especially on that gross margin line, considering what else they turned up. >> yeah. and it's going to have outsize impact on the estimation semis are a big part of the market too that does it for "overtime." >> yeah, and quite a f"fast money," given these nvidia numbers. that "fast money" begins right now. ♪ right now on "fast," shares of nvidia jumping in the afterhours, the company reporting results in the last few minutes. we'll get to the headlines and all the details. plus, are we getting more hawk talk from the fed the latest minutes from the central bank showing growing support for a 50 basis point hike will the markets come to terms with the higher for longer mantra apple taking another step to make its wearable technology a must-have. the major step forward it is making and what it could mean for the stock. i'm melissa lee. this is fast"fast money.

we start off with the big question for big tech investors. is a.i. all it's cracked up to be after microsoft announced its multibillion dollar investment in chatgpt, maker open a.i. in late january, shares rallied the stock added about $300 billion in market cap, but that rally has blown a fuse as creepy interactions with the bot started surfacing. the stock has given back nearly half of its gains. shares of alphabet, down 15% since its own a.i. blunder the company has lost over $200 billion in market cap, and more headwinds seem to be emerging chatgpt getting blocked on chinese social media apps, maybe not a surprise there, and new analysis shows a.i.-powered search could cost tech giants billions of dollars more than traditional keyword searches so, is it way too early to say whether a.i. is big tech's next big thing? certainly, investors wanted to jump all over it, dan, when we first heard about it >> there was a lot of hype over

the last couple of months, and i would just say this. it is probably the next big thing on a whole host of different industries, and what we're talking about is the digital ad market. this is a $500 billion market. when you think about search and you think about google's dominance there, they have about 84% or so. microsoft has this thing called bing you've never used it, but some day, we might. think about their growing advertising revenue. they had about $18 billion that was maybe up almost 100% year over year last year, and i think microsoft, when they unleash this open a.i. or chatgpt a couple weeks ago, they said, for every 1% market share, that would be an additional $2 billion to their search revenue, which is essentially ad revenue, so it is important to them this is a company that's doing $200 billion in revenue. if you could get that sort of growth across their platforms and don't forget that they just did this deal with netflix, right, as they added that ad support, so advertising is going to be really big for microsoft is it important right now? no you know what i mean i took the other side of this

two weeks ago, i put a bearish position on. i took it off today at $250 or so because i feel like that is the hype google has some existential risk here i was thinking about buying the google, and i bought it at $94, sold it a week and a half later. i think this is going to continue to weigh on the story from a sentiment standpoint. >> i feel like there's a period of time here where adoption is not there yet. we haven't seen the efficiencies the cost of search for an a.i.-powered search is five times more, according to morgan stanley, for alphabet. we're going to be faced with higher costs, and are we going to get the revenue to offset that from ads? there's a transitional period here are we in that period? >> the question is, penalty to the stock is saying, okay, costs will be higher or they'll lose share or both, but this idea, this hype around a.i., as if a.i. did not exist at all in google or anything else, i mean, if you think about google

search, image search, things like that, that's all a.i. we have this giant catchall phrase that is worth billions of dollars. i agree with you that microsoft was just way overhyped, came back in. google did not at all. you know, i like it. i think that a lot of fear is priced in. i think we're going to have a lot more clarity on some other issues that face alphabet before that, including we have 230 coming up whenever the court decides to rule on that, and we have semantic trust, so those weigh on it. so, you know, it's big position for me i still like it. i think we're not going to get some clarity on this issue of overhang for a while >> and you bring up expenses, and i think that's going to be the biggest thing that's overweighing a.i. right now, and if you look at a google, for example, if they used a.i. for about half of their 50-word responses, that would cost in excess of $6 billion it's not cheap to do this. i almost see this as the early years of social media. no one knew what platforms,

myspace or facebook or whatever it was, it's just so new is it going to be the future i think so but in the meantime, i think it's going to cost a lot more than they're going to get out of it, so i think it's too early to be buying stock specifically on this reason. >> that figure you're citing came from that morgan stanley report you're assuming it's going to be a 50-word response, and if you're like kevin and you want to engage for two hours, i don't know how much that would cost. but you figure, sometimes you're going to get a two-word response sometimes you get some punk kid who wants to engage with the bot for hours on end and that's going to cost a lot of money we don't know how this thing going to be used >> there are places out in nevada he could probably go for less and get a similar type of experience now, listen -- >> for two cents sorry. >> a $2 trillion company, you know, you wonder what a.i. has to be in order to move the

