buying fewer macs as a percentage of overall pc sales than in the past. apple generally outperformed. it could be a huge holiday season if they could deliver that. >> we'll see what they say. jon fortt, michael santoli, thank you, guys. "fast money" begins right now. "fast money" starts right now. i'm melissa lee. traders on the desk, pete najarian, karen finerman, dan nathan and guy adami. tonight on "fast," there is an emerging trend that could help you. we'll explain exactly how it works later this hour. plus, there is one group of stocks that suddenly fell and fell hard today. it could spell big trouble for the consumer and broader markets. and later, check out shares of chipotle sinking after earnings. we'll hear what how they are trying to win back customers. first, we start with apple falling after reporting earnings moments ago. cnbc's josh lipton spoke with ceo tim cook. let's go straight to him at

apple head quarters for the details. josh. >> reporter: i did, melissa, just speak to tim cook. let me give his rundown. as for the iphone, he said they couldn't be more excited about the demand they're seeing for those new models, the 7, and 7-plus. he pointed out the demand continues to outstrip supply, specifically for the 7 plus. i did ask him about competition. i was interested in his reaction to, of course, samsung and that really unprecedented blunder with the note 7. cook telling me too soon right now to really identify how much of an opportunity that is for apple. he, of course, said they do welcome all switchers. he is ramping up supply of the iphone 7 plus. he said. but that's not in a reaction to samsung. that's simply trying to meet demand. i think you also hear a lot of investors have questions about greater china. you did see revenue fall about 30%. cook, in his explanation, saying a lot of that is due to just really apple being a victim of its own success. specifically that six o'clock such a blockbuster, creating

very tough comps for the company. he did say he expects a better performance out of greater china in q 1 and q 2. also for the mac, remember hearing rumors here at apple headquarters in cupertino on thursday, we might see a new line of macs. cook saying the rumors might be creating a pause in demand for macs. he's, of course, looking forward to that event. and finally on services, we did see a pop about 24%. i asked cook whether he would ever at least consider maybe offering a package of services. in other words, instead of paying for apple music and storage, would he ever consider a package. he smiled and said, "sure." i'll let you make of that what you will, melissa. i'm going to hop on the conference call and bring more headlines as they come. >> thanks for the update, josh lipton. this is apple's third straight quarter of sales decline. second straight quarter of earnings decline.

the big question here is, are apple's best days behind it. dan, i'll kick it off with you. >> probably not. you have the three consecutive quarterly sales and earnings declines here. we knew what's going on here. they're in the third year of a cycle of a phone that's the same -- the same hardware design they've had. so, you know, to me, you are really getting ready for this ten-year event that's going to happen next fall. it's going to be what a lot of people with calling a super cycle. i think you're going to see more of the s sort of upgrade cycle for the 7. you're going to have a big quarter in q1. that's coming at the end of this holiday quarter. a couple take-aways. the quarter -- the guided gross margins flattish coming up. the one disappointing thing, asps were below expectations. average selling prices. >> for products. >> across ipad and iphone. the iphone the big one here. there wasn't a heck of a lot. remember, since they launched this phone in early september, introduced it, the stock has gained $100 billion in market cap. i think expectses were very high. >> that's the context.

is this the quarter to keep up the 20% gain since the last earning support. >> this guy wasn't a disaster, at all. it was fine, had it not run up, it would have been a good quarter. so -- in terms of is it their best days mind them, i think their days of hyper growth that explosive, innovation all of the time, i mean, always hitting it right, probably. it's just -- it's so hard to ever maintain that. but i agree with dan. i don't think the stock is -- i don't think -- i do think we will see the stock higher than here at some point. i don't know if it's the end of next quarter. the quarter setting up not bad. >> holiday quarter. you guys, you're more bullish than i expected. i thought you were going to come out here in a huge bear and i was like, whoa. >> really nothing to pick at. >> you find the things you want to pick at. that's all i'm saying. i almost feel like, wow, we're on the same page. >> only two minutes into the show. >> i think the most important part of this earnings report is the services. i know how small that percentage is. but we've been focusing on where can they grow.

