mentioned at the top of the show, a lot of the hardware and semiconductor names that did so, so well today. we'll see to what degree that can continue. i mean, among the semiconductor names, not even all just straight a.i. qualcomm was up by 3%. >> that's going to do it for us here at "overtime." >> “fast money” starts now. live from the nasdaq market site in the heart of new york city's times square, this is "fast money." here's what's on tap tonight. all bulled up. as this year's winners keep winning and records keep falling, the street is starting to crank up its price targets for stocks. is it possible the rally is just getting revved up for a new run? plus, why one wall street firm is putting best buy on the buy list and says it is poised to surge higher from here. and later, using a.i. to try to make lemonade out of lemons. the story of how a slumping insurance company is using machine learning to litigate risk and create coverage options

for gen-z and beyond. i'm melissa lee, coming to you live from studio b at the nasdaq. on the desk tonight -- tim seymour, guy adami, julie biel and chris verrone. and we start off with a possible reason to get even more bullish on the market, if that's possible. the s&p and nasdaq both notching free all-time highs today. the benchmark now up 15%, posting 30 record closes along the way, and that kind of run has analysts rushing to play catchup. goldman sachs upping their year-end target for the s&p to 5600, more than 2% higher from here. and julian emanuel going from 4750 to a whopping 6,000, making him the new biggest bull on the street. congratulations, julian. so, is this a case of analyst fomo, or is there really even more upside for stocks? guy? >> i can even be more bullish

having not been bullish at all. >> good point by you. >> julian, 4750, raised it to 6,000, you saw mike wilson, not similar, but he capitulated a month and a half, two months ago, jpmorgan, i mean, they actually made some positive comments. goldman sachs, i think, the outside of their range, 6300, if everything lines up. they talked about all this money coming into the market in july, so -- the momentum is clearly there, but in my -- just again, my opinion, the concerns that i've had for awhile have not abated. they clearly have not manifested themselves in the market, but i think if this is the time of year where people who are behind the eight-ball are starting to play catchup. >> i think you're beginning to see that catchup. let's remember, the average target on the street, i think there's 28 strategists who submit their targets, is still 5350, s&p trades above it. we've done a lot of work looking at what, what do the forward market returns look like, when the s&p is still above that average target? they tend to be quite good. you want to get uncomfortable when the average target begins

to surpass and leapfrog, what's one of those features of the end of a market cycle? you have the sell side tripping over each other to put the highest target on the street. i think we're shy of that just yet. >> let me pick up on two things you said. end of the cycle, hard to know where we are here. and again, that's also the economic cycle. we might be, you know, frankly, mid cycle in terms of the economy, but the term uncomfortable, you can also say, is attached to people, you know, folks in the market strategist, people that frankly have been holding onto a dynamic where they felt the market multiple didn't make sense you they felt like the backdrop of volatility, and also then, dynamics around both the fed and stuff that's yet to play out. and what we all know is when the fed starts to steepen, it's actually bad news, historically, with the inverted yield curve. i think at least a very fascinating part of what's going on here is that these strategists are all more comfortable with a higher multiple. david at goldman said, 19.5 to

20.4. julian said he's at 25 times, and he doesn't think it's -- it's that extraordinary, at least given where we are in the cycle right now. but it is about people accepting that the breadth in the market has narrowed, and that you are, no matter what, when you add up the market as a whole, you have five companies that are giving you the kind of growth that warrants this kind of a multiple. it's fascinating with $6 trillion in money market assets on the sidelines that people still say, you know what, that money will probably come in,s person lip as rates come lower. not all -- i'm not sure i agree with that, but there's a lot of money on the sideline. >> which has not come in so far and people are comfortable with the leaders in the marketplace. there's an argument to be made when people get off the sidelines, they are comfortable going to nvidia and apple. what did we see today, we saw extraordinary volume on those names, more than two times the daily average volume, mid- hf

mid-session, with big percentage gains. >> yeah, i think what you're actually seeing in the narrowness of the market, the slowness in strategists to update their forecast is the discomfort with the narrow ens. i think many strategists don't feel great in terms of market multiple and the rest of it, until there is more breadth. and the breadth is not all about the stock performance, but the earnings performance. when we take out the performance of beneficiaries of a.i., it's still not great. it's fine, but it's not great. and i think that is the hesitation that strategists are having in terms of getting very enthusiastic about this market. i think until we see earnings improve, particularly in small cap, it's hard to get super enthusiastic about the long-term trends. >> then we will have missed what has been an extraordinary market run so far. so, how do we grapple with that? we all want to see better breadth n the market, in terms of sector rep sensation, right?

