Major moves in semi stocks... And what’s next for oil 9/2/26

0:00It's all about the money. I want to be the person in my family that creates an original well how they earn it spend it and make dreams come true. I'm not going to sugarcoded it's hard, but it's so worth it. Millennial money on new Saturdays three Eastern CNBC. Live from the Nasdaq Market site in the heart of Times Square New York City. This is fast money and here's what's on tap tonight. Broadcom dropping after its latest earnings report, the semi-giant's guidance, disappointing investors. We're dialed into the conference call. We're going to bring you all the details and relief on rates. Long time long term yields pulling back from recent highs and helping stocks rebound. But can the momentum continue after a rock run will debate that plus crude oil rises even as a deal is struck with Venezuela. Alpha bed gets a stamp of approval from Berkshire Hathaway and bank stocks. They catch a bid, but some of the biggest names in the group. They sit out the rally. What's behind that divergence? We're going to get some answers. I am Frank Holland in from Melissa Lee coming to you live from Studio B at the Nasdaq. On the desk tonight, we have Steve Grasso, Karen Feinerman, Dan Nathan and Guy Adamie.

1:05But we start with an earnings alert on Broadcom. She has the chip maker dropping despite an earnings and a revenue beat. Disappointing revenue guidance. It seems to be what's weighing on the stock pulling back about three and a half percent. The call kicked off at the top of the hour. Let's get right to our Christina parts and evidence with all the details. Just started a minute ago. But Broadcom, like you said, just beat on almost every single line. This quarter and yet the stock is still falling revenue up 86% from a year ago earnings beat. AI semiconductor revenue, which was a key metric came in at 16.7 billion dollars. Topping the company's own forecast and you're wondering, Frank, you brought up. Why are shares down? The outlook does play a big role. Fourth quarter revenue guidance came in a little under what Wall Street wanted. Same for Q4 operating margins. And on the number investors cared about the most, the new fiscal 2027 AI forecast. Nothing new was actually in the release for that number. So we continue to assume, quote, north of $100 billion, which was what? Hawk 10 has provided when the street wants to hear at least 115 billion.

2:05That matters because of what's hanging on the stock competition. Google is bringing in cheaper second sources for its custom chips with media tech, Marvell and AMD all moving in on business. Broadcom used to have. I know that there's different tiers, but nonetheless it's competition. There's still strength here, though. Management says AI chip revenue jumps to 21.7 billion dollars next quarter. And see, a Hawk 10 called demand very strong, which is why there is a lot writing on this earnings call that just started two minutes ago. The detail on 2027 and on how Broadcom holds its lead, especially with Google. That matters more than the numbers that are already out. All right. So a lot of questions about the TPU business. That seems to be another thing, Wayne on the stock. Morgan Stanley out with the notes and they expect Broadcom to keep about 80% of that business. So is the idea here that that's what's keeping the guidance from coming out or being increased is that they have some lack of clarity, I would say, on the TPUs? Morgan Stanley may be bullish, but then others are more concerned saying that media tech is scooping it on the lower tier level of the TPU business.

3:06Or I should say Google's custom chip business. I think what we're missing is what portion of Marvell is actually taking from that business. And they won't release those details until their October analyst day, where Marvell says, okay, we're building all the networking and all the other chips, not the TPU business, which pertains to Broadcom. That's something we still don't have an answer. So perhaps on the call tonight Broadcom will say, don't worry, we still have our business, our relationship with Google. Marvell means nothing. All right. Now you'll be listening. Christina Pratsnovellis, thank you very much. Guy, I want to come over to you. Free Castro is a little light. Street is sucking at that Steve has addressed the problems with free Castro for some of these companies, although it's still positive. But Christina at the now on the head, I mean, it's the fourth quarter guide in terms of revenue, which came in, I think, $34.8 billion, which is lower than the higher end of the whisper number, which I think was about 37. So 37 are higher. I think the stock is unchanged, slightly higher. I think they're sandbagging a little bit. I mean, margins are holding intact. I think gross margins were 75% the street was sucking for 73.7%.

4:07Operating margins were better than expected and up year over year, good for them. So I think given, you know, it's funny. If you go back about what, three or four quarters in when that broadcom had a huge move to the upside, that didn't make a lot of sense and it subsequently sold off, I think the converse is happening here, the inverse that we're selling off on a quarter where you actually might want to think about buying broadcom here. All right, Karen, agree with that take that you might think about jumping in here. Broadcom's also lagged the rest of the chips sector all year. Yeah, by the way, I mean, I think quarter actually I didn't think was bad. I thought the quarter was good to your point guy. The margins were good. They were having a little bit, but the expense is a little lower. So I thought it was a nice, it was a good gross margin beat and a good just Mark E. Dabbit. So I don't know, this one's sort of interesting though. I do really think you have to listen to the call. You have to hear the color. I don't know if they're going to address this issue. You know, we're talking about it has to be north 100 to 115 billion dollars. I don't know if last time that was in the guidance or it was on the call. I have a vague recollection of the call, but out me if I'm wrong,