you've got a billion-plus devices out there. you look at the app store, that's running very strong for them. that's something that tim cook has been aiming for. 24% growth. $6.3 billion, a record number. yes, a small percentage. but they're getting growth where they need it and the stock run-up very similar to intel in terms of you get the huge run-up. apple went from under 100 to 118. now we're looking in the post market at, what, 116, something like that. i think they delivered, but i think what they delivered most on, in my opinion, is talking about the next quarter, and i think the comps you're talking about, dan, whether it's the macs or you start looking into the holiday quarter. i think there's different areas you can look right now. you can say, you know what, apple has got room to run. >> they guided the first quarter revenue higher. you talked about it before the show. gross margins, 38%, were probably better or in line with what people are looking for. i wish i could come up with something more exciting. i actually thought the asps for the phone were better than expected. i thought the average selling price for the iphones were 1616.

it came in at 619. we're splitting hairs. the stock traded up to the level -- actually, in the post market, 120 and change, up to levels we saw last november, and it's backed up a little bit. i don't think it goes -- i don't think it goes anywhere from these levels, to be honest with you. >> what is the right multiple to put on this company, you know. and it's probably in the fairly -- valued right now. but if they can accelerate a little bit, and the mix changes -- so if pete is right and the mix changes -- >> recurring revenue stream, a bigger percentage of the revenues -- >> far more valuable than a lumpy, potentially -- >> you make the point, a billion devices out there. what's not keeping them -- why can't that be more super charged than the growth that we have seen? >> something more than the 24% is what you're saying. >> right. >> you know, that's an interesting question. i mean, you look at what they have to offer under the services area, and the apps and everything else. those numbers just continue to climb to the up side. i think vem we're going to

see -- >> this is where -- >> i want some of that negative activity. >> coming off the mat in 2013 and 2014, people were looking at the iphone expansion in china. sales started growing, a triple digit percentage. it was basically almost -- i think it topped out at almost 25% of their total sales. so if you're telling me that the services is going to pick that sort of growth up, they're not going to be able to grow like that and the iphone until they really have distribution in india and indonesia, big growth markets and they're not there yet. what is going to be the thing that lifts them -- >> does that imply you think services is a percent of sales for north america or the united states, the developed markets -- fully penetrated markets is at peak? >> no. i'm saying its a great opportunity for them. what i'm saying is right now it is only growing at 20-some percent year over year. it's not eye-popping yet and too small a percentage. 14% of their total sales in this quarter. what i'm saying is, it is not going to be a growth engine in 2017 after a $230 billion revenue base. >> but to answer karen's question, what's the right

multiple. i think they -- i don't think they get rewarded for their cash. i actually think they get dinged for it. because interest rates globally are zero and because 75, 80% is domiciled overseas. if they ever figure out a way to get it back or put it to use, that 13 multiple that it currently trades at to me should be higher. >> let's dig deeper into apple's report with david garrity on the red phone monitoring the earnings call over the smart board. what do you make of the quarter? what's your assessment here? david, can you hear me? >> yes. >> david, what's your assessment of the quarter? i know the conference call is riveting. what do you make of the quarter? >> the assessment of the quarter, the iphone 7 is very colorful. tim cook is happy to tell us the color schemes are looking strong. they're making the argument is that apple pay is strong in the option outside of the u.s. transaction volumes up 100%. is this going to displace visa or mastercard?