but yet, here we are, this is the market we have. >> and let's not forget how long this can persist. breadth peaked in fall of 1998 and you had 14, 15, 16 more months of what in hindsight became a narrow market that was leading you to a top. i think the bug question, we've been using a 5550 target, we're 75 points from there. the market is getting externally oversold and overbought. i want to be mindful of that. if this is a market that consolidates into the summer, july or august, what do the other 490 stocks do? do they use that breather with the big ones to exert some leadership? because there's a lot of actually oversold industrials, oversold discretionary names that might be starting to perk up here. >> the s&p is trading 1250 basis points over the dow jones industrial. so, if you're measures the market, you are measuring five stocks, and you are measuring -- i probably said a year and a half ago, i think towarding of

the top five stocks has peaked, i think it's gotten higher. nvidia at 7.1% of the nasdaq, probably 6.2% of the s&p fcht you are breaking down the attribution, nvidia is two-thirds of the performance. it doesn't mean that if you look throughout semis, and that the place, i think, you stay excited about in the market, because you see that the nasdaq over the last two days has made fresh all-time relative highs to the s&p. you can't tell me if the nasdaq isn't cruising. it's the entire nasdaq of which semis grow and grow every day, but you can't tell me this market's in trouble if we've got new leadership out of the place we got the original leadership. >> so, what do you say to that? >> well, the market's not in trouble. i thought the underlying economy is in trouble, i'll stand by that. there are things out there that are absolutely concerning. the market is not in trouble at all, given everything that tim just said. some of the superlatives, i think technology is the biggest part of the market now since the dot com era.

we talk about all these stocks there. the contribution to s&p 500 earnings. i mean, all those things are great on the way up. you know, you have to be concerned, what happens when that flips a swritch switch? not to mr. to be political, if economy was the stock market, the president's approval rating would be at all-time hikes instead of all-time lows. so, that suggests to me the chasm between the two is as big as it has ever been. >> if you are a believer, julie, that the economy is going to turn or show some cracks, the unemployment rate is going to tick higher eventually, can you still be bullish this market? we lost julie. so, i'll ask one of these guys here for that same answer. what do you think? >> when you look at the last couple weeks, i think if there's a blelblemish out there, we've

rates come dourngswn, and the patientpatient parts of the market that you would expect haven't reacted to it. we always look at bio tech as a proxy on rates, that hasn't really responded. so, you could start to put together a story that the market does not luke, or it's not responding to the move lower in yields as it did in november, december, january. what that means, we'll learn in time, but to fight the trend here, yes, it's an overbought market, but there's not a lot of big top formations out there. there are stocks that have corrected. i think the big test over the next couple weeks is, can those names that have come in, can they respond to those oversold conditions? >> what do you think that means, we're not responding anymore to lower rates? >> i think it's a concern for the growthier part of the economy that is not in tech. if you want to see transports, you aren't getting it. you haven't been for months. so, i think the jury is still out on this economy. until we got that payroll number

going into -- the middle and end part of that week, we were getting more data points that were concerning on the overall market. so, i just -- i look at some of the moves, you know, microsoft at all-time highs again. and you look at other places -- it does seem that semis have assumed the mantle, and there are others like taiwan semi that are up 40% in the last 25 seconds or so. these are extraordinary moves that people thought they'd already had extraordinary moves. and that's the part of this, there's a pain trade higher that i think continues. >> julie, do you think that this area finally gets a lift, or -- i mean, it has not, to chris's point, they have not responded to the drop in rates that we've seen, in the past few weeks or so. bank of america last week said, you know what, the pe is in line with the long-term average on small caps at this point, so, where do we go here -- from here? >> rishgght, it's all about the and the e hasn't been there in

