margin they make on the '95 petrus we but you get to keep the bottle and you get a certificate. >> this is why people are silly enough to spend the money. >> you can see that and more tonight on secret lives of the super rich. >> if you just won at the casino, it doesn't cost you anything. >> "fast money" starts right now. "fast money" starts right now, live from the nasdaq markets overlooking new york city's times square. i'm melissa. tonight on fast, some classic trump trades showing cracks, some sold off hard today and that had one of our traders hitting the buy button. we'll explain. plus the word that stopped wall street, treasury secretary steven mnuchin giving president trump the credit for the rally. is trump the first stock market president? the man who took down nvidi

a, he'll tell us why he made the call and mouch more pain he sees ahead. but first, we start off with president trump's words late in the trading day that took oun retail stocks. courtney reagan has all the details on that developing story. >> reporter: hi there, melissa. late session movement in the retail stocks happened on headlines from a reuters interview with president trump with comments about the border adjustment tax. so the president says, quote, he supports a form of tax on the border and that a border adjustment tax could lead to more jobs in the u.s. as companies come back and build their factories here. president trump previously told the "wall street journal" the republican proposed border adjustment tax was "too complicated." trump said the administration would tackle tax reform after obamacare. the xrt retailer etf took a tumble on the comments, closing down 2.3%. you can see the leg down clearly in this chart. the american apparel and footwear association says that 95% of u.s. sold clothing and shoes are imported so a border

adjustment tax if it were to be in place would be very harmful to apparel retailers like the gap so look at gap shares. they lost 3.6% on the headlines in today. remember ceo art peck was one of those ceos in washington last week speaking to president trump. representative kevin brady and others about the pain that it would cause a retailer like his. gap earnings after hours did not move shares really in the post session though they are up now just a bit. jcpenney ceo marvin elsen was in washington last week. here you see the leg down that jcpenney shares took on the headlines ahead of its early release tomorrow morning and walmart's shares went from positive to negative in reaction to those reuters interview headlines that suggest president trump is at least considering some form of the border adjustment tax. but melissa, we're going to continue to debate this because he seems to sort of jump all around with this terminology, is it a border adjustment, is it a tariff, is it a border tax,

there's a lot to be discussed but we may not know until after obamacare gets handled. >> courtney, thanks a lot for that. certainly moving the stocks here. so, could a border adjustment tax be be essentially the straw that could break the backs of some of these retailers? >> well, certainly by the price action, yeah, absolutely. whether, you know, how big of a tax it is, the degree of the tax, probably doesn't matter if you have a border adjustment tax, products are going to be more expensive and you look at walmart. you look at some of the dollar stores, dollar tree got crushed today. those are the ones that are going to be in the crosses hairs if and when this happens. >> how do we unpack this, pete? there's some retailers that are not as exposed to imports than others. >> it makes the entire sector really difficult, i think, to ascertain exactly how these guys are going to be able to manage this whole thing so i think it makes it extremely difficult but we've gotten earnings tonight after the close. obviously it's not affected by the taxes but it's still an interesting thing. you know, it was today i think it was the u.s. steel ceo who was actually on and he was

talking about the idea that this is a level, fair playing field and that was what they kept calling it, rather than trying to use the same expression that everybody else is using, which is you know, some sort of a form of a border tax. whatever the case may be, i think it does make it that much more difficult because we all know how much is coming across the borders. >> but you know, here's the thing. it's not just the dollar trees and some of these lower end retailers. look at nike. this stock gained 13 bill clinton -- 13%. i think these guys really need better messaging because it is creating some real volatility it ha have. >> look at foot locker too. that's another one that got absolutely crushed today. we already know it. 98% of the apparel and shoes come from overseas so this whole thing, if they don't unpack it from the other tax returns -- tax reforms that they're trying to do, it could be a real disaster for all these stocks if not the entire stock market.

