there anything to suggest what we seen play out this year. >> i think the tone remains the tone, it's very calm. we have a couple things, pay rolls coming up. we will have some congressional testimony next week. i don't know if people think that will cause flutters in the market. i think it's basically stable. the s&p 500, 8% year-to-date. >> michael, thank you very much. >> that does it for "closing bell" today "fast money" begins right now. >> "fast money" starts right now! like from the nasdaq markets site overlooking new york city time's square, i'm mellissa lee. tim seymour, nathan seymour, is the bromance over? elon musk might be taking a step to distance himself from president trump. what is causing the beef and what it could mean for the stock. palo alto soaring after hours t. current shareholder cyber security fund has a bone to pick. you won't want to miss this. later, reed hastings talking

act cord cutting to house of cards today, we'll tell you what he had all of wall street talking. first, a bank worst performing sect sector. both negative on the year. check out some of the action, gold man sax, j.p. morgan down and 3% respectively. could the banks be the ultimate value track or should investors be buying the dip, tie? >> there obviously haven't been trades, goldman sax is the first one reporting. the contracter the price action since has been miserable, think about it. since makening an all time high, they're down over 20% in a couple months on what's been a pretty decent tape. i have been one of these people bullish in the banks, now i have to ask myself, does goldman need to recapture that 225? tim talked about this, and j.p. morgan. 84, critical level. down again today. the last piece is xlf.

>> i think goldman was terrible. i think they actually -- >> that to me will be an explanation why they would be under performing. fair enough, what goldman franchise is you can argue is unparallelled. j.p. morgan, if you take a trend line off the june 2016 lows, you can make an argument that today we broke through that trend line. so if you think about it, we're right back to where we were two days after the election for financials. the question is, what do you do now? to my, i think those numbers under their bell. i realize we've we heard from the banks, trading volumes are not what they were. the pick business is not what it was. the second quarter will not be the first quarter. >> the stifel nicolaus conference from banc of america, they were in essentially a pre announcement mid-quarter when j.p. morgan says, you know, what trading revenue will be down 15% already. >> we talk about the vix every night, how it had historic lows.

you are talking commodities, mixed income. it's been flatline. so it doesn't matter if you have a specialty and someone like goldman may have a specialty. it doesn't matter the volumes and volatility is not there. add into that, the fact that you have a yield curve, at least on the long end, that seems to be going lower. i have been a person who has wanted to buy the bank but this action coupled with a little oil, which we will talk about has me concerned. >> i think it's important. i'm not saying what guy's comment is a false narrative about the basque, we all know they're cheap. we know some continue to carry over book value. throughout this whole down turn at least in stock prices, look at goldman, they had a bad quarter in trading relative to all their peers, down 2% year over year, when you have j.p. morgan saying it will be down or it is in the first two months of the quarter, bank of america is staying down 10 to 12%. >> that probably doesn't bode

well for goldman sax, they lost share for all intents and purposes in q1. >> that is one of the reasons that stock got the hit today. >> should we be worried? >> no, you have to be. the price action suggests you have to be extra worried about it. no question, as i said, down over 20% since that 255 high leads to believe there was something amiss. it wasn't that venezuela an bond deem, there was clearly more than. that j.p. morgan below 84 is the one that catches my eye, that has been a leader for a long time. now it's starting to roll over as well t. good news, i go es is, the xls holds the 23 level. you couple goldman, j.p. morgan, look at deutsche bank has down sized, maybe something is brewing once again. >> i look at j.p. morgan's chart, it looks like a stark discussion today. key technical levels were broken, j.p. morgan, 78 is your election rally, too much if you get through there, there is a lot of air below that stock. i don't think they take the

elevator down. that's the difference here. you have a high quality company. imagine we put stops out there, you will see a huge loss on an earnings day. i think ween now and next earnings, i earn jp morgue were, it's a diversified earnings profile. it's not the narrative. it was we were going to have deregulation the yield curve flatter taven it was re-election right now. we were going to have an economy where loan goat was going to be better. all this low growth stuff that took the stocks up dramatically, it's coming undone the narrative. >> dan, the feds will hike probably in a couple weeks. >> it hiked in march. >> that interest margins in the first quarter were better, by the way, they're not making money priced off the 20 -- 210 i would point i poiout, the fact we talked about this many times,

