Closing Bell - Closing Bell Overtime: AI with Nvidia & ServiceNow CEOs; AMD Earnings 5/6/25

Episode Date: May 6, 2025

Paul Hickey, Bespoke Investment Group Co-Founder helps break down the market action and a fresh wave of earnings across chips, EVs, and enterprise tech. Live from Las Vegas, Jon Fortt sits down with ServiceNow CEO Bill McDermott for a wide-ranging conversation on enterprise AI adoption, digital transformation, and business confidence.Ruben Roy, Stifel Senior Analyst, joins to react to AMD and the broader Nvidia-driven AI rally. Rivian CEO R.J. Scaringe joins following the company’s latest results.Kristin Peck, Zoetis CEO, joins to talk pet demand and the latest quarter. 

Well, that's the end of regulation on the tech ringing the closing bell at the New York Stock Exchange Z space doing the honors at the NASDAQ stock selling off today, second day in a row as the Fed meeting gets underway and pounds your polls tech lower. That is the scorecard on Wall Street, but the action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan at CNBC headquarters. I'm Morgan Brennan at CNBC headquarters. And I'm John Fort in Las Vegas at ServiceNow's Knowledge 2025 conference, where I spoke earlier with NVIDIA's CEO Jensen Huang and where I'll be joined shortly

by ServiceNow CEO Bill McDermott as that company lays out some big AI targets. And also ahead this hour, a slew of earnings reports, including Chipmaker AMD, Supermicro, EA, Wynn and Rivian Plus. An interview with Rivian's CEO before he talks to Wall Street analysts on the earnings call. But as we await all of these earnings, let's get straight to today's market action. Joining us now is Bespoke Investment Group co-founder Paul Hickey, as well as CNBC Senior Markets commentator Mike Santoli. Great to have you both here. As I

mentioned, second straight day of red on the screen for the major averages. Paul, as the S&P settles out here, it looks like just above the 5,600 level, maybe 5,606. Looking at your notes here, you're constructive, dare I say, about this market. Is that the way to think about it? Well, no, I mean, I think there is a lot of uncertainty

so out there, so it's hard to get too excited. But I mean, look at some of the positives that we've seen here. We've seen earnings results this year, 12% earnings growth, which was double what analysts were forecasting at the start of earnings season. Granted, that's backward looking, but as far as the guidance is concerned,

we have seen some companies come out and raise guidance We've seen a lot of companies pull guidance, but it hasn't been Nearly as bad as what we expected and the economic data the hard data has been holding up Well soft data everyone knows has been weak, but the ISM numbers this month improved sequentially. So that's something I mean, these are all little bits and pieces improved sequentially. So that's something, I mean, these are all little bits and pieces, nothing great, but they're not nearly the cataclysmic numbers we were expecting

or people were braced for coming into this earning season. And then you have the cumulative AD line of the S&P 500 hitting a new high last week. So those are three positives. And I think what we can't dismiss is the decline in oil prices and the tailwind that that's going to be for consumers going forward. Okay, we have our first earnings report to bring you. Wynn results are out. Contessa Brewer has those for us. Hi Contessa.

Hi there Morgan. Yeah, Wynn reports revenues of 1.7 billion dollars. Just a hair shy of consensus of 1.74 billion and adjusted earnings per share of $1.7 versus the $1.19 estimate. The more important earnings metric here for analysts is adjusted property EBITDA. Wynn Resorts comes in at $532.9 million. Street account consensus, $571 million. Vegas, a tiny beat against extremely tough comps from the Super Bowl action the year before. And in Macau, the company says it got hit with bad luck with the high rollers.

VIP hold negatively affected the overall results. Now, the company bought back $200 million worth of shares in the quarter. Investors are far more interested though in what is happening right now. The call starts in less than 30 minutes. I'll be on it. And the stock, as you can see, off 4% after the bell. Morgan?

Okay, Contessa Brewer, thank you. Mike Santoli, I want to bring you into this conversation. I see what you did there talking about bad luck in Macau, but how does it speak to what we're seeing in general with some of the travel, hospitality, and leisure names, particularly ones that are affected by international flows. Yeah, at first reflex, it looks like there's still a sensitivity to any sign that that part of the services

economy is slowing down, that basically you saw the, this is where the soft data weakness might make its way or be making its way to the hard data. So not too surprising to see it back off. I'm also focused on the consumer cyclicals versus the consumer defensives type ratio and that has come back off the lows. You know we were pricing in worst case scenario a few weeks ago, but it's not really regained back a whole lot.

