be enhanced by that and even u.s. treasuries. >> yeah, that is going to be one to watch. and seeing who the who, the winners and losers in all of this as the regulations shake out is going to be super fascinating as well. and then of course, tomorrow we get ism, we get more earnings. so we'll continue to watch it. 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. a monster night of earnings from alphabet and amd to burritos and biotech. >> we've got all. >> the numbers. >> from companies. >> reporting tonight. >> and. >> are bringing you the. >> trades and a merck meltdown. >> shares of the pharma giant tumbling to more than two year lows after saying it's paused some sales of one of its key vaccines. >> what it. >> means for revenues this year and whether the stock can bounce back. plus, estee lauder. >> shares in. >> need of a makeover. >> pepsi loses its fizz and we're getting ready. >> for disney earnings tomorrow morning. >> how the. >> entertainment giant stacks up

now in the streaming space. i'm melissa lee, coming to you live from studio b at the nasdaq on the desk tonight. tim seymour, karen finerman, dan nathan and savita subramanian. >> head of. >> us equities and. >> quantitative strategies at. >> bank of america securities. >> welcome, savita. >> we start off with alphabet's slide. >> on its q4 results. >> the tech. >> giant losing nearly $200 billion in market. cap after a miss on cloud revenue. the company also announcing $75 billion in capex this year. the call kicking off in just the last hour. cnbc's deirdre bosa has been listening in. she's got the latest. debo. >> hey, melissa. i'm listening in. and the cfo, not ashton kazee, is speaking right now. we're getting to the juicy part. so i'll check back in with you. but the big picture here is that shares are down more than 7%. she just called out for an exchange rate impact that will affect q1 revenue. so that may be why you're seeing them slide even lower. she's going to call it a few more things, which i'll bring you. but it's really the cloud miss that investors have been focusing on. that comes about a week after microsoft's cloud miss, suggesting perhaps that investors are going to have to wait longer for substantial

ai monetization. sen. pichai, the ceo, opened the call talking about google's full stack approach to ai that's infrastructures, models and product capex. this is the number that many investors are looking at very closely in a post deep sea world. it is intact. they're expecting to invest approximately $75 billion in capex in 2025. that is a major step up. that's 47% growth year over year. the street had been expecting about 18%. so that is a big step up, basically telling us that they're going to continue to invest in ai, even though deep sea proved that you can do this a lot more efficiently, it doesn't really change the proposition for the big ai foundational model. players like google because the stakes are just risen for them. they have to keep spending. and senator pichai also shouted out their, quote, strong relationship with nvidia right at the top, noting that just last week they were the first to announce a customer running on the blackwall platform. melissa, i have a feeling that there was

more comments from the cfo right now. so i'm going to look at those and i'll bring you them if they're moving the stock. >> all right. thanks. >> deirdre bosa the stock is down 8.6%. as deirdre was talking i was. >> thinking a little bit. >> so what do we make of the quarter karen. especially given the stock was up into the results. >> yeah. so the stock was up sharply into the results. the last two weeks. >> but i mean. there's some stuff not to like here. and google's. >> a big position for me. and you know so this is not delightful. >> but i. >> think some puts and takes i thought the advertising business was fine if. >> you. >> were afraid there, i don't think it was anything to really be afraid of that. >> that capex which you talked about. >> that is a very big. >> change when we still. >> haven't fully gotten our arms around. what is the promise of all of that spend right on the flip. so google cloud was about $250 billion light. on the flip side youtube $250 billion above. so i don't know those two things. even though the same amount of money they don't seem to have the same weight. the cloud is much more of a focus here. so the last 3 or 4 points

down, i don't know what that was. i would say it's really important to listen to the call what they have to say. i want to hear what what are they what are they thinking when they talk about that $75 billion spend? why are they so feeling that they want to spend. >> so much ramp at this point. right. >> well and would we have been happy to hear $50 billion because. that that also would imply that there's been a lot of missteps in terms of capex. and they're toning it down a. >> little bit. so i don't know. i mean, i understand. >> why we're watching post deep. >> sea. capex for everybody. but i think. >> this was all about cloud. i think this is weak. this is bread and butter. because, you know, i think. about ad tech, i think. >> where they are. >> in digital ad and i think they're dominant and i think they're going to continue to grow, take market share and improve margins. >> so i guess. >> i'm less worried. about that than. >> i am the bread and butter. >> and it. >> gets. >> down to. >> some. >> commoditization and a very, very crowded cloud space. >> i do like the operating. margin at 32%. i think. >> overall margins for this company are getting better. >> that's good news. and i.