5:08but you need to listen to the comments call. Yeah, I think that they put out some of those huge annual guidance figures and the out year, maybe some analysts meeting not always on the call, but I think the problem right here is that you have a story where there's so many other, you know, like competitors right now that are actually doing very well. And even in video, you know, like the numbers that they're putting up are really eye popping. So then when you look at this sort of, you know, mild beat and not a fantastic raise, it's just not particularly interesting, especially with this valuation. And you know, here's a scenario where the entire street, I think K-Parts just kind of mentioned this, like some of the back and forth with the analysts, there's 60 analysts who cover the stock. 55 have a buy on it, five have a hold, and you get a setup here where obviously the street investors are not in the same camp because the stock wouldn't be trading the way it has. It's basically the exact same spot it was a year ago. So when you're just kind of, you know, guiding up and then beating that guy just a little bit and then the guide is not that exciting for the out quarter, you know, it's just not that interesting. So I think there's probably better places to play where you'll find more value.

6:10And I think we're going to keep coming back to this. And this has been Karen's play for a very long time. When you have a company like Nvidia that is beating like so aggressively, and it just doesn't seem to have that margin degradation that a lot of folks were calling for with all this competition, it seems like there's a huge disconnect where that stock is trading and the numbers that they're putting up and they keep going higher and higher every quarter versus a story like this. And when you look at it to Karen's point, they have underperform. When you look at more of Val, the stock's up 143% year to date. You look at AVGEO considerably less than that. And when Christina says that they'll say it's not a big deal that Google is giving them a contract, it's one less going to them. So they're the number one revenue supplier to their bottom line or their top line. I think it's a big deal. I think that when you look at the competition, it's a big deal. But coming out of Nvidia, you would have thought that it would have done well. I would have said that with Nvidia granted the lead up to Nvidia's earnings were probably set up perfect

7:15to perfection for them. I would have been a buyer of Broadcom, but when you look and you say, would you rather, you know, I still think it's a buy. But when you look at it to more of Val, that's where the hot money is going in because they're the one at the top right now. Broadcom's the one at the top. They're the ones that have the market share that's being stolen. But if you think about the hyper scalers, they're going away from Nvidia, making their own chips. So Marvell Broadcom should be the winner. Obviously, Marvell has won up until this date, but I think AVGO gets interesting on the sell off. All right. Call about eight minutes and shares of Broadcom pulling back about three and a half percent. Meantime, Nvidia shares ending up about three percent higher today. Our Jim Kramer on Squawk on the street made a very big call in what Jensen Wog should do right now with a big chunk of Nvidia's money. I quote for a half a trillion dollar buyback. Out of Nvidia. Yes, yes, indeed. That you talk about this look at like they got to go Apple. It's the first time I put a number on half a trillion.

8:17So almost 10% of the market cap. Oh, yeah, they have to. I mean, remember Apple bought back 44%. I'm just starting with this buyback. I think it's so much better than giving it to Nebius. So should a video buy back a half a trillion dollars of its own stock, Dan. I mean, it should if they maybe pull back and some of the investments that they're making in the ecosystem. I mean, I think at these sorts of levels and this valuation, it might make a lot of sense to kind of shrink that share count. And for Apple, it really did serve as a tailwind. They, I think they bought back maybe three quarters of a trillion dollars since they announced that going back to 2012 when Tim Cook took over. And so they've also paid back at least a quarter of a trillion dollars in dividends. Obviously Nvidia pays a dividend. But you know, like I guess they got to ask a question. Are there better uses of their cash right now, and especially you're getting to a point where there's a lot of, I don't know. I mean, there's a lot of questioning and a lot of these circular deals are getting a bit more complicated as it goes. And I would almost kind of get it out there. You don't actually have to start buying back the stock.

9:19You're going to announce that sort of stock out by back and you can kind of be, I don't know, a little opportunistic if you will, because at some point, if you look at the rest of the space, stocks does not trade well. A lot of these stocks do not trade particularly well. You can make the same argument despite Nvidia making a new high today. Just look at that chart. It's been going sideways for months and months. So to have that in the kitty and ready to go, that makes some sense. And you know, Jensen seems pretty optimistic about their roadmap here. So again, maybe that is a good use of capital and Jim's right 10% of the share count. That would easily buoy the stock in difficult times. You know, his whole point was that there's nothing more valuable in the market than Nvidia. So why not buy back your own shares? You agree with that thesis that this is the best way to put their money to work? I think it's not a bad way to put their money work. It's I don't think it's a, you know, that large of a, what does he want to do? $500 billion. That seems pretty large. It's more than the cash that they have. They do have incredible cash flow over the next two or three years. They could probably afford that, but it's not all they're not. But they do have, I think, currently maybe an $80 billion buy back in place.