pressure is off the banks. they don't have this lit fashion hanging over them. they don't have the same bulls eye on their back. that to me is still there. >> also potentially in the pull side of the argument, in terms of catalyst, results come out, it's favorable, they could be anouceing new capital plans here. here at this jung closure in time. with the pullback in bank stocks. >> here we go. >> ready to play the game. >> whether we put money in banks, show hands? . you have money. >> i have to be true. this caveat, xls above 2003, i think goldman sacks into evidence to recapture 225. >> it's my view most of these banks will round-trip the entire move from the election. we seen a lot of the trades over the last couple months. >> i don't think the panic set in just yet. i'm kind of hands out right now. i'm looking also at the yield curve to see in that reverses as

well. >> what have you been doing through bank tran signifies? >> bang of america, j.p. morgan, citibank, these are best of breed and problem children that benefit the most in an environment where there is not a target on their back. i think citibank is a globe business. that's to their benefit as we see the other capital markets. >> banks are getting crushed. another group is worse, energy, the next guest says there is even more pain ahead. let's go off the charts. what are you looking at. >> well, i this i the punch line is if you don't have to be here in energy and oil, done be here. one year ago $48. may 31st today you had six declines, averaging 20% down, you also have five advances, unless you are good enough so buy those highs and sell those lows, this is just too difficult for us to play. you have to be too perfect to make money.

if we go to the next chart, if not oil, what object the energy stocks? well, all the out performance vs. the s&p was made in the first six months off the low. so again, if you miss this spot by even a up can him weeks and this is topped by even a couple weeks, you really did everything all the way back over the course of the last several months. to us, that's just too hard, particularly when the biggest weight in the group, exxonmobile is already making new lows. remember, think back to when oil bottomed last year. exxon bottomed first, even while oil is going lower. it's the opposite, exxon breaking down. oil here at 47, 48. we think 40, 42 is in play a. better buy down there. don't touch it yet. >> don't touch it again. >> ouch. >> another trip comes over. i think it's good, come on over. >> bring him over. thanks to you for bringing the

chair why. so this is a terrible trade in your view, we were just discussing banks, that also a terrible trade in your view? >> i don't think it's bad. >> if you had to choose? >> if i had to choose, i own banks. let's put this in historical context. energy is 15 months off, a 70% decline. right. banks are seven, eight years off a decline. they put in more time repairing itself here. there is another difference all the price action, j.p. morgan, banc of america, citigrourngs all happen up ward sloping 200 day averages t. bank stocks, the oil stock is not the case. these are down trends, versus up trends. i want to sell strength and down trends, i'd be more inclined to put money to work here. citigroup is acting better. it hit a new high, let's keep that one up in mind. >> i'm curious if we look back at oil, we see the 2014, 2016 decline, this looks like a

correction of that down trend. does that then mean we break lower and go below the 2016 low? >> i think this means no one makes any money for the next number of years. >> years? >> remember '01,' 02, longs an shorts you were frustrated. banks were frustrated for seven, nine years. energy is 6% of the s&p. if you are spending any more than 25 minutes of your time is too much. this is probably dead money for a long time. there will be tradeable opportunities. there is a couple stocks here and there that look okay. don't confuse that with secular leadership. it doesn't take a share of the pie here. >> chris, why are ten or 11 movers you articulate on the board in both directions, things that don't give you an opportunity? there are a lot of traders out there, realize, this is spot pricing versus the energy moves, why don't you go after that sentiment? i think it's crazy both directions.

>> i think if you are good enough to do that, you are confident you can time that perfectly. i found that to be too hard, chris. if you have to be right twice in a short period of time to make money, i'd rather waste my time somewhere else. i'm not sure energy will give us the biggest bank for the bucks. i want to own leader this. that's not leadership. >> what are the standout stocks? there are a couple. >> i think lng, marathon, globally total is one of the better ones. let's focus on the anti-energy, airs, carnivale, that's a stock we want to own in an environment where oil is under pressure. will you see a better success playing those than you will the big oil stocks. >> if you had to choose, guy. >> are we playing would you rather? >> let's listen to the lady. >> jump it is gun. >> the menu, marathon, shanear.

