softer than expected outlook, and that stock Tim dropped 4%. I mean, I know we're not supposed to kind of lump them together, but we kind of lump them together most of the time. >> Well, yeah, I think it's a slightly different format, I realize within the same format. I want to get back to gap, part of the reason here is it's all about their operating margin. I mean, they grew 7.1%, no one was expecting that. Old Navy was weaker, apparently guy wasn't buying enough of those long baggie denim shorts, but I think if you look at the comps at the gap there up over 10%, and this is kind of the story. So, this is also a stock that looked like it was starting to kind of break out. I mean, the chart tells you it was putting in a bit of a bottom. This is the kind of a number on the margin side, which is what people wanted to see. >> I wasn't able to buy them because Tim got in before me and hoarded them all, I'm just throwing that out. Number one, number two, it becomes sort of evaluation story. Dollar gen, I think, and this is just my opinion. I think it's cheaper than Dollar Tree, and I think it's probably if you look at the numbers and look at the metrics in terms of growth in comps, it's a better company. So, I think, you know, the name sound familiar, the companies are entirely different, Brian. >> All right. More fast money. No jorts in two minutes. [MUSIC] >> All right, we've got a news alert happening right now on Gilead Anica, Kim Konstatino. What's going on? >> Hey, Brian, the FDA just approved Bix Leno. Gilead's one-steely pill designed to simplify treatment for some people living with HIV. The drug is aimed at patients whose HIV is already under control, but who can't use existing single-pill regimens and will need to take multiple pills a day because of side effects, or their HIV-resisting certain drugs. We don't have specific revenue estimates for this product, but there is a clear market with Gilead estimating that patients could account for at least 5% of the more than one pill million people living in the US with HIV. So, this could be an important option for long-term HIV survivors who have exhausted multiple treatments and want a regimen that can control the virus while also simplifying their care, Brian. >> All right, Anica. Thank you very much. All right, now let's move on to McDonald's. McDonald's down two and a half percent, third straight day of loss. Now trading at its lowest level since July of 2020. 20, 24 guy dummy you flagged us for us how come I don't want to make a huge deal yet But think about how quickly McDonald's has gone from an all-time high made earlier this year to almost a multi-year low Which is where we're currently trading you don't see that at a company this side still a 200 billion dollar company Or maybe just shy what does it speak to well you would imagine given the state of the economy and we talk about this K-shaped economy, which I'm also sure you hate just like saspocalypse McDonald's wins. They're not winning now I don't know if it's necessarily a McDonald's specific thing But the health of the consumer and McDonald's if you think the consumer's healthy McDonald's is telling an entirely different story We all talk about McDonald's definitely I will admit makes me grimace Tim Seymour to you I think Burger King is is eating her lunch QSR Yeah, I mean grimace This is a weird dude grimace is a weird dude anyway, so I don't know guys got a story about eating 14 McDonald's hamburgers But I will say that I think the unit economics and quick serve and fast food are really difficult And now this is the conversation we're having about Wendy's last night Which is nowhere near the quality of a name and obviously needed some activists flow. I like McDonald's here I worry a little bit that this is such a high quality name that the market is telling us a little bit more I don't know. This is an immediate turnaround. Even though this is a long-term hold I just want people on the radio you can't see this but Brian just drew a pic Can you hold that up to the audience please? No, he drew a grimace on his blank piece of paper it's actually very good It's I think grimace might be eggplant. Well, there you go. What is it eggplant? It's all the people sometimes make Parmesan out of it It's hard to cook up next your final trades Tim Seymour kick it off Brian. Thank you for the helpful last few days. It's been great It gold miners are within eight or ten percent of an all-time high But meanwhile copper miners are now breaking out to all-time highs So complex. I think you stay in that trade. I think you're just getting going again Dan yeah guy just mentioned McDonald's from an all-time high down what 25% or so to a multi-year low You know what else is doing that T.J. Max? It was at an all-time high about a month and a half ago Here it is down at a 52 week low. I think there's more room to the downside Hi, I hope you know how much we'd love you adore you I mean seeing some of the Twitter commentary the fan-based love to as well I could recite something but there's not enough time left in the show So I'm just gonna say the following Brian Cleveland clips that comes out CLF Iron Ork. It's an inside joke from the CEO. I love you. Why makes you're watching fast money? 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