>> i'll see pete's ascertain and raise him an impervious. >> even better word. >> there are certain companies that seem to be impervious and i think one of those is home depot. morgan stanley upgraded the stock today. i will say better late than never but they are clearly late on that one but you just saw them coming off another fantastic earnings release. >> why does home depot not move on the threat of a border adjustment tax? you walk through the stores, righted, stuff comes from elsewhere, not all made in the united states. >> not all made in the united states. a lot of it -- i can't speak intelligently what percentage of things are made in the united states but my sense is, more is made in the united states than not. >> but isn't the broader issue what it really means for the consumer. there's been a lot of enthusiasm, a lot of consumer sentiment, business sentiment has shifted or really shifted in november, december, about a lot of these pro-growth lower tax sort of situations and i think the issue with the border tax is that it has the potential to massively offset any gains about lower personal tax rates or

income tax rates so to me, if you think about the stock market as a kind of discounting mechanism when the stock market is rallied 10% since the election, you have to say, if we can't put our finger on when some of this fax reform is going to happen and what it's going to be tagged with and then we have the backdrop of better economic data that could be matched with rising interest rates and the rising dollar then you say to yourself, there's a lot of potential head winds to offset future growth and we have a stock market that may be discounting. >> what bk is talking about is how it's packaged. is this the first thing on the agenda right now. it's a topic today but doesn't it seem like obamacare, then they're going to move towards then and then they're moving down the line. mnuchin today was talking about exactly the time line that he was already putting to august. >> but the problem you have, though, is the more these get delayed, the markets priced everything in. >> i don't agree with that. >> the rally that we've had. we've got people looking for 12% growth and earnings from 2017 to 18.

>> why are retailers reacting like this to a border adjustment tax? >> this is a particular thing but if it starts to crack, if the narrative that everything's great and everything's wonderful again and we're going to get all that stuff done t market was built on the fact that you have a republican in the white house and a republican congress and they're going to be able to get everything done. if that narrative cracks, then you'll start to see sector slack. >> people say president trump is not the reason for the rally and other side want to say he is the reason for the rally so we have to decide exactly how much he has. you said the other day, we were on the show and you said to me, the whole thing is because of trump. >> it is. it most certainly is. where was the market on november 7, pete? where was it? and so to me, when you think about this, it has to do with all these things coming together, a lot of needles being thread and my point is we have had nothing happen, we've had some dates put out there, there's a whole heck of a lot of uncertainty. we have a stock market that's up. >> so the earnings season meant

nothing to you. >> it was fine. >> the actual numbers that we have got. >> you want to go? i heard you today. >> yeah, come at me. >> on the halftime show. you said it was phenomenal, the earnings. they were not phenomenal. >> really? so the banking numbers weren't pretty impressive to you? >> we've had interest rates come up here. they were fine. >> how about the percentage of -- >> they were not phenomenal. we had very low expectations heading in so the revenue growth was litderly a smidge above what they were expecting to get. >> what i find interesting is whenever we have beats everybody likes to say well the expectations were low but when they miss it's like, well, this was terrible. you can't have it both ways and i looked at this earnings season going into it and looking at these financial stocks specifically, because i was looking at that sector because they had flatlined. well they continue to flatline, now they've made that next leg up. when you look at the technology stocks, they have been rocketed to the upside and aren't they the ones that are supposed to be having a hard time because of this whole thing with the taxes and everything, across the seas? isn't that an issue? >> i don't know.

i just don't think they were phenomenal. >> okay. >> we're going to move on and get back to retail here, more on this developing story from a retail industry veteran who has forgotten more about retail than any of us will ever know. ron johnson is the former ceo of jcpenney and the former head of retail at apple. ron, welcome to the show. pleasure to have you with us. >> thank you, melissa. >> what do you think of this border adjustment tax and what this means to the retail industry at this particular juncture for the retail industry? >> yeah, the timing is terrible for the are retail industry if this were to happen. the retail industry is essentially flat on its back trying to deal with this transition to digital. almost every retailer is forecasting comp sales flat or down next year. and if you have a border tax and they're forced to raise prices, that's going to further decrease their sales and keep people out of stores. so the impact on the retail industry would be very, very challenging. >> will this mean make or break for some retailers, do you

think? will this accelerate the downturn that some retailers are already in? >> we're in a very difficult time. many retailers are on the brink as they begin to close stores, as the malls they're in start to close and change so it's a very difficult environment and you add something like a major need to put a price increase on products and it could have a very serious impact on many. >> some would say that consumers will adjust to this, that they'll get used to the idea that everything, if 98% of all clothing and shoes are brought in from outside the united states, everything will go up and consumers will get used to it. do you buy that argument? >> no, i don't buy it because consumersov consumer over time have been buying less and less apparel as they spend more on experiences and technology so they're going to transfer their spending habits and i think a lot of people are on pretty tight budgets. that's why this election went the way it is and i think if you have a price increase, people will adjust their spending. >> mr. johnson, i think melissa did this interview the other day

