investors do with apple these days. >> yeah, the problem with that, morgan is that for the past decade, china has been the engine of growth for luxury and the promise of why china data tonight, including gdp. that's going to do it for us here at "overtime." >> "fast money" starts now. live from the nasdaq market site in the heart of new york city's times square, this is "fast money." here's what's on tap tonight. and bitcoin bonds. another way to play the red hot crypto space. we'll dig in on the latest etf with the ceo of strive asset management. plus, tie yan aiwan semi surgest misses the mark, and two more

trader acronyms. i'm melissa lee, coming to you live from studio b at the nasdaq. on the desk tonight -- tim seymour, bob that win eison, guy adami, and mike khouw. shipments from apple to china dropping 17%, with a whopping 25% in just the fourth quarter. that was apple's worth yearly decline ever. and put it into third place behind vivo and huawei. the stock falling over 4% today for its worst day since august. it's now lost nearly 9% already in 2025 making it by far the worst performing mag seven stock. analysts on wall street have been getting a bit more bearish. a rare sell rating was issued on the stock, slashed its price target, saying apple could fall 18% from here. the biggest concern, tariffs. and with president-elect donald trump just a few more days from returning to office, could that threat just be starting? i guess at the heart of this

whole thing is there more pain ahead? >> you know, there's an interesting word in the english language. swashbuckler. >> usually associated -- >> pirate. >> yeah, see, tim nows? knows. >> yeah. >> to make a call like that, in the midst whooch was --of every a ing move. >> i agree. i arts s ort of admire it. we've seen moves like this before, but finally, some of the china concerns i've had are starting to come to fruition. i think valuation is coming to the forefront, as well. you get through this level, the november low of $220 is in play. and feels like it's going to continue to trend there. >> there seems like a lot more question marks about the upgrade cycle and the strength of that, based on a.i. offering, saying there are few offerings that are compelling enough for everyone to pay for a new phone. that, plus the possibility of

apple not necessarily falling into the cross hairs of tariffs that we put on china, but retaliatory tariffs that china will take on u.s. companies. >> well, it would make sense. if you look at that whole greater east region, it's about 60% of revenue. so, the implications are significant here. from a top line standpoint. you know, again, you still do have the service business, you have a significant install base. and as guy's pointed out numerous times, when you just talk about the passive income flows, the passive etf flows, apple is always going to be a significant portion. the real question is, do you want to be over it versus the s&p? do you want to be adding that, versus the rest of your portfolio? and right now, going into a situation, where, one, the a.i. super cycle is not even a factor in china. that there is already a reason for them to look for -- for local competitors. but in terms of them offering something that's a compelling reason for you to pay and

upgrade now doesn't really seem to be there. and so, i would be hesitant to add, but i do think, as guy's mentioned, there is a floor to the price in the short-term. >> yeah, i think you're buying weakness in apple. and i think there's nothing about the china market share loss that we haven't been hearing about for a long time. this hasn't just happened. in the fourth quarter, they were number one, but sales were down 25% for the fourth quarter. so, the issue is absolutely partly the headlines from u.s./china, are we getting worse, are we racheting up? i would have thought in the days of when we were really putting the screws to huawei that china would have already gone after apple. we know they play the long game. i guess -- i look at the price of apple and i understand that the valuation isn't terribly cheap, but when i at least hear about people say, look, there's not going to be a real upgrade cycle, there's no real a.i., i don't see that in the price. i don't think there's any really a.i. dynamic in the price, and i

think people will continue to refresh and upgrade apple. the hardest part about this trade are not the headlines today, it's that apple trades at 33, 34 times forward, and depending on where you believe you should put a multiple on their services business and depending on what you think is the outlook. let's also not forget, if you think about the asp in the apple phone, it's gone higher. the gross margins have held their ground. when you think about china, that asp is getting harder and harder for a lot of people, and the domestic competition, they're very good phones. they're very good phones and they are significantly cheaper, and there is a buy local mentality there. >> so, the move in apple from june, from wwdc, to now, which is higher, but i don't know, 20 something dollars, that does not include any a.i.? >> i think it's a combination of people really looking at the consistency of the business. the overall dynamics around the soft ware services business is something -- i don't think so. especially when i look at the price of the stock going back 2 1/2 years, is largely within a

