the massive moves in these stocks >> thanks for joining us >> sure. >> and fresh 52-week highs for the s&p and the nasdaq and the transports today, john >> i'm particularly interested in the regionals reporting in the morning, given the movement from what saw from western alliance. >> that's going to do 40 us here at "overtime." >> "fast money" starts now right now on "fast," the bears getting burned the dow posting its best day in over a month, getting within a stone's throw of the 35,000 mark for the first time in more than a year all three major averages at their highest level since last april. is it time for the skeptics to start chain third quarter tunes? plus, the bull-bear debate tesla at their highest level since last september, but with earnings less than a day away, has the stock come too far, too fast and later, a new all-time high for microsoft bank stocks getting a big boost. and wi'm melissa lee.

we're at "fast money" on the desk tonight dan nathan, guy adami and danny moses of big short fame. and cameron dawson, cio of new edge wealth. welcome to you both. we start with the market melt-up on wall street stocks surging to their highest levels in over a year. the dow up for the seventh straight day, the longest winning streak since march of 2021 tech stocks leading the charge and now at 47% since january check out this chart tech valuations closing in on record highs forward p/es are at levels not seen since december 2021 when the world and the market was a very different place so with stocks rallying and tech valuations nearing record levels, when will the bears throw in the towel and i ask this in the company tonight, basically, it's a bear den on the desk tonight. so we're going to have this conversation, because it's a good one to have when do you say you have to trade the market you have? when do you say i'm being too dogmatic about my stance and my predicts as to what is going to

happen guy? >> it's great to have cameron and danny here sort of safety in numbers tonight. i've been on the bear camp in the broader market for some time, incorrectly since probably december of last year when this whole thing started. but valuations were stretched thin even more so now and you think about where the world was december of 2021-ish interest rates were still effectively zero the fed was going the raise in march. 500 basis points later, here we are. again, the market is going on its merry way. i'm hard-pressed to believe after what's going to be 525 basis points of hikes over the course of a year and a half, there is nothing to it there is nothing to worry about. there are no ramifications nothing is broken, and the market goes on its merry way it just doesn't make a lot of sense to me. >> danny >> people came into the year short technology, long energy and financials, somewhat defensive, as was i. and over the period of time, the chase began when the tech stocks started to run, people forgot about energy and financials obviously until the march blowup

of some of the biggest banks in the country. i think of two big events in the first half of the year the first obviously was silicon valley bank and silver gate. what happened as a relative humidity that 95% of people didn't see coming was the fed, treasury basically guaranteed all deposits going forward, in my opinion and they injected half a trillion dollars into the market the second thing that happened was the debt ceiling crisis that happened what happened as a result of that we have an unlimited debt ceiling. those i did not have on my bingo card s&p earnings have gone down in 2023 since we started the year and in 2024, they've gone down since we started the year. so i'm hard-pressed to, quote, chase the market here. that being said, i'm sure we'll talk about it later, there are names you can own and still be bearish on the overall market. >> right and that's sort of the stance you take, cameron. you finding some pockets want t vs. but overall a little cautious. >> what we learned this year is

valuations don't matter when everybody is underweight or short and bearish already. which means people get drawn into the market kind of regardless of what valuations are. but now if we look at where positioning stands, we're at a point where you've seen huge inflows into tech. you're now about 75% of the way going deeply underweight to very overweight so you still have a little bit of room to run to get to that max overweight position. and once you get there, that's probably when valuations start to matter. and that's why if we're looking at positioning today, we're saying we'd rather buy names that are cheaper, that equal weight index trading in line with average versus growth trading well above average so i think valuation discipline makes a lot of sense if you're looking out two, three years but if you're only looking in the next couple of weeks, the best trends are in those growth names. >> yeah, no doubt about that and i think really the question is what is the pull forward. if you want to talk about valuations, i'm looking at this is facts they tracked the forward 12-month p/e in the s&p

500, trading near 19 times that's above the five-year average of 18.6, above the 10-year average of 17.4. and danny just started this conversation by talking about s&p earnings classification. they are still up, expected to be up 2% year-over-year. but they're down from where they were massively a year ago or something like that. so i say to myself here, what are the names that are driving all this performance we know that the seven stocks make up 26% of the s&p 500 we know that they are a disproportionate amount of the expected earnings growth for the index that is trading at historically high levels and nen you think of all the excitement in and around the names, they are pulling forward a lot of excitement around something that might or might not materialize in the not so distant future so to your point, cameron, these are great trends to invest in. this is what investing in technology is all about. and that is i think the history of all of our careers in the markets over the last let's say 25 or 30 years but sometimes when it feels like a feeding frenzy, it's not a great time to jump in the pool, if you will.