not necessarily. outside of this, cook is saying they'll be able to move more into home controller, home device control off of ios devices. so from that standpoint, cook is talking a lot about services but not really coming in and talking about the meat of the company, which clearly is the iphone. he says simply that demand is greater than supply and they're struggling to catch up. doesn't say how soon, though. >> so you have some questions regarding that. do you think it's suspect he hasn't actually said more so far? >> we were hoping to see cook talk about the competitive developments happening and what a window of opportunity there is for apple, as far as the missteps that have come out of samsung. from that standpoint, we're staying very closely attune, because at the end of the day, that arguably is going to be the main profit driver for the company and will drive the stock. >> all right. david, thanks a lot. we'll check later on. david garrity, gva research. apple down by 2.1% or so,

pretty active volume here. and the s&p futures feeling a touch of pressure based on apple's decline in the after hours session. so who here on this pullback would buy the stock? show of hands. raise your hand if you're going to buy the stock on this pullba pullback? >> on this pullback? 2% is not enough -- >> tomorrow we see something deeper? >> potentially. 2%, we're coming off recent highs, 118. i don't know that's a huge pullback where i would say, oh, this is a great opportunity. we see anything further than this. i like the services number enough, i would be a buyer. >> i might below 115. trades tomorrow. to me, you know, when i sold it, the samsung thing hadn't happened. i actually think that is a really important piece of the story. and so that would make me -- >> 115 is your line in the sand. guy. >> if this stock off this earnings which i think we all said is pretty much middle of the road, if this stock somehow mech -- is there a c in that? >> i'll allow you to have one.

>> if this can go higher tomorrow, then there is -- you've been looking for. this is where it's trading, three or four days ago. so positive price action tomorrow leads me to believe it makes the next move higher. >> here's the thing. what i would like to see as far as apple is concerned, they're going to have a big redesign next year and that's the most important thing. two-thirds of their sales. i need to see other exciting things going on in the text base right now as it relates to consumers. just mentioned home kit. what are they going to do with the smart assistant, echo, and echo-like device. google is out there. these guys are never really first, and they do it better ultimately. i want to see them expand this eco system. we mention the watch? >> or tv. talking about tv -- >> i want to see them get beyond -- i want the phone to be the hub of everything. and they're not doing that for us yet. and so i want to see that play out in 2017. >> much more in apple still ahead. not just apple out with earnings. chipotle sinking while panera

jumping. and one group of stocks getting crushed today and could be sounding the alarm on the consumer. those names and what it means for your money. and famed short-seller jim chaino says investors are missing something big about caterpillar. we'll tell you what he said when "fast money" returns. chanos [accountant] my job is to manage and grow businesses.

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. welcome back to "fast money." shares of caterpillar falling after its earnings report. jim chanos on the halftime report talking about why he's still betting against the stock. >> the problem for caterpillar, though, is just that you saw once in a lifetime super cycle buildout in mining and construction. so right now, at about $100 billion in annual cap x, the cap x in the mining industry globally is seven times what it was in '01 and almost 30 times what it was in 1991. we literally saw a once in a lifetime because of the buildout of china boom in big digging holes in the ground. >> chanos said he thinks they will be looking at weak demand for years to come. we know at least for 2017 flat.

>> this is not the first time we have seen it over the last couple years. i think the main reason, in my opinion, the stock has rallied as strongly as it has this year. people have been looking for yield and they find it in the form of cat's dividend. for better or for worse. so if interest rates do go higher, i think it's negative cat. i've got to tell you something. at 24 times forward earnings, where it's credible trading in the world we live in right now, i think it's way, way too expensive. i mean, i'm not saying like mr. chanos, who has forgotten more about cat than i'll ever know. if you're long the stock and had a huge run this year, you absolutely have to be taking profits. >> i totally agree with guy. you look at the multiple of trades right now. if people are really running for it and i think they were running for it for yield and now all of a sudden seeing a 3.5% yield that still looks pretty attractive, i don't think now is the time to jump on cat. you have to wait for a significant pullback. this is a stock that was $60 early in the year, runs you up just under $90. i don't think you want to be buying it up here.