10% range from where it peaked out in probably early '20 or late '21. >> mike, you agree? >> no, not really. >> nice. >> look, here, one of the reasons we talk about the valuation expansion that we've seen in the s&p is because some of its largest constituents including apple are some of the names that have seen that valuation expansion. this name, you know, apple has not grown the top line as fast as the s&p in general has over the course of the last three years. it has not grown earnings over the course of the last three years. in fact, because it represents 7% of the s&p, that's one of the reasons you've seen multiple expansion in that broader index. look, it would have to be doing a whole lot more. i think there is good news priced into it. you can see that, at over 30 times forward earnings, then clearly there's some good news baked in that the last three years don't reflect. >> yeah. guy? >> it is a valuation thing.

and in the passive investing world, as bonawyn just said, nobody cares about valuation, and apple wins to that, without question. but when valuation is sort of at the forefront, and to tim's point, when you trade either side of next year's numbers, with revenue growth 8% or so, with margins, tim pointed out, as well, they haven't been deteriorating, they haven't been expanding, either. i think you're making your bet, overall revenue will continue to grow and services as a percentage will continue to grow and get closer to 27%, 28%. and then maybe you can justify that valuation. but short of that, you know, it feels like we're in another one of these cycles where we've seen it before. apple can go down 25%, 35%. >> again, if it's not really today's news on china and it's the valuation, then we can be -- we could have been having this conversation for the last three years. are you worried about china if you're apple? that's not only the story of the day, but it's the only real story. we've known about slowing iphone sales for a long time. we know there's no real innovation, okay? so, whatever.

bottom line is, this is one of the best companies in the world, the free cash flow generation, this is a bank. this is -- this is something you can go to the bank on and you can't tell me there's that kind of a competitive threat in the u.s. there's nobody even close anywhere else in the world. so, greater china, which is china, taiwan, hong kong, element set et cetera, this is the only place you worry about it. >> you mentioned it could go down 20%, 25%, because the valuation is up. is apple a better place to be, will it go down relatively less than the broader market? >> totally. sorry, you didn't ask me. >> i know what you're answer is going to be. that's a great question. >> relatively defensive stock. >> from high to low, or from here? >> from here. >> it's already down 12% versus and s&p that's relatively flat. >> sounds like he's on my side. >> to an extend, it's derisk. for us to pick one year or a year to date, it's kind of like

an arbitrary moment in time that we're kind of picking. i think what you're seeing right now is that you can see apple have some exorbitant beta to the market. so, i think now, being that it's already off 12%, sure, you expect apple -- >> that's the question we have to ask. we can't go back in time. i mean, it's today, mike, it is today, where people are making the decision, right? they're watching the show, you're making a decision. or they have it in their portfolio, today, they're making the decision. do they continue to hold apple, because it's relatively defensive. i think we're going to hit a volatile time in the markets and i want to be in a relatively defensive play? >> okay, so, no, and i also take issue -- no, it is not a safer place than the s&p. the options markets can tell you this. it's got a 27% implied volatility, which is double that of spy. so, you're buying a stock that is more expensive than the market is generally, and it's more volatile than the market is

generally. someone please explain to me how that is safer. it isn't. >> mike is -- >> i love how he's in my grill. >> right up in there. >> everybody is in your grill today. >> no, no, i'm not. >> i'm good with that. that's what we're supposed to do here. >> so, can you address mike's concerns -- >> mike, can you reiterate? you're saying it's twice as much as the s&p, so, in a downdraft in the s&p, you think apple is going to underperform? >> well, it is more volatile, and that's the point that bonawyn is making, and the options market is implying it will continue in the next 30 to 90 days. we look at risk-adjusted returns. if you want to get into something that is lower risk, you're looking for lower volatility. this doesn't have lower volatility than the s&p does. >> sounds like a good point. >> well, that's fine. i think if i look at u.s., china, japan, and -- they essentially are 70% of the apple