>> we're not talking about pets.com here. >> okay. but mel -- >> companies that were already large and profitable >> okay, we are. but microsoft came in today. it was a $2.5 trillion market cap company. they put out a press release at 11:30 about a part of a business that we know very well this is a company that has gained more than 40% on the year, and we know why it has been rallying this year. and they're talking about a product that might get to $10 billion in sales the stock rallied $130 billion in market capitalization on that we don't know what the cost of compute is for that service that they're offering to enterprise clients for $30 a seat we don't know what the cost of the data centers are going to be, the demand for those sorts of things. those revenues that might or might not come might come at really crappy margins. to me, i think microsoft at 33 times, this is really important stuff here because this is the thing that market participants are jumping into right now and if we go back to the s&p and

where it's trading and what expected earnings growth are, if you look at the seven growth stocks, if you take them out, the rest of the s&p is not expected to grow the areas that danny talked about that everyone came in really defensively positioned are not going to have a great year right now >> i would just add just to go back to the start of the year, came to the year and i believe fed funds were predicting a rate cut at this next meeting we've now pushed that out six months it kind of feels everything has been pushed out six months from here so economic data was better than expected on the margin there is no question about it. but i think all we've done now is pushed this out six months from now i'm not necessarily calling for a recession to happen or trying to time it per se, but these rates being this high for this long, you're starting to see an impact, and then we're going the talk about the banks and consumer credit, but it's happening and the consumer is getting stretched here. >> you hold on basically toward a negative view of the market. are you short the market currently? >> short the s&p. >> the entire year >> no, not the entire year recently got reengaged a these

levels and if i'm wrong, maybe by a couple percent >> at what point do you ai'm going to walk away and wait for my opportunity >> when stocks stop trading on fundamentals, you can't short a market that doesn't trade on fundamentals because there is no limit to where it can go a little bit scary >> we talk about $150 billion over the course of a couple of days a year and a half, two years ago, how many companies had a market cap of $150 billion in the first place. and now companies seemingly add that over the course of a trading day or so. we don't bat an eye. it's not necessarily anything fundamental to dan's point, it's all on money flows and probably there is an absence of sellers right now. the question is what's the catalyst for that? valuation at a certain point you can never really trade on the back of that there issing in coming i think it's going to manifest itself in another one of the regional banks or a credit

crunch cycle, whatever, rearing its ugly head, then it starts to build on itself. >> the fed stepping in and effectively back stopping all deposits, doesn't that sort of eliminate the risk of another big failure that we've seen? >> it eliminates that risk, but it doesn't eliminate credit risks that are clearly going to be out there you think, again, over the last now 18 months, what we've raised 500 base point, soon to be 525 historic in the amount and the duration with which we've done it people think somehow the economy can weather that storm and it has the lag effect clearly has lasted longer than i thought but it doesn't mean it's not going to happen. there is an inevitability to all of this. >> can i ask you guys the possibility there is an echo chamber going on you guys are on a podcast that everybody knows. lots of viewers, you three are together you're talking about your bearish views all the time and it happened on the bullish side i might add it's not just you guys

it's who you keep company with you tend to graph tate toward people who you share views with. are you concerned that your view of the market, your view of the world right now at this moment is real -- >> birds of a feather flock. >> exactly. >> i'll jump in quickly. that's an extraordinarily fair point you bring up and we have people on with a counterview. we listen to them. danny will say this. i don't want to speak to him but he embraces when people challenge his positions and he can talk about that, because you do want the hear the other side. thing is a fine line between being dogmatic and having a strong opinion, and we're probably right on the cusp of it what i'm seeing going on right now in terms of the economy, the interest rate, in terms of moves in the bond market, the currency market, the gold market which danny will talk about, it all to me lends itself to an equity market that is overvalued. >> here is another thing it's absolutely laughable, because i spent all of 2022 watching almost 90% of the strategists and pundits defending their bullish view the whole way down and it wasn't even that the s&p only closed down 20% a lot of stocks that a lot of people who watch this show lost

