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tv   Fast Money  CNBC  October 26, 2021 5:00pm-6:00pm EDT

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15%. i wonder how that will go down in corporate america it is companies with a billion >> you can deduct what you can deduct to me it is probably preferable to a 3 or 4% increase across the board. >> we are out of time here on "closing bell. thanks for watching. "fast money" picks up now. >> we are live from the nasdaq market site at times square. i'm melissa lee. we have a busy night of earnings all of these companies on the move many of the calls are just getting underway plus, we are trading the record rally. the s&p 500 trading at a fresh all time high.
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and later ups delivers, handing in its best numbers in six months we start off with the tech earnings trifecta. we have full team coverage of this report. julie is standing by and dierdra. hey, josh. >> microsoft had rallied hard, up about 40%, hit a new all time high in today's trade. 227 on the bottom. not clear if that's comparable to estimates i checked in with kirk who said strong results across the board. impressive in the cloud. continues to outperform at 48% commercial up 21%. most cloud businesses are
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accelerating keys on the call were kirk he rates microsoft outperformed, well positioned to capitalize in the digital transformation he said the call starts at 5:30 eastern. back to you. >> thanks so much. josh lipton. you may look at after hours action and say nah, but the context is important the run-up in the stock, the high bar in earnings and that it delivered in azure on growth following i think it was 51% in the previous quarter that's up there. >> is there a cnf by the way i don't think there is this is a staggering quarter for a company their size microsoft is the most important company in the world
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it touches so many facets of our lives. they are proving it once again the number that sticks out to me is net income for the first time ever is north of $20 billion and that's up 48% year for year. it speaks to a number of things, not the least of which how they run the company. a lot of people laughed when they bought linked in. it has been amazing. you look at valuations and the cps and start to put the numbers out. that 29 or 30 times next year's numbers might start to come down and you can start making a case for microsoft on valuation which is something we haven't been able to do >> is it expensive, karen, considering what they have delivered? >> considering what they have delivered, it's expensive, but
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they deserve to be expensive they put up fantastic numbers again and again. guy touches on a company this size, to have this kind of revenue growth is extraordinary. when you have it, that cures any ill sfr ills on the expense side it is still pretty high, a record high for them when they were a tiny company. it is huge now, deservedly so. it's hard to jump in right now i wouldn't buy more right now. i would let it settle out, but incredibly impressive. if you were in it for this, the context going in, the stock was on fire. still they put up a quarter that was good enough to be up in the
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after market amazing. >> dan, your take? >> i think all of the above. there is little to shake a stick at other than josh started off by saying the stock is up 40% on the year in a straight line in the last few weeks analysts rate it as a buy. it has a 3.2 trillion market cap. i would argue that this year you are expecting material deceleration in their growth sales up 12% year after years. but you think about the s&p that trades at a 4 pe of about 21 and that's well above the 10-year average of the high teens or so. it won't be until we see interest rates go back up that we will see interest rates in
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the 2. microsoft material lagged. i agree with karen if you are a long-term holder of this stock, this is what you own it for but let me remind you of this, they are going to guide in about half an hour and we may see it lower because the stock has already traded into all of this news, in my opinion. >> i will take the other side on the interest rate thing. i get when interest rates rise, but could you posit that you might want to invest in things like technology tools that are inflationary deflation -- >> first of all, i have to hear you out because i can't see you. that's what the ceo said he pointed out where their
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technology is deflationary this is the case where you have a moderate going on on the retail side and on the growth side to expect the growth we have had for the last four or five quarters for the next four or five quarters, i think you can expect it. i think you can get mid teen revenue groets growths. there is capital giveback. these are gross margins north of 70%, even with azure as a higher part of the revenue mix and lower margin product with the market we have, the stock is not expensive i think we are all speculating we do this every night where the market should be trading around the macrof for the fed and
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liquidity. it's all of these other businesses, too. hardware up 16%, xbox hardware up 166%. very, very impressive. >> microsoft at a flat line with about 23 minutes to go to the conference call. we turn to alphabet whose conference call is underway. doe deedra is listening in >> he went on to say that search remains at the heart of what they want to do. >> youtube revenue came in short of the street's expectations but
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continues to be a growth segment. they just touched on it. >> we have 50 million music and streaming subscribers including those in trials. in the past year the average number of first time daily creators more than doubled >> in short, youtube's answer to tiktok they say there is more to come including tapping into commercial on youtube. he also called connected tv their fastest growing screen q and a just kicked off talking about ai he was just asked about the impact of ios changes on youtube which we think of as being more vulnerable to those changes. it was very minimal. >> keep us posted.