needle to the extent that the stock moved. i mean, when it, post earnings, microsoft was at $233, and headed lower, quite frankly, and probably deservedly so until people caught wind of this whole chatgpt a.i. and then it ricochetted or, you know, made that meteoric move to $275 or so this move makes sense, and now we're right back to where we were right after earnings a month or so ago. so, i think the market got itself overly hyped, and dan was on it a couple weeks ago, and i think it holds true now. i think microsoft was unjustly rewarded for a.i., and i think google is probably being unjustly punished for the same thing. >> it's truly remarkable to think about this, though go back to the turn of the century, guys, i don't mean 1900 i mean 2000. back then, yahoo had dominant market share in search, right? it was nearly a $400 billion -- it was the biggest company in the world at that time and yahoo literally just got sold to private equity for $4 billion a year ago or

something like that. so, the idea that alphabet right now has this 85% search share and that it couldn't go away for one of the most exciting sort of technologies that, yes, was overhyped for a couple of months here, but we've seen this with technology again and again you have these sort of hype cycles here, and i think -- taking away from digital ads, taking away from search, if you think about what microsoft's core bread and butter is, it is their productivity tools and that sort of thing think about how you're going to work a.i. into that. they invested a billion dollars into open a.i. they just did $10 billion now. they're literally ensuring, for at least this technology, they are in the pole position with that they're getting rebates with azure and the cloud usage and the other thing is, think about this for their cloud, their public cloud, as they integrate some of that technology in there, it could be a differentiator there also >> do you think -- if we saw peak a.i. hype, have we seen trough a.i. hype >> no, but i don't think we saw

peak listen, can i tell you, broadening it out a little bit, i think what we just saw, as it related to google and microsoft, over the last month, was the death rattle for this bear market rally we've been in we've seen a lot of goofy stuff happen in the market, and the fact that investors got so excited -- i go back to february 7th, looking at my machine, and i see google, the alphabet, we've got 6.5% because of their bard thing i'm like, what the hell is going on here? it wasn't even a real presentation and then a couple days later, it comes out that the microsoft one that went so well, they had a bunch of errors in theirs, and what's happened since then is probably a lot worse than what happened to bard, so i just feel as like a moment in time, in this market, where things got a little goofy, in a market that was totally disconnected from valuation and stories. >> it seems to me like this idea of a 1% shift, let's say, from google to microsoft, is worth way more to microsoft than it is to google. i mean, that doesn't really make sense to me. for a long time, amazon, which was valued on -- not on their

cloud but on their retail business, the same thing a dollar of sales at amazon was worth way more than a dollar of sales at walmart, and that is no longer true. i mean, the valuations get kind of goofy it was an interesting piece by morgan stanley by the way, at the end, they do think it's buy with a $135 target and downside of $84 and upside of something higher, but in the short-term, i do think we're going to face these headwinds for a while. >> there's also the regulatory guardrails that could still be placed jpmorgan, there's a bloomberg article today saying jpmorgan is restricting the use of chatgpt, because it's a third-party software app there are unclear things we mentioned the chinese government banning chatgpt that's not a surprise, right you're saying on the call, earlier today, no surprise of course the chinese government -- they cannot censor a.i., especially a.i. that was built in the united states but at the same time, it gets to this notion that a.i. is only as good as the data you put in. it's only as good as any of the biases that you put in

whatever the biases may be as accurate as the information is and you don't -- we don't know that yet and we don't have the laws to regulate that and we might see those guardrails being put up by corporate america. >> well, the irony is that open a.i. was set up by the technorati out there to create a safe a.i. that was going to be open, and it's just really in the last few years that you have seen this focus on this subsidiary that was going to be a commercial product here. and so, when i think about that, i mean, i think that's the -- listen, this is skynet sort of stuff here this is all going to be happening for us, like, you know, like sci-fi is here and now, and the idea that there has to be some sort of regulatory bodies that are going to be monitoring this sort of stuff, you know, that's part of it. safety is probably going to outweigh productivity at some point in the not-so-distant future as we think about this technology being applied to a whole host of other things health, education, military, all these different applications there's a whole host of things here, so i guess we're just

scratching the surface that's why i push back on the peak hype thing. we are going to be talking about this for years to come >> right and there will be more peaks, and there will be more troughs, certainly. let's bring in brett winton. we have to ask a futurist. i'm sure you've been listening to our conversation, and i'm wondering where you think we are in this. i mean, before you came on our show, you talked about the great future, but right here, right now, are we in this tough transition period? we don't know what the regulatory framework is. we don't know what guardrails corporate america might put up on the use of a.i. at this point in time, and the cost for search is going to be much higher, at least for right now, as opposed to keyword search. >> i think that corporate america is going to have to adapt to a.i. or die i think that the competitive pressure in the marketplace is going to mean that those companies that aggressively on-board this technology and use the tools to the full extent will outcompete those companies that don't and so, you know, look at the