think everyone just hit it. i mean. >> the stock moved 40. >> points, or about 35%. >> from thanksgiving. >> into the print. it was priced to perfection even though it wasn't expensive. and karen will. >> point this out. i mean. >> what's. interesting about google and this might be a negative. >> is that. >> in the run we've had with mega-cap tech stocks. this stock is absolutely in line with its ten year pe. in other words, it's not really. a stock that you can say, well, it's gotten kind of expensive in this move and it deserves a higher multiple. it doesn't have. >> a higher multiple. >> why is that. >> yeah gross margins though. >> last year 69% this. >> year a little below 64%. >> so this is something. and it goes back to capex. >> it goes back. >> to you know, just kind of, you know, how they're operating and how they see their path forward. you know, when you say that that step up in capex from 59 billion to 75 billion, it almost seems somewhat defensive. and i think tim's point is a great one. if they had come in from 59 down to 50, like, might that show a level of confidence about what they've already built? when you think about the hyperscalers in general, they are more interested in asking

for forgiveness than permission on this front. and that might be one reason why this kind of story has flipped a little bit lately. >> the stock is approaching a 9% loss here in the after hour session. let's go back to debo who's got more from the conference call. >> deirdre. >> yeah. so this is where sort of the cfo left off. it's exactly what dan nathan is talking about. she called out that increase in capex. she says that is going to increase pressure on the pnl, primarily in the form of higher depreciation. the profitability picture has been trending much better in the last few years. so this is something that investors probably don't want to hear. they're also saying that they're expecting some headcount growth in 2025, in key investment areas such as ai and cloud. all of this to say that it feels like google alphabet is back in spending mode, and that could hit sort of the margins. so that may be what's taking shares lower about by about 9% right now. >> all right deirdre thanks. keep us posted. deirdre bosa. savita how do you feel about the ai trade at this point? >> look, i think. >> these. companies the hyperscalers are. damned if they. >> do and damned if they don't because. >> they have to. >> spend a lot to. >> remain competitive. but they. >> are cutting into.

>> their cash flow. >> right. >> and more. >> and more. >> so what we found in. >> our, you know, our. numbers of. >> backtests that we've done on. >> everything. >> what you don't want to own are companies that. >> are. >> accelerating their spend. >> on capex. >> because they. >> tend to cut into their profitability. >> what you do. >> want. >> to. own are the. >> companies that are. >> getting the money. >> and right. >> now it. >> seems like. >> these ai. >> plays are missing. on expectations in terms of revenue and monetization. but they have. to spend, and that's not a great recipe. >> look, i don't think. >> it's game over for big cap tech. >> i think. >> these are big companies. >> with lots. >> of optionality. >> they can. you know, they can do. >> what they did. in 2023. >> cut costs. >> they can, you know. >> shore up balance. >> sheets, do big buybacks. >> and they're. doing a. >> lot of that. but they. >> have to hire more. >> they have to spend more. it's not the same. it's not the. >> same profit. >> story that it. >> used to be. one thing i notice about this release, their their headcount is actually already up a little bit. and you think, you know, ai and the promise of efficiency and all of

that and how much you can save. >> on efficiency. >> would have brought it. yes, but not yet. and then it sounded like deirdre said, they're going to go even higher. yeah. right. and so everyone with this spend except for meta, which got a pass, will. >> got a. >> pass. >> but also. >> is monetizing. >> and monetizing monetizing. >> you see. >> the results. >> yes. >> yes. well yes. that's right. monetizing in a much more efficient way. >> they don't report a number like azure, like google cloud and like the aws. so like to your point that they're monetizing this. they've converted a lot of the spend that they did in metaverse. right. and they cut a ton of jobs. this is back to savita's point about 2022 and 23. it's just a very, very different story. but you asked her what about the ai trade? well, let's break it down a little bit. right. so the chips look at nvidia. it's down 22% right. just in the last month or so. look at micron. it trades horribly. it's basically round tripped and it's time to move. so there are some components that go into the servers. look at dell. look at supermicro that make the servers right. look at some of the data center names that we're seeing, how they're trading. we just went through

this on, you know, on the capex and everything like that. it feels like some of the pillars of the bull story are coming undone. and the price action in the stock market is kind of telling you that if nvidia goes and makes new lows, and these other stocks aren't going to be the recipients of a new cycle, then we're kind of out of the, you know, we're just kind of out for a couple of months or a couple of quarters, actually, for that matter, because i just don't know how you turn it around, especially when you just saw we saw 65 billion from meta and capex. we saw 80 billion in microsoft. now we're seeing 75. and look at how these stocks trade. >> unless we're seeing the next pillar, the next leg of the trade already. we started seeing that with the deep sea sort of route where we saw software. >> names. >> names came. >> back agentic. >> i names. >> really pick up. we saw palantir go gangbusters on its results. this is sort of the could this be the next place that investors are going instead of the hardware side? >> well, it has been. >> all along. and if you look at the move in crm or if you look in some of the other software names, i mean, they really after that pullback in may of last