terns of the earnings growth or the earnings stable section, because the majority of the small cap businesses just have not been able to shoulder the weight of inflation, plus the challenges with labor markets, plus higher interest rates. and i think until that starts to change, you're not going to really see the benefits of owning small cap. that said, i think you can still find really great small cap businesses that haven't been so negatively impacted by all these other factors. but you have to be extremely selective in this space. >> all right, let's get to our next guest. he thinks the rally will broaden from big tech. let's bring in dan niles. dan, great do see you. >> good to see you, too. >> so, where specifically are you looking, then, if it's not bug t big tech and not a.i., because it seems unimaginable to look beyond those areas. >> yeah, it's a.i. all the time these days, right? i think that's part of the problem, it's a.i. all the time, and i think part of this is fomo, and it is also

underperforming versus your index. if you're a big portfolio manager and people don't talk about this, you are judged against your benchmark. when your benchmark keeps concentrating down into fewer and fewer names, you're sort of stuck, or, you're stuck chasing it, if you don't own enough microsoft and apple and nvidia. and so, that just makes it worse. but at some point, it comes down to earnings, and guess what? in about two weeks -- three weeks, i guess, we're going to have companies start to report numbers, and what we saw, which is easy to forget, because you talk about the market hitting new highs and all the rest of it, you had some very big companies talk missed numbers. and i'm talking salesforce, workday, servicenow, mongo db, companies that report off-quarter that reported their april results, those companies all came out and had issues. and these were some of the darlings, you know, of the last five, arguably ten years, where software's eating the world, et

cetera, and the demand for these, what they offer is insatiable, and now the number is coming down. you spent a lot on a.i., every company has to say a.i. 50 to 100 times on their calls. and those four companies did. but now, you have to show the results. and the spend that you've had, about 50 billion or so last year on a.i., and the revenues you generated, which is about 3 billion, according to sequoia, which, by the way, was the early investor in nvidia in 1993, when that stock was valued at less than $15 million, they put something out talking about this. so, i think -- you know, in a few weeks, we're going to a come to jesus market and i think that's when the broadening out starts, because not every company is nvidia, and it's a very short list of names that are having estimates go up. their stocks might be going up,

but the numbers are not necessarily going higher, and so, i think that's the trigger, which is earnings. >> those results, and the commentary about what -- where their customers have gone, and what they've been doing, seems to underscore this notion that all the oxygen in the room is going to a.i. spend, so, you think that already in a few weeks, that cycle is going to start to crack? because it seems like a very smart amount of time for companies to say, i'm going to spend, spend, spend on a.i., but hold on, i need to figure out the r.o.i. >> but that's my point, right? you have an amazon web services, microsoft azure, or google cloud, they have companies coming to them and putting workloads on those clouds, because they thought they were going to get some return. now, all of a sudden, you have, well, the return's not quite what i thought it was. could you see some moderation in spend? so, let me be completely clear on this, because i put out written pieces on it, if you go back to the internet buildout,

which you could say started with the launch of netscape navigator at the end of '94, that continued for, you know, over five years. cisco never had a down quarter. sequentially, during a six-year period of time. but the stock went down 26% late '95, 38% or so in '97, and then another 37% or so in '98. and that was because revenues went ahead and started to slow down sequentially. they never declined, actually, but that was because you were going through some period of digestion over that big ramp up, and then the stock corrected. and so, that's all i'm saying i think is going to happen. the rate of growth is going to slow down from the rates we've seen, because you're going to have to look at, well, am i getting any return on investment? and we've had four very large software companies, which all, by the way, were touting the benefits of a.i., cut the

numbers. >> i'm sorry, dan, let's get a little granular. i think apple was your biggest holding may into june,finally j the party, apple did, after a year and a half. on huge volume. what are your thoughts here at $ $219 or so? >> it's funny, but i think it might be the best of all the magnificent seven between now and year-end, partly because, if you look at it from a revenue basis, it was the worst of all of them over the last three years. revenues for the march quarter that they reported were down 4% versus a year ago. if you go back three years ago, they're up a whopping 1%, and to put it in perspective, for the magnificent seven as a whole, which includes apple, they're up 90% on average over the last three years, and even if you take nvidia out, they're up 45%. and so, with apple says, look, we're going to give you all these a.i. features, but you're going to have to have an iphone pro or later to actually use it,