So we are in this wait and see moment in between while trying to figure out exactly how worried or encouraged we should be by what's actually happening in the economy. Okay. In the meantime, Paul Hickey, so Treasury yields move, we'll say drift higher ahead of the results of some positive ones, kind of reiterating what we've already heard from the Treasury Secretary Besson on the Hill today. How much now hinges on some of these big macro items versus some of the fundamentals as we do continue to get earnings, the two busiest days of earnings, in fact, tomorrow and Thursday? Yeah, no, I mean, I think the macro events are the big thing. The president today was talking suddenly talking about how we don't need to see

deals signed, which, you know, is a lot different than what we were hearing earlier in the week. But I think from the market perspective here, we need to see some sort of we've been promised deals and deals and deals. So by next week, at least, we need to see something tangible that we can hold onto. And then as far as the U.S. and China are concerned, you have to start seeing those two at least coming to the dance floor and at least talking. You saw a win down on earnings. Talk about a company with exposure to China and the U.S., two countries that are in the midst of a heated trade war where there's a lot of uncertainty.

So you can expect discretionary spending to be weak in both of those two areas. But we really need to see some sort of thawing of those tensions. Okay. Speaking of discretionary, Electronic Arts earnings are out. Steve Kovach has the numbers. Hi, Steve. Hey, Morgan. Yeah. And shares are barely green here on these results. Let me give you what we got here. Revenue was a beat at $1.8 billion. Street was looking for 1.56 billion adjusted. EPS, which we can't compare to estimates coming in

at 98 cents. And guidance here is pretty good though. Q1, a slightly conservative here. They're looking at for Q1, 1.18 to 1.28 billion. Street wanted to see 1.28 billion. And full year guidance for fiscal year 26, which starts the quarter we're in right now, that's pretty much above estimates,

7.6 billion to 8 billion estimated. Street wanted to see 7.62 billion. And just some little color here, they're saying they're American football business. That's the college football game and the Madden NFL game for fiscal year booked a billion dollars in net bookings we're seeing shares a good old hunch right here I'll send it back over to you okay Steve Kovac thank you we've got lucid and Rivian earnings

out as well phil lebeau has both numbers for us hi phil hi Morgan let's start first off with lucid this is a smaller than expected loss from Lucid in the first quarter, 20 cents a share. The street was expecting a loss of 23 cents a share. The revenue coming in at 235 million, a little below estimates of 249 million. Some of the metrics from the first quarter, net loss of $731 million, greater than the net loss in the first quarter of last year. With cash burn of $589 million. That's an improvement compared to the cash burn in the first quarter of

last year of more than $700 million. Liquidity stands at $5.76 billion and they are affirming, again, they are affirming their production goal for 2025 of building 20,000 vehicles. Let's switch gears to Rivian. Rivian is also a smaller than expected loss, losing 41 cents a share, well below what the street was expecting. They were expecting a loss of 76

cents a share, revenue better than expected at $1.24 billion. And this is important. They posted a gross profit of $206 million. Why is that important? Two consecutive quarters of gross profitability triggers another $1 billion in funding from Volkswagen as part of their agreement. Their

gross profit per vehicle coming in at $23,842 with a gross margin of 17%. Their liquidity at the end of the quarter, $8.5 billion. But this is going to be where you see some pressure on shares potentially. You've got guidance of building or delivery of between 40 and 46,000 vehicles. That is a cut from the previous guidance just a month ago when they expected to deliver between 46 and 51,000 vehicles. They are expecting an adjusted EBIT loss of between $1.7 and $1.9 billion for the year. Lots to discuss with R.J. Scouringe, founder and CEO of Rivian.

He'll be coming up in about 15 minutes, Morgan. We'll talk about two consecutive quarters with gross profitability, but the cut in deliveries for this year, my guess is something has to do with the tariffs and the impact there. All right, more will be revealed in just a few minutes. It's gonna be a must-see interview. Phil, don't go too far.

In the meantime, Mike, want to get your reaction to what you just heard? A number of companies exposed to the consumer in different ways. Yeah, it's tough to get too much of a broad read when it comes to, you know, these EV makers. But obviously, electronic arts, that's been a strong part of the market in terms of consumer. People essentially feeling like it's pretty resilient to any slowdown in other spending areas. So it looks like that's going to get rewarded at the outset. I think for me market-wise, we're moving from a period where it's the earnings base that

we have questions about to are we we gonna get the conditions under which confidence will be restored that we can go back to paying 22 times whatever the earnings end up being this year. Because we're back above 20 times, we peaked near 23. So to me it's the kind of confidence game around that and how we shape the narrative to get us there or if we're just gonna be chopping around down here more. Okay.