announcement by dane and open a.i. that they're going to help coca-cola on-board large language models into their corporate processes. i think you'll see a lot of announcements like that, where companies say, this is a real useful tool, and we're going to use it to compete and win. and if you don't, you're not going to win and if you don't win, you'll go bankrupt >> well, what do you make of this morgan stanley report i don't know if you got a chance to see it, effectively saying that keyword searches are about a fifth of a cent, and that gpt search, enabled search, would be five times that, roughly so, the costs would be much more, up to $6.6 billion more for google, and so, you know, how should we think about this in terms of right now, in terms of how much more it will cost to do a search? >> yeah, i think it disrupts traditional search, and i think you may even see, this will be classic innovators dilemma if google says, it's a good thing that microsoft is taking all of this large language model search for us, because we can't deliver

it profitably, and we'd rather have them handle that unprofitable business. the reality is, you're moving from a kind of business process, cycle, where people go to search as a portal to deliver them on to something else, and get to a spot where they begin to expect answers from an a.i. engine that's going to be living in the application that they're using and so, that -- the -- a.i. both breaks the revenue model and the cost model for traditional search, and so i think it imperils google in its current competitive position >> brett, it's karen are you saying that google is surrendering that search to microsoft? >> well, no, not necessarily but i'm saying, you can imagine a future scenario where microsoft begins taking share, and google's explanation will be, well, that was unprofitable anyway these are so expensive to serve. we don't want to serve these long dialogues between people in the a.i. agent

it's not even providing anything for them it's just kind of, like, social entertainment. and that will be a strong side that they're in the grip of the innovators' dilemma, where that actually, you know, looks like a near-term rational decision for them to be making, but it puts them into severe competitive distress >> hey, brett, this is courtney here we're talking about the future and corporate america really adopting a.i my question to you is how long in the future do you see that? if we're talking this becoming really adaptable in five years versus one year, it's very different from an investment standpoint it's not that we're right or wrong, but we could be too early, especially when corporate america is trying to pull back expenses i'm wondering how soon in the future you see this. >> as with a lot of disruptive innovation and the kind of innovations we invest in, innovation solves economic problems and macroeconomic

problems they can evaluate, how can we do more with the same number of employees? how can we better service our customers or better execute on sales without adding to kind of our cost line? and a.i. provides that solution. so, i think that the capability of the systems that exist today are already sufficient, certainly in the programming space, to massively improve the productivity of your programmers, but across every sector, i think that there's the opportunity for productivity delivery to corporate, since of course they're going to on-board the technology, because or else they're going to get outcompeted by somebody else who does. and from our perspective, costs here are declining by 3x per year, so it's more than twice moore's law in terms of cost declines, and so whatever capability exists today, you're going to have 3x the capability, times the amount of investment going into it, a year from now in fact, through 2025, we think there's going to be 100 to a

thousandfold total capability improvement in a.i. systems economiwide. so, it's the equivalent of taking the entire smartphone life cycle, original smartphone to today's -- original iphone to today's iphone, and compressing it into three years in terms of capability advance so, if you're not running that race, you're not going to be in the race by the end of this business cycle >> i can't wait to see what sydney is going to be like in three years. brett, thank you brett winton >> very friendly, i'm sure >> very friendly ark invest guy, what do you make of this? it's interesting to think that the efficiencies will be gained over a much shorter, compressed time period. so, what we're talking about increased costs right now, those costs will go down very sharply, very quickly if brett's right. >> yeah. i didn't know there was going to be physics in this, and i'm not sure who boyle or his or her law is or was, but listen. that's the bull case, right? it's going to get compressed to such a degree that you want to be betting on these stocks now, because the cycle is going to be

a lot shorter than people think. and listen, he's a futurist, so clearly, he sees something that i don't see, but i would push back and say, i think some of these stocks ahave gotten way ahead of themselves. we're about to talk about nvidia i'll save it, but that's going to be an example right there but microsoft, i think, proved that that run from $230 to $275 or such was not justified. it's getting towards levels that make a little sense in the pre-a.i. era >> all right, let's get to nvidia right now shares are popping after beating expectations on the top and bottom lines, nvidia upping its revenue outlook for the current quarter. steve joins us on the call >> more a.i. for you, mel. nvidia with that beat on the top and bottom lines, shares up almost 9% right now. that's the datacenter business that's in focus. that's where all the growth is, and where the company is expected to see benefits of this a.i. boom we've been talking about all hour datacenter revenue was up 11% year on year to $3.62 billion,

and full fiscal year of revenue for that segment, up 41% to just over $15 billion ceo jensen huang saying in a release, "we are set to help customers take advantage of breakthroughs and generative a.i. and large language models." but the question is, how long will it take for nvidia to start seeing the benefits of companies spending more in a.i.? meanwhile, some brighter comments about the gaming business, which has struggled in the back half of last year gaming revenue for the quarter was $1.83 billion, down a whopping 46% from the year ago quarter, but huang saying, "gaming is recovering from the post-pandemic downturn." the call has been going on for about 20 minutes i'll have more for you as it develops >> thanks, steve kovak so, this falls into the category of over it >> i'm going to give you a little math here this time last year, nvidia was trading $225