with terry lundgren and he basically said, when we get it together, the consumers will come back to us here at macy's and mel said, what makes you so confident they're going to come back. do you think people are shopping differently? jim kramer today said anything associated with the mall in terms of a stock is effectively dead money. do you agree with that? >> you know, unfortunately, i tend to agree with jim kramer on this one. what people don't realize is for 22 years, amazon has built, in the u.s., an $80 billion business, and that's had a lot of impacts on the industry. over the next three years, they will add another $80 billion in revenue in the u.s. so, they're going to have the same kind of market share impact the next three years that the retailers had to deal with for 22. and i'm not sure people are prepared for that. the only retailer that's truly

taking a. taking amazon seriously is walmart. and they're making a lot of moves and it's starting to pay off but even walmart will have trouble because if walmart doubles its $10 billion in sales, it will add $10 billion while amazon adds $80 billion. people have to take amazon much more seriously. >> what would you do right now if you were the head of a retail organization once again, ron? i'm curious in terms of either fighting amazon or the message that you would send the trump administration about this border adjustment tax. >> yeah, my read, if i was a retailer, companies need a target. they need an enemy. you need someone to go after. for years, everyone's been saying we've got to figure out omnichannel, get people to buy online. that's not the issue. the issue is amazon. so, i would say how are we going to beat amazon. what do you do in store to beat amazon? what do we do with our merchandise to make sure it's differentiated and preferred? i would put amazon on the wall. i would paint it on the

billboards and i would say, we are going to find a way to beat amazon because that is what's going to change the game here. >> you want all the retailers to band together and gang up on amazon, effectively. >> they've got to all recognize that's the enemy here. if you look at it, collectively, they can have impact. look at a super regional shopping center like stanford. when the industry goes together and simon puts together a better center, people come. the super regional mall is doing well against amazon. it's very hard for an individual store within its four walls to create an experience that can matter enough. so, the industry's got to figure out collectively how do we compete better with a company -- there's never been a company in its 22nd year that does $80 billion in revenue that's comping at 29%. that never happened in the physical world. and so the growth, the impact has been really profound over the next few years. >> give me an idea of the impact that the are retail industry will see from the amazon effect

in a year and also let's assume that a border adjustment tax is in effect. will there be bankruptcies in this industry? will we see the same retailers today as we will in a year? >> yeah, i think -- i think you will. what's going to happen is the retailers that are on the edge of bankruptcy will probably be pushed over the edge. the others -- >> we will see bankruptcies? >> you will see some, but i think the other thing to remember is the retail industry has done a very good job of managing inventory, reducing expenses, most of the companies are reporting pretty good earnings. and retailers still generate significant cash flow. you know, i think macy's will generate $1,800,000,000 in cash flow next year. walmart generates five times the net income that amazon does. walmart has the resources to take them on. so the industry has to take that cash as they are reduce their store current and figure out how to compete better for the next

decades. >> ron, thank you. it's a pleasure having you on the show. we hope you'll come back again. ron johnson, former ceo of joek jcpenney with some very interesting analysis of the border adjustment tax. with this looming over the industry, is it too hot to touch. >> you know, it's funny, he spent a lot of time talking about walmart there and walmart just report and had in that quarter, it was the first quarter since they paid for jet.com to accelerate their online sales growth -- online sales in the quarter actually decelerated on a sequential basis. when you think about that, and you think about that the only name that he said is actually really competing well with amazon, and you say to university, the rest of the retail space has a really tough time and 22 years before, back to when amazon's inception, we could have probably been having -- you probably were on this channel having the same conversation that walmart was destroying -- on the radio or whatever. however you guys used to talk to each other back then but amazon

was the walmart destroying mom and pops. >> smoke signals. we had our blankets. >> if you were to send a signal with a ticker. >> i'll give you three, sister. >> go ahead. >> m.a., v, hd. end. not end the symbol. end, i'm done. >> coming up, tesla's electric slide, the stock reversing much lower after last night's earnings report but is the dip a buying opportunity or a warning sign? plus, president trump's treasury secretary making some very interesting comments about the stock market and it could have big implications for your portfolio. we'll tell you what he said. and check out nvidia having their worst day in six years. why? because that man right there, the analyst at nmura downgraded the stock. he'll be here to tell you what has him suddenly so bearish. all ahead on a very busy "fast." join directv today starting at $35 a month.