which is less than 10% of their installed base of about 1.2 billion iphones, that, i think, is going to get on the margins, some people that say, you know what? i'm going to go ahead and upgrade, because i want to have those capabilities. and that's enough to get the stock, i think, going. the multiple makes no sense, obviously, in the low 30s, relative to the s&p at 23 times. but as we've seen in the market, where you got things like gamestop and every stock going up, people aren't really focused on the multiple, if the earnings or prospect look particularly good. i think in apple's case is probably the best they've looked in over three years. >> dan, speaking of pro or, you know, chasing gamestop, let's talk about the professional community is really where i'm going with this, and i'm not sure that is what's going on in gamestop. what's your sense within the hedge fund water cooler conversation, how crowded are these trades? i know what the numbers are from the prime brokers and what not, but i'm wondering how many

people have been short some of these big winners, and i'm wondering how much chasing and how much anxiety is, especially in long-short edge funds that are mostly long. how does it look from inside the hedge fund community? >> well, i mean, general underperformance. because you haven't been massively overweight a few of these names. and remember, hedge funds, by their definition, have longs and shorts, and so, if you are short the wrong stuff at the wrong time -- if you were short apple all the way up until may 2nd or so when they reported, it was great. fantastic. if you were short it from may 2nd to now, it's a very different picture, where you have gotten absolutely buried. so, i think you the had to be nimble, you had to adjust your thinking quite quickly. and also, the one thing you haven't brought up, how much of what happened last week is due to something you guys haven't talked about, which is europe?

where, if you look at last week, france's market was down about 6.2% during the week, relative to the s&p up 1.6%. that is the widest spread since russia invaded the ukraine, you had covid, and after 9/11. so, how much of the performance in the u.s. stock market is people fleeing europe, coming into the u.s., whether it's bonds, by the way, bonds in france had the widest blowout relative to german bonds in quite a long time, as well, and so, what if that starts to get unwound? because the eu is having a meeting right now, the 27 leaders there, to, you know, talk about who is going to run different institutions, and what they're doing about france, and what if that starts to reverse? so, that's why last week we picked up some stuff in europe, we picked up small caps, and by the way, the russell is down very slightly for the year relative to the s&p, and we're going, okay, there's got to be other stuff that's driving this,

and if that starts to reverse, i'm willing to take advantage of statistical ano, ma'am lips to try to make money off of that. >> dan, always great to speak with you. thank you. >> thank you. >> dan niles. all right, so -- he said apple looks like the best of the mag seven, quote unquote mag seven, to year end. what do you think? technically? >> i think technically it certainly means something. but it's hard to say one is better than the other. microsoft at new highs, google is right there. meta looks like it's reinflected. you can go back to the old fang acronym, netflix is back. within that broader landscape, it's still relatively broad there. >> and interesting to hear dan talk about how the hedge fund community has had to be nimble, but adjust their thinking. i mean, this sounds like a strategist that, you know, whoever they are, i don't want to name names, but can you go and, you know, upgrade your target by 20%? well, you had to have adjusted your thinking. it's not just a function, because these guys are smart guys, they are not because

markets are higher i have to go higher. the adjusted thinking is the way to go for the inflated stocks. if yo that's fascinating, because you had to adjust. coming up, g uac and roll at chipotle. a record-breaking run. first, afterhours action in len near. the numbers, next. this is "fast money" with this is "fast money" with melissa lerie ght here on cnbc. so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call