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karen, the stock is down by just under a percent at this point. why do you think the softness is there? >> it was down a little more before we got on the air i think it's the tininess on youtube. i think expectation was high going in i know the stock pulled back after the snap results this is my biggest position. i like what i am hearing i want to hear more about whether they think that the ios issues that others are having is really going to be a big benefit to them or more fleeting much i want to hear about that. they did mention something that retail search was up i think travel search was up, which makes sense. it makes sense they deal with less supply chain. but, again, you have giant numbers and giant growth
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the margins aren't quite as good as microsoft for sure, but you get tremendous operating leverage they did increase the pace of their repurchase they were 12 and change mostly in the class c that was up from about 4 billion the quarter before i like they are giving money back to shareholders i like it it i don't think this was a disappointing quarter to me. trading down one or two percent, that's okay. >> tim, what did you make of the quarter? >> for a stock that outperforms 40% on a year to year basis, there is a lot priced into the stock. i agree with karen, i think this is the place there is the most upside global was a one-third ad share.
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no one is on linear tv anywhmore except those who watch cnbc. despite you see their core business growing, that's the cash cow that keeps on delivering i love that. in terms of the market we have, 26 times 23, maybe 22 times x cash, this stock is really cheap relative to the market we have now that we are all investing in it until that changes, google can go higher. >> dan, does this also fall into the category where rates will rise sooner than later, is this the stock you want to be in or ditch? >> i don't think rates are going anywhere that's the one thing i think if rates are going
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higher, i think you will see more rotation into a more gdp sensitive names. we are talking about margins, growth at a reasonable price versus microsoft right here. these companies both have 68% margins, both have similar expected earnings and sales growth for the next year or so i would make the case that google trades cheaper than microsoft, about 7 times sales versus microsoft at 30 and 10. if you are into drawing lines like carter braxton worth, draw a line from the jan louary low alphabet it got rejected on this bounce, sold off a little bit in line with snap. you might see a retest of that uptrend but that to me will be important technical resistance i would boy this one on a
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pullback, cheap relative to where the market is trading. no reason it should trade at a market multiple given its growth expectation. i would love to do this rather than microsoft i would love to see microsoft back under 300 again it was 280 three weeks ago and i think that's a good level. we will keep you posted on the conference call. twitter kicks off higher in the session. let's go to julia. >> coming in with expectations this is in the range of expectations, but the mid point is below the consensus they are coming in a bit lighter than anticipated apple's operating changes, we are told the impact remains
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modest because his company benefited from being 85% brand advertising and only 15% direct response advertising those ads are more exposed to those changes. the ceo telling me we are coming from a different starting point. now going forward the company says it also sees more potential in shopping. they say they are learning from the shop module pilot program they rolled out in the corner and they are making changes to make twitter easier for users in particular as for the damage snap felt from advertisers pulling back, twitter says more than half their ad revenue is tied to services in digital goods. and those don't feel the pinch from supply chain issues
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>> be sure to tune in tomorrow on squawk box for our interview of the cfo at 8:30 eastern time. it also feels like twitter was saying take that, snap we weren't impacted by the things you have been citing. >> it's amazing what he has done as ceo what is fascinating to me, if you look at the quarter pretty much everything is in line i guess that's all twitter needed to do we talked about being in formation from the high back -- i think it was up to 80 in february or march. the uptrend it has been since the march 2020 lows. this has broken out to the upside and we will take out the $80 level. it looks as though it might be
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on the verge of breaking out good for twitter >> dan >> i don't disagree with much of what guy said. i just don't think it's going anywhere in this environment the stock did what it needed to do i don't think it's take that snap they are very different businesses i like the innovations they are doing and trying they are moving away from things that are not working very quickly. i think shopping will be a big one. i think there will be some form of payment component of it we know jack is big into the bitcoin. at some point we may see a monster deal -- i don't mean a mer jer, but a monster deal with the payment capabilities that square has i see a lot of opportunity here and see what guy sees on the charts i just don't think this is getting away from anyone soon.