Gentlemen, thanks for kicking off the hour with us. Paul Hickey, thank you. Mike, we'll see you in a bit. John? All right, yeah Morgan, let's turn now to the AI trade. ServiceNow shares slightly lower today with the rest of the market,

but up about 25% or more since earnings a couple weeks ago. Company announcing new financial targets for its AI business, aiming for one billion plus in annual contract value for its now assist platform by the end of 2026. It's up from a quarter billion today. Back with me now is Bill McDermott, ServiceNow Chairman and CEO. Thanks for having me here at Knowledge 2025. Three years in a row.

Great to have you, John. People are still getting together and coming to Vegas. Five years ago, we wouldn't have taken this for granted at all. Totally. Why is it important to do? Well it's all about the customer and right now you know we're in a whole new world of agentic AI and these enterprises are being reinvented on a platform like ServiceNow where you can completely rethink how you run your company. And right now, John, so many companies are stuck with legacy systems.

It's a $10 trillion tax in the US economy alone, and they gotta move from that world where they're stuck in silos to platforms that matter. We're one of them, and we're really having a great show. We have 25,000 here live, a couple of million online today. So it's been a great show. One of the big areas where you're growing is customer resource management, CRM.

People will also recognize that as the ticker of Salesforce. But it's an area with a big addressable market. Why are you growing there? How aggressively are you gonna move in and eat the lunch of perhaps some others who are already dining? Well it's a big market, but in that market the customers have suffered a lot over the last decade. So right now the cost of losing a customer is higher than ever and the lose rate of businesses

is higher than ever, the lose rate of businesses is higher than ever. 30% greater than it's been. So the customers are saying whatever you feed me it's not working. And so what we're trying to do is reinvent the category and that includes how you order things, how you fulfill that order, and how you service the customer relationship. And we're doing that all on a single platform with a pristine architecture that's fully integrated to enable autonomous, agentic AI to serve that customer. The net present value of a very satisfied customer is the greatest asset your listeners have. So they need service now. A little more than an hour ago we were talking

and you mentioned the telecom business. Yeah. And there was a term that terrified telco executives 20, 25 years ago. That was dumb pipe. Yeah. Nobody wanted to be a dumb pipe. Right.

Are we at the point in software where application providers are at risk of becoming a dumb pipe with somebody else's better agentic AI built on top of them taking tomorrow's margin? Well, I think you're going to see the consolidation of the 20th century software industrial complex and there will be a lot less apps because if you don't need them all, why are you paying for them? And so what I see evolving here is the hyperscalers are all going to do great.

What we're trying to do is integrate with all of them, all of the large language models out there and have a workflow data fabric that connects with data sources from those old systems of record or frankly any data, all into one central nervous system, which is the ServiceNow platform. And that is the game-change, where you can put that platform in, exit out lots of OPEX on lots of legacy that you don't need to be paying for, so you can invest in a platform that's going to cut your cost and help you grow again. What's driving government adoption?

I'm not just talking U.S. here, but government adoption and is that pace sustainable? Totally. Actually, it should increase by a lot. You know, this platform was built for this moment, John, and this platform is all about driving efficiency and effectiveness. And if you think about the fact that one agency

can't talk to another agency, or one worker has to text or email, or call somebody up to get something done in 2025, doesn't even make sense. So, agentic AI on a platform that connects all of the functions of an agency or a business. Government has to run like a best-run business and we bring that to the biggest agencies not only in the United States which has been outstanding but

now all over the world and they're getting the memo that doing things the way you've always done them is not getting you the result that you want so change is in the air, John. Bill McDermott, CEO of ServiceNow. Thank you here at Knowledge 2025. Morgan, quite a day here and it continues, the story continues to evolve. We see what the market's doing. It is. It has been a big day for AI News. So much of it coming from you, John. Really fascinating. Also that opportunity for government contracting for software players like ServiceNow.

Well, earnings from Supermicro and Arista networks are out. Christina Parts-Nevelis has both numbers for us. Well, since we're talking about AI, let's start with Server Assembler. That would be Supermicro. Their earnings coming out. They pre-warned last week that they were gonna provide lower revenues for the quarter. So Q3 EPS of 31 cents adjusted much lower

than the street wanted at 50 cents on revenues Q3 of $4.6 billion, which is also less than the street anticipated something we got last week. They said that customers were pushing out their orders in the release quote. we do expect many of those commitments to land in the June and September quarters, reinforcing my confidence in our ability to meet our long-term targets. However, economic uncertainty and tariff impacts may have short-term impact.