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welcome back. shares of lennar down after reported beats on the top and the bottom lines. the company will hold its conference call tomorrow morning. diana olick has the numbers. >> melissa, it with us a nice beat for lennar, but emphasized incentives in a big way. that may be what's hitting the stock, as well as a slight miss on guidance. the chairman said, although affordability continued to be tested by interest rate movements and challenged consumer sentiment, purchasers remained supportive to increased

sales incentive, resulting in a 15% increase in your delivers year over year. the average sales price of a lennar home was down 5% from a year ago, to $426,000, that's net of incentives, but that is down less than the 8% annual drop that we saw in q-1. guidance for deliveries was in line with estimates, but guidance on new orders was slightly weaker than expectations, and melissa, that may be adding to the trouble with the stock. >> yeah. diana, thank you. how does this chart looshgs chris? >> i think this is one of those names and one of those groups that it's really important to respond to home builders. the group has essentially been sideways for the entire year, as bond yields have bounced between 4.20, 4.70. >> they are oversold. they have paused now for six months. i would want to see lennar

defend this 150 level. we'll see how that oeps tomorrow, 200-day is right there. my expectation is, you want to be a buyer of these. >> theoretically, the fed will cut rates. we've seen the highest rate on the ten-year yield, probably, unless -- >> well, i think the fed controls the front end. i'm not sure -- noted, i get it. and chris just mentioned a chart. let's look at little longer term chart. 172 beginning of april, sold off to 150, back to 172. short-term double top. in terms of what she was talking about just now, look at the new orders for the third quarter, 20,500. the street was at a little over 21,000. i don't know. you're starting to see, maybe some weakness around the edge, but that 150 level will be, i think, basically defended in a major way, that's probably huge support. >> well, i think it has to be, and i think -- again, chris is right here, he can comment, but that's right at the bottom end. this is a stock that's moved from 70 to 160.

that doesn't mean anything, if, in fact, the earnings profile of the company has changed. it has. at the same time, there's a level where they're seeing pricing power. net of incentives, pricing power is not there. and i think ultimately, with the home builders, we've gotten to a place where the first kind of wave of after the fed had raised rates, any weakness in rates was great for home builders -- they're stalling out here. and, again, i wouldn't chase that. >> what i think is notable there, as the home builders have paused for four, five months, you know what's started to break out are the residential rates. tends to be the antidote to the weakness in the home builders. and tends to be a signal on rents. are rents starting to reaccelerate here? i think certainly worth considering in this context. all right, there 's a lot more "fast money" to come. here's what's coming up next. ubs out with a bullish call on the tech retailer, saying the stock could be one of your best buys of the year. we'll go behind the numbers of

the upgrade bringing this name to life, next. plus, the technical tale calling for industrial-sized gains. what one of our traders sees in the charts that has him calling for this group to put the pedal to the heavy metal. you're watching "fast money," live from the nasdaq market site in times square. we're back right after this. at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today. ♪(voya)♪ there are some things that work better together. like your workplace benefits and retirement savings. voya helps you choose the right amounts without over or under investing. so you can feel confident in your financial choices voya, well planned, well invested, well protected. as an independent financial advisor, i stand by these promises.

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welcome back to "fast money." best buy topping the tape, closing the day up almost 5%, touching its highest level in other a year. ubs upgrading the stock from a buy neutral to a buy, citing a l leaner operating model. upping its price target to 106. they also -- and it's not just about a.i., it's part of the upgrade cycle, but when you take a look at how long people have owned electronics, maybe it's time that you buy your new tv. >> i love best buy, i spend time there, i think the geeks are cool, they're not geeks at all. they know what they're doing.

and so, this is an a.i.-adjacent kind of trade. it really is a gross margin trade. if you look at the trends of other retailers that have been working in a similar space this is a gross margin that comes from ad optimization, store optimization, a better e-commerce mix, where i think they've come a long way in terms of loyalty and technology. they even have these loyalty programs that allow them actually to bill people annually in terms of that geek squad and tech support. so, i think it goes higher, and i think there's some element of the a.i. trade here. >> they also point out that market share tends to go higher at the beginning of a product cycle, julie, which could mean that best buy will just have a firming grip on the market as this a.i. product cycle takes off. >> yeah, i think that's right. being, you know, having an in-store presence with thoughtful people who can help guide you to your a.i. phone, your a.i. laptop, is really their advantage at the gunning of an upgrade cycle. the question is the size and the scale of the upgrade cycle.