10:20But seems small. Is it 100 now? That's sort of maybe adorable compared to what Jim wants, but it could be somewhere in between. I think they deserve to have the streets say, all right, you've been good stewards of your capital. So continue to do that if the way you think is not buy back since something else. I sort of say, all right, they've earned that adorable. Or you want to do. Kind of adorable. You like adorable? I mean, I listen, half a trillion dollars, we've seen companies buy more than 10% of their stock back. And that is, or 10% of their market cap back. That's exactly what the math is as David just sort of pointed out in the clip. So I don't think it's ridiculous. I don't think they have the balance sheet for it currently. I don't think, but obviously, I'm sure they could raise money pretty easily. What I'll say is this, we talk about how cheap Nvidia is all the time. It does not trade at a market multiple. Some of their peers, the extent that you think they have peers, trades it twice the multiple. So they could easily come out and say, we don't think the markets rewarding us for our growth. And yeah, we're going to do an aggressive stock buy back here. The market would absolutely fall in love with that.

11:22However, to Karen's point, you know, are there better ways? They've been great stewards of capital so far. So we'll see. All right. We're going to turn to an earnings alert dial on Snowflake. Those shares are surging after the software company beat on both the top and the bottom lines. The company also raising its four year product revenue guidance. Our SEMA Modi has the detail. And Frank, that was key guidance. Going up to $6.1 billion up from its previous outlook of 5.8 billion. Surpassing expectations, a strong guide from Snowflake, underscoring the continued increase in demand for its data warehousing services. Then reinforces this notion that as AI usage increases, the large language models are leaning more on cloud infrastructure companies like Snowflake. And by the way, cloud, our customer adoption rather is increasing to more than 2000 customers began using its AI tool. Coco, increasing the tool to over 9,000 and the CEO, Shreeta Ramaswamy on the call just saying our first party AI products continue to see rapid adoption. The upbeat outlook is also quieting fears over competition from the likes of Microsoft and data bricks.

12:24Which provides similar services and is rumored to go public soon. Now going into today's report, the setup what Frank was challenging shares, so we're at about 35% in May following first quarter numbers, raising questions around valuation, its ability to beat these lofty projections going forward. But here we are, which shares up about 22%. All right, SEMA, thank you very much. I'll see you when I catch Snowflake CEO on Squack on the street tomorrow morning. SEMA, thank you again. Grasso coming over to you. Yeah, so this is one where it's a bifurcated market where you see some companies report and they have great earnings, but the guy's not not as good in snow. And they're all consumption models. So it's not just about subscription. So you have to see which one still has momentum, a jump of 22%. That was momentum that shocked the street. Snowflake is probably still the name to go to in this place. Karen. It was pretty impressive. I mean, on so many metrics, everything going right. It's, I'm sort of surprised. It was a great, great quarter, great guidance. I also want to hear the call, but there's a lot to love here. Would I, if I owned none, which I don't own any, would I buy it right here?

13:26Probably not. Dan, I don't really have a opinion. I mean, just had a big run and a good quarter, good guidance. I mean, we're just so long into this earnings season right now. And just like I almost feel like let's clear the decks and let's start focusing on what Q3 looks like in the back half of the year, getting into Q4. So again, sorry, I don't have a opinion here. This is a case where clearly the market doesn't have a great concern about valuation because the valuation, a current price, regardless of what they reported and what they got it to, is pretty extraordinary. And again, it goes back to the conversation we just had about Nvidia. I know they're not in the same world. I'm not making that comparison. The comparison I'm making is the market's clearly rewarding Snowflake that doesn't have nearly the metrics of the growth trajectory of an Nvidia. And it's trading it a multi, many multiple of what Nvidia is trading at. So it's some of the disconnect that's going on. I don't think my opinion, you're not chasing Snowflake here, I don't think. All right, we'll leave it there. Coming up, banks rallying back with driving strength and financials today. And should you bank on fresh highs for the group to come?

14:26But first, 10-year yields pulling back after hitting nearly three year highs earlier in the session. What it means for stocks? What does it mean for the rest of your money? Do not go anywhere. Fast money's back in two. You're watching Fast Money here on CNBC. We'll be right back. It's all about the money. I want to be the person in my family that creates an irrational well. How they earn it, spend it, and make dreams come true. I'm not going to sugarcoat it. It's hard, but it's so worth it. Millennial money. Only Saturdays, three Eastern CNBC. Welcome back to Fast Money. Rates off their highs the day, the 10-year hovering right around 4.8% earlier, though, it touched its highest level since November of 2023. Still, that was just enough to give some relief to stocks. The major index is all breaking. There are three-day losing streaks for more on what's next for the markets that's bringing in Stephen D'Nicolo. He's a senior portfolio manager, for Federated Hermes, Kaufman Funds. Stephen, great to have you here.