year in the chips, which then took them to fresh highs, they never stopped giving, gaining, gaining ground. and i just think that the software story is part of what we took out of deep tech. and it's also the place where other folks, even, like an apple, suddenly look like they suddenly have a little bit more of a seat at the table. in a world where you have a broadening ai story, more efficiency, ai for the masses, a productivity story that i'm sure savita likes for industrials. i mean, this is part of the eps story. >> i mean, absolutely. >> and i think, you. >> know. >> there are. >> ten other. >> sectors besides technology. tech was the. only sector that was down. >> in january. >> everything else. >> was up. and i think that's kind of. >> telling us that we're. >> moving from an. >> environment where every company. >> spent only. >> on tech. >> to tech. >> spending on everything they're spending on. >> power, they're spending on chips, they're spending on hardware, but they're spending. >> and that, i. >> think, is the important shift. >> for more on alphabet's results, let's bring in fast money friend gene munster. gene, your take on the quarter. the stock is down 8.8% right now after hours. >> melissa, i don't know if deirdre covered. >> this in her kind of recap from the call, but they did say

that there are two headwinds related to fx. and the. >> loss of. >> one day of leap year. it's going to have a negative impact on the march quarter. but they also said, and this was what really caught my attention, is that the cloud segment is going to have variability. that was the comment variability quarter. >> to quarter. >> based on when capacity becomes available. it all makes total sense. but when you play it into an investor's hyper focused on the near term, what it means. >> for. >> the march quarter in terms of google cloud growth, the street's. >> at about 30%. >> when you talk about variability, it probably means that the numbers should be closer to 27%. so i just want to highlight the stock is really trading on one data point, which is that we need to start there and just acknowledge, of course, that this is all about google cloud. but i think that that is largely missing the point. the search business saw a fractional acceleration in growth. they've rolled out from 300 million customers that saw ai overviews to over a billion. remember, that's the big negative here is that is generative ai and perplexity going to take away? we're not seeing that yet. but i

think that that is an impressive youtube 2.5% upside. that was in part driven by some of the election spending. so don't read too much into that. but overall, i put this in general. my money's on that. this is an overreaction what we're seeing here. and then one final piece, melissa is dan was kind of doing some of the setup here talking about the derivatives relative to this and the concept that we're shifting to a software focused ai trade. and i understand that that that concept around that. but i think there is much more room left for these hardware companies to grow again. of course, the 47% increase in capex that google talked about tonight, they got to run the table. amazon needs to say something positive about capex. if they say something negative, then all bets are off. but my suspicion is that they're going to also be spending like drunken sailors. and i think that this ai hardware trade still has another year or two years left in it. >> i know those are real issues, but fx and the leap year thing really sound like lame excuses. i mean, google's got a calendar. we know that. so they know they they know that leap year.

>> is not you know i agree. >> it's. >> weak right. it's kind of weak. >> putting that aside though, in terms of the capex spend as an investor, are you confident that that additional spend there's going to be a return on that? i mean, i think that is the critical issue here, a ramp of 47%. that's major. and what are we getting out of it? >> yeah, it's major. just some quick context to that. they they generated this year's 72 billion in cash. they've got 97 billion in cash. they're talking about taking their capex from 51 billion to 75 billion. they've got plenty of money to spend. and i understand the concept of wanting to see a return on this. but they've got the money to invest. and then how do we see this forward. and unfortunately, i can't put a stake in the ground and say that all of this is going to have this incredible outcome. i believe it will for all the virtues around ai, but that's going to be a question that's going to be nagging. i would say that where are they spending that more specifically on the infrastructure, sundar said that this year is going to be the most innovative year in search. every year should be

incrementally more innovative, of course, but i think that that speaks to still this underlying question is the google search results is still pretty junky. it's pretty messy. it's not as clean as perplexity by any measure or gpt, and i think they need to really overhaul that in the next year or two years. well, not really jeopardizing the golden goose around their search business. they still got to thread the needle here, still feel confident they can do it, but there's a big task ahead of them. >> jean. >> it's karen, thanks so much for being on. just to clarify something for you, were you saying they were not constrained capacity constrained in q4 but would be in q1? >> what what i was saying was that just there was no capacity issues there in q1. there's just variability in saying that. i guess that's a form of capacity, is that they just don't have some of the data centers up and running. so yes, i guess that is a form of, in an indirect way, saying that they're capacity constrained. she did not explicitly say that they got too

much demand, but she said that based on availability of hardware, when these when these data centers are up and running is going to have an impact. and that's understandable. but i don't think investors are going to really like that tomorrow. again, i think this is an overreaction. i think the stock should be flattish on on these results versus down 8%. >> all right jean thank you. keep us posted on the call. let's get to the latest now out of d.c. president trump signing a slew of new executive orders this afternoon and making comments on usaid, the department of education, china and much more. cnbc's eamon javers joins us now to break down all the headlines. eamon. >> hey there melissa. it looks like there's going to be no call between president trump and chinese leader xi jinping. >> today. despite what. >> officials have been signaling. early in the. >> day. >> president trump spoke to reporters in the. oval office. in the last hour, he played down the significance of a call with his counterpart in beijing. >> no, i won't speak to him at the appropriate time. i'm in no rush. i'm in no rush. do you have that problem?