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>> tim, the sole levers to pull. >> if they are on schedule they will do 7.5 billion revenue. the reference guy made back in the day was a function of these levers they just said fourth quarter 1.4 or 1.5 billion in revenue. either the numbers don't add up or it will be a massive year they have reaffirmed 7.5 billion on a revenue target for '23. that should be exciting for investors and i am not sure that's in the price. >> karen >> the social media space on advertising, i would much rather in terms of valuation, i would
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much rather be in facebook or -- kudos to dan who said they would trade up today but i would much rather be in facebook >> twitter trading up. all three calls are now under way. uaerill break down the qrts straight ahead plus, check out the move in ups today. we dig into the trade when fast fast returns you have the best pizza in town and the worst wait times. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire
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welcome back to "fast money" much we have an earnings alert on robinhood it is down about 8% after earnings report. kate >> it was a big miss as well as slow down on crypto activity crypto stole the show in the second quarter, but in the third quarter it brought in about $51
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million, down about 78% from the prior quarter although still up more than 800% from a year ago the call just kicked off at the top of the hour saying that robinhood saw considerably fewer accounts and lower revenue compared to q2 he said -- i also caught up with cfo jason afterwards and he said it will be impossible for the company to accurately predict the revenue on a quarter to quarter basis. robinhood forecasting some of the same factors to persist throughout the end of the year,
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headwinds. robinhood looking for about 66,000 new accounts in the upcoming quarter sales are down from the first quarter where they were seeing millions of people join the platform that is weighing on the stock after hours. looks like it's down about 8% after hours. >> so no new user growth quarter on quarter and a decline in average revenue peruser, decline in transactions. >> after a blowout first quarter. and a lack of viral events to drive some of that growth. >> kate, thanks. dan nathan, what should one pay for a stock like this when the cfo says you can't predict quarter to quarter >> they shouldn't pay anything sell the stock i am not saying sell it right
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here what they pulled before the ipo, it was like giving a fat kid candy every morning for breakfast. they were knew what they were doing much the fact they have gone from 231 million in crypto which was predominantly dozed down to 51 million, this app should be in your gambling folder on your iphone. we know what the account sized was in the last quarter. this is not monetizing anything. he should stop talking to the street especially when you have the president of the securities division trading ahead of the nontrading order that happened with gamestop. we know this is not ready yet.
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we know this stuff with citadel is not done. i don't get it there are better places to invest in the market >> we haven't even uttered the word payment for overflow and the chance that may get changed by the sec which is looking at this and that threatens the business model of this company guy? >> not only threatens it we talk about facebook's ex-ten shal risk. i never thought there was anything innovative about the company other than the name. we are learning that now one of the points i will make again is if the market says they are worth this, wonderful. but no way that the nasdaq
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should be a $33 billion company. my sense is it is wrong on both sides. nasdaq should be higher which has been happening and robinhood should be lower which in my opinion will begin to happen >> what extrapolation do we make do we make any to coin base, other sort of related exchange or marketplace trades, tim >> i think apples and oranges to nasdaq to the extent there has been high correlation to crypto i think it makes sense to compare it to coin base. you have a demographic that's similar. the 51 million in crypto related revenues is up nine fold year over year is impressive. i know for a growth company it's disappointing especially talking about loser accounts but think about the pull forward and the user base. i am not terribly impressed by
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the size of these funded accounts and the fact it's flat and sideways, but it hasn't fallen you can't tell me the street hasn't tacked in those numbers or maybe another 8%. we knew crypto was down, new options was a sweet spot the fact that options trading is hot, it doesn't surprise me. i think they have a valuable audience you priced in bad news and you still have a sticky loyal customer base. >> how about how this trades with morgan stanley? >> e trade, i don't know what the embedded value is for etrade, but i don't think it's enough relative to this. to your early question, coin base is probably taking some of
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robinhood's crypto away. but the valuation, you can go a lot of different ways. i think a better valuation -- a black stone, a black rock, morgan stanley, probably a charles schwab, i know it's materially less than this. i know it is not cool and old school, but they make a ton of money. i would much rather be buying morgan stanley than robinhood down to -- i don't know where it is now 37 >> down 9% in the after hours. we will keep watch on this coming up, after hours action and later lock heemaind rt plunging how the players are playing this one. you are watching "fast money." back right after this.