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welcome back to "fast money." shares of tesla sinking more than 6% today, reversing its post-earnings game from last night. the reversal marks a two-week row for the electric car maker as investors digest the mixed quarterly results. is this reversal a warning sign

after the stock's big run or just a chance to buy the dip? more specifically, guy on the conference call, elon musk talked about the financial model not suggesting that they need a capital raise but they will go to the edge and maybe it's more prudent if they do. >> the free cash flow burn, $756 million when you lump in their other company it's probably closer to $1 billion of burn which is a significant number. and to your point, it would be prudent to raise additional capital. to me, that line right there took the stock down. i don't know if it was the entire reason it went down but it was pretty close to the entire reason. is it an opportunity? we talked about it last night. i'll say one more time, every time they have gone to the market to raise capital, every secondary they've done, i'm pretty sure within a week, the stock has traded significantly higher than where they priced the secondary. i think this time will be exactly the same. the problem, though, is i don't know when or where it's going to be priced. so, you sort of in no man's land here. still love the story. the price action today was not good. >> yeah, so i'm with guy. i actually own tesla until about

a week -- i love tesla. i do love tesla, actually. so i owned it up to about a week or so ago, sold it, waiteding for r a chance to get back in. i don't think it's here. i think it's you buy it on the secondary. once that's announced, that's when you buy the stock because every single time it's come back and this is a long-term play. this is more of a venture capital deal where there are going to need to be capital raises but this is a long-term game changing stock and it is not a car company. >> what's amazing is that everybody sort of knew or suspected there would need to be a capital raise done some time this year. >> that was the bad and i think it actually is the majority if not all the reason it went down because last night when it was up, everybody was excited because he actually addressed the model 3, the production, some of the numbers they threw out there, including all the way to 2020, which is unrealistic for us to think about but the million he's talking about there. but then all of a sudden it comes out, well, you know, capital raise and suddenly everyone seems to want to hit the exits. i think that does create a bit of an opportunity. it might not be yet but very soon.

>> listen f you go back and look back to 2014, this stock has had runs. like it had from december, on numerous occasions it rallied 50%. but when it tops out, it's come in about 30% so the stock is down about 10%. felt pretty euphoric about a week and a half ago, who knows when the capital raise is going to be. they set some targets for the model 3 production in july. if they don't hit those sorts of things, you start hearing rumors that's pushed out, this stock will be back. >> dan's got a long-term chart in tesla and he says it looks like a double top from 2014. i'm reading your mind right now. >> you think you are. >> i know i am. >> that's pretty quick to read the mind. he read. >> coming up, a number of classic trunk trades got dinged today. i'm melissa lee, you're watching "fast money." in the meantime, here's what else the coming up on "fast." absolutely. absolutely. i mean, this is a mark to market

business, and you see what the market thinks. >> the words from trump treasury secretary that had all of wall street talking. and we'll tell you what it could mean for the rally. plus nvidia, the hottest stock in the s&p is crashing. we'll talk to the man responsible for the fall when "fast money" returns. what's critical thinking like? a basketball costs $14.

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welcome back to "fast money." we are live in new york city's times square. here's what is coming up the man who took down nvidia. shares down 10% and the nomura analyst says the shares have a lot more room to fall.

