Closing Bell - Closing Bell Overtime: Stocks Seesaw, Nike earnings & Affirm’s CEO 3/20/25

Episode Date: March 20, 2025

Stocks on a rollercoaster ride, giving back big early session gains as investors remain cautious about the economy. Nike shares higher in after hours trading after beating wall street’s earnings estimates. Oppenheimer’s Brian Nagel discusses whether Nike’s turnaround is finally in full force. Fedex shares however under pressure after missing profit expectations and lowering its full year forecast. Evercore ISI’s Jonathan Chappell weighs in on whether now is the time to buy the stock. And Affirm CEO Max Levchin reacts to rival Klarna taking over its buy now, pay later partnership with Walmart and if he is starting to worry about the state of consumer spending.

That ballot marks the end of regulation 100 black men of New York bringing the closing belt in New York Stock Exchange Marwin Holdings doing the honors at the Nasdaq and it was a choppy session of trading following Wednesday's Post-fed rally the Dow and S&P though still on pace for games this week That's a scorecard on Wall Street, but winners stay late. Welcome to closing belt over time. I'm John Ford back with Morgan Brennan Yes, it's good to be back. It's one of the most important afternoons of March earnings season. We've got the results coming this hour from Dow component Nike along with FedEx, Micron and Lennar. We're going to bring you all the numbers and expert analysis as soon as those reports cross.

Also this hour, an exclusive interview with Affirmed CEO Max Levchin after a wild week of ups and downs for his company stock following news of Walmart's's decision to partner with a firm rival and upcoming IPO, Klarna. Plus, we will talk about why a reported executive shakeup at Apple is such a big deal, and what it could mean for shareholders. Well, the earnings are already rolling in. Micron is out. We are going through it. But before we get to those earnings, let's talk market action with Vital Knowledge founder Adam Chrisafulli and Wealth Enhancement Group Senior Vice President Nicole

Webb. Welcome guys. Nicole, the Fed's tone was a relief to markets, but it seems that gets you only so far. How confident are you that this economy is decelerating but not shifting into reverse? Yeah, we don't see data that supports that we are headed in this trajectory of recession. What we are communicating to clients right now, John, is that there is a cap on these rallies until we have clarity on the outcomes of all of this vacillating policy.

And while yesterday was really supportive from Powell, we don't think it all stops after April 2nd. And so the setup we're communicating to our clients is that this year has a lot of volatility because it extends beyond tariffs. It's fiscal, it's monetary, it's deregulation and immigration. And so there's gonna be fits and stops to this.

Adam, what do you think investors should do with their portfolios if they're concerned about stagflation? Yeah, no, so I agree with a lot of what Nicole said. investors should do with their portfolios if they're concerned about stack inflation uh... you know so i agree with a lot of what the call said i think that the fed yesterday was kind of about as good as you can get right now but really they are not the central part of the macro narrative that's very much what's happening washington on a variety of friends but in particular with tariffs so

you know we are in at the least environment of cooling growth uh... you know i don't think we need to start talking about recessions just yet But we're definitely in a slowdown with a with a uncertain inflation backdrop prices are a little bit stickier Than it had seen the case a couple months ago You know in which case I think we're gonna be Looking for safety in this type of an environment until we get a little bit more certainty on what's happening with policy Safety it is.

Well, my crown earnings, as I mentioned, are out. Christina Parts-Nevelis has the numbers. Christina. Well, it is a beat on the top and bottom line, but I'd like to preface. Last quarter, the company did slash their guidance. So this beat is on lower guidance. What we're seeing is $1.56 adjusted for earnings per share on revenues of $805 billion. So that is a beat. For the non-GAAP gross margins for the quarter, again, this would be Q2, it's 37.9, which

is a little bit less than the 38.5 the street anticipated. But they are saying that they expect record quarterly revenue in fiscal Q3. So they're in Q2 now, fiscal Q3, they expect it to be a record. And that's why you're also seeing their guide, Q3 EPS guide of $1.57 higher than the street on revenues of 8.8 as well. So they're definitely calling for maybe possibly a bottom with revenue increasing into Q3. Back to you guys. Shares are popping 5%, Morgan.