>> can i add a few other names? >> i give up. rcl up on the day, all time high, a name we talked about a year-and-a-half ago, rcl. sorry if i changed the rules. >> can you myers e first play the game? >> thank you. >> bottom line, total is one of the names he mentioned. have you the euro as a tail wind and ultimately a dividend yield that is 4-to-5%. i think the integrated are ugly. some are more towards the down stream. >> unfortunately, we're changing to another game. i will give you the salty one on the desk. he doesn't like that, like mikey. banks or energy? >> i actually like tom lee last night was on the program. he did a constratrarian call in stocks. the weakness in the dollar, at some point i think he will get that right from a trading standpoint.

i think the xle-issue probably have a 10%s pot. it's trading near two-week lows or near. >> that could be setting up a rally. >> what say you? >> even though given the choice between the two,ize rather the banks. because i think they are pretty e better prospects. i am long oil stocks. what concerns me about that, is that my, the whole thieves for getting into it. saudi arabia was going to control the price. it appears they are losing control of. that that worries me. >> why do you hold on to your oil stocks? >> i am waiting to see what happens. we are in this range. we haven't completely broken out of it. i am seeing cracks in my investment thieves. it's not quite a kel set. >> i think with oils, you have extremes with buying and follow-up sentiment. >> before you go to break. you rich ross'd everybody. nobody picked up on it. you said mikey, like cereal mikey, which is amazing you even

knew that existed. i want to give mellissa lee kudos. >> you know what happened to mikey? >> we lost him. >> i'm not looking that up. that's not my story. >> tesla ceo elon musk might be taking a step back from president trump in the white house. the stock is on a tear sense the elect. will a dust-up with the president change all that neighborhood, plus, streaming profits dropped on netflix. something else could send the stock into overdrive. we got those details. come over here, tim seymour, stepping up to the plate, she has the one name on a six-day losing streak he says is providing a perfect buying opportunity. >> that stock when "fast money" returns.

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>> kel bam back to "fast money". president trump's possible crawl from the paris accord striking a wrong accord. >> reporter: hi, mellissa, we saw dualing fists between the president and elon musk t. president tweeted despite the media report that said he had already made up his mind. he has not made up his mind and will be announcing the decision over the next several days.

that prompted a tweet from elon musk earlier today. he said, don't know which way paris will go, but i've done all i can toed a voice directly to potus, through others in white house and via councils that we remain, that the united states remain inside those paris accords. he was asked by a follower on twitter, what would he do if the president decided to pull out of the paris accords? elon musk tweeting we will have no choice but to depart councils in that case. he means multiple white house advisory councils, by our count he is on three of president trump's, including the manufacturing count sim the infrastructure council and others. he's been a valued person giving input here at the ceo level to this white house over the past six months or so. today, though, i asked sean spicer the white house pressing is, how do they consider elon musk now? he a trusted adviser on this issue and others? sean spicer said simply, look

the president is getting a lot of input from a lot of people on this. that's howl we will say. elon musk certainly sending a signal that he'll withdraw from those councils if the president decides to pull the united states out of the paris accord. >> it will be interesting to see whether or not other ceos follow suit, not necessarily on the paris akrord agreement, perhaps to others near and dear to those ceo's hearts in the future. >> reporter: elon musk has taken a lot of criticism from democrats and liberals from working with the trump administration, a lot of folks said you shouldn't work with trump at all? he said, no, i'm a moderate, i need to be in the room. if you are a political moderate or a liberal, you want me in that room. now he is threatening to walk out of the room. >> thank you. tesla shares up 75% sense trump was elected. so musk withdraws from the count sim, what could that mean for tesla shares? he certainly has been the posterchild in terms of what

everything trump lovers, manufacturing, tech lo knowledge cal advances, hiring. >> i don't think that's been behind the tesla rally. i think it's been a part of the story. clearly the tesla rally has been about shifting into higher gear of the autonomous driving story, ever intrinsic value. i think that's the reason why people are on tesla. not because he's flooded the zone. >> i don't think anybody necessarily sold tesla because he was working with president trump. i think it's probably a tailwind here, if anything, but the story still remains that this is a play on the decarbonization electric grid. >> i don't love your covfefe on thisp toic. i want to be clear. >> is is that how you are announcing it? >> that's how we're doing it. >> is that friend snch. >> so here's the deal, this stock is up 80% from the day elon muck walked into the tower december 2nd. adisagree with you to some