plus call it the icon activator. the investor just did something. first, we start up with a very busy day for president trump, a number of manufacturing ceos meeting with him at the white house. for more details, let's get to the white house. >> reporter: the white house says that those 24 ceos who were here today collectively they employ about 2 million people and they represent about $1 trillion in market value according to the white house. they participated in some breakout sessions over in the executive office building then came over to the white house for a round table with the president. a lot of ceos speaking very highly of this ptd and his level of engagement in business issues on the way out of this meeting, including andrew of dow chemical. here's what he had to say right after the meeting was over. >> it was a very much a working session today, following a month ago when we first met with the president. needless to say, we in the manufacturing sector, all the ceos that were here today and in the last meeting, are very

encouraged by the pro-business policies of president trump and his cabinet. some of us have said this is probably the most pro-business administration since the founding fathers. >> reporter: you know, we saw a couple of things at the white house today from this administration that we are not used to seeing, including this moment from this morning's interview by becky quick of steven mnuchin at 7:00 in the morning. she sat down with him for an exclusive interview and she asked him whether or not the stock market should be a report card on this administration. here's his answer. >> absolutely. i mean, this is a mark to market business, and you see what the market thinks. we're in an environment where there's very attractive investment opportunities in the u.s., and i think that's reflective of the administration's goals and what the market thinks of it. >> reporter: melissa, i can't emphasize enough just how unusual that is for a treasury secretary to say. usually, administrations say, you know, markets go up, markets go down, that has nothing to do with us. this administration is very much saying it wants to be judged on

stock market performance. now, that begs the question, if there's a correction of some kind or a downdraft in the dow over the next year or so, they will be asked whether or not they take the blame for that. if you're going to take the credit when the dow is up, you're going to definitely get the blame when it goes down, that's why previous administrations sefrply don't want to embrace markets the way this administration has in terms of a benchmark on their own performance but that's what we saw here today. >> the knife cuts both ways. thank you. so is donald trump the first stock market president? you can see from his tweets ask interviews that he has taken credit for the stock market's run. all of his lieutenants, whether it be steven mnuchin or kellyanne conway, they've also said this is the trump rally. >> well, he also said that it was a big fat bubble before we started, so i'm not sure which one happened because we haven't seen any greater economic growth in the last couple months. mft, gdp is basically where it was before the markets rallied but i'm not sure that the fundamentals got any better. so, i don't know. you know, and on whether or not they'll take credit or take the blame on the downside, there's

no politician in history that has ever taken the blame for anything. it did you want have to do with donald trump. he will find an excuse. >> the excuses are going to come out, i agree. i still think it's been somewhat fundamental. there's been an influence on the marks, the idea of tax reform, rep repatriation, most of those ceos, when they walked out of that meeting, a lot of them were talking about, hey, it's still over regulated. if we could get a little bit of an ease back, we know this pe pendulum swings, it's very, very difficult for small, medium, and even big businesses to be able to operate the way they'd like to. >> i don't know how anybody could walk away from what i saw the video there and feel really good about him trying to take credit for all the stuff that hasn't happened yesterday. >> he shouldn't. >> they set themselves up for failure. the stock market, the s&p 500 is

up 25% in the last year t. guy's an outright liar. when they're going around the table, he said, look at gary cohen, he just paid $200 million in taxes to take this job. it's an outright lie. he may not have to pay tax on his goldm goldman-sachs holding $200 million so at when point does kr krony capitalism and all the lemmings coming out of it do his people that voted him in office realize that he's been sold out by a bunch of billionaires in his cabinet. nothing's happened yet. that is fundamental. he's an actual liar. >> i understand, but if you are a stock market participant and you hear the administration focus so intently on the stock market and the stock market going up, isn't that a good thing in a way? all your interests are aligned when it comes to investing. you have an administration that is intent on policies that will help the stock market. >> yes, i agree with that.

but you don't have to, then -- there's a saying in sports gambling, they don't pay you at halftime. and i mean, they don't -- he's taken a victory lap. he's been there 30 days. so, to me, he's -- they're skating on extraordinarily thin ice. the question pete talked about or somebody -- what's going to happen if it was to go down, who's going to take the blame. the administration won't take the blame. and i've said this before, i'll say it again. i think they'll blame the fed and they'll have some magic tip in front of it, the corrupt fed, the politically motivated fed, whatever it is, but i guarantee you that if the mark were to go lower, the fed would be in the cross hairs of every tweet about the stock market on the decline. >> let's not forget, okay, two times in the last 15 years, the stock market has had a 50% peak to trough decline, okay? and that could happen again in the next four years under his presidency and the problem that i have is that he will take the whole system down with him if he