15:27Thanks for having me. All right, so what is next? It seems like oil bond rates, they're just kind of tied together. We saw WTI up over 90, Bren over 95, bond yields moving up higher. Is it just that simple? Does that continue to, that dynamic just continue? Well, it's never that simple, so thanks for the easy question. But look, this is the typical sort of end-of-summer shop that you expect to get. We had a weird comments out of Warsh at Jackson Hole last week. We're dropping bombs, and I ran. Interest rates are going up, and all of these things are sort of coming together with uncertainty. At the same time, we are debating whether AI is good or not. I heard somebody talking in the previous segment about Broadcom and the 60 analysts who cover Broadcom. Well, there's 82 analysts who cover Nvidia on Wall Street. This is the most covered stock in history tied with Amazon for coverage. And they said just last week, although it feels like a year ago at this point, they said things are 75% better than what we thought two weeks ago.

16:28That is how much off we were on just a one year look forward, right? And so the AI trade is 75% better than what we thought. So what does that mean? That means a tremendous amount of opportunity, especially as you start going down cap. In the AI infrastructure names out there. And I think once you get through this summer swoon and we get through the midterm elections, it's going to be the Santa Claus rally and it's going to be Game On because business is actually pretty good out there. Yeah, it's Game On without question in the bond market. If it was just a US thing, I would somewhat, it's not though, it's a global, it's going on all across the planet. I mean, Japan seemingly this powder keg that somebody wants to ignite. There seemingly was some sort of intervention today or somebody said something because I saw the end strengthen. But now there are a lot of factors at work that suggest rates globally are going to continue to go higher. Oh, look, luckily we had the New York Fed president today say he thinks oil and tariffs. And I'm not going to use the word transitory, but probably are peaking right now.

17:32And so I think the way you have to look at it is maybe we get a hike, maybe we don't in September and it's the big bad event and we get past it. And then we get back to actual fundamentals at the federated coffin funds. Look, we buy assets. We buy appreciating assets that are generating real cash flow. And over time, especially as you go down cap, over time these are going to be great sources of appreciation. So Stephen, I'll pick you back where you just left off the market. Every market always sets up to hurt the most amount of people at any given time and it seems like to guys point the rest of the world is raising rates, but they have single mandates in their central banks. We have multiple in hours. So I think it's a different nuance to it. So I'll give you a which happens first. Do you see a break of 50 basis points higher or 50 basis points lower in the next three months? I'll give you that. Oh boy. I'm going to choose the under on that. Look, I think that if something can't happen or shouldn't happen, it usually doesn't. And whether it's the markets or life, they're usually up and to the right.

18:33And I think that it can't happen and that won't happen and that there's plenty of firepower behind us to keep that from happening. And today's news from the New York Fed really sort of make comforts me on what the future holds. You know, Stephen, earlier you said I gave you a softball. I want to balance something else off of you. Bage book. They said data centers were driving a lot of the economic activity. At the same time, I'm talking to a lot of investors. They believe we're going to see a broadening trade and they like cyclicals. So do you like cyclicals with the idea that we may see a fed rate hike? Look, I don't think you can get a cyclical move higher and higher rates. They don't sort of go together. It will hurt cyclical trades for sure. And so look, I don't think that I think 50 basis points plus or minus is irrelevant when we are entering a generation, a generational opportunity for investment in the US. We have 30 years of factories moving offshore, not just data centers, just everything. And now I spend my time visiting companies in the middle of the country. And if you're a plumber, if you're an HVAC guy, you're busy right now.

19:38You don't have enough work out there. And so you don't have enough time for all the work you have out there. So I think the economy is generally strong. I think we get through this. And I think earnings are 75% better than we thought two weeks ago, right? And so that's pretty good. Steven the Nooklo, we got to leave the conversation there. By the way, Dan wants to get to the next court. He's tired of these earnings. Great to see you, man. Thank you very much. Thank you. Karen, come over to you. Look, I'm always long. And I'm always long whether that's the right thing to be or the wrong thing to be. But I'm still, I'm long AI, but I also have financials, health care, energy. Those are probably my end banks as well. Those are all big allocations. Steve? Yeah, I don't think I had a belief that we weren't going to see a rate hike. But I think the Treasury Secretary, Scott Besson, getting in front of this and using the Treasury Fund to buy the long end, to figure out ways to moderate the long end. I feel as if they know it's stacked against them or they're preparing for the inevitability

20:40that we are going to see a rate hike. So I'm a little unclear on that. I still think we stay sort of sideways. I don't think we get a cut, but I think we stay sideways into year end. Guy, I'm going to read you. Is a rate hike? Does that create competition from the bond market for equities? Does it just create kind of a ceiling on where equities can go? I mean, what happens if we get that rate hike? I said, I talked to a lot of people. They see a broadening. Where do you see this all going? I'll say something that I'm going to get a lot of Twitter hate on and make it sneaker at me. I think if the Fed would have raised rates, it actually might calm the fears of the bond market in some perverse way. And I think the back end of the curve might behave in a way that you don't anticipate. Rates actually going lower. Now, that's counter to a lot of people think I'm sure. And I'm not necessarily 100% certain what happened, but it's not out of the realm of possibility. Because I think a lot of people then be walked off the ledge and you'd see stability for the first time in a couple of years. All right, coming up, then as well as oil. It's back in play with the deal to get the US back to more black gold pumping and the key companies that are getting in on all that action.