Speaking of short-term impact, let's talk about Q4 guidance. They're cutting it for both Q4 and full year. The range for EPS is 40 to 50 cents, lower than what the street wanted. Q4 revenue guidance coming in at 5.6 to 6.4, lower than what was there. And then lastly, they did cut their full year

to a range of 21.8 to 22.6 billion. That's why you're seeing shares down 4%, I was gonna say 4 billion. Now let's move on to Arista Networks. Arista makes networking equipment and connects a lot of these data centers. Their shares are up 1.5%. Why?

Q1 EPS, slight beat, 65 cents adjusted on revenues of about, let's call it $2 billion, which is higher than the street anticipated, up almost 4% quarter over quarter, despite what the company is saying in the releases, unknowns around tariffs. So again, tariffs being mentioned quite a bit. And then Q2 revenue guidance will just add there they said that that is at 2.1 billion, which is higher than the street anticipated. And lastly they provided a new repurchasing program, 1.5 billion dollars, and that's helping shares. All right, Christina Parts-Nevela, thank you. We've got much more earnings action ahead including results from AMD, which just came out're gonna go through them we are going through them now we will get

an analyst first reaction and the read-through from the rest of the chips plus access you will only get here on overtime Rivian's founder and CEO will join us for a first on CNBC interview ahead of his earnings call with analysts we have so much more stay Stay with us. Overtime is back in two. Welcome back. AMD earnings are out. Christina Parts Nevelis has the numbers. Christina? Oh there is no word of tariff in this report. EPS beat Q1 coming in at 96 cents adjusted, 2 cents higher than what the street anticipated on revenues of $7.44 billion for Q2 revenue guidance.

That was stronger than what the street wanted at $7.4 billion. And a lot of that strength in this past quarter really came from data centers. That came in at $3.7 billion, which was higher than what the street wanted. Same thing for client, which would encompass PC sales, something that we saw a strength for Intel. Perhaps it's pull forward demand because of tariffs, but in the report, the only thing that Lisa Suh, CEO, says is that despite the dynamic macro and regulatory environment, our first quarter and second quarter outlook highlight the strength of our differentiated product portfolio. And you can see shares really reacting positively, 6% higher on the earnings beat

and increased revenue guidance for Q2. Morgan? All right, Christina, thank you. Don't miss an exclusive interview with AMD CEO Lisa Su. That's going to be tomorrow, 930 a.m. Eastern on Squawk on the Street. John? All right.

Now let's bring in Stiefel Managing Director Ruben Roy on this. Ruben, stock reaction kind of speaks for itself, but data center segment was up 57% year over year. It seems like that had been an area of concern in the last couple quarters and also client revenue up 68% driven by strong demand for Zen 5 and Ryzen, they say. So given that, how much of the concerns that people had had about AMD's competitiveness with Nvidia and just overall the consumer appetite,

how much of that might be put to bed here? Hey John. Well, we'll have to wait for the call. There's two parts to the data center number, right? So as you said, it's a beat, that's great to see. We're seeing the reaction in the stock and really throughout earnings season so far, I think a lot of companies in and around data centers in terms of reports and outlooks have been better than feared.

Okay, so that's one thing. But the data center segment, like I said, has two parts. It's got Epic, internal purpose compute, CPUs that go into servers. So that's one part of the business. And then of course, you've got the part that investors are very keen on, which is the GPU part of the business that goes into data center AI infrastructure compute. And so that's where there's been a little bit more of a debate, John, around sort of the trajectory

of that business as we flow through this year. AMD went from zero essentially, and GPU compute 2023 to five billion last year. They did talk about a flattish first half relative to the back half of last year when we think about those GPUs. So we'll see how the company breaks it down on the call, but certainly on the print,

it's better news than I think some investors were expecting. Yeah, Ruben, I mean, just the fact that they're saying here, the commentary from Lisa Sue that despite the dynamic macro and regulatory environment, that the Q1 results, Q2 outlook highlight the strength of the portfolio and they position them, positions them well for strong growth in 2025.