if you look at the little ticker, it's trading $225. so, although they beat by 7 cents on eps, eps is down 33% from the same quarter last year, down 33%, and revenue from the same quarter is down 21% so, clearly, declining the stock's the same price one has to ask themselves, it was expensive this time last year it's equally, if not more expensive now, and yes, it is expensive. so, good for them. datacenter just shows that they're better than intel. everybody seems to be better than intel that's a good thing, but a stock that was expensive this time yesterday is as expensive as it was 24 hours ago so, i'm not quite sure what the market was looking for i will say that i thought you sell the stock in earnings that was wrong the same way it was wrong to do facebook i'll also say that, you know, that pop we saw on facebook lasted a couple days, and now it's finding itself on the way back down. let's see how this thing plays out. >> one big difference versus a year ago is that rates were at

treasuries that were 1.5 or two-year versus almost five. that obviously puts in multiple. but it's amazing, because it's had a big run on this a.i. hype, gave back a little recently, but to be up $20 after that, i mean, that's pretty impressive >> yeah, and i do think what was hopeful about this is their gaming, i think, was a lot more optimistic than everybody expected it was gaming and pc sales i think everybody was really worried about them it's so expensive, still trading at 54 times next year's earnings, which in this kind of environment is not the stock you're trying to get into. yes, it had a good beat. it's still not something i'm jumping into early >> i'm with you. half a trillion dollar market cap trading at 18 times sales, so you can quote whatever you want, that's pretty remarkable, but then here you go kovak just gave us a couple quotes "a.i. is at an inflection point, setting up broad adoption, reaching every industry. later on until release, "our new

a.i. super supercomputer is in full production. think about these things that he's saying on the back of this sort of hype, and i think that there's very few pure plays in which to do this or express these views in the markets and i'm not saying this is a peer play, but this release seems to be littered with a.i. here it will be interesting to see when we go back and look how many times he says it on the call >> or in this earnings season, how many companies mention a.i. just for the buzz of it. coming up, we've got an earnings alert on lucid motors shares are dropping off. plus, crude oil prices dropping back below the $75 mark what is behind that move, and what does it mean for the n't a dogonywhere. "fast money" is back in two. and one thing i learned being a firefighter is plan ahead. you don't know what you're getting into, but at the end of the day, you know you have a team behind you that can help you. not having to worry about the future makes it possible to make the present as best as it can be for everybody.

you ok, man? the internet is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] wow! yeah! it's time to take control of your investing education. cut through the noise with best-in-class education resources that match your preferred style of learning. learn your way. not theirs. td ameritrade. where smart investors get smarter℠.

welcome back to "fast money. we've got an earnings alert on lucid motors, shares tumbling down 9% after q4 revenue fell well short of expectations, the ev maker blaming manufacturing challenges for low production last year, but it expects to as much as double output in 2023. phil lebeau is here onset with all the details. >> but melissa, their expectation of building between 10 and 14,000, that's the guidance for 2023. some were expecting it to be closer to 20,000, so that's the reason why you see additional

pressure on the shares after hours. let's run through the numbers for lucid for the fourth quarter, another quarterly loss, 28 cents a share it is thinly covered the estimates were all over the place. revenue was shy of expectation the street expecting over $300 million then you have the q4 production numbers. they produced just under a 3,500, delivering just under 2,000, and for all of 2022, they didn't even deliver 4,400 vehicles, 4,369 was the total. i had a chance to talk with peter rawlinson, the ceo of lucid, and i said to him, what is the outlook what is the plan he said, "we can do the production." i'm not sure everybody's going to agree with that he's not worried about production he's worried about sales and how do you increase sales. he said that will be a personal mission of his to lead the increase in sales. i said, well, do you have a big marketing plan is there some big initiative he said, we're going to have to work on grassroots, getting people to talk about it, getting

people into the vehicle. i don't know if that's enough. i was hoping that i would hear something a little bit more when i talked with him. we'll see if they come up with something a little more concrete by the way, you saw their estimate building 10 to 14,000 that's their plan for 2023, and in terms of cash, that's going to be the question they say they have enough to get them into the first quarter of 2024 that's where we are. >> it's like a vicious cycle, phil i mean, they can do the production, but production would be much more efficient if they gained scale, but they're not gaining the scale. they're in this terrible vortex. >> and their reservations have gone down from, you know -- they are now at 28,000. they were at 34,000. now, those are nonbinding reservations, so it's not like you were counting on them, but you're not pleased to see them going down you would like to see them at least holding steady, i guess, and let's not forget, this is a very expensive vehicle it's rare air when you're getting over 100,000 for people