degree, they named all the things that tesla represents that wasn't in line with the president's message, there is other things like science that they're kind of at odds about, stuff like that. to me, i actually think a lot of investors thought this was a great move to get this administration online f. he glows off the train. >> what other trump trades have gone off the rails? >> they've held the lines. >> i think this is a pretty special one. we can all agree on that. >> i wouldn't disagree on that. this company is not more special. >> it's not only the most shiniest special thing on the planet right now. >> what about facebook? >> actually, technologically what they are doing for society the most disinteresting things going on in the world. >> to you. >> really? >> yeah. okay. i'm long tesla, i don't know if it's the shiniest thing on earth. >> i think maybe dan's point, maybe the point is that actually the technology tesla is working on can fundament ally clang how

we live where -- can that change how we live? >> i'm not ought facebook, no it hasn't -- >> but then dan agrees with me. we're getting back to why tesla -- >> don't put words in my mouth, let's be track. >> dan you said it, it's a shiny little what? >> more "options action". >> oh. >> what was active today, call volume was one-and-a-half that of puts. what is interesting is mark cap today, a lot of that call buying was in short-dated calls. the june 2nd weekly, 12,000 o. 340s and 350 call trades, i think there are a lot of that, somebody for a move 240 up to

350 between now and the end of the week. that performance is up 85% since december 2nd. look at this chart right here. this is this uptrend that has been in here. obviously the brakeout level was above 295-ish. 200 seems to be a good level of support. >> that uptrend and this move is parabolic it's basically gone up $40 in a week here. i want to go back to the june 2010 ipo of this thing. just giving you a sense, some of these people, you know, you are pretty happy how the thing has traded. you got to physical out where there is support. >> that level is down to 295-ish. >> guy. >> actually it's more 285-ish. >> that itself core level. i don't want to mince words here. dan said a lot is due to trump. the rally from that -- listen coincidentally the major support when president trump was elected. that was a level we flagged way

back when. so whether it happened whether he was elected or not. i don't know. but you can still see tesla in a pulled market even if it pulse back to that 285-ish level dan flacked. >> watch the full show friday 5:30 eastern time. coming up, palo alto has been sinking in the last two years, down 20%, sitting out this year's market rally a. former ceo laneen bess says he has more to sound offer. i am mellissa lee, you are watching "fast money" on cnbc. here's what's coming up on "fast. >> ceo reed hastings says there is one tech company that's downright scary and could stand in their way. we'll hear from him. plus, tim is serving up theich ', different whack he says is the hot et deck stock to own right now t. name queen "fast money" returns. [ birds chirping ]

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>> welcome back to "fast money". we're live at the nasdaq market site all the indices are closing higher. the second half of the show, call it mcdonald's 2.o. it's one of the best performing stocks this year t. key may be in technology. check out cyber security firm palo alto soaring after network. the ceo says he had three ways to fix the company. he'll be here to break it down. netflix ceo reed hastings had a big impact today.

our julia boorstin has more. >> reporter: the explosion of competition as amazon and huh will you are doubling down on original content and youtube and others are launching streaming service, hastings says amazon scares him the most. >> they're so scary, everything amazon does is so amazing. how are they doing so many different business areas so well? they're trying to repeal the basic laws of limited capability. we're continuing to watch them and they're helping to grow the industry, because they're investing in the content. >> reporter: now he says he will not try to outamazon and copy their move to sports. remember amazon made $50 million for the rights to air ten nfl games. he says that much of the success is not at the expense of the traditional broadcast networks and the ecosystem. >> very few people have cut the

chord, we're about 50 million in the u.s., we've seen maybe two or 3 million of 50. cut the chord. don't think of it as an overlap, we're driving chord cutting. it's probably mostly from pricing. it's twoebl two or 3% a year like broadcast ratings over 30 years, it will be a long, slow, secular decline, no politician calamity and they're adjust economics. >> reporter: in the meantime, hastings says they are working on global expansion and they have huge potential. they are no longer pushing to launch a netflix in china. they're licensing their content there. >> julyia i thoughts that was interesting when you asked him specifically, about china. he said not for a few years. the numbers don't really tell the whole story. what have you learned from code? >> reporter: well, they don't, this is not a life from code. this is the facts, melissa,

those yields and numbers were specifically referring to what they call the mvtv the traditional cable tv satellite operators. what they don't include are the explosion of skin my bundles, directv now, play station view, there's sling tv, now huh will you is launching a tv service and youtube tv, so there are all these new services bundled with content, disney made sure espn is in all of them. if you include the digital and skin my bundle itself, espn has growth discovered for the month. it doesn't make them old fashions universe if espn is in the package. >> thank you at the conference for us. disney shares react to that report. they've reacted before to a similar report before. do we know why? >> guy has been saying he thinks reed hastings is going to be the next ceo of the disney