store services revenue, and that's up 12% year over year. i mean, i -- there's a number of data points that to me tell me their business isn't falling apart. and in a downdraft, apple has proven to be defensive and the stock has done nothing over the last three years? don't you think it's going to be nvidia, amazon? >> as i mentioned earlier, and exorcised mike was mentions derivatives. it would be great on a show like that, given that we had somebody that could speak to, like, a mandy xu, for example? >> ah, your wish is my command. one of wall street's top volatility experts thanks a regime change is under way in the broader market. mandy xu is with us. welcome back. >> thank you for the intro. >> great to have you. so, what -- how are investors bracing thmss sthemselves for couple of months? >> yes, i think one notable shift that we saw in the options market is that there is now more

fear and downside price in the options market. and this is looking at s&p index options. now, puts always trade more expensive than calls, but we were in a regime of the past two-plus years where there was a lot of demand for those upside calls. and we weren't seeing a lot of fear in the options market. that has shifted over the past four months. we're now seeing a return to a more normal environment, where now people are actually concerned about downside risk in the market. and that's something that we haven't been in for the past two-plus years. >> we were just having a very heated discussion about apple in particular, i don't know if you can address individual stocks, or just big tech broadly, and the desire to protect against downside there. >> so, what is notable in this environment is that investors are still expecting a lot of dispersion. so, if that means we get a rotation out of tech, that certainly is kind of how they're positioned for. now, the risk is, we get a selloff, where it's not a rotation, but everything sells off. we haven't really seen that.

and that's not what the market is pricing in. if we do get that, you could start to see the vix move higher. >> so, mandy, can you speak a little bit about tlt volatility? we've seen quite a bit of that volatility, and it seemed like we could see a lock-step move in rate pickup and expected rate cuts, and as you pointed out, we're not seeing the same tickup in tlt volatility when we are seeing some of these movements in the longer term rates. can you explain that a bit? >> sure. what's been notable, we've been in a big bond market selloff. if you look at tlt options, which is one of the most traded bond market options, we're not really seeing a rush for protection in tlt options. and that is in sharp contrast with the last couple of selloffs that we see in tlt, where as bonds have sold off, people have bought puts to protect against further losses. this time around, there's been more demand for those calls. so, the biggest pickup in option activity has actually come from the call side. i would say that's a difference

from what we're seeing in equities, in the bond market, at least. investors are saying, perhaps this is the top, but there's no that fear of additional accelerated selloff in the bond market. >> mandy, over the last, let's call it since august, volatility events have been one-day events. august 15th, december 18th, december 27th. is there any indication that those events could last longer in 20 that?25? >> certainly. i think the catalyst would have to be a shift in the economic backdrop, in the economic outlook. so, i would say, so far, the broader u.s. economy has been doing relatively well, certainly compared to other major economies. but if we start to see, you know, persistent inflation, a more aggressive fed, tariffs impacting the economy, that's when you see volatility pick up on a more sustained basis similar to what we saw in 2022. >> mandy, so, therefore, where do you see concentrations, either on the calendar, are

there certain places, events out are that are coming to light, or asset class? and you talked about how fixed income maybe got a little overdone. how about in currencies, how about in oil? because we have seen big moves in the dollar. we've seen a surprisingly good move in oil, even with a higher dollar. >> that's a good point. we are seeing more volatility, risk premium, or more fear being priced into the other asset classes. big pickup in volatility in that asset class. certainly in oil. and then, within equities, we're seeing more volatility risk premium. the story of u.s. exceptionalism, right, people are still looking to other regions for more downside, so, china, we talked about that, you guys talked about that earlier, europe. i think those are the countries that are kind of -- regions that are exposed to potential changes in trade policy. >> are traders positioning for a stronger dollar? even stronger from here? >> that -- i didn't look at the skew, but in terms of volatility, expectations of more