i know steph was talking on the "halftime report" now the industrials have more lift, maybe potential behind them. i think multiple is way too high. >> does this make you concerned, karen, about other industrials? >> i feel like cat has their own unique story. and so it would be better for other industrials if mining were great. but for me, a name like uri, very specific issues here and they have some balance sheet -- it's not the cleanest balance sheet there is. so, you know, the dividend is -- it's nice. but it wouldn't be so shocking. >> right. >> to me. it wouldn't be so shocking to see that change. >> next up, netflix ceo reed hastings speaking to julia boorstin last night about what buying at&t could mean for the streaming giant. >> hard to tell. very early. we didn't know anything about it. just sorting through it. you know, for sure, we want to make it so that we want to require that for at&t customers that hbo and netflix are treated

the same. now that they're going to own hbo, we think that any, you know, special treatment for hbo data would be inappropriate. but i think that's pretty basic. >> so will an at&t/time warner deal, could that hurt netflix? >> i don't think so. you know, he didn't look too bothered, does he? the stock is back basically near the all-time highs or not too far away from it. their sales have accelerated the fastest growth this year than in five years, they're going to grow 30%. i think he sees, you know, they're growing geographically. they've gotten that bump back with some of the original content over the summer. won back some of the subscribers. the problem is, a $55 billion market cap. everyone trying to figure out who is next. no one is going to buy these guys. not going to sell for less than $75 billion bucks. >> so apple/netflix -- >> no way. >> no way? >> apple doesn't make deals that size. that -- >> they're biggest is still beats. >> $3 billion -- >> you probably -- it's a $65

billion deal. and i don't think apple is in a position to do. nor do i think disney is about to sit at the table for netflix. i'll say this. i think we've been constructive on the name for a while. it has run 27, 28% in a week. and to dan's point, it just traded up to levels we last saw this time last year. so if it starts to fade here, you've got to be really careful about trying to buy this dip, because it could go right back to levels we saw a week and a half ago. >> the last thing i would say, why did he look so comfortable, reed hastings, i think he believes, which i believe, as well. i don't think this deal goes through. i think there are fluff people that are going to fight this deal. >> if he did, it would imply it would hurt netflix. >> i think it would to some degree. i just look at it and say, you know what, i don't know how this deal goes through. amy klobuchar in minnesota, on the right side over time, one of the political folks fighting these deals, i don't think this m & a can go through. >> what do you think, karen? >> i don't -- you know, like

from a -- a giant hole in it, it could take forever. to me, it highlights, you know, the value of content. so it could be a little negative for netflix, maybe. but i mean, they're killing it on content. >> right. still ahead, check out apple falling after ours. we'll hear from ceo tim cook about what drove the quarter. i'm melissa lee, you're watching "fast money" on cnbc, first in business worldwide.. here's what else is coming up on "fast." >> one group of teflon stocks suddenly crashing and it could spell trouble. we'll explain. plus, an emerging trend is gaining traction and we'll tell you what that is when "fast money" returns. alue of capital? what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods?

the value of capital is to create, not just wealth, but things that matter. morgan stanley

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welcome back to "fast money." let's get to the biggest story in the after hours market. that would be apple. it is falling in the after hours session. this is off the after hour session lows, down by more than 2.8%, now trading at 11.65. the third straight quarter of sales decline, second of earnings decline. the conference call is you said way right now. the q & a portion just started. let's join tim cook here. >> i'm not sure. i wouldn't say yes at this point. because the under lying demand looks really strong on both products, particularly on the iphone 7 plus versus our forecast going into the product launch. >> thank you. >> next question, please. >> katie huberty with morgan stanley. >> thanks. good afternoon. luca, can you help us understand what's embedded in revenue

guidance for the extra week, as well as any rebuilding of channel inventory, given all the major products are running below target. just trying to get at whether you see revenue and in particular iphone growth here on more of a sellout basis when you adjust for those two factors. then i have a followup. >> sure. let me say a few things on the 14th week and revenue outlook for the december quarter. keep in mind that the december quarter a year ago for us was an all-time quarterly revenue record. we think we can grow this year. it's been said the interest from customers on iphone 7 and 7 plus is very strong. the strength of our services business, you see, we have grown 24% in september, we think we can continue to grow very well into the december quarter. you mentioned the 14th week and the few extra days.