to spend that money. yes, those sales are up compared to where they were 10 or 20 years ago, simply because there's more people with the means to afford a $100,000 or more vehicle, but it's still tough. >> let me ask you. they talk about the burn, saying they have enough money until 2024 2024 is very close >> first quarter of 2024 >> you got to address that burn before you get to the first quarter of 2024. >> correct >> what are they thinking? >> i think they believe if they can get that scale up and if they can get the production -- and the deliveries to increase, look, they only -- they built over 7,000 for all of last year, but only delivered 4,300 peter rawlinson told me and a colleague on the phone, he said, "well, you know what we're still working on getting those deliveries out a lot of those are in transit. that's still not -- that's big gap there between production and delivery so, yeah, they've got their work cut out. >> phil, 60% of this company is owned by the saudi public investment fund and there was a rumor a couple weeks ago that seemed to be unfounded that they

were going to take over the company. so, when you talk about burn rate, i mean, i could not think of probably a better large investor than the saudis if they are trying to, like, think about some new industries. i don't know so, what do you think about that i mean -- >> do i think it's possible? yes, i do. why would it -- why would the saudis do that look, this is -- for anyone, we were talking before we went on the air. the lucid air is a spectacular vehicle. there's no doubt about that. the question is, how do you increase the production? how do you increase deliveries how do you make a profit on this would the saudis be willing to say, okay, we're going to lose some money for a while but this is a very fine automobile, and there's no doubt that rawlinson and his team know how to design vehicles they've got another one on the drawing board. i'm not saying that the saudis will do it, but i could understand why people would look at that and say, i can see that happening. >> it just seems like they

cannot -- i mean, you mentioned how many they produce and how many they deliver. so, there's about 3,000 that are just hanging around a parking lot? >> not just hanging in a parking lot. some of them are in transit. >> to people who will hand them a check for that car >> correct >> okay, so in theory, the 3,000-plus or whatever it is -- >> some chunk of that. they were not giving us specific numbers in terms of what percentage of that have been committed and they're just waiting to take delivery and then cash the check afterwards >> seems like a lot of questions around this one. >> yeah. and i think that for peter rawlinson, they've got to come up with something more in terms of how they're going to advance sales. i mean, they've done some marketing. i mean, i've seen the ads. and they're very nice ads. i think the question becomes, do they have to come out with something at a lower price point much quicker >> right rt >> all right, phil, thanks nice to see you in person. get back safely. it's awful outside terrible outside in new york

city guy, what do you make of lucid here >> well, i mean, 2022, they're supposed to deliver 20,000 cars. that continued to get slashed to levels we're seeing now. i think dan brings up the exact right point. the saudi public investment fund owns 60% of the company. at a certain level, they're just going to take their ball and go home it has, probably, what, 25% or so of its market caps in cash or investable assets, i would imagine. probably going to see a huge flush to the downside tomorrow, and probably seven or eight times normal volume. i think if you want to play the high-end table here, despite the fact that they're challenged in a number of different ways, i think you can buy the stock for trade for sure tomorrow. >> it does sound like maybe a segment on "options action" show or something, dan. >> fridays at 5:30 look at the rivian this is its $17 billion market cap company with $13 billion in cash, less than $2 billion in debt, and they're making a car that's much more affordable, and you're starting to see more and

more of those on the road, both the suv and the pickup trucks, so interestingly, these are going to be stories not too different than the way tesla was 2011, '12, '13 they're going to miss target after target they're going to push out after pushout. they're going to have production delays and all this stuff, so i guess you have to decide whether you think there's going to be multiple players that are not the existing players in korea, in germany, in detroit, that sort of thing, and so, you know, maybe there's room for others other than tesla here. >> i think there is room for others, but they got to be super well capitalized having saudis, that's a great thing, but it seems like 2023 will be the year for a lot of shakeout between some companies that are just not going to make it or at least not going to make it on their own. maybe they'll be acquired by somebody else, i don't know. but especially with the burn and then the cost of money being so much more expensive. >> and competition is already here versus tesla. >> all right, there's a lot more "fast money" to come here's what's coming up next

>> announcer: running on empty, energy heading lower as crude gets crushed so, is the space still worth filling up on? the traders are pumping into the energy space next. plus, the fed spike continues. the minutes are out, and it looks like there could be more rate hikes on the horizon. the latest on the battle against inflation ahead. you're watching "fast money. live from the nasdaq market tesi in times square. we're back right after this. sq. we're back right after this. we're back right after this.

♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq for businesses of all sizes, yeah... oh. don't worry i got it! there are a lot of choices when it comes to your internet and technology needs. when you choose comcast business internet, you choose the largest, fastest reliable network. you choose advanced security for total peace of mind. and you choose a next generation 10g network that's always improving, getting faster; more reliable; and more intelligent to keep you ready for today and tomorrow. the choice is clear: make your business future ready with the network from the most innovative company. comcast business. powering possibilities™.

welcome back to "fast money. energy under pressure today, wti falling back below 75 bucks a barrel, posting a sixth straight day of losses.

that's its longest losing streak of the year, nat gas falling below the $2 mark for the first time since september 2020. it did rebound to post a game. occidental, halliburton among the biggest laggards >> i think you're going to see some of this you have been getting this big rotation out of energy and into other thngz like technology, for example. occidental is kind of interesting. there was a big increase in trading volume last week and there is a lot of rumor, nobody knows if it's true yet, that actually berkshire hathaway may be buying more of that i do think this is something you want to look at, when there are dips like this, i do still see this as a temporary dip. i think longer term this year, just the short-term, two month down, i don't think you want to extrapolate that out to 2023 >> i think energy was the common thread across all the trader acronyms for 2023, guy >> mojo.

oih is one of the os, and occi is the other one you get my drift evercore, somebody downgraded the stock to underperform, but $60 price target, it's basically trading $60 now. look at the name, though, o xy $58 has held a number of times it's not a valuation story it just comes down to whether or not you believe operationally they can get things done, which i do, and clearly, warren buffett does as well i think they report on the 27th. i think there's some catalysts in store i don't think the energy trade is over. the commodity is challenged, but i don't think the energy trade is over by any stretch, and the nat gas reversal, carter braxton worth has been highlighting that as well. i think nat gas might get on its horse over the next couple weeks. >> i agree with courtney i think part of this is that rotation out of what worked last year, defense had been relatively cheap, so people's interest is elsewhere. but i'm actually a little bit surprised. i would have thought -- just

this last one day with rates going higher, forgetting that with you -- with the idea of recession being somewhat less than it was and china opening up, i'm sort of surprised that we continue to see stockpiles were higher, so that was what weighed on it today, but i think it's a decent place to be in the long-term. >> coming up, the inflation fight continues. fed minutes out and the battle is not over yet. the details of the central bank and what to expect at the next meeting. that is next apple making some big strides in wearable health care. the big breakthrough in uce niri wn ast money" returns. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums] life is for living. let's partner for all of it. i'm so glad we did this. edward jones

nothing, it really is something. as an expedia member, you can save up to 30% when you add a hotel to your flight. so you can have a bit more money, to do even less.

welcome back to "fast money. let's take a look at how stocks finished the day, the dow dropping 0.25%, the sam bankman-fried s&p just down 6 points shares of tjx down nearly 2% despite a sales beat the company saying inflation pushed consumers to lower-priced clothing after hours, we are watching shares of moderna and merck, the companies receiving fda breakthrough status for a personalized cancer vaccine. karen, you were mentioning tjx what do you think? >> the gross margin was a little bit disappointing. i like tjx it's not cheap it's never been cheap. they do a great job. they also talked about a buyback, so i'm hanging on to

it i think it's somewhat counterrecessionary in that, you know, if there's excess inventory, it's bargains and also, i think the slowdown in home sales has hurt the home goods portion of it. maybe we'll see some bounceback there, but i'm hanging on to it. i like it. the latest fed minutes indicating more is needed to bring down inflation, and our next guest suggests that weakens the case to own stocks jim bianca owns bianca research. what did you think of the minutes? did that change anything about how you think the fed is going to proceed >> no, the minutes are hyped because jay powell said february 1st that he would lay out a detailed plan for how the fed would pause, and when we got there, we didn't really get a plan and it was before an uptick in cpi and really doesn't apply anymore. that set the stage for what we've seen in the last two weeks, and that is a big rise of interest rates, ten-year yield's

up 50 basis points the street is coming out now and saying the fed is going to raise rates not only in march and may but again in june and go to 5.5% and that is becoming more and more the reality and the minutes didn't do anything to stop that train that we're going beyond the 5.25% that the fed was saying would be their terminal or end point, just a few weekes ago. >> i guess there's also the wild card of 50 basis point hike the next meeting we know that mester and bullard were in favor of that at the last meeting we don't know who else might have been also, because the language in the minutes seemed to imply that there could have been another person who was in this same camp but i'm wondering, jim, if we're just, you know, we're not looking at the big picture here, whether there's 50 now or an additional 25, the end point is higher, but how long do you think we will be at that end point? >> no, you're right. i think that whether we do 50 or 25 at the next meeting is really

a function of the stock market if we're 42 or 4,300, i think witwe do 50. if we're at 4,000 or lower, i think we do 25 but really, what's important is, where are the fed ultimately going? are they going to 5.50 and stop there? that's really no different than 5.25 but the market is starting to bet on they might go to 6% by the fall, so for secured overnight financing options, which are going to place libor, are seeing a gigantic rise in open interest in 6%, the best options bet's that the run rate will be at 6% by the fall. so, a lot of people are starting to think that the fed's not just going to go one extra rate hike. they're going to go many extra rate hikes and they're going to keep going, and that's why i think you're starting to see the stock market wake up to it, and you have started to see short rate, the two-year yield made a new high yesterday for the entire cycle >> hey, jim, so, you just mentioned the stock market starting to wake up to it.