75% of their value and those people are making all the stupidest arguments about why you continue to hang on. as far as i'm concerned, i think a valuable -- it serves as a valuable service, because i've been on this network for 14 years. and i always find it really interesting that a lot of folks here, they come on here, and they can talk out of the both sides of their mouth, and you push them, and a lot of the great journalists on here push them at least i'm here every day and i'm talk about it, coming with new stuff, you know what i mean? and i think the transparency is kind of the only way to do it. but i'm not going to change my mind every other day. >> right. >> part of it is having a front row seat for the financial crisis in 2007 and '08 it's hard to unsee everything that happened. and i really go out of my way to try to teach people and help people we pitch longs on the podcast from time to time. but once you see something like that happen, when you think about the bank crisis in mid-march, 99% of people had no idea what that was we were talking about guaranteed government securities that were getting marked down.

these weren't subprime mortgage bonds. that's scary prospect. there are things like that oy curbing right now that no one wants to pay attention to. i see them it's not manifesting right now in the markets but i believe over time it will. >> this is something you highlighted earlier. take a look at the dollar taking a sharp move lower against major currencies this month. cameron, you highlighted the move in the dollar this is something you're watching. >> yeah, it's really important because it will drive market leadership one of the things that a weak dollar does it typically is supportive of value stocks, international stocks, and commodities. and if you have higher commodities, of course, that could exacerbate some of these inflation drivers. so we have to watch it very closely. if it breaks below 99, that's where we think 96 is each in play but if it holds that, maybe we have this sideways chop. so the dollar is all important in where market leadership will go through the end of the year. >> you're focused on dollar yen. >> yes, you think of the new

bank of japan governor look at 2022, the very end japan has effectively had something called yield curve control where they've been maintaining the ten-year yields between 25 and 50 basis points where. did it go the day they did it? right up to 50 basis points, and it's been staying there. i'm watching because the yen carry trade has been short yen, long dollar. and the rate differential they're finally experiencing inflation in japan, which is a good thing now that's potentially unwinding. those are the types of things i see happening underneath the surface that i think the same way people didn't see this silicon valley thing happening could be one of the things you wake up one day and there is a currency crisis on our hands. >> challenging your views a little bit, i was out all last week i looked at the move in the dollar that is a substantial move challenging my bearish view, everything we just talked about the s&p 500 earnings and everything like that, you think about how much of a potential tail twhwind this is for s&p earnings

cameron, i would almost push it back to you. to me, is this the thing where we were really worried when the index was 115 nine, ten months ago. now it's at 100 here this the sort of thing that might buoy s&p earnings if we were to have a weak dollar and is there a scenario where maybe the dollar falling out of bed doesn't mean something horrible for the u.s. economy. >> no, it doesn't have to mean something horrible but it does have to mean where we see the leadership within the global markets so we do know that are quite a few sectors in the u.s. markets that are negatively correlated to the dollar, a lot being consumer names because they derive a good portion of their earnings from overseas so as we start to see a weaker dollar, it usually helps benefit those consumer names, as well as things like materials and energy, which really have been left for dead all this year. so then if we think then about the other implication on liquidity, i think the other thing interesting on japan is that the bank of japan has expanded its balance sheet really materially. and actually, the low in the

balance sheet coincide was the low in the market in october so if they back off from doing yield curve control, and not to outwonk you, danny, if they back off from doing that, the challenge we have is a drain of liquidity from global markets. that's a key watch item as we move into2024. we have a market flash shares moving lower in the after hours. pippa? >> carvana is dropping down 9% after the company bumped up its second quarter results, announcing it will release earnings tomorrow morning before the market opens with a conference call of 8:00 a.m. eastern. the used car retailer was initially slated to report on august 3rd that stock has been on a tear this year, up more than 700%, but dropping 9% here in extended trading. melissa? >> thank you, pippa stevens. we got the perfect person on the desk tonight danny moses? >> i was unaware that was happening. but if i were to guess, i would say maybe there is an equity offering coming so they want to put the earnings out now that's complete speculation on my part. yes, the stock is up a lot from