>> do you. >> think that. >> conversation can. >> lend itself to the type of. >> freeze that. >> it meant for. >> the tariffs. >> for, for canada? >> and what? we'll see what happens. i mean, well, there's a short term freeze. with mexico, as you know, and with canada. but they've agreed to be very, very strong on the border, stronger than they ever were by far. >> trump was also asked. >> about the retaliatory tariffs. >> that china imposed on american goods overnight, calling them fine and predicting that the us will do very well against china. now, in beijing, officials announced a slate of new tariffs and other retaliatory measures, including a 15% tariff on coal, liquefied natural gas and other commodities, a 10% tariff. level on crude oil, agricultural machinery, pickup trucks and other goods there. a chinese antitrust investigation into google and export controls on tungsten and other metals, along with rare minerals as well, tungsten is used for everything from light bulbs to microwave ovens, but it's also used in armor plating and armor piercing

projectiles, so that restriction there could, over time, impact u.s. military supply chains. back over to you. >> all right eamon thank you eamon javers. so savita how are the markets taking all of this. >> well i mean. >> we've had a you. >> know a positive. >> start to the year. >> i think. >> there still. >> is a lot of liquidity. >> out there looking for a home. i think there's. >> still a lot. >> of cash on the sidelines. we still get the question. >> my client. >> has a lot of cash. >> should they. >> buy now. >> or wait for. >> a. better entry point? which means there's probably not going to be a better entry point until we stop getting that question. look, i think that it's a tricky right now because where we are is an environment where the uncertainty is, is, is high. the other factor that we need to think about is, you know, are our allies going to continue to trade with us if, you know, if we're playing hardball with them right now? so i think that's the other kind of longer term ramification here. i mean, i think that so far what we've.

seen is that us corporates are actually in a position where they can handle tariffs, the extra tariffs reasonably well, especially for china, because they've already had this learning curve since 2018. half of the economic activity that we used to do with china is now being done with mexico and canada. so that's the bad news is that it's been transported to other areas that are starting to be in the crosshairs. i think that, you know, from an inflationary perspective, this is potentially negative. we've dialed back our fed call to no hike. sorry, no cuts this year. we're not talking about hikes yet. so no cuts this year. but but i think that where we are is an environment where you want to you want to sort of prepare yourself for upside pressure to rates to inflation, to the idea that we don't have an all clear on policy decisions until maybe, you know, closer to the second half. and that could stymie corporate planning. et cetera. what i would say the easiest thing to kind of invest in with

trump 2.0 is deregulation. and i don't think that gets as much play as it should, because that is a theme where it's easier for him to get a lot done. it's not as negative for the economy, it's actually positive for productivity. it's positive for rates, it's positive for growth. so i feel like the lens on tariffs is obviously that's where the headlines are right now. but there are a lot of other ways to think about policy changes and how to invest. and what. >> is that deregulation trade. is it financials. because that seems like the easiest. and we've already seen the lift in financials on the back of the expectation of deregulation. >> yeah. but you know what's interesting even in financials if you look at the stocks that are most crowded by professional investors, they're private equity and regionals or private credit and regionals. you know the larger banks are still underweight. and i was surprised to see that data in our latest run, because i would have expected to see this huge, you know, bid in the most regulated areas. so it's kind of

surprising to see that positioning is still very overweight. the sectors and the areas that have less to gain, maybe more on m&a activity or other facets. >> coming up. earnings season in full swing. shares of chipotle, snap and amd all on the move after reporting the numbers moving those names next. and speaking of results, shares of merck plunging on theirs. the stock sinking more than 9%. what china has to do with the drop and why it's having such an impact on the company's outlook. don't go anywhere fast. money is back in two. >> for the fourth consecutive year. interactive brokers is one of the fastest growing prime brokers and is now number five in preqin's ranking of top prime brokers. interactive brokers serves both organizations and individual investors to get better results, get a better platform. the best informed

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>> welcome back to fast money. we've got an earnings alert on chipotle. the burrito chain stock lower after hours. despite a slight earnings beat. the conference call is underway. courtney reagan has been listening in. she joins us now with the very latest. >> yeah. so question and answer session going on now was the first full quarter with brian boatright at the helm. quarter largely largely as expected. maybe some weakness here for the sales. the revenue comparable sales up 5.4%, also slightly below expectations. comps gaining though every quarter but one over the last seven years. transactions up 4% for the quarter. now the full year comparable sales guidance also coming in as expected. the company also authorizing a new