starts getting blamed for that sort of thing. >> let's just talk about the market, though. this is what we started at the top of the show with the narrative of the market. the problem with taking credit for the rally is that when you can't get your policies through, because of politics, because that's how this country is set up, then you have to deal with the consequences of the downside, so that's why the retail concerns me, that's why materials concerns me. step by step, if it starts coming apart, the market's going to crumble. >> let's talk about some of these traffic trump trades. a lot of names in sectors like bk just mentioned, names that have had huge runs since the election getting hit. caterpillar up 13% since the election, down today. mosaic up 22%, down 4% today. norfolk southern up 25%, down 2% today. uri, up 59%, down 7% today and u.s. steel with the biggest run, down 8% today. is this a crack in the trump trade? or a chance to buy the trump slump? pete, what do you say? >> you know, i just continue to

think that we're in a market that, whether it was obama or now it's trump, where we see rotations within the market itself and we continue to see these rotations and i think after the run that some of these have made, i think we expect some of the pullbacks. i look at the steel stocks, i still like them but that doesn't mean they can't have these kind of pullbacks like we're seeing like today. even though the ceo himself was sitting in there with the president today discussing all these topics so i think it's one of these things where we're rotating around in the market right now. the tech names bounce back. today was a day that didn't take down the market but obviously this went through what you were talking about. >> it seemed to be much more of a rotation, it's like basketball or american football like my friend pete likes, you never bite on that first move. you never do. so on this, don't bite on the first move on these. >> i would just say real quickly the biggest issue is we have a stock market that has not had a 1% move in either direction for over 50 days, the second longest

period in like 15 years and at some point, the price action you saw in materials and metal and then you saw in some of these industrials, if it all happens at once, you could have a cascading effect and a stock market that people are fairly uncertain about. i don't think that you have a whole heck of a lot of committed bulls at these levels so that's the risk to me that you see the price action we saw in a couple of these sectors all happened at once and don't think for a second nvidia -- it's not attached to any of this stuff but when you see crowded trade come undone, that's the thing. >> one thing that concerned me about u.s. steel, the fact it was down 8% today, on two times normal volume, leads me to believe pete said maybe there's a couple more days and i got to be candid, yesterday down 2%, i thought that was it. i thought the move would continue higher today. i was wrong but when the stock goes down 8% on two times normal volume, having the run that it's had, to bk's point, don't bite

on the first move. as dan mentioned, one of the hottest stocks, nvidia, getting crushed today ask we have the man who took down the stock. how much more pain does he see ahead? plus, could we soon see a rash in mna and big pharma? we're back right after this. ♪

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let's get to our call of the day. shares of nvidia plummeting almost 10% and having their worst day in six years after a downgrade by nomura. joining us on the phone is the man behind the call, romit shah, the senior analyst at nomura. a big driver of this call was your belief that investors are underappreciating a potential downturn in gaming, not just gaming overall but the fact that nvidia is focused on the high end gaming market. >> yeah, that's correct. if you look at their results from a couple weeks ago, they showed some upside in their gaming business, but it was the smallest upside we've seen in almost two years, and since then, melissa, we've sort of come to believe that pricing has gotten a little bit more competitive, there's some inventory in the channel. they've built some inventory on their balance sheet and it just feels like for at least the next

couple of quarters, they're their gaming business could decelerate perhaps faster than what the street's forecasting. >> at the same time, though, romit, a lot of investors like nvidia for its presence in data center, in automotive, in a.i., artificial intelligence. can those bright spots offset a potential volatility or downturn in gaming? >> well, if you look at what happened this last quarter, they actually had terrific results in data center and automotive, the two segments that the investment community is most excited about. but you know, this company's core business is gaming. it didn't show the upside that people are anticipating and as you've seen, you know, the stock has been under some pressure, and look, let's keep in mind that this company trades at a very large multiple, and so unless they're firing on all cylinders, you've got to believe that there's, you know, there's downside.