but i think it's important to keep in mind that there are other factors that go and offset these extra few days. as you know, the launch timing of the new iphone is different this year. we had the first 90 days of sales this year hit q4. there are only two days last year. so the cadence is -- has moved more towards the q4 this year versus last year. as you know, we increased iphone 7 inventory by 3.3 million units in the first quarter of 2016. as has been said, we are very constrained on iphone 7 plus this year. certainly more supply constrained this year than we were a year ago. and then keep in mind, there was -- there were a couple

things that affected as well, which is the fact that a year ago, we had an award for an i think fringement of $548 million, obviously 10 and is not going to repeat this year. and also the foreign exchange environment remains difficult. and we expect effects to be about 650 million headwind on a year over year basis into the december quarter. so i hope that gives you a bit of a sense that when you take into account all these factors, we believe this is a good guidance for the december quarter. >> that's great color. thank you for that. followup for tim. what should we read into the fact that r & d has more than doubled over the last three years while sales growth was sort of a fifth of that. are r & d investments just less efficient than they were in the company's history?

or should we think about that as incremental spend for products that haven't yet come to market? >> there's clearly some amount of r & d that are on products that today are in the development phase that have not reached the market. and so that's a part of it. and we feel really great about the -- the things that we've got. we have also put, you know, a lot of emphasis on our services business, as well, and on making the ecosystem even better. and so we're very much -- we're confidently investing in the future, and that's the reason you see the r & d spend increasing. >> thank you. >> thank you, katie. the next question, please. >> from crash research, shannon crass. >> thank you very much. a couple questions. the first, tim, can you talk a

bit more about china, just how you're thinking about it? you know, where you're seeing pressure? i know you mentioned you expect to see a significant rebound during the first quarter. but, you know, what are your customers telling you about the demand in china? >> yeah. it's a good question, shannon. so to sort of back up from our results for the quarter -- 90-day clock and look at the full year of '16, we were down 17% compared to the fiscal year '15, which was up 84% from the previous year. so if you look at '14 to '16, the revenue grew 52% and pretty good results. also, as you probably know, the fiscal year '16 performance was hurt by the devaluation of the currency, which affected it about 3%.

so the underlying business performance was 14% down. and so why was it down? the -- there's lots of reasons, but the largest one in our view is that when you look at what happened in '15 in china, we had a surge of upgraders that came into the market for the iphone 6 or iphone 6 plus, and this -- and the upgrade rate increased relatively more in greater china than elsewhere around the world. and so when that upgrade rate in fiscal year '16 returned to a more normal upgrade rate, which would be akin to what we saw with the iphone 5s as a point, it had further evolved. and so that's the main reason in our view that you see a difference.

now, that -- that spun created another issue for us. we didn't -- we didn't forecast that accurately, so in q1 of last year, we put in too much channel inventory and had been resetting the channel inventory over the few quarters that came beyond it -- or came after it. so those two issues, which really the main -- the main one is really the first one and the second one was a symptom of it, are in, our views, the main issue. now looking forward, the response to the iphone 7 and plus has been very positive. it's very hard to gauge demand, as you know, when you're selling everything you're making. and so we'll find out more through the quarter, but we're confident enough to give you guys guidance that we're returning to growth this

quarter, which obviously feels very good for us. and from a -- longer-term point of view, out of the 90-day clocks and so forth, we are very bullish on china. you know, we continue to see a middle class that is booming there. there might be some sort of a new normal in the economy. but a new normal there is still, you know, a good growth rate. and so with the number of middle class -- people growing into the middle class, and the lte adoption rate being still, you know, fairly low, around, you know, 45, 50% or so, then i think we continue to have a really good opportunity there and so we continue to focus significantly in china. >> thank you. and then can you talk a bit

about acquisitions and i don't mean the smaller ones you've done at a smaller cadence, but there was one announced this week in the content world, and especially if you find a way to have -- repatriation of the cash at a low tax rate, possibly, with the next administration. so i just -- if you can give sort of an overall view about how you think about acquisitions that might be larger than normal. >> we're open to acquisitions at any size that are strategic value where we can deliver better products to our customers and innovate more. so we look at a whole variety of companies, and based on that, we choose whether to move forward or not. but we're definitely open and we definitely look. >> thank you. >> yep. >> thank you. shannon. the next question, please. >> we'll go to tony with