Tells us what about the secular nature overall of what we're seeing with this AI build out and implementation right now. Yeah, we'll have to get again, a little more granularity on the actual mix between CPUs and GPUs here. However, I would say that the data points coming through earnings,

that's far from the hyperscalers that are spending a lot of money on AI infrastructure compute have been quite positive with most hyperscalers either maintaining high levels of capital expenditures expected for 2025 or even raising in some cases. And so that tailwind into AI infrastructure compute remains strong and I think that's a benefit for these companies that we like like AMD or Nvidia. And so we'll see. The other question though, of course, Morgan,

is any of this related to pre-tariff, pre-culmination of tariff policy pull-in, that type of activity? We did hear a little bit about that from Intel on their conference call around at least the PC side of the business, more consumer related, maybe not so much impacted by data center infrastructure, but get something that we'll be listening for on the conference call tonight.

Yair Rubin on the geopolitical front. A few minutes ago here in Vegas, I was speaking with Nvidia CEO Jensen Wong about the current trade environment, what it would mean for the US if the government continues to restrict to increasing degrees sales to China. Here's what he said. China is a very large market. It's probably going to be a $50 billion AI market in a couple of two, three years. It would be a tremendous loss not to be able to address it as an American company.

It's going to bring back revenues. It's going to bring back taxes. It's going to create lots of jobs here in the United States. And of course, of course, we just have to stay agile. Whatever the policies are of the government, whatever is in the best interest of our country, we'll support and we'll stay agile and keep moving on. Ruben, how much does that China policy question hang over both Nvidia and AMD? It's in the stocks to a certain extent. Of course, there's been tariff concerns, geopolitical concerns earlier this quarter.

Nvidia, both Nvidia and AMD talked about inventory write downs related to increased restrictions on chip sales in China and their big numbers, right? So Nvidia taking a five and a half billion dollar inventory write down on this. So the numbers are big as Jensen said, we believe that that's probably 60, 65% gross margin inventory that's being written down. So really translates into eight, nine billion dollars

of revenue. Now having said that, you get a tailwinds around AI infrastructure really strong globally, right? So it's not just China, United States, you know, sovereign nations, etc. We're hearing about things like Stargate and others otherwise. And so there's still a big tailwind on spend like I said, but certainly something that investors are keen on and I think over the next several months we're hoping that we'll get more clarity on where the policy directionally is going.

And, you know, we think best of breed companies like Nvidia will do just fine. OK, Ruben Roy, thanks for joining us with shares of AMD at four and a half percent right now in overtime. When we come back, Rivian's CEO will join us in a first on CNBC interview to talk earnings, the impact of tariffs on the auto industry and much, much more. Overtime, we'll be right back. Welcome back. Shares of Rivian are moving slightly lower and lower in overtime after reporting a Q1 earnings result. Our Phil LeBeau joins us now with Rivian CEO RJ Scorringe. Phil, take it away. Thank you Morgan. RJ, thank you for joining us today from Palo Alto. You beat the expectations, a smaller than expected loss for the quarter,

but let's be honest, your guidance is nothing to write home about. You're going to be spending more in terms of cap ex and you're cutting your delivery guidance. It was 46 to 51,000 vehicles. Now you're saying it's going to be 40 to 46,000 vehicles. What's changed in just a month since you gave your last guidance? Well, thanks, Phil. As you said, Q1 for us was important as our second consecutive quarter of having a positive gross margin, $206 million of positive gross margin, which is great. But as you said, there's a lot of uncertainty, and both in terms of our cost structure on CapEx, that's equipment we're buying, with the trade and tariff situation, we are reflecting more CapEx spend for the same content.

And we're also looking at the overall consumer sentiment, just more broadly, in conjunction with what's happening around trade. I wanna talk about consumer sentiment. Are you telling me that basically people are saying overall I'm pulling back in terms of vehicle purchases or with electric vehicles? Because you know the narrative that was out there in the first quarter as there was the backlash against Tesla, there were people saying, well, they're going to go over to

Rivian. Has that not happened? Yeah. Well, look, we have today on the consumer side, we have really just our flagship product, the R1S and the R1T. They're doing really well. The consumers love the product. It's the it's the best selling premium electric vehicle over $70,000 in the entire United States and it's

the best selling premium SUV over $70,000 electric or non-electric in California. So the product is doing well. The challenge is as consumers start to be more price sensitive, it's only our flagship product and so we really need our R2 product in the market. This starts at $45,000. It's incredible. I can't wait for it to be out, but if you see more price sensitivity on the buyer side,

having that lower price product's gonna be really important for us. RJ, it's Morgan. Given that price sensitivity from consumers, what does that mean in terms of your ability to push on or push out price if you do see higher prices internally, higher costs internally amid trade and tariff dynamics?