$300 million buyback program, sort of the details that came out after that initial release, and then higher food and beverage costs as a percentage of revenue was primarily due to the higher usage of ingredients. as we focused on ensuring consistent and generous portions. yes, they heard the people and the smoked brisket offer too. that was part of it. chipotle did call out higher avocado and dairy costs, but that wasn't the primary reason there. and they said that the increased cost, partially offset by those higher menu prices. now on the call, the cfo just said that guidance does not include the impact of new tariffs on items imported from mexico, canada and china, adding that if the recently announced tariffs go into full effect, it would have an ongoing impact of about 60 basis points on our cost of sales. but the cfo also added the company's actually confident it can offset that through investments it's already made, and then some other identified efficiencies. now, ceo brian boatwright, she tried to say, said the digital sales made up more than a third of total, which is pretty interesting and detailed. some kitchen process improvements like new slicers, increasing speed and

consistency. and get excited guys. honey chicken coming soon. that's coming soon for the new protein offer. yeah, that. >> sounds great. >> so basically they made their portions more normal. yeah, bigger. >> more generous and more consistent. after, you know, people sort of started noticing that perhaps they were shrinking that. and then. >> does that mean they were shrinking them? i mean. >> it seems to be an admission. >> that they got smaller somehow. >> yeah, yeah. have you noticed i feel like the burritos i'm. >> well, there's a candy bar. i won't give the brand name, but those minis have gotten really mini. sorry. >> really many. and the prices have really gone up in that candy too. >> courtney. >> thank you. >> you got it. >> courtney. reagan, what do you make? i mean, avocado prices. >> i know i'm very into the avocado. >> prices right. very closely following that market. yes. they will go up. >> they will go up. we talked about this. it's hard to hoard because they. >> ripen too fast. >> but i'm wondering they say, well, we can we can compensate for that with some other things we can do more efficiently. do they do those anyway regardless of whether. >> they think they're terrorists? it's not like, oh,

we're paying higher costs. we'll look for other efficiencies. >> i think they should do that anyway. but it wasn't a bad quarter. i mean, i've always found it too expensive. the restaurant margins were actually fine. it was a decent quarter. too expensive for me. it's interesting that this is happening at cmg at a time we thought that their margins were going to decline. we were certainly seeing the economies of scale loosening, all the elements of their dtc business paying off. everything we heard here says it sounds like there's going to be some pressure on margins, and we don't even know what's happening to avocados, so i don't like it either. but what's interesting about cmg is and i you know, i've been quoting this five and ten year pe because it is relative to something and they're cheap relative to themselves, which means they're growing into being a massive company now. doesn't make them cheap though right? >> and do not miss us. exclusive. first on interview with chipotle ceo scott boatwright. catch the full interview. top the money, top of the hour on mad money. there's a lot more fast money to come. here's what's coming up next. >> merck in reverse shares hitting two plus year lows as

the pharma company pauses shipments of a key vaccine into china. what it means for revenue and the next move in the stock plus streaming center stage as netflix hits all time highs and fox plans their own foray into the space. and with disney on deck to report, can the media giant keep up with the competition? what to expect out of that report ahead. you're watching fast money live from the nasdaq market site in times the nasdaq market site in times square. we're bac what tractor supply customers experience is personalized service. made possible by t-mobile for business. with t-mobile's reliable 5g business internet. employees get the information they need instantly. this is how business goes further with t-mobile for business. 160 patents issued and pending. leveraging a diverse library of commercial use. fibroblast cells

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your fund experience. >> my ambition. >> at children's institute is to influence policy. my mother was a holocaust survivor, and so to be able to impact the lives of people who have experienced poverty and stress in their communities in america. >> is a way of. >> restoring justice. >> welcome back to fast money. some big moves in pharma today. amgen shares down after hours. despite reporting a top and bottom line beat for the q4. the company saying its obesity drug candidate is moving into late stage studies this year, but adding that regulators are pausing early stage studies of another obesity drug the company is developing without citing a reason. meantime, merck dropping 9% in the regular session after giving full year revenue guidance that fell short of expectations. the company saying the lower sales range reflects a decision to pause shipments of its hpv vaccine, gardasil in china through at least the middle of the year, citing sluggish demand there. for more on all of this, bmo managing director evan david seggerman

joins us on the fast line. evan, great to have you with us. >> thank you for having me. >> i want to start off with amgen and the news on its obesity assets. how does that shake out in terms of being pulled forward and the other one being discontinued? >> i'm most focused on maritime. >> they on the earnings. >> call. >> they announced that we're. >> going to get. >> the. >> phase two presentation. >> at the ada meeting in june, which i see. >> as a positive. >> the other data, the other drug that they had. >> mentioned was not anything. >> to do. >> with. >> the safety. >> or efficacy or the more regulatory issue. they said they're working through that. >> so again. >> not. >> concerned there. >> okay. let's move on to merck because that was a huge decline. yeah, exactly. and the real i mean, the underlying problem in gardasil is a problem. the underlying problem is that keytruda comes off patent in 2028. so it's a looming cliff that it is facing. and gardasil is not going to provide any sort of ballast to that drop off. how much do you write down that business at this point? how much are you assuming just never comes back for a long time? >> well.