volatility. >> mandy, thank you so much. mike khouw, where do you fall in the volatility? what events, dates on the calendar have you concerned the most? >> well, i think obviously we have to look out to the next fomc meeting. that's going to be an important one. net of the inflation data we just got, i think there's more uncertainty about whether they could actually act sooner than some had probably believed even ten days ago, so, i think that is obviously one of the spots where we can look. and of course, there's going to be more volatility right now. we're right in the beginning of the earnings season. and there's two things that are going to happen in that environment. one is, you're going to see individual stocks move around much more, and of course, that can contribute to broader market volatility. and there's also going to be -- there's going to be greater dispersion in the returns of individual stocks. so, more stock picking is really in place when you're going around earnings. and that's not just unique to 2025 first quarter. i mean, this is, you know --

it's a standard characteristic. it's a seasonal issue and we get it four times a year. well, on capitol hill, lawmakers grilling scott bessent today. he's in d.c. for his confirmation hearing. cnbc's megan cassella has the details. >> melissa, it was our first time hearing from bessent. he kept himself fairly measured and balanced throughout. tax cuts dominated the day. bessent warned that not extending the 2017 cuts would bring economic calamity. he embraced the use of tariffs as a negotiating tool, and as a revenue raiser. he suggested he'd support a tariff on carbon. and he said several times he does not believe that tariffs would raise consumer prices. he vowed to cut spending, but without touching social security or medicare. and he spoke a lot about sanctions. he both side that he would support stronger sanctions on russia, but he also said that trump believes that the u.s. has gone too far on sanctions, and that it has driven countries away from using the u.s. dollar. and then finally, he did touch

on the independence on the federal reserve. take a listen. >> you think that there should be independence? >> i think on monetary policy decisions, the fomc should be independent. >> and melissa, bessent had initially suggested that a shadow fed chair should be nominated to limit jay powell's influence, but today, backing off that stance. >> all right, megan, thank you. seem like there were no big surprises, which is a great thing for wall street. >> independent fed is one of the greatest things about this country. most people don't even think about that on the day-to-day. when you walk around with that blue passport in your pocket, part of it is our central bank, the ability to navigate monetary policy. otherwise, interest rates are extremely, extremely political. the other thing about sanctions, backing off of sanctions, not being as aggressive, because people lose confidence in the dollar, that's a fascinating thought. and people would not think that's trump's angle. a lot of people would associate tariffs and sanctions, they're

very different things. that's fascinating. >> i think when he -- it seems as though the bond market took a leg higher, yields went lower, on the back of some of his commentary. maybe justified. and, again, i said last night, i thought that was an inspired pick for treasury. i'll say, and i think tim agrees with this, i think this bond rally's going to be short-lived, and i'll say what i said last night. we're one bad auction away from 4. come up, investors piling into taiwan semi. is there more room to run in this name? plus, hitting the bulls eye, sort of. how the numbers stacked up and what investors thought about the results in target. don't go anywhere. "fast money" is back in two. this is "fast money" with melissa lee, right here on cnbc.

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get the 5-year price lock guarantee, now back for a limited time. powering five years of savings. powering possibilities™. welcome back. shares of taiwan semi up nearly 4% after a big earnings beat. the nvidia supplying showing no signs of slowdown in the a.i. spending boom. net profits up 57%, hitting a new record.

high performance computing division continuing to drive sales. taiwan semi's cfo telling that after tripling in 2024, revenue from a.i. is expected to double this year. but can the company keep delivering on such high expectations? how are you feeling about taiwan semi? >> a lot better than apple, frankly. at 23 1/2 times, talking about 57% earnings growth, 39% revenue growth, and yes, i understand there's concern around a.i., but would you rather be a.i. and have that exposure or would you rather be exposed to automobiles or smartphones? that's perhaps why we saw some of the apple selloff today. i think this is a situation where management has aligned with secular trend, and it's probably positive. >> but are we immune from china tensions with taiwan semi? >> here we go. here we go. >> definitely not.