the lows, but it's down i'm guessing 90% from its highs. and i don't they're out of the woods by any means but i'd wait to see what this news is going to be. >> if memory serves -- >> it does. >> for me it often does. i think danny was here in the fall early winter of 2021. this was i think a $285 stock. he actually talked about it as one of his top short ideas stock went from 350 to 3 now it's bounced significantly to your point. but it's still an extraordinarily troubled company. but we've seen bounces along the way. if you look at this chart over the last couple of months, it looks extraordinary. you look at it over the last couple of years, it's a beatendown, probably business that's probably going out of business so listen to danny on this one, folks, for sure. >> it's not just car van that has ralliedasm lot of other names have rallied that i don't think are high quality and i don't know what everybody is waiting for with these companies. i would be raising equity quickly as soon as you can we'll see if that the trend. charged up and ready to go

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welcome back to "fast money. a strong day for bank and brokerage shots. charles schwab, morgan stanley, melon all rallying the kbe at the highest levels since march. so has the downed sector put the worst behind it? let's bring in sheila bair great to have you with us. the stocks are telling us we've emerged unscathed, that there aren't any more repercussions from what we witnessed in march. that the right message >> well, i hope that's true. i can't be sure that's true. if people build that into their expectations, they're probably disappointed no, i think there is probably going to be more bank failures banks fail we've got a lot of them out there. and so people shouldn't get excited than

if they're below the deposit insurance levels, they're fine and if they're large depositors, they should understand what their bank is about. i know the government has tried to imply that all these deposit are guaranteed they really don't have the legal authority to do that but the vast majority of the banks are fine there is real estate loans, recession risk there is a lot of headwinds out there. and for the regional community banks the inverted yield curve if that continues, it's going to be a real problem i think. >> help for the consumer brian moynihan, it's always great. listen, it's not just him. they all do it i don't think there has ever been an environment where they haven't said that i don't think it's great what do you think? >> no, i don't think it's great either we're always trying to get the consumer to borrow more, lever up, keep buying. that's not the kind of growth sustainable there has finally been real wage growth. now we've seen positive wage growth it needed to catch up. just based on that data to say

everything is twoufl the consumer is not accurate delinquencies are up savings rates are down those are trend lines that are not great. so, no, i don't think we should be relying on the consumer to keep fueling this, to the extent real wage growth does support demand, as borrowing costs go up, that's a positive. that's sustainable but we don't know that's going to be consistent hopefully inflation is on the downward trajectory now which will support real wage growth. we don't know that for sure. >> we opened the conversation being bearish with the market rallies. it sounds you're sort of bearish on the banking sector. i don't want to make you -- but it does sound like you think there are real worries about the sector that are not necessarily being priced in right now. >> i'm the kind of person who wants to hope for the best and prepare for the worst. i do think there is some real issues you know, the fed stress test, i published an op-ed on this last week the true nightmare scenario is

the inflation persists interest rates have to stay high we go into a recession so they've got credit losses but they're also dealing with the impact of high interest rates. and that's the nightmare scenario we need to worry about. that was not stressing the fed's stress electricity they are running more tests now. i don't know if they're going to be public or not but those are the scenarios they need to look at. we need to be prepared i'm not saying that's going to happen i think it's plausible it might happen and that's the whole idea of a stress test, to think of those plausible worst case scenarios and make sure the banks can withstand those conditions. >> government agencies were obviously caught offguard with what happened in march in silicon valley bank. do you think they have a better grip are they in tune now >> i do. it's funny they were focused on interest rate risks but more from an earning perspective than these unrealized losses if you had to actually sell these super safe government securities what was going to happen. so i think they are focused on that now i worry there will be an

overreaction because i said then and saying now, the vast majority of the regional banks are healthy we need them to lend they're important providers to small and medium-sized businesses i do think there is a risk of overreaction but i think they can weather it. one thing that the regulators haven't done that they should is these liquidity tests, we talk about these capital stress tests, those are the big public headline, the liquidity tests continue to assume the government security, even if they are deeply under water, if you can't sell them except for significant losses, they're treated as highly liquid to determine whether a bank is liquid or not that was big problem with silicon valley. people said they should have had the liquidity stress tests the way the big banks do it wouldn't have caught it >> the current stresses don't have a time element. >> they don't. >> they allow the banks to work things out. >> they do. >> over the course of nine quarters >> yes, they do.