corporation. >> say it again. >> it's funny, i think the hard part about this is now they have a $70 million market tab. this is netflix. i think very soon you will hear of netflix being an acquireer, there is a lot of competition coming online, huh huh, why wouldn't they buy pot sfie like broaden out here and have a broader outlook? >> i think that's all smart stuff. i think it's crazy to think that disney would buy netflix. they own a big piece. they have this band -- espn is getting new life through this band tech which will be streaming espn, major leak baseball. it's disney, why do they need to buy netflix? >> they won't be as profitable as traditional cable customers. >> obviously, they can compete wherever they want to. they're not waving the white flag and saying over the top el

i think they made over the top investments. meanwhile, you are investing in consumer product and investing in parts. >> do you want to respond? >> i understand, the valuation to buy netflix can give or take a $90 billion deal t. likelihood seems to diminish. netflix continues to go higher. in terms of content the land grab. quite successfully, by the way. they may make sense on that metric. i do think if anybody is going to be the behemoth of a company, it's a guy like reed hastings. >> they are used to behemoth. >> what he's saying. >> covfefe. >> trades. >> when i look at it, i will be looking for the platform out there, the most under sawed.

we need it, twitter. the twitter machine they're starting to get is remember. >> oh, covfefe. >> i'm saying an under valued platform that has the potential for big upside, it's twitter. >> i like what twitter has been doing. >> i'm all right from here. i own the stocks. >> everybody here except dan is covfefe'ing everybody to death here. >> if only we knew what that meant. ahead, palo alto surge on earnings, the former ceo thinks management needs to make changes. tim seymour over at the plaza warming up. better than the beloved match. i'm kidding. he closed out the six-day lozanoing streak. you are watching cnbc first in business world wide, more "fast"

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♪ ♪ making every stay a special stay. holiday inn, smiles ahead. whether for big meetings or little getaways, member always save more at holidayinn.com >> welcome back do "fast money". imagine, imagine it's a late night, you're really hungry, are you flipping through those food delivery apps, none deliver the one thing you want. >> that one thing would be

mcdonald's world famous fries. >> yeah. >> the fast food giant has we heard your cry for help. susan. >> yep, it will take half an hour, though, melissa. i'm not sure the fries will be cold by the time they get to you. yes, mcdonald's now delivers in new york and new jersey, announced today it's expanded delivery program. the golden arches teaming up with youtubeer to get you those nuggets and those fries. the ceo says they will get delivered to 3500 cities by the end of june, on average, delivery takes 30 minutes with 60% of orders made in the evening or late at night. the digital delivery, mobile order and pay, big reasons mcdonald share versus ricin to record highs, denny's announcing they will offer delivery from 50% of the restaurants through third party delivery. panera a first mover when it comes to technology, hiring 10,000 drivers to offer delivery at over 35% of their bakeries by

year's end, they have embraced double digit gains, back to you. >> thank you very much, susan lee. i think that it was really the most important part of the story was answering the first ten seconds. 30 minutes. mcdonald's did not have 30 minutes. >> it had to be really late at night for you to want cold mcdonald's fries. >> or cold nuggets. >> i think it's the math. >> they could come in ten minutes. you want to take that risk? >> you are making a presumption people are making a pounder with cheese. >> isn't it like what taco bell should be doing like late night delivery? they're the first ones that stayed late. >> is this going to move the needle for stocks?

>> that's down. >> no, i don't think it moves the needle. dan will argue, it's 23 times forward earnings. mcdonald's isn't expensive. they haven't changed anything. the word that's obsolete. your word, not mine. something that's clearly going on the stocks made another all time high. it continues to move to that 160 level, which was the price target for a number of analysts a few weeks ago. >> something is going on, it's called insanity. it's the company that literally had $28 billion in sales five years ago, if they become smaller, more profitable. it can be a very investible case. >> first kale comps are going higher, dude. it's remaking both the i think the image and the tech knowledge perspective, so that they can appeal to a different group in a different stem graphic. >> they did them in the test