There's a lot of knobs we can turn. So we have our product mix. So if you do the math on our quarter, you'll see the average selling price for all of our vehicles, both our consumer focused products, the R1 product line and our EDV is over $88,000. So we have a very high ASP, average selling price,

but we have mixed ships. We can make, you know, we can build more of our largest battery pack we call our Max pack. We can shift to different trim configurations, so that's one of the big knobs we're looking to turn. Of course there's also vehicle financing offerings that are in place and what we do in terms of leasing and in terms of overall vehicle financing. And those are the two big variables we have to play with and what we're doing as a company, as leadership teams, we're very focused on profitability. And those are the two big variables we have to play with. And what we're doing as a company, as leadership teams, we're very focused on profitability.

And so when it comes to making a trade-off between volume and selling more units versus driving towards increased profitability, we're gonna err on driving towards profitability. Recognizing that this significant volume step up for us comes with R2. And RJ, speaking of R2, you've had two consecutive quarters with gross profitability, significant because that was one of the gating benchmarks, if you will,

that you had to cross in order to free up another billion dollars in financing from Volkswagen. Do you have the liquidity in place right now to get to the R2, which you have indicated is critical for you to address a more mass market? Yeah, thanks for pointing that out, Phil. So this second consecutive quarter profitability does unlock another billion dollars coming in from Volkswagen. That supports an overall strong cash position that we have today and allows us to launch R2 and to have the cash in place

to ensure that not only through the launch, but through the ramp up of that product, we're in a really healthy place. Fringe, thank you for joining us in our own Phil LeBeau. With Rivian shares down about one and a half percent right now here in overtime. It's time now for a CNBC News update with Bertha Coombs, Bertha.

Hi, Morgan. President Trump announcing earlier today It's time now for a CNBC News update with Bertha Coombs. Bertha. Hi, Morgan. President Trump announcing earlier today that the U.S. would stop bombing the Iranian-backed Houthi rebels after the group agreed to cease attacking vessels in a crucial shipping lane in a deal mediated by Oman. After the announcement, the head of Yemen's Houthi group indicated that its ceasefire with the U.S. would not stop it from continuing its military operations in support of Gaza. The Supreme Court has allowed the Trump administration to enforce a ban of transgender people serving in the military.

The court granting the administration's emergency request to lift a nationwide injunction blocking the policy while legal challenges moved through the courts. The ruling was unsigned, but the court's three liberal justices dissented. And Amazon's driverless car company, Zux, said today it issued a software recall for 270 of its robo-taxis. According to regulators, the vehicle's automated driving system inaccurately predicted another car's movements, increasing the risk of a crash. It comes after an unoccupied

robotaxi collided with a passenger vehicle in Las Vegas last month. Let's head back to Vegas now. John, over to you. Bertha, thank you. When we come back, the mega media battle, shares of Netflix are up nearly 20% since earnings a couple of weeks ago. And tomorrow, we get results from Disney. We're going to look at how the new guard and the old guard stack up against each other. And much more ahead from my interview with Nvidia CEO Jensen Huang, including why he says the company needs to keep reinventing itself

Where he thinks that AI industry goes from here Welcome back to overtime Disney out with earnings tomorrow before the bell and the stock has been Underperforming the market so far this year, and the Mouse House also falling behind a major competitor. Mike Santoli's back with more on the media battle between the old guard and the new. Mike? Yeah, John, in terms of stock performance,

I mean, Netflix in the last 12 months has outperformed Disney by like 110 percentage points. Here's what it looks like in terms of each company's enterprise value. That's their market cap, along with any net debt. You see it was actually kind of a race and neck and neck. Occasionally in the 2010s, late 2010s, and then during the pandemic, you know, Netflix would sort of rise to bump up against Disney's enterprise value. And then it's no contest really anymore. You see this massive surge in Netflix as it's been ordained as kind of the only safe and

predictable play in entertainment media. And you have Disney bumping along these levels that really at first reach several years ago, let's call it six or seven years ago. There is a bunch of debt on Disney, $40 billion left over from that Fox asset sale. So here's how the valuation in terms of expected earnings shakes out. And it's really been kind of a change in positions here in terms of which has the premium. So Netflix back here really wasn't earning any money.

It was sort of in the type of growth phase. But then they both kind of moved in cadence. The pandemic period's actually fascinating. Basically the market decided that the streaming world was gonna be big and profitable enough for so many players and everybody was growing gangbusters. And now Netflix, around 40 times forward earnings, really premium for a consumer cyclical or staple, I guess.

And Disney is really historically very cheap for its stock 16 times, although it is definitely more expensive than Warner Brothers Discovery or Paramount, which are considered a little bit less well positioned than Disney, John. Mike, there was this idea during the pandemic that investment in content was going to perhaps build Disney and maybe one or two others up to the scale of Netflix and that was going to eventually lead to profitability.