21:42You're watching Fast Money Live for the Nasak Market Sight in Times Square. We are back right after this. It's all about the money. I want to be the person in my family that creates an irrational well. How they earn it, spend it and make dreams come true. I'm not going to sugarcoat it. It's hard, but it's so worth it. Millennial money on new Saturdays, three Eastern CNBC. Welcome back to Fast Money, stock snapping a three day losing streak that out adding 300 points. The S&P and the Nasak each gaining a half a percent. And the Nasak 100 up about a quarter of 1 percent. Uber rising a percent and a half after announcing plans to cut 3,300 jobs or 10 percent of its workforce. The CEO writing in a memo, the cuts are aimed at consolidating teams and concentrating

22:44workers in a smaller number of key hubs. Jack Daniels maker Brown for him and jumping almost 4 percent even after missing sales estimates this morning. The company maintaining its full year guidance and also warning that macro pressures and geopolitical instability are weighing on consumer behavior. Somewhere after hours action to bring to you, HP Enterprise down despite better than expected results and guidance, five below higher after its beat and raise in P.V.H. higher even after the Calvin Klein parent company gave some lackluster guidance. By the way, the HPE CEO is going to be on squawk on the street tomorrow morning at 10 a.m. Eastern time. Banks also bouncing back today after hitting more than two month lows just a day ago, both the KBE and the KRE Regional Bank ETF up 2 percent or more. But a couple big names they just weren't able to hold on to the early momentum. We're talking JP Morgan Bank of American City Group and as well as a number of others closing well off their Session highs. Karen. Yeah, so I like the bank sector. I love JP Morgan. I like city bank as well. I think SpaceX was sort of a moment for all of those banks.

23:47Remember Goldman Sachs had that gigantic quarter not long after that and all the banks really rallied and then I think, you know, Iran heated up again and oil started moving all of that but they've come in. But I still think I like the banks. I think that they're going to see a lot of efficiencies from AI. I think that credit quality is good. The consumer is still spending. Their consumers are still spending. And if you're in the debt capital markets business, equity capital markets business trading yes, all of that is great. So I'm staying long for sure. If I own no city, I would buy it right here. Dan? It's interesting that you're just mentioned consumer credit and by all means it looks like it's hanging in there especially for that top part of the K and I think there's some bubbling up on some of the lower end and I've just been kind of focused on capital one and American SpaceX kind of hitting two of those sort of demos if you will and those stocks really can't get out of their own way. And again, that doesn't mean that their users are having problems. It doesn't mean that we get data on defaults and do link with season that sort of thing.

24:50But through the lens of the market, I mean those two stocks I find are very, very interesting to Karen's point about if you're talking about equity capital markets, debt capital markets, talking about investment banking, you're talking about trading. We saw amazing numbers out of all of these banks over this last quarter and guidance that worked pretty well. But I'll just say this, if higher rates, if higher oil, if uncertainty around geopolitics, if we see any blips in the AI trade, these deals are not coming. I mean, these big trillion dollar plus deals. If anthropic gets pushed out in the next year and by all means they want to get it done pretty soon, then you're going to see these banks kind of come in and specifically probably Morgan Stanley and Goldman Sachs. It's gross though. Yeah, I do think Karen's point on the IPO market where you saw this rush in and they all got to had a huge payday. But I still believe that the IPO market is open and it's not only open for those high profile names, it's open for a lot of other names as well. But if you look at specifically Wells Fargo, different animal, different breed, it's actually breaking out now on a chart. So not to get too specific in granular, I would choose Wells Fargo over the balance

25:53for a host of different reasons, underperformed, then caught up and has underperformed recently. The chart looks like it's really breaking out to me right now. All right, looking at Wells Fargo, finished up about 2.5%. All right, coming up, the next move for crude, what the latest flare up with Iran could mean for energy prices, plus a major suspension in the MBA of the Clippers owner and former Microsoft CEO Steve Balmer. We have all the details when fast money returns. Stay with us. Mr. Moment of Fast catches any time on the go. Follow the Fast Money Podcast. We're back right after this. Welcome back to Fast Money. Sometime oil prices up again today as new details emerge from the US Venezuelan oil deal. Brian Sullivan was on the ground in Caracas. We spoke with the Energy Secretary Chris Wright about the US government's partnership with a private company to develop 17 Venezuelan oil fields over 100 years with the Defense