if consumers are already a little bit pressed, are they necessarily going to be beneficiaries of that? it's a little bit uncertain, but i agree, the execution is much better. you know, they're announcing small restructurings and layoffs, and really just trying to be leaner and more able to manage through different types of cycles. >> i love broken charts that gap through big levels. it changes the entire character of the chart when it's got through 80 then 85. we sit 90 and change today. the next big level is about 110, i think you hold it to 110. and just note, despite the upgrade today, there's about 30 analysts that cover the street, only 30% of them have buys on the stock. so, this is hardly a consensus call. >> were you a member of the geek squad in high school? >> i still am, tim. you say that -- >> you just said geeks are cool. >> right, except for me. thank you, mel. >> i just wanted to ask. >> i got the hat and everything. >> do you have a trade on this, or -- >> between 60 and 80 over the

last -- as chris just mentioned, the longer the, what, the space -- >> the base. >> the higher in space. and it's been in range for the last two years, effectively, between 60 and 75, 80. broken through it. valuation is okay. it's interesting, oppenheimer actually said some of the optimism may be a little too much in terms of best buy, however, now you have momentum working for you. and the momentum will probably take tow the price target they put out. coming up, when life gives you lemons. insurance stock lemonade down 10%, but could be in line for an a.i.-based turn around. we'll talk about how gen-a.i. is changing the industry. plus, chris goes charts on one part of the market that could be primed to pop. more "fast money" right after this. missed a moment of "fast?" catch us any time on the go. follow the "fast money" podcast. we're back right after this.ing]

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welcome back to "fast money." stocks jumping to kick off the short week. the s&p up about 40 points, closing at a fresh record high. the nasdaq gaining 1%, its sixth positive day in a row and its own record close.

gamestop shares down 12% after the company's shareholder meeting failed to off any rereal details on its business strategy. >> what a surprise. that's so weird. >> why is that a surprise? retailer dick's sport, goods jumping to a new record. the stock up 50% since the start of this year. wow, dick's. and finally, draftkings surging nearly 8% on rumors that the company could announce a $1 billion buy-back program, and shares of merck up. the fda approving a vaccine for adults against pneumonia. next here, the industrials have been stuck in the mud. look at the xli versus the nasdaq over the past month. one of our traders thinks a number of names in the sector could be oversold. are they ready for a bounce? let's go off the charts with chris. what do you say, chris? >> well, i think this is going to be a really important test for really the market at large. this is a group, these

industries, where basically leadership for 18 months, they were great off the late 2022 lows, they persisted on. the last six, eight weeks, they've acted funky, they've come in, they've corrected. when we're looking at names that are viable candidates in oversold conditions, we look for uptrends. and cummins, caterpillar really fit that position. so what we did is -- above upward sloping 200-day moving averages, but have rsis in the 35, 40 range. it would suggest they're oversold. when you have a name like cmi, nice reversal the last couple days off that 260 level. i think really important that continues to hold. caterpillar coming off 315. really big level for what was essentially a former leader of the last 18 months. and uri, this 595, 600 neighborhood -- i think we're going to get a real-time tell here, is the economy still on good footing? if it is, i would expect these

to rally out of it. perhaps the signal is that these rallies fail, we'll have to adjust, but i would give them the benefit of the doubt here. the long-term trends are still in tact. >> makes sense. some of the economic data has been soft, and that's basically corresponded in terms of caterpillar, for example, this move from 380 down to 310-ish or so. which does make sense. and somewhat counterintuitively, i would think. when rates continue to go lower, that's not fog to be necessarily supportive here, so, in a weird way, i think, you want rates to sort of stop here and actually continue to go back up. >> it's been fascinating to look at the rails relative to this group, because they've been abysmal. and if you look at a unp, it's a question of pricing power. we're starting to see the supply chain dynamics that made rails very defensive and a very interesting play from a growth side 18 months ago. these charts are to watch. down 10% on the year. reports in a couple of weeks,

probably four weeks, but you have an opportunity to see where rails are overly beaten up. if the company is where we think it is, which is not off the rails in terms of strength, but certainly on the rails in terms of, you know, some type of trend growth, rails should be doing better. >> julie, do you have a small cap pick within the industrial world? >> i really like ads -- wms, advanced drainage. i like the idea of having exposure to water in infrastructure. i think in an election year, you're going to see more public sector spending to kind of boost any kind of sentiment around that, and so, i think that's a nice way to play that. >> all right. coming up, the low cost insurance carrier relying on generative a.i. zest. an a.i. look at how the company is using gen-a.i. to help get gen-z covered. that's coming up m, more "fast money" in two.