but we like to play -- we play a lot of games. >> so many. >> it's fun. >> we should have a catalog of games. >> somebody out there probably does. but one of the games we play is, mel, if you had told me last night that taiwan semi would come out with the numbers that they did, with the commentary around a.i., where's nvidia going to trade, given the selloff we've seen since june? i would have said, oh, my god, stock is going to be up 4.5%, 5%. >> it was at one point. >> but look where it closed, tim. look where it closed. >> i teed that up for you. >> that i find interesting. against the backdrop of -- >> so, that tells me, mike, that nvidia might be running up against some resistance, but where does that leave me, leave you on taiwan semi? >> yeah, i mean, to bonawyn's point, i think taiwan semi is more attractive on a, you know, a growth at a reasonable price, if -- we'll call it that. of course, there has been some

volatility in their operating results over the course of the last several years, so, at 23 1/2 times, i think the ten-year average multiple on a forward basis is probably closer to 17, but i mean, this is a pretty positive backdrop that they're talking about. so, you know, i -- we did see, i would say, a lot of speculative upside call trading. it traded 600,000 contracts or something like that today, which is more than four times the average. and i think that's probably -- not a bad way to, you know, speculate on further upside for the name. there's a lot more "fast money" to come. here's what's coming up next. >> sales decking the halls, but a ho ho holdup on profits. why target's holiday beat wasn't all sleigh bells and good cheer, and what it means for the retailer's place among the competition. plus, from crypto coins to etfs, and now, a bitcoin bond etf. the latest way to play the crypto craze, and how bitcoin proxies like microstrategy factor into the equation. you're watching "fast money,"

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welcome back to "fast money." target shares missing the mark

today, despite reporting strong holiday sales. the retailer raising its q-4 sales forecast on record high holiday shopping, but its profit outlook remained flat, indicating that those black friday and cyber monday deals drove the bulk of the sales. it further widens the gap between target and walmart, which is up nearly 70% in the past year. so, is it time to check out of target? the problem, though, mike, is that walmart has that valuation problem, as well. >> walmart does have a volume volume valuation problem, a little bit. they have basically more consistent foot traffic result of, you know, basically the grocery business that they're increasingly capturing. and i think that's one of the important things to look at when you're looking at these kinds of companies, is basically, it's a market share question. i like to see the top line growing at least as fast as gdp growth. walmart is exceeding on that metric, and target is actually falling behind. it's not even keeping pace with

the economy or inflation, in terms of revenues. and that's a little bit problematic. >> so, on a day when we got a retail sales number that was very strong, and really shows the elements that are included in the gdp number are essentially implying a 3.3% q4 gdp, the consumer is better. apparel and toys are doing better. we all knew that's where things were going, and i don't think they're the only ones. i think it's a story of some management changes. i think at this point, you are neutral to positive on target. i don't know how you're negative, given the backdrop of the consumer and where the stock has come from. >> so, brian cornell should go? >> no, i'm saying they announced some changes to the management team. i think brian cornell's fine. i do think there have been some issues that i think are kind of prove me stories here, but i think -- you priced in a lot of bad news there. >> yeah, i agree. i think the would you rather

target or walmart, i think, is a separate issue. one thing that i will say is, i think some of the metrics that we saw here is positive for bjs and costco. you saw that target 360 subscription. that was one of the leaders in terms of driving growth forward. when you just think about maybe some of the issues around the consumer right now, if you are going to have to do promotionals, and if you are going to be in the essentials business, you probably want at least some of those revenues to be augmented by subscription model that allows you to promote and get -- and right size inventory and still have some type of revenue uplift from that. >> target's been cut in half since 2021, number one. this is a -- i mean, wall street's always bullish about everything. this is a stock, by the way, that only 41% of analysts have buys, 56% are hold. i think the average price target is $142ish. so, tim's right. it's hard to press here, but to me, it feels like it's going to go back down to the november lows. meantime, another call here

to join the "fast money" live waiting list, thanks to an overwhelming response from our loyal fans out there. we have sold out in record time, but if you missed out, don't worry. we might be able to find a ticket for you. you can join the wait list, you'll be notified of future events, as well. go over to cnbcevents.com/fastmoney. >> and notified of future events -- we don't know what's going to happen next. anything could happen. on that wait list -- >> maybe tim's band will play at a future event. >> oh. >> that would be fun. >> wouldn't it be? people -- >> that would be great. >> people that don't know, tim is an accomplished drummer. >> geez. >> and he's got great pipes. >> yes. >> that go with those steely -- >> maybe -- >> these pipes? >> tim, your voice. your voice. >> requests can come in? >> you know what, we should do that. to the highest bidder, to the highest charity bidder, of course. >> for tim to serenade them? >> oh. >> can you imagine?