26:58Department taking a 35% stake. Brian also sat down with Chevron CEO Mike Worth about the company's separate deal with Venezuela and the structural changes that made that possible. As we've seen a significant change in the fiscal and commercial terms and the legal framework for investments in Venezuela. This has been negotiated over the last several months. There's a new petroleum law that's been put in place and that has changed the taxes, the royalties, other terms around investment and has taken this from not being very competitive with an art set of alternatives to something that's very competitive versus our options around the world, which is why we're willing to commit significant capital and grow the way we are. For more, we're joined right here on set by Michelle Caruso Cabrera, CEO of MCC Global Interplastics. And he's speaking to his big. It's a pleasure to be here. Ladies and gentlemen, it's good to get our oil applause out. You were also recently on the ground in Venezuela. Thank you for joining us tonight. So we just heard from Mike Worth. We've seen great reporting from Brian Sullivan all day.

27:59I think the question for a lot of people is exactly what is the state of play in Venezuela? Mike Worth, he just kind of alluded to it that the situation has changed a bit. There's an interim president, Delsey Rodriguez. And I think the question, other question is, back in 2007, Conaco and Exxon, they have things seized. Their property and their assets. Has that completely changed? Is it safe to invest and put capital there now? Yep. Venezuela has a terrible track record. And what happened today with Chevron announcing a separate deal from the United States was meant to put that to rest to say it is safe to come back. I would say the other thing that was achieved through this is when I was on the ground in Venezuela, there was consternation that there hadn't been enough movement when it came to the oil sector with enough deals with smaller players trying to get things done. They didn't have to have a lack of capacity, lack of desire. But this certainly turbocharges the situation and gets oil up and running faster. And that's important because the United States, it's in the national interest of the United States, they are rest in Maduro. You broke it, you bought it. You need to stabilize this place. You need to start increasing the amount of revenue coming into the country.

29:01So that way you can stop the mass migration that was so pervasive for the last 20 years, 8 million people leaving the country. So there's a lot of things that this deal, the White House believes it's achieved for them. It's great having you here. The strategic petroleum reserve got below 300 million barrels. That's sort of the line in the sand. There's a school of thought, I think the president believes is that this could be the key to refilling it. Is it that simple? So it's going to take a while, right? Mike Worth says to double production is going to take several years. So I don't know that what happens there today is going into the strategic petroleum reserve. But this is certainly about reducing the reliance on middle eastern oil for sure. Will it take a while to get up and running? Yes, of course. But real estate you use the term places got a load, has good bones. But as well as got good bones, they used to produce more than 3 million barrels a day. They know how to do this. They need investment. They need less corruption, et cetera. And bringing in American companies, I think is going to help them achieve that. So this has also been framed as kind of a national security deal. It's another source of oil here in the west hemisphere.

30:04But why have been as well? Why not try to strike a deal with Argentina where they also have oil reserves or obviously in Guyana where there's very rich oil reserves as well? I think the White House would say all of the above, they want all of that, right? Argentina is living through an oil boom right now that they've never experienced before. It's super important for them because they lack dollars and they really need them to stabilize their currency. Guyana is going to be an incredible source of oil. I think all of those things for the United States are extremely important. The other thing I would say in terms of national security is the White House was very up front saying that the fields that they're taking right now are paying for or doing a deal about. They were taken from the Russians and the Chinese. So this is also, Mark Rubio said this is also about eliminating the Russians and the Chinese from the western hemisphere. Can I ask you, what's the vibe there in Venezuela? How do they feel about the United States presence and what's the optimistic? So the polling shows the President Trump is incredibly popular throughout Latin America. He was incredibly popular after this move with Maduro.

31:06People were absolutely thrilled with it. When it happened that they could not cheer because a lot of the old regime was still in place but behind closed doors, they could tell you they were very, very excited. They won the baseball world series and one person said to me, we were so ecstatic, we were so thrilled. And I think we were so jubilant because when Maduro was arrested, we weren't allowed to express anything. We had to stay quiet. So when we won the baseball world series, it was a way to express joy that they hadn't previously been allowed to express. One other question for you. The Department of War, taking a 35% stakeout. I don't know about you. I wasn't aware they had private equity investors inside. Yeah. The Department. Exactly how does that work and how does America have reap the benefits? Well, Steve Feinberg is number two in the Pentagon, right? He's a private equity guy and so he's brought in a lot of private equity people. I mean, you put private equity people in a government, they want to do deals, right? A hammer thinks everything's a nail, right? So they like to solve a lot of issues by proposing deals.