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it's the go-tos that keep us going. the places we cheer. trust. hang out. and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. powering more businesses than anyone. powering possibilities. welcome back to "fast money." shares of lemonade rebounding, closing the day up almost 4%. shares of the low cost insurer known for its use of generative a.i. to measure risk down 17% over the past month, but the ceo is optimistic, particularly when it comes to a.i.'s benefits. daniel schreiber, welcome to

"fast money," to the nasdaq. good to have you with us. how do you measure the impact gen-a.i. is having on your business? can you see the metric was here six months ago, versus here today? >> yeah, absolutely. insurance is a stunningly big business, 11% of gdp, it's pretty nuts. and all of it at its core is about monetizing probability. it's really all about using data, ingesting it, predictions. so, it's really the foundation of our industry. and businesses within our sector are not built on a.i. are missing out on the most forceful technologies around. it effects everything that we do. the company was built upon it. so, it starts with managing risk. every consumer who comes in has about 50 different machine learning models analyzing and making predictions about, will they way, will they churn, will they claim, you create a very rich lifetime value picture in real time, and that drives all of our marketing spend. that 90% of our marketing spend

is driven by optimizing to those machine learning probability theory-driven kind of predictions. and then once you're onboard, the consumer experience is entirely a.i. 98% of our policies are sold without any human intervention. 98% of claims is taken without any human intervention. and 50% of the time, the claim is paid without any humans. about a third of all inquiries, whether by e mail, sms, or through the app, are answered through generative a.i. so, this transforms everything, from the risk management piece to the cost to serve piece, to the user experience. >> do your premiums or what you charge customers for various policies change according to what the machine predicts about that consumer's behavior in the future. you mention ed cross cell. if the consumer is likely to buy another policy, a pet policy, property insurance, will you reduce the initial premium to capture that stream of revenue? >> in places where we are allowed to do that from a regulatory point of view, yes. in europe, for example, we are

approaching germany, france, there, they're much more allowing of that kind of dynamic pricing in the u.s., much less so, but we can guide where we spend incremental dollar to where we think we'll get the best bang for the buck, and that does use those machine learning predictions. >> cash flow profitability, net cash flow positive by the end of this year, which i thought was a huge deal. the stock doesn't seem to be reacting to it. is it as big a deal as i think? >> i think so. we ipo-ed some four years ago. 5x-ed our business since then. this is a business that's really driving on every metric, gross profit, top line, bottom line, profitability, cash flow, it's all green lights everywhere. the stock market will notice that sooner or later. the megastocks sucking a lot of that oxygen out of the air, but the fundamentals in, 15 quarters in, we have beat and raised 15 times. i think we're on the right track.

>> and back to the dynamic around a.i., and i guess, you know, what we hear -- sounds like not only is it critical, but it's been a game changer. so many companies, you know, we hear about a.i., we see the performance of nvidia, it's not as if you just flipped the switch last year. i'm curious of that. but bring that more to strategic thinking in terms of the growth of your company, and where you are disrupting and where there actually might be people out there that, you know, you're not going to ever talk about m&a, but you can talk about the concept where you think actually the bigger players in the insurance space are not as nimble as you and might be interested in what you do. >> i think they are, and we've been acquiring rather than selling and we hope to continue that. we're going to be approaching a billion dollars of premium this year. we could 10x our business, and we plan to, and we still wouldn't be the largest insurance company around. this is really unlimited upside. there's so much we can do. and we're competing with companies that we respect, but