bernstein. >> yes, thank you. i have a question and a followup, please. i guess apple is benefitting from an extra week this quarter, and is benefitting from samsung being in complete disarray. and yet from your guidance, it's unclear that iphone unit growth will be up or certainly not up more than low single digits implied from your guidance. and i appreciate some of the issues around channel inventory build and the timing of the launch. but if i just stand back from that and say you have terrific new products, your major competitor is lying down. you have an enormous -- you have a significant contribution from an extra week, arguably 7 or 8%, and yet the iphone growth is sort of flattish, what does that

really say about how investors should think about iphone on a sustained basis growing forward, and is it reasonable to think that this is an ongoing growing business for the company? >> tony, let me take this one. i think you mentioned, you know, a number of the things that are affecting us in the december quarter. and i went through them with katie just a few minutes ago. you're right. we've got an extra few days. you know very well the launch timing is -- we increase iphone china inventory by 3.3 million units a year ago. i mentioned two issues that affect us, you know, the one time or from a year ago that you obviously need to exclude. and, you know, the effects that -- the reality of our business right now.

but maybe the most important element of this is the fact that we are supply constrained on 7 and 7 plus. so when you talk about are there competitors, it's not particularly relevant to us right now, because we are selling everything we can produce. and so, you know, when we look at all of these things in its tolt, we think for the total company, we believe the revenue is going to grow. you know we don't get into specific product from a unit standpoint getting guidance. and so we feel very confident about, you know, the trajectory for the company and for iphone going forward. >> tim, if i could ask you one, please. you've talked in the past about television being an area of

intense interest. i was wondering if you could reaffirm that statement, is that still the case, and then additionally, given what's happening with acquisitions, how broadly you think about the role of content apple has started creating on a very limited scale, some of its own content. and whether you think content creation and ownership is important to apple, or whether apple ultimately sees its place in the value chain as being more around ecosystem and distribution. >> i would confirm that television is a -- has intense interest with me and many other people here. in terms of owning content and

creating content, we have started with focusing on some original content, as you point out. we've got a few things going there. that we talked about. and i think it's a great opportunity for us. both from a creation point of view and an ownership point of view. and so it's -- is an area we're focused on. >> thank you. >> and that was apple ceo, tim cook. we'll check back in later. tim cook addressing the decline it saw? china, saying in 2017 they saw a huge upgrade rate and that explains for a more normalized uptake rate in '16 and the latest exchange, talking specifically about content in light of the proposed at&t/time warner deal, saying tv is of intense interest to me. those are his words, as well as

other people at apple. and this is an area content that they are looking at very closely. is anything that he has said so far changed your mind, dan? >> no. i mean, in china, this is the third consecutive quarter of down 30% year over year sales. so when you think about what's going on there, he talked about upgraders in 2017. but here's the big issue. when you look at the top ten -- excuse me. smartphone providers in the world, seven of them are in china. and that's what's coming on. that -- we used to talk about -- remember this stuff? this is coming. and so to me, i think that's going to put some pressure on their asps in china over time. so i'm not expecting a huge uplift in growth in china any time soon. >> pete? >> we talked about the lte, the adoption -- >> still low. >> right. and it's still low. and that brings me to something you were talking about earlier too, dan. i can't remember if it was on-air or on the break. in terms of india. and when you look at the areas of growth, i bring up services all of the time. the other thing still is india, china. i know we have seen the slow down. part of that does have to do with this adoption of the lte.

and until we get to those levels, we're probably -- >> last year on a call, or this year, tim cook said, india is six years where, you know -- six years ago where china was. i'm just saying. so don't hold your breath for india. >> right. >> he said it, his words. >> we should note that apple shares right now are sitting at after hour session lows, just about down 2.9%. we'll continue to monitor this conference call as it rolls on. meantime, let's take a look at some of the other big after-hour movers. chipotle is lower, panera higher. we'll bring the headlines moving those stocks. plus, traders betting on a huge move for tesla when it reports earnings tomorrow. the only question is, which direction? we'll give the details when "fast money" returns.