32:08I think it's just their national way to think. So this is the office of strategic capital. They brought in a lot of money that they can use to try to advance what they think are the national security interests of the United States when it comes to critical minerals, when it comes to semiconductors, and when it comes to oil. MCC, it is always a pleasure to see you. Thank you very much from that on the ground insight from Venezuela. Thank you. Thanks. Brasso, come on. The real trade of the refiners still. They've had unbelievable years. You look at fillups, you look at Valero, you look at Marathon, all up above, at around a hundred or way above a hundred percent year to date. Those are the ones that are going to be refining this heavy, sour crude, where we are set up for light sweet, but these refiners in the Gulf are capable of doing it. This trade extends longer than most people. Thought it would crack spreads are at all time highs. It probably goes higher. All right. Coming up, the NBA handing down a big penalty to the LA Clippers owner Steve Balmer, all the details and the implications right after this break.

33:09Fast Money's Back, right after this. Welcome back to Fast Money, a developing story at this hour with the NBA throwing the book at the LA Clippers owner Steve Balmer and star Kawaii Leonard as a result of charges that the team circumvented the salary cap to pay the NBA all star. The Clippers will lose five first round draft picks beginning in 2029. The team's going to be fine. 30 million dollars Kawaii Leonard will have to pay the league $700,000 for his part in the scandal. And this is the big one. Owner Steve Balmer will be suspended from all league and all team activities for one year. The Clippers reacting, telling CNBC, we vehemently reject the NBA's findings, which are the result of a heavily biased investigation seeking to justify a predetermined narrative rather than facts and evidence. With the league told us privately, differs from what it announced today publicly. The Clippers say the intended challenge, the decision, Balmer himself has yet to comment.

34:10Joining us now on the fast line is Jason Gasebore's columnist at the Wall Street Journal, Jason. Thank you for joining us. Thank you for having me. All right, so Steve Balmer not commenting, but we have had a comment from Kawaii Leonard. He essentially is taking responsibility for lapses of judgment by people in his inner circle and he says he regressed the distraction. Give us the sense of how you see all this. And the Clippers actually challenge this and what happens next in this process. Sure, I mean, the funny part is, of course, is that Kawaii is moving on. He has been traded. He's off back to Toronto where he won a championship before joining the Clippers in 2019. As for the Clippers, the real pain here is going to be those graphics. That is obviously a key team building part of the way the NBA teams are constructed and to lose picks in that kind of succession is a real, real injury. In terms of options that the Clippers have, I mean, they're making obviously a lot of

35:12noise about taking this some other forum, some sort of arbitration process. I don't know exactly the mechanics of how that will work. I mean, obviously, they are part of the NBA here, but this is a rather unprecedented situation. Jason, it's Karen, fine. Thanks for being on. So I doubt that I actually, I guess I'm almost certain other teams might have some sort of unusual sort of deals with players. Do you think they should just consider abandoning or restructuring the entire cap structure? Well, I mean, let's go specifically to what is being investigated here and why the NBA had the role that it had, which was that it was to kind of alleviate any sort of back and deals, you know, a surreptitious dealings that would add financial weight to a league that has a hard salary cap. And if you don't police that, you create all sorts of opportunity incentives for teams

36:16to construct situations in packages like this. And then what kind of pack structure do you actually have after that? I think that's why they as well as exist. And what happens in this lockout report is that they make it pretty clear that the clippers were quite aware of this circumstance because they had fact didn't penalize before with a player, Deandre Jordan, before a choir Leonard. And in fact, Leonard's case is pretty well known around the NBA that there have been discussions with multiple teams about potential additional financial opportunities for Leonard and that team for advice and not entering to those kinds of agreements. So Jason, about 25 years ago, we saw a similar situation with Joe Smith, a player. And that team also lost the Minnesota Timberwolves. They lost five first round draft picks, but that was under the David Stern NBA, a very different regime than the Adam Silver NBA. So I want to ask you, does Adam Silver deserve the support of the other owners and the people on the league to maintain these five draft picks being forfeited? Or do you see the clippers having the potential to maybe lobby the other owners and say,

37:19hey, you know, this is an extreme penalty. I mean, it's not quite a death sentence, but it's certainly extreme. I think you're going to have both. I mean, I think you're going to have people, you know, lobbying on behalf of the clippers. And I think you're going to have people who appreciate the belief that our position on this. I mean, let's not also forget that Adam Silver is forever tethered to Steve Balmer and the clippers because Steve Balmer was the owner who came in and purchased the clippers amid another crisis with previous owner, Donald Sterling. It has to be, you know, quite surreal for this to be entangling his relationship again. You know, the complexion of the NBA has changed quite a bit as well. A lot of private equity money coming in. It's just a different NBA from family ownership. So with these new owners, do you think they want to see a harsh penalty to someone like a Steve Balmer? And of course, there's a lot of deals in play, whether it's the Lakers or other teams. Do you think this might have a chilling effect that an owner can say, hey, you know, I can be penalized very harshly if I'm trying to run my team even slightly beyond, you know, the line that's been set by Adam Silver.