>> it's not like a quick change in the environment that can trigger the stresses. >> inverted yield should not be underestimated as a challenge for banks, and that they assume that it uninverts within a couple of months which is not normalized in a couple of months which is not the case. if we have a problem, it's going to be more like the "snl" days where banks can't find loans and investments to match, to cover their deposit costs. the deposit costs are going up so they start doing stupid things to get investments or loans, and what becomes liquidity becomes credit, and you've got a banking crisis that also is not good for the economy. i think if we need to worry about something -- i'm not saying it's going to happen, but if we need to prepare for something, that's really the bad scenario that people need to be alert to right now. >> sheila, thanks for coming by. >> my pleasure thanks >> sheila bair

dan, i don't think it's a surprise where you stand on the banks. >> no. listen, i think the results for from the big money centers were pretty good. i don't think people were particularly bearish on them despite some of the things sheila mentioned in the yield curve. there were clearly beneficiaries from a deposit standpoint from the regional banking crisis here if you look at day like today and a stock like schwab, there was a lot of skepticism. to look at the kre, the regional banking index at a technical level, if we're just trading here, you started off by trading the market we have if you think that we are going back to the all-time highs of in the s&p 500, the nasdaq has a chance to getting back to its prior highs about 10% away, then you want the start finding some laggards where the stories are maybe getting incrementally better and that regional banking, it might be because we've all been saying there are other shoes to drop. i don't know what's going to happen i don't know what's going to happen to the yield curve. technically, those things look okay people can only by so much of the same stuff they've been buying for the last six to nine

months. >> i think we don't have a clear picture on the regional banks yet because they start reporting effectively tonight with western alliance and through the rest of this week. so this is going to be the real test of the true trends of what's happening because we know the big banks were the beneficiaries but at the end of the day, if this is a soft landing, and we really believe in it, you really want the banks to participate, because they are cyclical economically sensitive parts of the market so we do think having banks show better performance is the best indicator that we are in fact truly have a soft landing that can persist versus just a breather in the economy and maybe a recession risk for '24 >> and charles schwab was big. did you see the ceo interview? was saying people are back in the markets. >> they are. >> 50% more buys and sales on the platform. >> schwab weathered the storm without question they were in the crosshairs for about a week and a half so and they got through it. it's a great institution without question that's not sheila e. talking

about the banks. that's sheila bair talking about the banks. she is amplifying some of the things we've been saying for a while. none of us hopes this happens, but again, she talked about the consumer everybody wants to say they're in great shape they always spend should they be spending credit card debt is north of a trillion dollars now the warning signs are clearly there for the banks and for the economy. just the market doesn't want to listen right now. >> all right there is a lot more "fast money" to come here is what is coming up next in reverse lockheed martin unable to hold on to a morning rally after a strong earnings beat so what has investors changing their minds? the details next plus, the battle over tesla. bulls and bears sparring over where the ev maker is headed next everything you need to know ahead of tomorrow's big earnings report you're watching "fast money," live from the nasdaq market site in times square. in times square. we're back right after this.

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welcome back to "fast money. shares of lockheed martin a buzz kill in today's rally. giving up early gains, ending down more than 3%. the move coming despite an earnings and revenue beat in the latest quarter the war on ukraine driving sales of the f-35 combat jet and missile defense systems. terrible price action in response to this earnings, guy. >> initially a very good price but the reversal today is something we want to talk about. it traded three times normal volume we didn't test the all-time high which i think was north of 500 they guided higher for the year. this is a stock with that guidance that's trading below market multiple. trading about 17 times, which is in line, a little cheap to them

historically where lockheed trades i don't know if it was just rotation out of the space into some of these highfliers, but it's something you absolutely want to watch. when people start devaluing names like this and flying into, flocking into some of these high growth names, that's a sign as well i don't think there is anything wrong with lockheed here i think the stock is fine. the company is fine. this earnings release was fantastic. but the price action to me speaks about what we were talking about at the beginning of the show. this euphoria in other sectors >> this just shows that there is no demand for defensives, because a name like lockheed to beat a raise and sell off on it just shows that people want sensitivity to the economic cycle. they want the potential for greater upside and lockheed is the most counter cyclical name you could own within a sector. it is trading about a 17% discount to the market to put that into context you go back to the relative discount low which was during sequestration. it got down to about a 30% discount so it could get cheaper, but the