>> and you think it's another 10% basically from where the stock closed today because your price target is $90 a share. how do you think about how nvidia is valued in relationship to how other semiconductors are valued, the whole group has had a tremendous run up on hopes, many hopes that there's going to be consolidation in the group and some just simply deserve a premium. >> yeah, that's -- you know, that's right. we've got a $90 target. i think the range for this stock is probably somewhere in the, you know, between $75 and $100. if you look at their comps, both inside and outside the semiconductor industry, melissa, they're trading at about 25 times, so if we assume nvidia earned somewhere between $3 to $4 next year, i think that's the right range but the one thing to maybe keep in mind is that time is really important here. over the next several quarters, we're going to see pretty sharp deceleration in revenue growth, and i think you just want to get that out of the way. as we've seen with the stock, it has the ability to overshoot both on the upside and probably on the downside as well. but to me, i think $75 to $100

is the range for this stock. >> all right, romit, thanks for joining us. appreciate it. romit shah of nomura. the next several quarters, that's a long time for this stock. >> so, obviously, last night i said you buy this downgrade, i think the stock was trading 108 or so and i said at closed obviously $100 w-r-o-n-g, wrong. my thesis has been they're making the pivot from gaming to autonomous cars and i think they're probably doing it better than anybody else but it is a huge valuation, we've known that all along. i still think they'll figure it out and dominate the space but now you have a high valuation stock that is under the pressure of analysts. it's very hard to make a compelling case to buy it here at $100 and close your eyes. >> within his note, romit self-played would you rather. >> i loved how he did that. >> he said that investors should buy intel. >> that's right. he's right. >> is that the trade -- >> the data center.

because what he's talking about is the growth areas that ai is laying out. intel, he feels, is one of the competitors that's going right at them. i think and we've heard this from many, many people in the last week or two, it seems like, that when you look at nvidia right now, $90 seems to be the area that everybody seems to be that's the sweet spot. i think at $90 it's a buy. until then, stay away. >> with nvidia bringing down se semiconductors more than 1% today, is this trouble for the group. carter, what do you see? >> well, there are obviously big highs. we had a bad day not only for nvidia but interdigital, the biggest decliner in the group down 10% to 15%. i got three lines, blue, orange, green. blue is the s&p. it's a five-year chart. semiconductors in orange and the s&p 500 tech sector so what you have here on a five-year basis

is you've got the market up 72%. you've got the tech sector up 86%. and of course semis where this blowout is taking place, nvidia being a big part of it, up 132% on a five-year basis. now, let's just try to put that in context. while that is really good performance, and it looks quite steep and pulling away and it has, what's interesting is it's actually starting to stall. so, this two-panel chart shows you the sox index and then it's relatively performance to the s&p 500 tech sector of which it is a subset and what we know is even as you've broken out to new highs, on a relatively basis, you peaked as far back as december. so that these new absolute highs are not actually outperforming the tech sector as a group. that's a tell that something maybe is wrong. now let's juks to pose the semis, top panel, versus the market.

so an incredible up trend and we're still above trend, but the bottom panel is relative to the s&p and we have literally responded to this line four or five times perfectly and today we undercut the line for the first time in about a year. so a breakdown in relative performance to its sector, to the market, not a great set-up and then news related items today, whether it's an earnings miss or a downgrade. all right. semiconductors index, five-year chart, what we do know is that things in up trends tiply will check back to trend, and things in down trends will throw back. what we're due for now is we've not checked back to the 100 average in about eight months and that's about as far typically you can go without having someone take profits or try to short. and so, not the greatest set-up, to my eye. let's zero in on this. i think we're looking at an 8% or 10% decline which would take us back to the 150 moving

average. >> 8% to 10% decline on the semiconductors. >> got to bring him over to explain himself. >> all right. done. excited. >> i'm going to bring my pen boyfrie. >> brian price, please bring in the chair. >> great beard on brian price. thanks for bringing the chair in. what does this mean for tech? >> let's talk about what it may mean first more broadly. two of the greatest leading indicators in the market are semiconductors and triansports. they're highly cyclical. the transports are the same price as they were in their peak in 2014. they're struggling at a prior high and we know that semiconductors, which have led the market, are starting to show nascent signs of trouble. it wouldn't take a lot to have more broad implications for the market and of course for the sector overall. >> so, what do you see in terms of declines for tech? if semis are down 8% to 10%. >> semis are a big part of that.

tech is dominated by apple, as we know, and other defensive names that don't have the beta that you'd expect, ibm and so forth. but still, the implications are, this is the leading edge of tech and it would imply trouble for the group. >> but leading edge of tech and we know there's five names that make up $2 trillion of market cap, it's apple, facebook, amazon, microsoft and google, what are they telling you? they got back to those prior highs, all of them. >> they're all sort of struggling now. >> is that sort of bullish though? >> facebook is at its prior high, reports earnings and it struggles. amazon made a slight new high, microsoft -- if you were to look at the relatively chart of the qqq, interestingly, its relative performance to the s&p peaked in october. despite gains, you're not actually winning as a pick, meaning if you're a manager to charge with delivering results, the results in qqq are less than the market. that's not very good.