we have an s&p 500 that's gone from 4,200 to 4,000 or just below that here. and you know, again, we went from hard landing, soft landing, no landing, and now all of a sudden, we're talking about a 6% fed funds rate what do you think the thing is that is actually going to shock investors this year that are going to qucause them to hit th sell button. i'm not saying that -- the market acts well, despite all these expectations going higher and rates where they are but is there something lurking that is going to cause investors to kind of all head for the door at the same time as it relates to a higher-rate environment. >> well, that's a good question, because the market has been acting well, but one market which i think might -- has not been acting well the last few weeks is the interest rate market those rates are starting to move higher i think they're going to continue to move higher in the back of the fed continuing to be very hawkish, and i think investors are going to have to start thinking about the idea that we have a 5% or 6% world,

and they're going to have to start thinking about the idea that, for the stock market, cash is no longer trash that was a two-decade-old meme that doesn't apply you get 6%, and a six-month bill by, say, the fall, you're going to get two-thirds of the long-term appreciation of the stock market with no risk at all. that is going to provide heady competition for the stock market now, it could suck money away from the stock market. cash could actually be somewhat of an alternative, where it was just a waste of time throughout the 2010s. it's no longer that anymore. >> jim, always good to speak with you thank you. >> thank you >> and karen, you just made virtually that trade before the show started >> yes, while we're sitting here, i was like, oh i meant to do that. the two-year, right? so, i've been adding to that i bought my first treasury ever at the end of last year, and i think it's worth adding to

it's an excellent risk-reward. >> i think on a personal level, we are seeing a lot of clients are not investing their cash right now. they are having us consistently add to treasuries, and as they're maturing, the treasuries are higher and higher rates, they're saying, keep reinvesting it there's an alternative now even if you could theoretically get better returns on the markets, the investors aren't willing to do that right now, and it's keeping all the cash on the sidelines and that could continue to happen for a while now. >> guy >> bond moves are getting volatile again, and bond moves have been the precursor to equity volatility a number of times and it's amazing that 210 got out to almost 90 basis points it's come back a bit, but it's going to 1%, i think i've said it for a while, and i don't know what the world looks like when we get there i don't know if it's going to be 5%, 4%, you know, 4.5%, 3.5%, but it's going to be ugly when it happens, and i don't think the equity market is prepared for it coming up, talk about another trick up your sleeve,

what the apple watch could soon be tracking anwhd y the news is sending a biotech stock lower. m. right? uhh...nope. intuit quickbooks helps you manage your payroll taxes, cheers! with 100% accurate tax calculations guaranteed. power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity how do we show strength and stability? that lets you place, flatten, or (eagle call)rs a mountain? a tree weathering a storm? (thunder) lions? nope. (lion rumbles) we do it with our people.

(vo) verizon has the epic new phone your business needs on the 5g network it deserves. boost your team's productivity with samsung's fastest processor yet. switch and save up to $1000 on the new galaxy s23 ultra. now that's epic. on the network america relies on. (swords clashing) -had enough? -no... arthritis. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.

welcome back to "fast money. a secret project at apple reportedly making a big

breakthrough, according to bloomberg. the company has been developing technology to allow for continual glucose monitoring without the need to prick skin and draw blood, the headline sending shares of dexcom plunging by as much as 8% midday the stock closing about 2% lower here but imagine if apple were able to do this one in ten americans are diabetic >> you were all over it like an algorithm. dexcom down. >> who, sydney >> yes you know, it's -- but it's been in the works for a long time, so we'll see, getting to this holy grail part is -- that's the last big step to take sometimes, though, we see companies that threaten somebody else's mote, i guess i think of things like facebook when they said, oh, we're going to do a dating service now that never happened. when we see amazon, we're going to do a ticketing service now,

and livenation went down and that never happened. i don't know if this is going to be like that, if this is sort of premature in the hype around it, but i mean, if we could address diabetes in a much bigger way, you know, through -- we talk about ozempic all the time, that would be a really great thing for health care costs. >> two billion installed base. that's the ios installed base right now. think about that they were a billion and a half, like, a year and a half ago. when you think about the ability for this company to kind of bring health, you know what i mean, to their digital devices and then you throw a.i. -- i'm just saying, again, this is going to be part of it this is not going to be for years, and you think about, we haven't even thought about the other wearables that they're going to have coming out over the next five years, so again, i mean, this stuff is all really interesting, and the more services that they can overlay to their hardware devices and in the cloud and all that sort of stuff, i mean, this is -- it's not to invest in right now, but it's great news. >> there might also be insurance reimbursement for them, which could open a whole new market