point is we're still in a very strong defense spending environment. so this would be a cheap way to add defense to portfolios. >> guy, do they not mention ai on the call? >> they did not. >> well, there you go. there is your answer >> lmt.ai. >> hold on i guarantee you that lockheed martin, they spend millions and millions of dollars on machine learning >> they're probably at the forefront. >> right so it's kind of funny in a way it's embedded into their business innovation is what they do >> how do drones fly ai. >> exactly exactly. >> coming up, the moment you've been waiting for the ev wars are heating up out there. and right here on this very desk, we've got bulls. we've got bears. so the tesla's future all green lights sore its battery about to run out? the debate next. talk to microsoft's new chat bot, the reaction straight ahead. "fast money" is back right after this

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welcome back to "fast money. a sea of green as another set of highs for the year, notching its highest close since last april even the s&p five% from their all-time high.

the nasdaq also rising today that index up more than 42% from october lows apple locking in another record high close today but a couple of stocks moving lower in the after hours j.b. hunt posting a miss for its later quarter. interactive quarters dropping after earnings miss and omni com down after missing on revenues let's get to tesla now the ev maker set to report poor results. the stock up more than 130% already in 2023, but in the latest challenge for the company, senator elizabeth warren is asking the s.e.c. to look into elon musk's potential conflicts of interest with tesla and twitter. joining us is "fast money" friend and long-time bull jean munson, gene, i have to warn you, you've got some bears specifically on tesla on this desk tonight so i hope you don't feel outnumbered by bringing you to the fold here. what are we expecting for quarter? and how is december la going to justify where it's at right now stock wise >> so there is the near term,

which is tomorrow, and then there is the long-term as far as the near term, i don't know if the stock is going to be up or down after they report their earnings the key topic is going to be auto growth margins x credits. in the march quarter, the street is a looking for 20% they missed it they hit 19% the street is looking for 18 this quarter i suspect it's going to be light, somewhere between 17 and 18%. i don't think that's going to be an issue for the stock ultimately because i think the commentary from the cfo is going to be to expect improving growth margins throughout the back half of the year. so kind of put that as the starting point i think all systems go when it comes to improving margins, despite what probably is going to be a miss for june. the outlook is positive. but i love for the conversation, the debate to be focused on the long-term, because i think that's what's more important, melissa. and ultimately, i think the long-term, if we're going to boil the question down, it's not about auto growth margins x

credits. the long-term question is this can tesla get to 10 or 20% market share of where eventually evs will be 100% and i will make the case that if their goal is for 20% share, if they do 10% share in a decade, it's a long time, a 10% in a decade, that's a $1.1 trillion business they are going to do 130 billion in revenue this year if you're of the camp that traditional auto is going to catch up to tesla, then i'd love to have a debate around that topic. >> hey, gene, it's dan and, again, i think you're a great long-term thinker. i'm not. i'm a short-term think other this one of late you think about the short-term right here into last quarter, the stock had sold off 16% they missed on gross margins the stock sold off the next day 10%. it has since rallied since bottoming out, earns 100%. it's gained $450 billion in market capitalization since it was at 150 in the days after

e earnings when you think they're likely to come in 17% growth margin, who knows whatever they say on the call whether that's true or not, whether they're bottoming out or not there. is a price war going on right now. so to me, in the history of tech, and you and i have talked about this a lot over the last 25 years, when you have declining margins like this in a market like this where there is just aggressive pricing, the more units they sell, it's worse for the margin here. i'm curious. how do you square the near term right now with your very positive long-term vision? because the fundamentals don't seem to be improving quarter over quarter >> so i would square it up by saying ingmar gins are going to improve in the back half of the year if i'm wrong by a quarter, it's going to likely improve in 2024. and the reason is that they are ramping production at austin the 4680 battery has wisconsin has been a drag on margins you talk about lithium prices going down that benefits tesla more than

ford facts are the facts. margins have been down but i think they will rally back here, back after this year into next year. and as far as the margins and the impact, i think this is a critical topic, which is traditional auto is getting smoked right i know when it comes to evs ford, they break it out. they lose 40% in their ev division pole star by volvo 45% tesla makes about 15% operating margin my case is this. what you just described, dan, that's going to be the world of traditional auto i think they're going to continue to have struggles to improve those margins because it's not just about ramping production they have the redo their factories, rework their labor contracts, we do their software stat, change their distribution network. they have to adopt more nimble, profitable playbook. so i agree margins go down. bad for the business my bet is a year, two, five years from now, we're going to be talking about big traditional auto that is going to be a fraction of the size they are today. just look at what's happening