in terms of technology, the incumbents are encome pers. geico has 6 00 different systems that don't talk to each other. when you have that kind of legacy behind you, you are really going to struggle to take advantage of everything that we just spoke about. the number one cause of loss for most insurance companies in america in their database is other. garbage in, garbage out. you can't close the loop, you can't do the stuff i just spoke about. so, i think these are structural advantages that will manifest. such a tiny scale, to already be best of the pack, once we 10x our business and our cost structure hardly moves, we doubled our business in the last two years, play that movie forward, and you have a good sense of where we're going. >> to tim's point, though, i'm wondering if you feel you've not

been given enough credit in this sort of a.i. frenzy for being an a.i. company, one that was actually formed around a.i., your systems are based on a.i., everything about you is a.i., it's in your dna, and yet -- didn't know, maybe -- do you feel like you deserve a little bit more of the a.i. pixie dust that is being afforded to some of the other players? >> i think we're trading at a price that doesn't make a ton of sense. so, this was a wonderful buying opportunity for those who were looking. there's been a.i. -- not simply about pixie dust for us. for us, it's a structural thing. as you rightly say, from day one, it's been part of our tag line this is not a johnny come lately, we discovered a.i., this is the foundation upon which we built our business. >> one of the big stories in the insurance business has been the increase in premium just year over year. is that beginning to ebb at all? are you seeing any evidence that the pace of growth, or the pace of price increases is starting to come down? >> i think so. it's really driven by inflation, so, all of those prices were simply a time lag, because the

regulatory framework. a time lag to the inflation which over indexed on car and home, so, you saw those rising pretty significantly. 20% inflation within the car industry. so, that reflected itself in our rates. and yes, companies are earning in and i think that wave has perhaps plateaued and you'll start see it filter through pretty soon. >> daniel, great to see you. >> thank you so much. coming up, tesla, chipotle, and broadcom trading in heavy volume. we'll go inside today's action for a closer look at why these big names are jumping. more "fast money" in two. (grunting) at morgan stanley, old school hard work meets bold new thinking.

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welcome back to "fast money." what do tesla, chipotle, and broadcom all have in common? today, it's big gains on massive volume. three stocks all significantly outtrading their 30-day averages to kick off the week. tesla trading up more than 150% of its average volume. chipotle, 175%, broadcom, nearly 300% of its 30-day average. with volume this high, these trades made us go hmm, what's going on? and you have the split dynamic of chipotle, as well as broadcom here, but -- >> i'll go to broadcom.

this is one we've said, look, it appears it's like an expensive stock because of the price tag, it's anything but. it's actually reasonable. this is one that we've actually done a good job with, i think. and what it feels like to me, people are realizing, wait a second, this is a name they can get their arms around in terms of valuation, so, like many of these names, there's a huge catchup going on. so, at least broadcom makes sense to me. >> what does this mean to new terms of the volume side? >> it certainly wakes you up to some big moves. and looking at it through the lens of tesla, i'm open to changing my mind here. they had a chance, the bears, to really punish this thing the last four, five weeks, and they couldn't keep it down. you have the moving averages starting to flatten out and turn up. you have to wonder, is something starting to percolate here? >> that chart is amazingly, i'd call it docile. other than that quick shot down, it's traded between 165 and 185. i've been a bear, too, i'm not sure i'm ready to change. the chart is impressive, i think. up next, final trades.

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time for the final trade, julie biel? >> you know, i'm nervous about home builders, but simpson has 70% share in wood connectors. good enough for me. >> geek squad today, guy. >> yeah. >> altria, a member of the consistent div earner company. >> chris verrone of baird? >> i think the industrials turn up here. cmi. nice hammer bottom off 260. >> great to have you here, chris. >> guy? >> i wear my geekdom proudly, as

you know. some of us embrace it. good sweep at shea this weekend, tim, that's extraordinarily well done. i think lennar holds this 150 level, as chris said, earlier in the show, melissa. >> all right, thank you for watching "fast money." see you back here tomoowt 00rr a5:. "mad money" with jim cramer starts right now. more "fast." "mad money" with jim cramer starts right now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you a little money. my job is not just to entertain, but to educate and teach you. call me at 1-800-743-cnbc newsom. tweet me @jimcramer. you want to know the single most useless thing you can do in this busi