But I guess there's an argument now that Netflix has achieved a kind of escape velocity that's going to be very difficult for other media players to achieve, no? Difficult for them to achieve in terms of scale, getting there in a hurry. I do think there is a question though in terms of how big consumers' media budgets or diets are going to remain. So Disney is really in the first position after Netflix in terms of aggregating the audiences. Of course it also has theme parks and all the rest of it. So it seems as if it has the scale to be profitable, if not necessarily to compete with Netflix.

And then the market is saying, you know, however much Disney and Netflix earn, they're willing to pay more than twice as much for each dollar of Netflix earnings next year versus Disney. All right. Mike Santoli, thank you. Well, shares of animal health company Zoetis are under pressure despite better than expected earnings and guidance before the bell. Up next, CEO Kristen Peck on how tariffs could impact her business. And check out another major earnings mover. Shares of Upstart Holdings are sinking

despite a beat on earnings and revenue. Those shares down almost 17%. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back. We'll be right back.

We'll be right back. We'll be right back. Welcome back to Overtime. Zoetta is finishing the day lower despite reporting an earnings beat this morning and raising its FOIA guidance. Joining us exclusively is Zoetta's CEO, Kristen Peck, here on set.

It's great to have you. Welcome back. It is great to be back, Morgan, especially after such a strong quarter. As you said. We had 9% organic operating growth on the top line, given our diverse and durable portfolio. What gives you the confidence to raise guidance, despite all the macro uncertainty we've been hearing about from so many different companies across so many different industries?

So as you look at our organic operating growth, we maintain 6% to 8%. What you're talking about is the revenue number overall. And that was really foreign exchange, which, you know, for the first time for me as CEO was actually raising a lot of our numbers. You saw the same thing on our EPS. But really the confidence comes from the fact that animal health is incredibly resilient. And you look at Zoetis with our portfolio, when you have the human-animal bond and you have the demand for protein really driving the overall sector. But with Zoetis, it's our innovation, it's our, you know, what we deliver for our customers. What you saw in the quarter is 14 percent growth across our three largest

franchises in parasiticides, dermatology, and OA pain. And that's what gives us the confidence is we see the underlying demand from our customers. Which is interesting to me because you just touched on it. You got this companion animal portfolio. It's the bigger business and then you have livestock. If I stick with companion animals, I mean, we're talking about pets, right? Yes, exactly. What are you seeing in terms of consumer spending trends? And we hear about consumer confidence starting to soften, but we also know pets mean a lot,

perhaps more than they ever have to soften. But we also know pets mean a lot, perhaps more than they ever have, to people. So the human-animal bond has been incredibly enduring, and you've seen year after year. You know, as we think about zoetis and our growth and the overall growth in the industry, people want to make sure they take care of their pets, and that is enduring. Obviously, as you saw in the quarters we mentioned, you are seeing, you know, some consumers, you know, who have concerns, maybe moderating their spend on chronic, you know. But as you look at what we printed even in the U.S., where you're seeing some consumers who have concerns, maybe moderating their spend on chronic, you know. But as you look at what we printed even in the U.S., where you're seeing some of those

concerns, we're still seeing 8% growth in companion animal in the U.S. We had 9% growth overall in companion animal globally. And so that's really that human animal bond. It's that need to your dog is itching, your dog is in pain, you want to make sure you don't have fleas or ticks at your house, you know, that's really an enduring trend. And you mentioned globally, you are, you do have a global footprint, so how are you navigating trade and tariffs? Sure, I mean, as you know, as we talked about on the call, you know, obviously it's an incredibly dynamic space right now in tariffs. I think as the global leader in animal health, we have a very diverse

portfolio. We have a very strong supply chain team. You know, we have many levers we can take to try to mitigate some of those risks. We can obviously look at cost management. We can look at procurement. We can obviously look at inventory management, pricing. There's many levers that we can have, but it's a dynamic environment and it's ever-changing. So... And you do have a U.S. manufacturing footprint. Does that continue to expand, depending on what happens here with EOs around pharma production and some of these other trade dynamics?

Yeah, I mean, we were not surprised to see the executive order around pharma production given all the meetings we've been having in D.C. And I think what really sets Zoetis apart is today 60% of our global manufacturing is in the United States. Only 50% of our sales are. We manufacture 75% of what we sell in the United States in the United States. Only 50% of our sales are. We manufacture 75% of what we sell in the United States in the United States. And we've been investing in manufacturing in the US for a long time, about a billion dollars over the last five years.