with toyota today. i think it is a tale of what's to come. >> gene, danny moses here. the only reason i totally agree that the only reason to own the stock here is you think in the outyears, all these things will come the fruition as far as market share and being able to produce these many cars. but to dan's point, it has been a supply problem it was a demand problem at least near term cutting price to do that until i see these things which have been promised for year, fsd at the right level, whatever level that would be, or all these other things that are supposed to be on the come, i still see it as an auto company. maybe that's naive i'm still trying to figure out how we went from $110 a share to 280, 290 on what has been happening. yes, there is ai, always a part of tesla, ai has been. where are all the screaming bulls, because it feels they went away when the stock was drifting below 150 what is the reason the stock has rallied from 105 to 290? >> i think it's an understanding

that they are recaptured sales dipped and they rebounded. the march and june quarter delivers 83% up year-over-year the overall ev industry up 50% they had a great june quarter. that's part of the reason why they had the rebound here. i want to see the tesla bear-bull debate is great. i love the topic i think ultimately, let's just quickly base it on maybe an agreement or will share something. are electric cars going to be the future and i would guess that most of the desk there would say electric cars will be the future i'm okay if demand slips for a quarter or two or four quarters because the end point is clear in my mind gas cars are going away. and ultimately, i think that what is most optimistic is the other players that are trying to grab this massive cam, it's as big as it gets, the other players i think are going to struggle with profitability to get there. that's why i'm okay. there is not like mental gymnastics or on optimus prime

or solar roof for lithium refinery that needs for me to think that the stock is going higher this is very simple. the world is going to electric tesla has a competitive advantage around profitability if you don't get provable out of traditional auto, they have got problems, and i think that's opportunity. >> gene, thanks for playing. gene munster, deepwater asset management >> thank you >> is it possible that it's simply a process of elimination? gas cars will be gone. electric cars are the future who is going to win? is it going to be gm ford look at ford, they're cutting price because no demand. there is a problem with demand there is not a problem with supply here. >> there are a lot of other auto companies which are going to be producing evs which are coming on to the market right now i go back to what drove the stock higher i think about their charging stations it's 50 cents maybe in 2032. i think incrementally we're at a market tesla is one of the magnificent seven that is getting the benefit of the doubt in all aspects. i think it's kind of fed on itself and i'm not short a lot here

because it's not trading on fundamentals in my opinion it's trading on the outyears and the promises >> last night we had phil lebeau on we asked about margins it's that wells fargo note the bull cases, this will be the trough quarter for margins, or at least a quarter or two away and that's when you buy the stock. and the bear cases, margins are going to continue to deteriorate. so you go from 17.5 to 16% margins. then it's a whole different paradigm for the stock so if you're bullish, this is a trough margins if you're bearish, it gets worse from here. listen, i'm not an expert in the stock. but i think given the run you have, it's very hard to make a continued bull case given the run we've seen over the last few months. >> there is clearly a demand problem. gene mentioned evs the first half up 50%. you know what they were up last year 71% year over year so that growth rate is actually declining. you think ramping giga berlin. i don't know about you guys, but europe is in a bit of a recession. china is dealing with a deflationary environment right now. and shanghai is a large part, i

think of the valuation off of the lows that started in january when basically, the chinese did an about-face on zero covid. i don't think china is much better to me, i don't -- i don't get it here and i've been on the other side of this. i had it right on margins into the q1 print i think if you're new to the story, thing is a probably a good trade right here in around 290 for the same reason. i think they present 17% and whatever they say, i think you want to discount whatever they have to say about margins troughing in the back half of the year. >> it's not to say that fundamentals will matter, but what is the right multiple to pay on a company that has declining margins, might be growing rapidly, but is incredibly capital intensive because at the end of the day, that's what this business is capital intensive. so at 70 times earnings where it is today, the valuations never really mattered. but at some point once it hits that rate of maturity, growth rates decline, valuation will matter

coming up, closing on shares to an all-time high. details on the newubript sscion service, and what it could mean for the stock. for the stock. more "fast" new zealand in two i was told my small business wouldn't qualify for an erc tax refund. you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. take the first step to see if your small business qualifies.