>> what have we done here? >> this has gone downhill fast. coming up, a new approach to investing in bitcoin could be on the way. how individual investors could get in on the trade. strive's ceo joins us with all the details next. more "fast money" right after this. missed a moment of "fast?" catch us any time on the go. follow the "fast money" podcast. we're back right after this.

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welcome back. stocks finishing lower. the dow and s&p down 0.2%, snapping three-day winning streaks. shares of uber getting a boost today. the ride share stock getting bullish calls from goldman sachs and wells fargo in recent days. uber is now up nearly 14% so far this year. and unh dropping more than 6%. the insurance stock missing revenue expectations, but beating earnings estimates. bitcoin clinging to the 100k level just days before president-elect donald trump's inauguration. and a new way of a digital currency valuation could be on the way. strive asset management filing for a bitcoin bond .

the fund would primarily invest in bonds from companies like microstrategy, which now holds 450,000 bitcoin. strive's ceo is here with us on set for more. matt, great to have you with us. >> thanks for having me. >> i assume it's a pretty concentrated portfolio, then, since there are only a handful of companies that actually do that. >> yeah, so, to start, there's only a handful of companies. the tam of these companies, of the convertible bonds is about $10 billion. but interestingly, when you even look at those companies, or companies that have not issued these convertible bonds, there's a lot of desire, so, there's a lot of desire for more supply, if you think about econ 101. there's also a lot of demand, clearly, from retail investors that haven't been able to access these bonds. so, i think what you're going to see over the next year is just a shift up in supply and a shift up in demand as there's access to these bonds. >> how do you know that the

convertibles are actually going to be deployed in buying bitcoin? sometimes when hey file, they don't -- it will say general corporate purposes. >> yeah, so our job is to say, do we reasonably expect them to buy bitcoin? and so, this kind of gets into the definition of how we define a bitcoin bond. and so, my background, i'm a fixed income background, worked for 16 years prior to joining strive. and if you go back to the green bond era, a green bond was a bond issued by a corporation to invest in solar panels for their roof or something like that. as long as we reasonably think they're going to be deploying into bitcoin, we define that as a bitcoin bond. >> fascinating stuff. and when i think about risk/reward, and again, from a credit perspective, you know, aside from the fact that credit investors in a cap structure have certainly they're higher than equity investors, but when i think about a microstrategy, i'm not suggesting they're on the eve of a credit event, but i would almost think that the

risk/reward for buying a bond that's linked to a company that could have huge credit exposure, because they're wildly levered to the price of bitcoin, isn't a great tradeoff for a bond. and to me, help us understand, also, for the investors, what the return profile of these bonds is. are we talking about correlation to bitcoin returns? >> yeah, so, to answer your first question, you have to figure out, how do you break these bonds, right? right now, with micro strategy, the value of the total aggregate debt versus their bitcoin is about 25% so, you would need a decrease of, call it, 75% in the price of micro strategy, but they have a laddered security. they don't have it due over one year, but many years. it's very hard to break these bonds, and talking about a major decline. not only a decline, but has to basically flatline for them to

really have real solvency issues and not be able to do things like issue equity to cover their first maturity. and so, if you think about it that way, there's a lot of bitcoin bear scenarios where these bonds are going to pay off at par. so, that creates a really interesting risk/return raush owe, where, on the upside, they're designed to give about 75% of the upside of the exposure to microstrategy, at least in the issuance of microstrategy debt, and then, in most reasonable bear scenarios, they'll pay back at par. so, that creating an interesting scenario from a sharp ratio perspective, of yes, it may not return at the same ratio, but you are getting a good chunk of the upside, unless everything goes really bad. and if everything goes really bad, you're not going to do well, if you're in the equity or the debt. >> if you are an investor and looking at these bitcoin bonds, it seems that you would probably want to go with the biggest