>> let's face it. >> you know, they started. talking about. this back in july and. on again off again. and i feel it as a management credibility issue at this point. and i hate saying that. but, you know, right now they withdrew their $11 billion of long term guidance. this is their second largest product. china is becoming a black box. we're entering a trade war. this is not a good place to be. and then you have keytruda coming off patent at the end of the decade. so you have these two huge holes to fill. yes. they have a good pipeline. yes. they bought an oral glp one. but is that enough to really fill the gap and get investors comfortable as we get to 2029 and 2030? i don't think so. well. >> the oral glp one we should note i mean that's early stages. it's still i mean there's $114 million. so that's not going to fill the gap at least in the near term. dan you got a question. >> yeah. >> so my point exactly right. yep. >> our friend savita on the desk here just mentioned one big theme that she's excited about is possibly deregulation over the next few years. look at how poorly i know. you know this pfizer, merck, biogen. some of these stocks are really badly in the history. over the last 20

years, we've seen some big pharma mergers. do you think that's something that you might expect if some of these companies can't get out of their own way? for a lot of the issues you just talked about, lack of progress on some of these new drugs and then others going off patent. >> no, for sure. i think ftc, you know, becoming more business friendly is great, although i don't necessarily think big pharma mergers are necessarily the answer. the biggest one we've recently had, abbvie and allergan and of course bristol and celgene. and while for bristol and celgene you've got a lot of free cash flows. you still have a lot of issues that bristol is working through now from it. so i don't know if that's the answer. you want to buy a lot of these 10 to $15 billion companies that have great assets to mosaic out of pipeline, but you got to be smart about it. otherwise you become like a pfizer. >> or maybe even cross border m&a. i think that might be an interesting theme. it's not just the russell 2000, but it's also europe. and you know, the a bunch of really cheap stocks in other regions of the world. >> right? right. >> tim. evan. hey, i want to go back to mark, because i know we've just talked about the keytruda gardasil dynamic here,

but it just seems to me look at pfizer. look how this has been. dead money. look how it's dead in the water. it fell off a cliff. and it seems to me that the analyst community i mean, you take away gardasil and keytruda, that's 70 and remove animal health. there's nothing left to the business. i mean, the risks we're talking about. why isn't this stock dead and i mean dead for a while because it had a big move today. why did it take till today to for a china headline when we knew these two other things were out there on the stock? it makes me not want to go near merck anytime soon. >> well, for what it's worth, we did downgrade the stock on these issues. >> you did a. >> good job, september. >> so not to do a little victory lap. >> but yeah. >> absolutely i agree with you. these are big problems that we need answers for. and i don't know if management has them. >> all right evan we're going to leave it there. thank you. >> thank you guys so much. >> evan david sugerman of bmo. karen, what do you make of this merck drop? >> yuck. i think it's more expensive today than it was yesterday. yeah, right. i mean, the level of uncertainty is much

higher. i didn't get the sense that was a kitchen sink kind of gardasil. right. so, yeah, i don't like it. okay. >> coming up disney on deck. the media giant gearing up to deliver earnings before the bell tomorrow. and with competition heating up in the streaming space, will the numbers open up a whole new world for investors, or is it time for them to let it go? don't go anywhere. fast go? don't go anywhere. fast money is back in two. ♪ (action music) ♪ woah! i can't do it! agh! cut! this gap! it's just too big. bring on the double! aflac! after my hospital stay, aflac helped close the gap by paying me cash for expenses health insurance didn't cover. nothing covers gaps better than the aflac duck. aflaaaaac! aflac. get help with expenses health insurance doesn't cover. find an agent, get a quote at aflac.com. you do look like me. (grunting) at morgan stanley, old school hard work

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at omni luxe ledcom. >> welcome back to fast money. stocks climbing despite china's retaliatory tariffs, the dow jumping more than 134 points, the s&p up three quarters of a percent and the nasdaq up 1.3%. shares of spotify jumping more than 13%, its best day in more than three years after the music streamer reported their first full year of profitability. spotify also saying it saw a q4 record for monthly active user growth. shares of palantir surging to a record high in the back of strong ai driven earnings and guidance last night. the stock up nearly 24% and breaking through the $100 level. shares of netflix briefly topping $1,000 for the first time but losing steam mid day. the stock up nearly 16% since reporting results two weeks ago, and some more after hours action. shares of amd taking a big turn lower after initially

popping on an eps and revenue beat for the quarter. and disney delivers its first quarter earnings report tomorrow before the bell. shares have been on a tear, ripping 18% higher over the past three months. but is the bullishness overdone? let's get answers from media trailblazer and cnbc contributor tom rogers. tom served as nbc cable president and is now executive chairman of orbit media and entertainment. tom, welcome. it's always a pleasure to have you here. >> great to be here. >> thanks for having me. >> what are you expecting? >> well, let's put. >> disney's tear. >> in some perspective. the stock is basically where it was. >> ten. >> years ago. >> so it's got a ways to go. some things to prove. profitability of streaming was obviously a big milestone. >> the fact that. >> revenues for the streaming business now. exceed revenues for the linear business. also a major milestone, something that puts it in a different class than the other traditional media companies. but speaking of