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. welcome back to "fast money." chipotle and panera on the move. susan lee standing by with the latest. >> hi, melissa. yes. chipotle on the conference call says they're trying to emerge from the most difficult year in the company's history. bad quarter gore them. sales missing, revenues missing. earnings missing. interesting development that they just announced on the conference call in regards to a southeast asian restaurant chain. >> shop has not demonstrated the

ability to support an attractive economic unit model. as a result, we have decided not to invest further in developing or growing the shop house brand and will pursue strategic alternatives. >> there you go. they are closing down shop house. meantime, they confirmed to the market they will lower the number of new restaurant openings into the future. i guess there was one bright spot for them in the previous quarter they kept highlighting throughout the conference call and that is chorizo offerings, which they say has really caught on. here's one company that's doing well in this restaurant recession. panera bread. we saw earnings beat, also revenues in ahead of estimates. but despite the fact we had comp. sales actually missing in the quarter, we only got 1.8% of the markets looking for 2.8%. panera bread, 2.0, as i call it, given that digitization and the mobile strategy continues to bring in the customers and hence you see the stock rallying in the after hours. back to you. >> all right, thank you very much, susan lee here at the

nasdaq. let's -- guy, i think -- we tult all tried the chipotle -- to see if that had any legs in terms of it being offering. we all enjoyed it. that was a bright spot at chipotle mexican grill. at the same time, you have been bullish on the stock. >> i'll tell you something. it looked like i was a hero for a while. in the after hours, the stock was 420. now it's down. all they needed to do was say something remotely positive. comps down, be not remotely positive. operating margins were a huge miss. now what happens? well, i've got to tell you something. they authorized $100 million buyback. we'll see if that helps. bill ackman came out recently, filed an amended statement. this is now put up or shut up, man. he's in this from obviously higher -- it's time to -- in my opinion, for somebody to make a stand in chipotle. >> well, i didn't realize how volatile aftvocados were. >> yeah. >> going from 30 to 80 -- 30 to

80. and they don't have the -- >> huge increase. >> huge increase. by the way, melissa is excellent at making guacamole. >> true. may not believe it. >> not in a position to be able to pass along price increases. >> right. >> so now bill ackman, we see, looking at his first, was not particularly aggressive. left open all of his options, which he should do. we'll see. that will be interesting if he turns up the heat here. i don't know if -- i don't know. i don't know if he will, but it's -- you know, gives him an opportunity, certainly, to -- >> and to stick with chipotle just for a minute, rather than panera. the reason i find it so interesting, people are trying to fish for the bottom and having a really hard time. when you look at multiples and look at something like a yum brands and see this trading at a 20 times forward, you look at chipotle, it's still 30 times forward and talking about somebody really struggling. missing, missing big. their margins -- >> they're talking about contraction and all the rest. so for a lot of reasons, why do you need to jump into this name

until they can show their turn. >> let's take a look now at another highly anticipated earnings event. that would be tesla. reporting tomorrow after the bell, can the car-maker shift gears for a comeback? dan at the smart board with a preview. >> shift gears. i got that, mel. tesla reports after the close. the options market implying about a 6% move. that's in line with the fourth quarter average. when you think about that, you say, well, for a stock that's been so volatile, why isn't the applied move greater than how it's been moving on average over the last four quarters? one reason is, we know they already gave their q4 or excuse me their delivers. 24 kind of 24 1/2,000 deliveries of the model s, but it's been a newsy year for tesla. we know the issues going on with the solarcity bid, the autopilot stuff, people focused on the cash burn. but look at that. all of that kind of is becoming into the stock a very well-defined down trend here. it's obviously found some support at 200 bucks. here's the thing. when you bull this out, from the

2010 ipo here. this level down here at 200 that's kind of been holding on here, has to hold here. we're not expecting a whole heck of a lot of news between now and really some updates on the model 3. that's the mass market one. that's the one that they have taken 400,000 preorders and need to see some traction there. that's the future of the company. >> all right. thanks for that, dan. for more "options action"s, check out the full show, 5:30 eastern time on friday. the hot new index that could hold the key to beating the market. we've the got name to keep an eye on. you're watching "fast money" on cnbc, first in business worldwide.. hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary.