We spent $100 million in 2023 in our Atlanta facility. So I think we're actually what the administration is looking for, a healthcare pharmaceutical company in the United States with manufacturing here, investing here, 99% of our intellectual property sits here in the United States. So not just manufacturing, but R&D. So we've had a lot of people in DC listening,

whether it's the administration or Congress. I think we have really, really good facts on that. You've also had a hand in taking care of avian flu and arguably bringing egg prices down too. The last time we're here on overtime, you announced the news that you had unveiled a vaccine for birds in the midst of bird flu. How's that going? Yeah, I mean, look, we live our purpose every day and as we talked about last time, making sure we have solutions for emerging infectious disease is a key part of how we live that purpose. We're a solutions provider, so we have diagnostics, we talked about the conditional license for avian influenza, we've submitted results for our high path avian influenza

vaccine for dairy cattle as well. So we'll stand ready if the administration and regulators decide they want to move forward with vaccines but right now we're really focused on biosecurity. Okay, Kristen Peck of Zoetis, great to have you here. Thanks so much, good to be here. John? We've got some news just crossing now on Marvell Technology. You can see the stock here is down almost 6% in overtime. The company says it is postponing its previously scheduled investor day due to, quote, the dynamic macroeconomic environment that investor day was meant to take place in June, but will now be pushed to sometime in 2026.

The company, though, says it will host a webinar in June on the future of custom silicon technology for AI infrastructure. All shares of drug development company, Sarepta, Sarepta falling off a cliff after reporting earnings. Those numbers are up next. And some other big movers that need to be on your radar. And later, Nvidia CEO, Johnson Huan,

on why he thinks AI is no longer just a data center play. Overtime, be right back. Welcome back to Overtime. Let's check on some more earnings movers. Sarepta is sinking down about almost 19% after the drug development company cut its full year revenue guidance, saying it faced headwinds in the quarter. Klaviyo moving the other way up about 4.5%, getting a boost after earnings and revenue topped analyst estimates.

All right, up next, Nvidia CEO Jensen Huang on transforming the chip maker into an AI infrastructure company. And Mother's Day is this weekend. And if you're still looking for a gift and your mom is a Fast Money fan, then get out your smartphone and scan the QR code on your screen

to sign up for the Fast Money Live event on June 5th at the NASDAQ. Welcome back to Overtime. I spoke with NVIDIA's CEO, Jensen Wong, earlier today exclusively and asked him if he was worried about the fierce competition in the AI sector. He said it's growing so fast it's become effectively an entirely new industry. The projects we are talking about, people are talking to us about, are $50 billion, $100 billion large 100 billion dollars large. 100 billion dollars.

Now put that in perspective, that's Boeing. Not the plane, the whole company. And so these projects are gigantic. AI is no longer a data center play. AI is now a factory play, industrial play. It's a new industry, and every country realized that this is now part of your social infrastructure. Every country needs to have it.

Yeah, I think we're at the point now, Morgan, where there are these questions about whether AI was a thing, whether it really had legs or had been overhyped. Now it seems clear to me, with all of the turbulence that we've seen in the macroeconomic environment, but the continued strength, continued buying of the hyperscalers, they wouldn't be investing that if they weren't getting results. We've heard them from Facebook, Meta, Onreals, etc. Now it seems to be more of a question of who's gonna have that wrecking ball style momentum across chips infrastructure software

to really gain scale as a company, as a stock in this era. Yeah, it's super interesting and comments from Nvidia matter so, so much in this market, especially coming out of an earning season where the hyperscalers continue to double down on their AI capex and their spending. And then of course, hearing from some of the winners,

early winners so far, on the software side too, whether it is ServiceNow with Bill McDermott in this hour with you from Vegas, or whether it's Alex Carpet Palantir, and yes, that name fell something like 12% in trading today despite the fact that earnings came in in line, and they raised their forecast for the year. But again, really talking about sort of this strong AI

adoption despite the macro uncertainty and maybe even faster adoption because of it right now. It all speaks to, I guess, this moment we're in with the next two days expected to be the busiest for earnings and of course a Fed meeting tomorrow with Fed officials also navigating all of this macro uncertainty. Yeah, McDermott and Karp both telling us that they're getting more efficient cost-effective use out of AI versus the spending that some others are having to put in. We'll see how that plays out for them on the bottom line

continues to. All right, well, John, safe travels back. In the meantime, it was another down day for the major averages, but that's going to do it for us here at Overtime. Fast Money begins right now.