netflix being on a tear, last quarter, they reported 19 million new subs, which was just a blowout number. but disney guided this quarter to losing subs on disney plus. that that doesn't compute. either they're going to beat the hell out of expectations, or something's very wrong that netflix could have that big a sub growth quarter, and disney plus could be losing subs. so the question goes to if that does happen, what are the catalysts here to get disney subs going again. and that goes to espn flagship launching which is in and of itself got a bunch of issues attached to it. what kind of impact that will have on the cable bundle that you can get espn now as a streaming service, just as it appears as a cable channel. but more importantly, what i'm interested in is espn plus as a bundle with hulu and disney+. how is that going to be

priced? because that could be a huge catalyst for the entire disney family. and the pricing on that. i don't know if they'll touch it maybe too early, but that the answer to that question is going to have a lot to do with how disney distribution is going to be ignited or not. hey tom, i just oh, wait, hold on. i got a message here from guy adami. he told me to tell you that you're a stud. okay. i just want to get that out of the way before i get to my question. i just want to get that guy for me. jeez. yeah. so you talk about catalyst, you're talking about disney plus. and again, it seems like the stock has been rewarded for that progress. but what about the pullback in original content. and some of these studios obviously that were driving a lot of the performance initially. i'm just is that is that still a problem for them as they pull back from some of the marvel and some of the lucas stuff? well, i think certainly engagement is a is a big deal. and. hulu was somewhat disappointing in terms of its overall viewership, say, in the last month about 2.5% of total viewership. whereas over a year

ago it was hitting about 4% of total viewership. so they do have to focus on what it means to cut back on entertainment programing. but some of that is a function of how aggressive they've been on sports programing and wanting to make sure that they maintain their primacy in sports as they launch espn flagship. and that's clearly going to have that kind of impact. so i think where you really have to watch this is on the advertising front, disney is the number one viewing destination when you aggregate all its linear and streaming services together. people watch off of disney more than anything. youtube a close second on the television set, but disney's number one, they are not exploiting that relative to ad revenues as well as they need to. espn flagship streaming when it launches probably can be

priced in a way so that when people come off the cable bundle and take that instead, they can make up the loss of sub fees on the cable side by how they price espn streaming. even though the cable bundle loses multiple disney channels. but they got to make up the advertising piece they're losing too. and the advertising side clearly needs some work. >> so godfather oversimplify this one for us, because the inflection in dtc and profitability is huge, but there are still people out there talking about experiences and talking about studio and content has never been better. and historically, you know, before we had this secular change in the linear tv world, we were driving disney on a different factor. if i'm seeing these numbers tomorrow, is it all about profitability and dtc and subs? >> well, i think that will be the best part of the story. profitability. because the year over year comparisons will be will be great. i think people will be watching parks and experiences pretty closely. as

you know, in the third quarter, attendance was down year over year. last quarter they were flat. it's a tough quarter to assess things because the hurricane impact this last quarter, they have the challenges of universal epics launching which is ahead of it. but universal and disney tend to perform pretty close in tandem. and universal beat expectations when comcast announced. so that may be a surprise on the upside in terms of disney, where i think disney really has to look at is its international streaming business, because they really are much closer to netflix domestically than people realize. they have about the same number of subscriber relationships domestically, and netflix's total subscriber revenue about 17 billion. domestically, disney is about 14 billion, not that far apart, but netflix has three times the number of international subs,

and that is just such an advantage relative to amortizing programing costs, not to mention what it means in terms of additional sub fees and revenue. so they really have to play some catch up on the international side. >> tom, always good to see you. >> great to be here. thanks for having me. >> tom rogers and do not miss a first on cnbc interview with disney cfo hugh johnston. that is tomorrow morning, 7 a.m. eastern time, right here on cnbc. coming up, more earnings action. shares of snap on the move after hours of stock reporting results in the last hour. we'll bring you the details and the numbers from that quarter next. fast money is back in two. >> bitcoin is the best performing asset. >> but its. >> volatility has. >> kept many on the sidelines

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we were made to put them in a package. disrupting the status quo? scan this code or go to cnbc.com. slash disruptors to apply now. entries closing soon. >> welcome back to fast money. we've got an earnings alert on snap. the social media stock popping after the company beat on the top and bottom lines. julia boorstin joins us now with the very latest from the call julia. well snap ceo evan spiegel explaining how snap is reaching more advertisers and bringing those ads to more consumers with the number of advertisers they had in the last year doubling from in the fourth quarter from the year earlier. while the new ad formats sponsored snaps and promoted places. those are the ads on the map helped reach 30% more snapchatters with ads. spiegel

also weighing in on tiktok, saying that uncertainty around tiktok is benefiting the business, both in terms of advertisers and in terms of creators. and as for snap's subscription ai chatbot called snapchat plus. spiegel saying that they are seeing a lot of adoption of personalization features, and with the product driving that division to an annual annualized run rate of half $1 billion, he says he sees room for price increases for that chatbot. spiegel was also asked about deep seek. he praised the innovation, noting that capital is not a long term moat in the tech business. he said that hopefully this will make their ai more efficient. he also said they're in the early experimentation phase for some open source work. >> melissa julia. >> has been ramping up their capex as well. they have, but they're not doing it in the same way as others are. one thing that they said they're going to be spending a lot of money on this year is hiring, but they are using other people's tools.