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welcome pack to "fast money." if you haven't heard, cnbc is unveiling its new cnbc i q1 hundred index, powered by m cam. here is david marr tin, founder and chairman. great to have you with us. >> great to be here. >> this is a rules-based index, no human tinkering with it. and values companies who innovate and demote money to research. >> one step further. companies that not only innovate but actually know how to use their innovation and that's one of the big messages that comes out of this index. a lot of companies file a lot of patents, a lot of companies spend money on r & d and have no idea what to do with it. the companies in the index are companies that are actually driving their marginal value because they are in innovative and because they know how to respond to market opportunities. >> so how exactly is that calculation made? >> well, it's made by a number

of factors. the first is we look at all of the innovation that is are actually aggregated from 168 countries around the world. so we're not just looking at u.s. markets, we're looking at global markets. and we're saying, how is a company actually anticipating where markets are coming and then defending where they want marginal profit and marginal controls as they look at the global marketplace. most of the time, people actually look at maybe how a single sector or single region is performing. we're actually saying, can we get a forward look on where that company is going and are they positioned to respond to what's coming? >> and you've back-tested this? how does it get back to us if the index can change every year and if one's intellectual property or investment in innovation may be pleelth different five years ago versus today? >> yeah, well, we've been doing this since 1998 and focused historically on the credit markets. but as we moved into the early 2000s, doing this on the equity markets and formally into fund management. we have funds that are actually using pieces of the strategy we've been deploying for quite a long time. the key thing about the back

test is to say, the data that we're using is actually going to give us that ability to tease apart where marginal profitability is coming from. so we're not just looking at a company and top line growth or top line earnings or anything else. we're actually saying, what is it that's really driving the value creation, so when we pick, like we did in the index, a look heed or crane or companies that did well today and really have really crushed it in both today's performance and going forward, if you look at why those companies are there, they are highly diversified, they have anticipated where market growth is coming from, and their engagement with the market says we first innovate, protect the markets and go for them. >> thank you for coming by. a new index cnbc launched in today. >> fascinating. something we all concentrate on. what were we talking about after hearing apple's earnings tonight. >> innovation. >> and also guidance. this is giving that look forward

into the future. >> all right. still ahead, final check on apple after hours and the traders. we'll tell you what they're watching for tomorrow. stay tuned.

time for "final trade." david, what's your final take on apple now that you've been listening to the conference call? >> apple spent a lot of time talking about the extra week in september and how strong the dollar is and hitting the business overseas. wasn't necessarily talking about innovation, which is somewhat disappointing. so from that standpoint, even know samsung is off the field, apple is not moving in to clean up. >> all right, so you're disappoint disappointed is the bottom line, david. >> bottom line, with the stock here, i think it's probably drifts higher with the market, but i wouldn't run out and add a new position on it. >> david, thanks for joining us. david garrity. "final trade," pete. >> petrobras, pbr. big buying in there today, and pushing towards 52-week highs. >> karen. >> you probably saw under armour today, terrible day, but one bright spot. foot locker down on the news. it's fine, i like it right here. >> dan. >> the whole home improvement got sacked. >> lower lows. >> express scripps. >> really?

after a subpoena? after a subpoena, you say go buy it. >> yeah, because if it holds 70 bucks and doesn't fall on the wayside after the subpoena thing, it's going higher. giddyup. >> i'm melissa lee. thanks for watching. see you back here tomorrow at my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always work 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 it make friends, i'm just trying to help you make money. my job is not just to entertain but to teach, help and put it in context. so give us call. or tweet me. @jimcramer. these days people pretty much surrender the whole notion of money management to if you can't beat them join them concept o