issuer, that would be microstrategy, which has been at this for quite some time. they are the trail blazer. what is the advantage to buying the etf and having a diversified, to the extent that it can be diversified, basket of bonds. is it just the liquidity aspect that you're gaining? it seems like you would want to be in the premier name in this arena. >> my mentor in fixed income told me, there's never a bad bond, there's only bad prices. micro strategy's bonds are safer, and they are at a lower spread than other bonds. you have to look at, how do you break the different bonds? it's not as simple saying microstrategy good, mara bad. you have to factor in the other prices. because of how much extra juice the bonds have in them, they're pretty interesting. but that could be true today, it might not be true tomorrow.

and so, you have to think about exposure to convertible bonds and factor in the price. but yes, right now, microstrategy is the 300-pound gorilla in this space. >> matt, great to have you. thank you so much. >> thank you very much. >> mike khouw, you going to scoop some of these up? >> ah -- it's not for me, necessarily, but you know, i mean -- first of all, i come from an options trading background and a lot of them tend to do a lot of convert. and that's an important element of this. when people think about an etf that invest in bonds, this is not hyg or tlt. the reason is, because most of the issuance, and certainly all of the issuance from microstrategy, and they are an imbedded call option. when you buy that bond, you are seeing you're in the cap structure of the company, but

you're getting a call option, essentially, for some participation in the upside move in bitcoin. the way i like to think about it, microstrategy is basically buying call spreads on bitcoin. and the buyers of these bonds are buying that higher strike call. >> real quick, you can see how quickly this has matured. there was a point a month and a half, two months ago, where they were trading at 3x levered bitcoin. now it's back in line to the way bitcoin is trading. i think these instruments get interesting. coming up, more 2525 acronym reveals. bonawyn and the defending champ are laying out their picks. the words they hope will carry them to the top, next. plus, two s s diverging. we'll be in opposite directions, when "fast money" returns. agh! cut! this gap! it's just too big. bring on the double! aflac!

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100,000 delta airlines employees, powers tractor supply's stores nationwide with reliable 5g business internet, and partners with pga of america on game changing innovation. this is how business goes further with t-mobile for business. welcome back to "fast money." all week long, our traders are revealing their 2025 acronyms and their trades to watch. today, we start off with our reigning champ, mike khouw. his winning acronym brave put up the best fight thanks to bitcoin, which surged 122% last year, followed by real estate, let's say, oh, gold.

value and emerging markets. so, mike, what do you think. >> what's value? >> ah -- >> are you saying he didn't play by the rules? >> a little bit. >> no, no. as far as value is concerned, there are etfs that track the s&p value index, and that's what that was referring to. this year, i'm incorporating some of the same principles, but to make it simpler to track, i'm basically just choosing equity-like tickers. either etfs or equities. this year's acronym is rising. the r is for rsp. rsp is the etf that tracks the equal weight s&p. the equal weight index gets comparable bottom line growth to the regular s&p 500. the big difference is that it's trading closer to its five-year average multiple where the s&p is trading at a premium. ibit tracks bitcoin. s is for for the etf that has

reits in it, which is not that dissimilar from my -- basically the mortgage-backed securities bet that i was making before, kind of a way to get fixed income total return, but still have some hedge against inflation. i is for the etf that invests in india. n is for nance, as in nancy pelosi. this is an actively managed etf, it tracks basically the trades of democratic members of congress. and it has actually outperformed the s&p since it was issued back in 2023. and g is for googl, alphabet. but i'm trying to make sure that the acronym adheres to the sort of tightened up rules of the game this year. >> it's not tightened. nobody played -- some people -- >> including the winner. >> flaunted the rules this year and this year, we're cracking down. it's not tightened. they are the same rules. >> i like how he pointed out he's playing by the rules this

year, opposed to last year. >> admission that -- >> he did reat. he won. >> very long acronym, but nice one. rising. >> soupupercalifragilistic- expialidocious wasn't available? >> he won, he must be doing something right. >> bonawyn, your acronym this year was digs. what is your acronym this year? it's boom. i'm going to get slapped around, because broadcom is the ticker is -- >> it's not -- that doesn't work. >> it's close. >> it's boom or bust, and listen, the goal here is to win and outperform. this isn't about necessarily the best risk adjust rewards, but essentially, i think the enthusiasm around a.i. and a.i. adjacent is going to continue. i want exposure to broadcom. i want their vertical integration.