>> you look concerned. >> it's interesting because as i'm listening to him, he's saying well, they've struggled and used the stalled and why isn't that consolidation. i look at the financials going back and there was a consolidation period for the financials and they took off again. >> let's say that exact trajectory occurs which means the banks had a big move in, interestingly, the banks have broken out but they have not broken out on a relatively basis. the banks peaked on the 8th of december and they are underperforming in the market so let's say they do consolidate, semis like banks, that implies sideways at best or maybe it's a giveback but i think the third scenario, up and up and up away and increasingly low odds. >> carter, thank you. still ahead, carol icahn causing a flurry of buyers in the days to come. we've got the names and what the street is saying in a special edition of stock therapy with meg terrell right after the break.

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welcome back to "fast money." does carl icahn have the prescription for what ails bristol-myers squib? fuelling speculation of a takeover and reinvigorating deal buzz in the space. with so much going on, it is time for a little "stock therapy" of the stock variety with our stock therapist meg tirrell. hi, meg. >> well, this stake that carl icahn took in bristol-myers, people have been waiting for mna

and biotech to come back, carl's playbook has oftentimes been smaller companies should be bought by bigger companies. about five or ten years ago, many companies ended in fairly sizable deals. his basic premise was buy in often after a vulnerability when the stock has fallen, agitate often publicly and loudly for a deal to take place. you can see a few of those deals taking place between 2007 and 2012, lillian, a very well known one, santa fe, this was back when i started covering biotech in 2009/2010. i started covering it to cover this. and then of course bristol-myers buying in 2012. the guy who was there doing this with carl icahn was alex stepper who has now started his own fund, employing a similar strategy at one of the only biotech deals this year, buying in after the drug that they sell was pulled from the market.

you can see the drop in 2013. buying in close to the bottom there and then agitating at the company until finally orchestrating a sale in january for more than $5 billion. so the question is, can carl do this at bristol-myers, bristol-myers having a similar vulnerability after that failed lung cancer trial in august. much bigger company, doesn't have as health care investing guy anymore. will carl reignite mna in this space. >> do you think this will mean more activism in the space? these are companies with giant balance sheets, investors wanted them to do something. it just seems like a space that is ripe for more carl icahns. >> i think the big question is, is carl an mn indicator in biotech either because he's going to agitate himself or because he chose to buy in at a time when it's ripe for more activism because of the valuations. >> any other investors looking around in this space? are they mostly the focused funds right now? >> of course we know jana partners gotten into bristol-myers and done agitating there as well.

it will be interesting to see if more folks will jump in. a lot of activists were in more specialty pharma companies and people have been scared away from that space so whether they'll get into smaller biotechs and try to sell them is another question. >> meg, thank you. >> i'm not going to give away my final trade, but i'll say, the reason -- bristol, their cancer immune yo therapy, not great results. and that stock down 20% or so. but it's not -- that's not what all bristol-myers is about. they took a down thinking that was it but they're not just a one-trick pony so i think bristol makes a lot of sense here in a lot of different levels. >> even if it's just staying alone. >> yeah. $125 billion deal would do it. i don't know who's going to put that kind of price tag. >> that's the curious question for me is, who is the buyer at this point in time? of $100 billion company. >> yeah. that's a good question. >> all right. up next, one cloud stock that is

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tax, it's ge. they like it. >> bristol-myers, welcome back. >> good to be back. i'm melissa lee, thanks for watching. see you here tomorrow at 5:00 for more "fast money." "mad money" 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 some money. my job is not just to entertain but to educate and teach. so call me at 1-800-743-cnbc or tweet me @jimcramer. trump this. trump that. if you only listen to the media, you think every single point of this rally was about the