38:20Right. I mean, just to go into the macro here, I think that the name of the game is for individual owners and ownership groups is franchise valuation. And yes, there are ownership groups that are, you know, in under the hood looking at the mechanics of the caps and team construction and winning and all that. But at the end of the day, these have, this has become sort of an asset class that is managed as much. And the particular small, you know, the base of the caps and the structuring of deals, I don't think are as much a material issue for owners as if you had something that was affecting the bottom line, affecting the valuations of these franchises. Then I think you would see a real up for today. You haven't seen anything like this. In fact, it's quite the contrary. Would these franchise just explore the deviant? All right. As it stands right now, the clippers are going to forfeit draft picks from 2029 to 2033, also owner Steve Bommer suspended from all activities for one year. Jason Gay, thanks for helping us break this down. Cheers.

39:21Thank you. All right. Coming up here on FASMONEY. A big alpha bed, Berkshire Hathaway, CEO, spoke to CNBC about his third largest position while he's staying bullish on the hyperscaler despite recent weakness. Also, here's a sneak peek at the Kramer camp, Jim's chatting exclusively with the CEO Rubrik. Catch that 400 view at the top of the hour on bad money, much more FASM coming up in two. All right. Welcome back to FASMONEY. Cheers to Broadcom. A racing early loss has climbed in a positive territory up just about 1% right now. The CEO on the call raising fiscal 2026 AI revenue guidance to 58 billion from 56 billion. That's a 186% increase from last year. He also said the company's on target to exceed EPS of 30 bucks in fiscal 2028. Meantime. Berkshire Hathaway, CEO, Greg Able, on Squawk Box earlier today, digging into the company's stake in alpha bed. Here's what he had to say.

40:22I called Warren and I said, we had a significant opportunity to invest in, continued investing in Google, but in a significant block, discuss the size. They hadn't set the size, but recommended that we consider 10 billion and Warren and I discuss the size. We discussed the size of discount, and I'd recommended 6.5% discount. And we are comfortable with that. That stake now worth about $37 billion off of Betts Berkshire's third largest stake, the Google parent under some pressure recently having put in a four-straight losing month and down over 12% since the start of May. Karen. I like it. It's one of my biggest positions. I like the Berkshire owns it. That's the kind of holder that you want. But I think the hyper scalars, they're in favor, they're out of favor. We'll see the new model release today. We'll see if that is enough to sort of goose the stock again, but it's not crazy expensive. I like it. Dan? I think this is so much more than a hyper scalar.

41:22I know that that's what you buy into. If you think about it, they have the TPU. They have distribution across so many different platforms, including Android. They have deep mind. They're able to use this infrastructure to serve their biggest businesses. They also have GCP, which sits there just waiting for enterprises. To do this, you talk about the models that come out of the lab. To me, this is the most diversified way to play AI going forward, especially if you think that some of the hyper scalars or a meadow or some of these other inputs, input suppliers, that sort of thing are probably tapped out. This is the one I think that gets bought on big pullbacks. And you have search. And you have... And Wimo? Search funds, everything else. Right. And YouTube. Yeah. Got a lot of stuff. Guy? I mean, you have evaluations, Karen said. I mean, it's a market multiple for a premier. I mean, it's a premier franchise. Their mode is still very wide and very deep, I think. I mean, the existential risk we talked about a year ago has not come to fruition, so I'm with Karen on this one.

42:22I think the problem is they went to where we started the show, free cash flow negative for the first time since the IPO. And with everything from ads to search, funding the AI spend, you're at that tipping point where they have to find that right balance between what they're bringing in and that free cash flow machine because it wasn't the right balance, the stock paid for it, hopefully they get it. Yeah, able calling out for about a significant player in the AI trade. So giving a boat of confidence. All right. Coming up next on Fast Money, we got your final trade. Stay with us. Welcome back, Tom, for the final trade. Let's go around the horn. Steve, PayPal, deal was off, stocked the plunge. Now you start to see it rally back. I think it's going to go much higher from here. Karen. Yeah. So if it's good enough for Abel and it's good enough for Berkshire Halfway. It's good enough for my final trade. Doodle. Dan. Yeah, Frog Convuse Down is by what's not impressed with much of that came out of there.

43:25I wouldn't be buying it here if people. Yeah, I clipper strap history. The NBA is doing to make huge favor. Just take a look at what they've done. Halliburton. Young man. Halliburton. Is that resellum? No, yeah. All right. Thank you for watching Fast Money. Mad Money with Jim Kramer. It starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy. And it should not be relied upon as such. To view the full Fast Money Disclaimer, please visit CNBC.com forward slash Fast Money Disclaimer. It's all about the money. I want to be the person in my family that creates an irrational well.

44:27How they earn it, spend it and make dreams come true. I'm not going to sugarcoat it. It's hard, but it's so worth it. Millennial Money. All new Saturdays, three Eastern CNBC.