market. >> so today i play, right? >> so the buzz word, the machine, to make sure, you get the french fries. >> you get the chi? >> the technology, he's hacked -- >> stock up from 110 to 50 since july. i would think a lot of the chi and the delivery. >> fast food to the fast pitch, one of our traders pitches stock they think is worth a buy. when they're done, the traders will offer if they are buying or selling. tim, what is your pitch idea? >> it's time to throw the high heat, i'm going with qualcomm, it's a not a company that people think has its best days in front of them. it's a company that i think is first of all much more maligned by investors. there is a couple key catalysts to the company. this nxpi deal is totally

creative to the company. j.p. morgan says it's 65%. it's not in the price people don't think they can close that deal. the apple dispute, there will be negative headlines on this stock, i'm sure for the next two or three months. apple is doing what they need to do, renegotiating a royalty deal. they will negotiate patent by patent. ultimately, though, they need the ultimate technology. you have 5g rolling out. there is intel to play a role if that space. these guys both need each other. the market has not priced in where apple needs to go and there is nothing they've overpricinged this fallout. finally the stock is around 55 off these lows, there is very good support. it's a key level here, you take this stock gone back, this is a level we found, if you take this chart back further, you have a company at $50 you have

multi-year support. they struggled with lawsuits around the world. they keep coming back for more. it's a sum of the parts valuation. it's very compelling at these prices with a lot of bad apple news in the stock. >> tim, solid pitch. xh xgi, you mentioned it's a deal, a massive deal. if it doesn't happen, where does the stock go? and are you are buying down there? does that presents an opportunity or is it a must do? >> think about whaut xgi, congratulations to them on the balance sheet which i think is very cretive. it's ultimately the sum of the part. this makes that and the qtl make this a $70 stock. i don't think nxpzy in the vote. >> let's vote, time to vote. tim's pitch on qualcomm? >> i will go with a buy. i'd rather buy the little puts at 55. here's why. there is so much negative news on this stock, bk likes to be a

contrarian. >> i'm with you. >> i hate to be with both of you. i am also a buyer. the nxp thing is important. i think it's great you don't have it. at that point they still have a boat load of catch. >> that i have to do other stuff. if there is any positive that comes out of the apple negotiations, i hit the it's a four year. >> i said nice chi, that did a good job. my concern is they might have to negotiate at a higher price, against $52, which was a recent low twice this year. i think the rick to down side is 52. the upside i do believe is 70 bucks. that's up well, i'm with tim. >> all the traders here think it's a buy, qualcomm, do you agree? vote oop our pool cnbcfastmoney. plus, collect out palo alto, reporting moments ago. will you hear from the ceo lane bess who owns and is a josh hair stockhold, what management needs to do right now. much more fast money still ahead.

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the future isn't silver suits anit's right now.s, think about it. we can push buttons and make cars appear out of thin air. find love anywhere. he's cute. and buy things from, well, everywhere. how? because our phones have evolved. so isn't it time our networks did too? introducing america's largest, most reliable 4g lte combined with the most wifi hotspots. it's a new kind of network. xfinity mobile. welcome back to "fast money". we have an earnings board in the after hour sex, courtney reagan joins us from headquarters with the very latest. >> palo alto network is turning

in a strong quarter, beating revenue, guiding currents quarter revenue above analyst consensus. it has the highest number in company history, existing customers expand their be even as it reorganizes the sales staffing which caused some zrupg, the ceo told analysts that the recent warner crime, cyber attack, regenerated some anxiety in the marketplace and explained how palo alto software would catch it. >> i think wifi is primarily an end point problem, but it's broader than that once it gets into an organization that movers around, it has the ability to spread, so, you know, platforms like ours are, uniquely able handle that stuff. >> reporter: palo alto taking the opportunity to list the number of clients, including larger europe mean travel companies the largest bank and a major health care provider. melissa, over to you. >> thank you very much, courtney

reagan. let's trade this, that's going to be a help. can we. >> what can you glean? >> glean? >> the good news is, operating margin is up 200, 220 mavis i bas basis -- basis points. are you comfortable with eps growth of maybe 28 to 30%. my answer would be yes. but i have been saying this for a while. this stock basically went from 190 to 115 at a straight line down. it's terrorist i difficult to g -- it's difficult to mimi arms around. >> let's take palo alto here. the next guest has a bold message for current management. lane bess served br bounding bess ventures, a cyber investment firm. lane joins frus san francisco, it's a pleasure to have you on

the show welcome. >> thank you for having me. >> you have three pieces of advice, i'll gloss to first two, the nail down distribution channel, reexamining the costs and initiatives, you also say they need to re-visit acquisition targets. what source of acquisitions do you think they need to make? >> let me be clear on this, i think the company has done a great job navigating from a high growth early public company to a mature high growth public company and what they really got to focus on now is where they get that next growth. they've done a great job. i would be remiss if i didn't pause and commend market management team on the results of this quarter. but the next phase of growth is coming from a lot of these smaller innovative companies the same place that palo alto originated from. a lot of these originators, whether it be ransom ware or end point technology, the internet of things.