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welcome back let's go to leslie picker with a break down of the quarter. >> the texas instruments conference call, almost entirely no surprise focusing on supply chain issues they narrowly missed estimates on the top line while eking out a small beat on the bottom line. executives looking for more color on how the chip maker is being impacted by supply chain which is being telegraphed they said the biggest change
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came from customers being more focused on a narrow set of products rather than a broad-based order. he noted this behavior is not specific to any product family or market or geography it was asked if this was due to lower customer demand or lower supply by texas instruments and they said it was by both it has incrementally added profit into the back half of 2022 clearly the supply chain issues are complex and showing up and down the customer base for them as well as internally. shares trading lower in after hours trading although they have climbed up a bit from the 5% dough kline after numbers came out.
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>> you have to think about nvidia hitting new highs the tale of two chips. >> and throw amd in there. nvidia is in the growth area and texas instruments is not it is not to impugn texas instruments. i just don't think they are deserving of what the market has given them i think the last time gathered and chips had a rough day. texas was at 188 and traded up to 200 bonawyn liked it but i don't see how they will trade up next year given the number i think it focuses on amd and nvidia eating everybody's lunch.
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>> dan >> it's a great example between disconnect of valuations and markets. nvidia, that thing is trading 53 times sales. a market cap company that blew out. think about how much market cap it gained, $50 billion that doesn't make sense when you think about the growth expectations next year on the flip side texas instruments with low digits trading about 10 times sales that doesn't make sense. my final call last night watts intel on its way down to the mid 40s. these are cyclical companies they do make changes you want to buy them when you are down and out and the valuation makes sense, not when they are busting out like this i am not a buyer of any of them, but i may consider intel on the
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way down to 45 >> it's a rare occasion when dan and tim would appear on something, but it appears they would agree on intel in this case >> we don't agree on fashion but -- >> you both keep rag and bone in business >> i can't see dan tonight so i don't know if he's wearing that denim shirt, but if he is, i'm sure he looks great. >> you are going to be stuck at $17 billion revenue. you are not moving on the revenue line the investment in the found ri business which is one or two years out, they are going to spend, spend, spend. the lee time and lag time with what is going on in the industrial chip space is well flagged but not entirely clear
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when a company like texan -- i would rather be with intel rather than texan with the value where it is. >> ups is surging. find out how our traders are playing this monster move. do not go anywhere "fast money" is back in two.
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welcome back visa is down lower let's go to kate >> executives are highlighting across board volumes and faster an anticipated recovery in travel it was up about 38% from a year ago. pandemic restrictions being lifted helped. they said further calls over the next two years will only help drive the growth
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he also talked about pent up demand for travel will accelerate when borders reopen latin america is the strongest destination and well over the 2019 levels. u.s. to mexico travel remains robust asia pacific remains mostly closed they say that did not really improve at all and restaurant spending is at some of the highest levels during the pandemic driven by higher fuel and restaurant spending payment was up about 121%, up 17% pr a year ago. total payment hit an all-time high of a trillion dollars and also talking about the pandemic talking about to digitize cash. that's e-commerce as well.
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the stock is down after hours. >> thanks, kate. karen, how do you trade this >> this was not a disappointing quarter. when you talk about the revenue growth in the teens, that's tremendous off a high base the asia pacific number being stagnant, i think that's more profitability to come. i think it's when that opens up, not if that opens up i think there is a lot to like if you were comfortable owning it going in, you should be comfortable after this release it is a little pricey, but it should be. >> as we know borders are not fully open and people are not fully back to travel but at 32 times forward have we priced in the full recovery? >> i don't know. how about exposure to digital payments visa will be there i think as much as some of these other
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higher syn tech plays. asia is effectively closed the cross quarter dynamics while encouraging, and i think the reason why the stock is somewhat muted here is really just they haven't guided for 2022. if you are not that confident, give some guidance i think that's the big issue here, at least based on what has come out so far. >> guy >> we are in a three-year uptrend. we talked about something we don't talk about so much anymore. whisper numbers and the whisper number for ups was light of that, but they beat what the street was looking for i think that is weighing in on it when you have year over year transaction growth, it's a juggernaut of a company.