we've got a market flash on oddity tech, the direct to consumer name just making pricing its ipo. pippa has the details. >> hey, melissa. oddity pricing above expectations at $35 per share, according to "the wall street journal" siting sources. just yesterday the company raised its target between 32 and

$34 per share up from initial expectations of 27 to $30. the company will start trading tomorrow under the ticker odd. melissa? >> pippa, thank you. pippa stevens. microsoft topping the tape making a fresh all-time high today after unveiling a subscription service for generative ai tools. enterprise users will pay 30 bucks a month. now standing at $2.7 trillion. dan was making the point earlier it's adding all this market cap. we don't know how much it's going to cost versus the revenue they receive but it is recurring. it's not a one-off spend by customers. it will be a recurring subscription stream. >> remember back in the day they had visibility, the market said that's great this is great as well. but right now given the clothes, i think microsoft is trading close to 32.5, 33 times next year's numbers they report on the 25th. and i've said it on the show 50

advertisements it's one of the five most important companies in the world. we've been bearish we've been bullish but at these levels, i don't have to question valuation go back and look at the last couple of quarters they were fine, but they weren't fine by microsoft standards, and they don't just, again, my opinion, a 33 multiple >> it does price in a lot of good news in growth. we're back to the prebeahm where the pandemic era peaked. so back to that 2021 level, which as we talked at the top over the show was very different environment. so you to see the earns materialize. you cannot see mediocre growth it really does have to knock the lights out in order to justify the valuation. coming up, game over for game stop. why one of our traders here calls this the ultimate meme stock and is till playing it from the short side. from the short side. more after this.

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welcome back to "fast money. one of the hottest stocks with retail traders over the past few years is catching one of our traders' eyes but not in a good way. game stop up 20% but down more

than of% since ryan cohen was elevated to executive chairman on june 7th. you have a small short position? >> put option. i don't want to be taken out like some other funds have but it was the making of the meme king. your documentary that really got me thinking about it again i watched it the other day but when i think about this name in general, through all the iterations of what we saw during covid and all the meme stop trading, it is the quintessential meme stock. and ryan cohen has a lot of money. ryan cohen has an ego, fine. that's all good. and he puts his money where his mouth is he said as much. this last quarter when the ceo resigned, there was no conference call at all, he went and bought $10 million of stock around $22.50 an average i would say he is a bad trader because i think he could have bought it 15, 16, 17 there were also two other board members that bought 5,000 and 10,000 respectively. there is a history to this back in march of 2022 after a disastrous quarter, he bought $10 million of stock right around the same level split

adjusted so call it $24 this company has 1.2 billion or so in cash they're not making money they're probably going the lose money here for the rest of the year and i don't know a company with a 7 billion market cap that looks like the other than the faith in ryan cohen. he wants to keep buying stock, great. but it's not something i would own at this point. let's cut to "options action." check with mike khouw. what did you see >> gamestop has remained one of the busier single stop options, not one of the biggest companies trading as danny alluded to. we've consistently seen calls outpacing puts over the course of the last 20 puts. that was true again today, about 3.6 to 1 the busiest options were the weekly 24 calls. well also saw buyers of the calls that expire at the end of the yeex 65 cents. what danny is doing buying puts is probably as good a price we've seen essentially bouncing around at four-year lows right now. >> thanks, mike.

for more options action tune in friday 5:30 p.m. eastern time. and you can see the meme king. >> oh, stop it. >> streaming on peacock. it's also on youtube catch it >> there it is >> there it is up next, final trades.tellie 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℠.

this is american infrastructure, a prime target for cyberattacks. but the same ai-powered security that protects all of google also defends these services for everyone who lives here. ♪ time for the final trade cameron dawson >> xle the last shall be first. >> danny moses

>> physical gold trust, phys >> shields go longer >> i watched you talk so many times, mel so good. devon energy, dvn. >> flattery is everything. no, just kidding thanks for wchg asatin"ft money. "mad money" with jim cramer starts right now my mission is simple -- to make you money i'm here to levelthe 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. i don't want to make friends, i just want to make money. my job is not just to entertain but to educate call me or tweet me. sure, we only had a few quarterly reports so far in the season but the ones w