this innovation is coming from a lot of smaller companies that either palo alto has to innovate themselves and/or integrate through acquisition. so i think getting the first two nailed down, which it looks like they're well on their way to do. they have to think about getting aggressive in the market. >> so you think about potential acquisition targets. you think about what is going on in the marketplace, particularly within it comes to ransom ware, we're see stack impact from one of the quarters of palo alto and some others. you like proof point. i'm wonder,b, proof point researchers found the wanna cry virus. also they have a specific target to target the path protection, which enables you to basically quarantine the infected messages or potentially infected messages. is is that one of the reasons why you think proof point could be a buy right here? >> no, not specifically. proof point subpoena well on many different fronts. as are a number of different

companies in the securities space. more importantly, there are start-ups addressing ransom ware and threats that, quite frankly, don't have the wherewithal all to get the scale. the inability to get the scale, will either mean that that technology needs to find a home in another company or lit just die. so the real challenge is for companies like palo alto, cisco, we are seeing more acquisition activity. semantic and macaphee now it's free and outside of intel. there is a lot more latitude to find these key technologys to enhance the platforms. i use that platform, to enhance those platforms for the end customers. >> lane, is there a small group of companies that we should be keeping our eyes out for, let's say, if palo alto or a cisco were to buy and say that's something that's a diamond in the rough? it's a small little tuck in? it's something you talk about up novation that maybe is not happening but it is in the start-up land? are there a short list of names

we should keep our eye on? >> one is probably going to enter the market later this year, z-scaleer that provides dip security as a service, so security as a service will become very big in the next few years and on their next five, ten years. but even sooner, i think the time is now to move for that type of an approach. other areas, there are companies in the ransom ware space such as trap-x. there are companies that are also focusing on the end point. you see a lot of the entries like xylans and tainium, which are trying to line up for other markets. the innovation the end point has become stale and vulnerable. so all of these large platform players, including the palo alto. you got to look towards cloud delivered security services. >> right. >> as well as acquisitions perhaps at the end point. >> lane, it was a pleasure having you. thanks, so much. we hope you come back too the show.

>> thank you, my pleasure. >> let's trade this, is that the solution, buying growth here at this point? will that make these stocks trade like theoretically they should trade in the environment where there are all these cyber attacks going on? what do you think? >> i didn't find growth. to me the growth they would have to buy would be too expensive to buy, it would be cost prohibitive in my opinion. he would know a lot better than i would. it seems zo somewhat counterintuitive. >> i think the valuation, if i look at the value, i want to say the stock is expensive, the whole sector is expensive. the sales are five-and-a-half times in line with the peer group, especially after a pullback. if you like security names, you should do it. >> earlier in the year, i thought these were the place to be this year. it has not turned out that way. i still there there is upside, particularly palo alto, generally, i don't like buying after earnings. but i still think there is upside to pal lo alta. i don't think the cyber threat is going away.

>> up next, did tim bring the heat? there is still time to vote. at ynbcfastmoney. the results when we come back.

. welcome back the verdict is in on tim's qualcomm pitch and only 44% voted yes for qualcomm. 56% voted no also in face of all the traders on the desk who said to buy. >> kiss of death i guess. >> time for the final trade, tim. >> a company that is various on buy here, there is a lot of reasons qualcomm. check it out. >> bk. >> i'm still going with twitter, even though it's controversial on the day. i think they're starting to get it. >> i'm with bk.

i don't think you buy it up 10%. palo alto will fill in that gap. >> i look forward to seeing you tomorrow. >> tesaro, not the refineer, the pharmaceutical company. where there is smoke, there is fire. >> here. >> tesaro, the pharmaceutical company where there's smoke there's fire. >> tune in at 5:00 tomorrow. meanwhile, "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. 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 trying to make you some money. my job isn't just to entertain but to teach you. call me at 1-800-743-cnbc. or tweet me @jim cramer. sure, sure, i get it. the group of stocks that are working in this market seems pretty nar row. sure, it feels like it's all