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we have seen moves like this in visa before. they are scary and people talk about valuation. to me we are talking about a stock making a new all-time high i think that that's what will happen again coming up, ups posting better than expected results we will bring that tdera to your doorstep >> and lockheed martin, tanking today. how they are trading this one. give you the power of sd-wan and advanced security integrated on our activecore platform so you can control your network from anywhere, anytime. it's network management redefined. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. ♪ ♪
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welcome back to "fast money. check out shares of ups, the shipping giant hitting an all-time high. thanks to an e-commerce boom the stock is up 29% year-to-date good news for you, karen >> good news for me. but unfortunately i have more fedex than i have ups. they showed fedex how it is done they didn't ship more packages but made more money on each package they shipped they didn't have the labor shortage that that fedex did
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ups is union, fedex is not the price per package will hopefully improve for fedex as well the stock is expensive relative to fedex, but it's not expensive. >> does this quarter tellyou that ups is where you want to be >> great question. on relative value, i like fedex under performing 30% year-to-date to ups. but this is where you want to be fedex to ups this is operational that ups can only dream about this is the first sign that they are breaking through add that to the pricing power they have. j.p. morgan refers to this as a virtuous cycle for ups if they
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follow through going into peak holiday season, they are about to announce pricing which should replicate what fedex has i would rather have fedex on a play and massive underperformance >> jim cramer wrote all about it at his investing club. we just got big news on robinhood. >> they said they would not add any new crypto currency until they have more clarity on the regulatory landscape he said they are keeping a close eye on crypto as the landscape is increasingly uncertain. he said we look to deliver new features with things that comply
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with the requirements, referring to sec customers a looking for new coins, and some of these other viral mean stocks have helped drive growth at robinhood, but we won't see any new versions for now. >> kate, for those coins, does the sec have saying saying it is a security or is it also up for interpretation and therefore could we see if the regulatory landscape changes, see these mean coins go away also? >> they said the only one exempts would be bitcoin and ethos. we have had them say everything else for the most part walks and talks like a security. not clear what would be
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difference between some the complexity between coins, but from what the sec has said, almost all of these are security >> guy, you have this grimace on your face. adding new securities is the way to get new people signing up and get transaction volumes up because that's what we saw with dosh that tells you they are not going to have that spike because of some phenomenon popularity of a coin >> literature seems to be the theme tonight. robinhood thumbed his nose at the sheriff of nottingham back in the day it appears as if jerry beginsle is thumbing his nose i don't get the valuation in robinhood.
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i get it's cool. but i don't think this move addresses the problems they have i think it goes lower from here. >> down 8.8% shares of ckedlohe martin falling. details next you are watching "fast money" next from the nasdaq site in times square we are back right after this staying up half the night searching for savings on your prescriptions? just ask your cvs pharmacist. we search for savings for you, from coupons to lower-cost options. plus, earn up to 50 dollars extrabucks rewards each year just for filling. at cvs pharmacy. [uplifting music playing]
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welcome back to "fast money. lockheed martin shares tanked after a lower 2022 guidance. "options action" is making a bet on it. mike >> lockheed martin traded 15 times its average options volume calls did outpace puts by about 3 to 2 it was focused mainly on the strike calls the example was the november 5 weekly strike call buyers purchased a couple hundred at 75 krens. -- cents they are betting on action in
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the next couple weeks or so. >> guy >> look what the january low was. and the volume today 9 million. they said next five years will be difficult for a trade i when i thakot ko beware just said makes sense >> for more "options action" tune in friday at 5:30 up next, final trade r future. so you don't lose sight of the big picture, even when you're focused on what's happening right now. and thinkorswim trading™ is right there with you. to help you become a smarter investor. with an innovative trading platform full of customizable tools. dedicated trade desk pros and a passionate trader community sharing strategies right on the platform. because we take trading as seriously as you do. thinkorswim trading™ from td ameritrade.
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time for the final trade let's go around the horn tim? >> fedex i think this stock is starting to make a move the backdrop is great for both companies. >> karen >> my final trade is facebook. i think it was overdone a little bit last night i am not disappointed in this. they bought occulus and instagram at incredible prices i am glad they are breaking them out separately
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facebook >> mark zuckerberg is not going to be the lord of the universe i i take microsoft my mission is simple to make you money. i am here to level the plain field for all investors there is always a bull market some where i promise to help you find it. "mad money" starts now ♪ hey, i am cramer, welcome to "mad money," welcome to cramer, i am just trying to make you some money my job is to not only to entertain you but teach you, call me at 1800-877-cnbc o

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