so it's not like they're meta or or google and or microsoft and doing that kind of capital expenditures. definitely working with some of the resources that are already out there. julia. thank you. julia boorstin who's got a trade on snap back. i know i feel like dan. >> you. >> know i saw evan spiegel speak i want to say back in october. and it was an unruly crowd. you know i think some of them were long it or used to work there. and he had a very good sense of calm about what they were doing. they had already laid out how they were going to change their ad business, more direct response and, you know, more short form marketing and some of the stuff they were going to do on the maps. they talked about their vision for ar and vr. it sounds like they're just kind of heads down and doing what they need to do. it's a $20 billion enterprise value company. i mean, it's a rounding error for most of these things. gross margins like 55%, there is so much room there. they're basically haven't had a gaap profit since they went public in 2017. so they could play like him. there could be an

inflection point for this company in the not so distant future. >> all right. coming up, estee lauder and pepsi making some major moves in today's session. the details on the quarters that had investors canceling the contour and bubbling out of the soda stock. more fast money and two. >> welcome to reinvented with accenture. today i'm here with margherita della valle, ceo. >> of vodafone. >> you were employee 25 in vodafone italy. today you're the ceo of vodafone. what is your strategy and vision for the future? we are changing. >> our culture. >> to really focus. >> on our customers. >> we need to. >> acknowledge that change. >> is hard. >> but if people. understand it's. it's. >> for the right reason. your shipping manager left to "find themself." leaving you lost. you need to hire. i need indeed. indeed you do. sponsored jobs on indeed are two and a half times faster to first hire. visit indeed.com/hire i had the worst dream last night. you were in a car crash and the kids and i were on our own. that's

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than 16%, the worst performer in the s&p 500 today despite an earnings and revenue beat this morning. the beauty company giving a disappointing q3 outlook, citing weaker demand, especially in asia, as lauder also saying it would cut up to 7000 jobs. shares are down nearly 50% over the past year. it is, of course, or was of course the e in tim's bicep trade. the acronym of 2024. still. >> i don't need to get punished for this. we already did this to me every night in 24, so that's fine. but we can talk about it because, you know, not surprisingly, i would be buying into this weakness. i think there was nothing awful in these numbers. i think there's a lack of visibility. i think there's a bit of a of a management vacuum. we're waiting for leadership. but i think the cost cutting efforts are taking hold. i think the cyclicality in their business, i think there's some concern about the need for more product innovation. but but that's not what was taking the stock down before. so i this was an overreaction to a stock that needs sponsorship. it doesn't

have and rightfully so. but i'd be buying weakness. it's still not cheap though right i think so there's that i mean i'd rather i'm sorry sell food my rather okay. i know the way you played the acronym game to i mean you don't have chinese exposure, which could cut both ways. right. there's a chance it could really be great, but i'd rather own ulta. >> all right, meantime, shares of pepsi getting a hit after reporting down 4.5%. the soda giant missing revenue expectations, seeing a fifth straight quarter of declining demand in north america for its snacks and drinks. pepsi, now down more than 16% over the past year, a staple. what happened? kavitha? >> what happened? >> what do you think? >> yeah, we're underweight consumer staples. we're underweight health care. we're underweight most of the defensive areas of the market. i mean, i feel like consumer staples is no longer this high quality defensive play, right? i mean, today it looks a little more interesting because it's so bombed out. but i do think it hasn't been behaving very well. it hasn't been behaving the way it's supposed to. it's not as high quality as it used to be. right. >> up next, final trades.

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>> next. >> the story is the fed's going to have our backs if things get weak. i see inflation coming down, housing costs are coming down, supermarkets getting slightly better, oils pulling back, auto prices going lower. that's the data. i like the data. >> mad money next cnbc. >> time for the final trade. let's go around the horn savita subramanian. >> okay listen i like large cap value. it's very boring. but that's my ticker. all right cap value. >> we're listening. great to have you on. >> when savita says okay listen i listen. so everybody gather around. yeah paypal if you listen to me last year this actually did okay. these numbers were not terrible today. bad on brand and branded products. and i think this is a stock going higher. >> the pe. >> in pfizer. >> yes, yes. >> if you've been waiting to buy merck keep waiting. keep

waiting. and i'm long it this was this was terrible. at least wait three days. >> dan, >> listen. i. >> think staff's. >> okay here. >> it's not. >> up or down 20%. and maybe people are focused on the fundamentals. >> all right. thank you for watching fast money. mad money with jim cramer starts right now. >> my mission is. simple to. >> make you money. i'm here to level the playing. >> field for all investors. there's always a. >> bull market somewhere and i promise to help you find it. >> mad money starts. >> now. hey i'm cramer. welcome to mad money. >> welcome to cramerica. other people make friends. i'm just trying to make you money. my job is not just to entertain, but to educate. to teach you. so call me at one 807 three cnbc tweet me jimcramer. look people on wall street you better start taking the president of the united states more seriously. or else you're going to keep losing money. l