for them in terms of people who would actually buy the watches >> yeah, i mean, completely revolutionary, and i think it's just going to bring so many other aspects of what the apple watch can do, but i think it's premature, not something to invest in right now, because this report is rumored they weren't even quoting anybody, because it's so secretive right now. nobody actually wants to come out and name it so i don't know how soon this is in the timeline i think that's something you have to question in the report i hope this comes to fruition. i think this would be amazing. >> maybe that's why we saw that bounce in dexcom from down 9% to down 2%. >> look at you you are melissa a.i. i mean, scrap everything else. no, i think, that's -- the algorithms and the machines, you know, they read headlines and they do what they need to do the move makes sense in today's world, and the subsequent rally back also makes sense. we've talked about the medical field for apple seemingly for years here, and they seem to be on the precipice real question is, how many years out is that, and you know, what

are you paying for it right now in terms of valuation? so, you know, i think apple's a little expensive here in this environment. i don't know if it gets back to $125, but it sees the low 140s again, i think >> all right coming up, block on the block, the company formally known as square gearing up to report earnings, so we're ecngn on the options picks. we got the details when "fast money" returns ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪ ♪(lovely day) (lovely day)♪ ♪(lovely day)♪ a bank that knows your business grows your business. bmo. we all work differently now. so cdw helped us deploy mac, supercharged by apple silicon. ♪♪ built-in security protects me from malware and forgotten passwords. i've got enough battery life

to get me halfway around the globe. and lower overall costs leave more money in our budget. for more practical furniture? this was supposed to be hip. no. can you help me up? with mac, configured by cdw, a solution that works for everyone isn't just possible, it's powerful. if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee, even if it received ppp, and all it takes is eight minutes to get started. then we'll work with you to fill out your forms and submit the application; that easy. and if your business doesn't get paid, we don't get paid. getrefunds.com has helped businesses like yours claim over $2 billion but it's only available for a limited time. go to getrefunds.com, powered by innovation refunds.

the eagle has landed. but that's one smallle fo step for man.... hey, what's up? uh... houston... we have a situation. how did you get here? you're characters in our video game! video game? yeah, it's what we do with xfinity 10g. it's like, you know, the best network imaginable. what the heck is that? those are the bad guys. are they friendly? the 10g network, only from xfinity. one giant leap for mankind.

welcome back shares of block, higher today ahead of earnings, the company formerly known as square has outpaced the broader markets this year, but options traders are betting that could be about to change. dan's got the action >> yeah, i do. the implied move in the option market is about $7 or 10%. the stock on average has moved about 8% the day after its earnings and the most active options today were in the march expiration they were the 72.5 puts, about 3,000 of them trading with an average of five bucks. there's some overhead technical resistance there still trades at a fat valuation. they're going to need a beat and raise to get that going. i still prefer paypal on valuation. >> all right, for more "options action," tune into the full show, friday, 5:30 p.m. eastern time up next, final trades.

you ok, man? the internet is telling me >> announcer: "options action" is sponsored by think or swim. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] wow! yeah! it's time to take control of your investing education. cut through the noise with best-in-class education resources that match your preferred style of learning. learn your way. not theirs. td ameritrade. where smart investors get smarter℠. ♪ at morgan stanley, we see the world with the wonder of new eyes, ♪ helping you discover untapped possibilities and relentlessly working with you to make them real. ♪ because grit and vision working in lockstep ♪ puts you on the path to your full potential. ♪

♪ this feels so right... ♪ adt systems now feature google products like the nest cam with floodlight, with intelligent alerts when a person or familiar face is detected. sam. sophie's not here tonight. so you have a home with no worries. brought to you by adt.

(vo) verizon has the epic new phone your business needs on the 5g network it deserves. with no worries. boost your team's productivity with samsung's fastest processor yet. switch and save up to $1000 on the new galaxy s23 ultra. now that's epic. on the network america relies on. time for the final trade guy? >> prudential financial, sister. >> courtney. >> oxy, i'd continue to play the

energy play here >> karen >> yes, i am staying short hyg, two ways to win with rates and credit spreads widening. >> dan >> yeah, paypal starting to get close to my buy level of $70 >> thanks for watching "fast money. we'll see you back here tomorrow at 5:00 for more my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends, i'm just trying to make you a little money my job not just to entertain but educate and teach you. call me at 800-743-cnbc or tweet me @jimcramer. we have to figure out why inflation is s