i want their custom chip exposure. and i'm doubling down with oracle in terms of their data base in cloud. i think this is going to be, if we're going to lift and outperform this is likely what's going to take us there. occidental. it was a laggard last year. clearly, you've seen energy start to outperform, whether it be in nat gas or crude. i want exposure. i want actually some of their carbon emission credits, if they qualify for them, as well. and then mastercard. clearly, you can have whatever opinion you may have about the consumer, but we are continuing to see outperformance, and i want the international capture there. boom or bust, and hopefully it's a boom. >> if you had to rank karen's uri for an r or bonawyn's b for -- >> that's way better. at least it's the first letter of the company. uri -- >> using r for uri --

>> that was just -- egregious. >> united. >> it's basically -- >> i mean, if we were in the national football league -- >> it could be kalb, by the way. >> throwing a flag. 100%. >> i don't want to lock like a sore loser. because i didn't even make -- i didn't even make the standings, i was so low, but i mean, i'm the only one who played by the rules. >> stop it, you're the only one. >> the clam. >> my clam was by the rules. >> your clam performed very well last year. >> what's a blicep? coming up -- more bank earnings filtering in. the numbers that had morgan stanley jumping and bank of america dropping. that is next. more "fast moneyinwo" t.

for all those making it big out there... ...shouldn't your mobile service be able to keep up with you? get wifi speeds up to a gig at home and on the go. introducing powerboost, only from xfinity mobile. now that's big. take a look at this video from just a few moments ago. spacex just launching its super heavy starship rocket, successfully caught the booster at the launch pad in texas. it is the second time they've accomplished such a feat, which a few years ago was thought impossible. but of note, spacex has lost contact with the second stage of the rocket. but still, extraordinary progress there. more big banks reporting today. morgan stanley and bank of

america, shares moving in pop it is directions after their results. morgan stanley seeing strength in its equity and fixed income trading businesses. overall profit more than doubled to $3.7 billion for the quarter. shares surging 4% to set a record close. bank of america, meantime, down about a percent, despite more than doubling its profits. investment bank fees rose 44% from the previous quarter. what really stood out to me, at least, for morgan stanley was the retail trader is back. it was up 29%. and more active in trading. >> yeah. tim talks about this. but they have three distinct business verticals, they're doing well in all three. good for morgan stanley. it sort of makes sense. different companies, similar. so, morgan stanley makes sense. you mentioned bank of america quickly. that's the one that should be concerning. if you think rates are going higher, actually bac doesn't win to that. and the recent level it traded up to are highs that we last saw in the fall of 2021. >> yeah, i do think this makes the case for the pure play investment banks.

the advisory and trading fees. i would expect, given we're expecting deregulation, i would expect follow through from some of the regionals and the price action was a bit concerning. >> up next, final trades. when i have customers come in i recommend prevagen. number one, because it's effective. does not require a prescription. and i've been taking it quite a while myself and i know it works. and i love it when the customers come back in and tell me, "david, that really works so good for me." makes my day. prevagen. at stores everywhere without a prescription.

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final trade time. >> i have to go with my acronym, rising. 2025. >> tim? >> i'm going to take a piece of the champion with me. google also known as alphabet.

anyway, google. >> listen, i think occidental has some upside. >> guy? >> see what you get when you come to this? >> there's a wait list so sign up. there could be a change, who knows? >> i'm going to go to my two and give you uber . >> thank you for watching. mad money starts now. >> my mission is simple, to make you money. i am here to level the playing field for all investors. there's always a bull market somewhere and i'm here to help you find it. mad money starts now. >> hey i'm jim cramer. welcome to mad money . i'm just trying to make you a little money. my job is not only to put things into contact and explained, call