All right, Christina Parts and Evelest, thank you. And we've got FedEx results out as well. We're going through those numbers. We'll bring in the report here momentarily. Nicole, I do want to go back to you because we are getting a number of earnings reports this hour that all in their own ways offer a gauge into different parts of the economy that have mattered for the markets, whether it is FedEx as a global economic and trade barometer, and also a little bit of a window into the consumer, whether it's Lennar with home building, whether it is Micron on

the tech and AI trade side of things. What are you looking for in terms of how some of these reports, oh, and Nike, let's not forget Nike, how some of these reports set the stage as we do move here into 2025 and we start to think about how things like tariffs are going to be baked into guidance. Yeah, you know I actually think these four names today are a perfect illustration of where security selection can really matter when you pin it against the backdrop of both policy but then thematically how people are behaving in a period of such heightened uncertainty. So whether we think about Nike from a technical perspective

or we think about it as a brand and how that affects the consumer, Lennar sitting at the convergence of so many policy disruptions to come in the year ahead, FedEx thinking about both the global footprint but then also on the e-commerce and delivery spectrum also likely to hear about manufacturing impacts and then Micron which is a continued story where memory and the build out of memory and the infrastructure there is an interesting parallel to how we continue to scale and then the economy built on that scale in the future. Okay well speaking of FedEx earnings are out. Frank Holland has the numbers for us.

It looks like FedEx is under some pressure here, Frank. Yeah Morgan, absolutely. FedEx shares moving lower. They beat on revenue, but they missed on EPS. The estimate was for 454 a share. It came in at about 451. Just looking through the numbers right now, CEO Rajshan Ramanian really highlighted

what he called a challenging operating environment, including a compressed peak season and some severe weather events. Looking through the numbers right now, we're seeing some pressure on the freight division. The company is saying that freight actually saw a slowdown, fewer shipments, also fewer weight on shipments. However, they said some of their cost-cutting efforts actually helped the express division. That really drives the majority of revenue. So again, being on the top line,

a miss on the bottom line. The also lowered its full year EPS guidance Previously the guidance was $19 to $20 a share. It was actually lowered the quarter before they've lowered it even more now The full year revenue guidance is $18 to 1860 a share important to note There's only one quarter left but reducing their guidance for that last quarter back over to you. All right, Frank Collins Thank you Adam want to get your reaction to this because shares of FedEx are down about 3.5, 4% right now. Coming into this print, a lot of folks expected that FedEx could lower its guidance,

but how much do we read through to the macro here, given the fact that some of the, maybe not the hard data, but some of the soft data, particularly in the US, has been deteriorating? Yeah, no, obviously FedEx is a very macro company. They have their finger on the pulse of the economy, not just in the US, but globally. And so the fact that they're taking down guidance, I think, just speaks to the very uncertain environment that we're in right now.

We heard something similar from Accenture this morning, just in the last several weeks. All of the policy changes in market volatility has caused consumers and companies to hesitate in their activity. Now, if this continues for an extended period, it's going to start to bleed into the hard data. But I think for now there's just a ton of uncertainty and out of an abundance of caution, you're seeing companies react and provide more prudent outlook on kind of what they're going to be able to put up financially. Okay, Adam Chrisafouli and Nicole Webb, thank you both for kicking off the hour with us as the major averages did finish the day fractionally lower

the Dow just below the flat line. Now let's turn to senior markets compensator Mike Santoli for more on the markets, Mike. Yeah, Morgan, so, you know, a tough start to the year for the S&P 500 down almost 4% less than a quarter of the way through the year, but all you needed to do to actually protect capital so far is not own the seven biggest

Stocks of the most successful companies in the world. Here's the X mag That's the S&P 500 excluding the magnificent seven largest stocks and it's you see it's actually up almost 1% year-to-date That's the eco weighted S&P So this is the broadening out of the market that so many people were hoping for and predicting it just happens in a very bumpy way. I like to point that out when you don't have the very largest stocks outperforming or keeping pace with everything else. It makes it very difficult for the index to actually not just advance but also to behave in a smooth manner. Let's take a look here too at one of the bellwether groups that I do think is something closer to a make or break. It's the banks. They've outperformed, you see this over a two year time, outperformed the S&P 500 pretty handily, but you see those huge burst tire.

We've gave most of that post-election bounce back, but we did bounce pretty much where we had to there and preserve the outperformance on a two year span. So it looks okay for now. It's obviously not showing a ton of exuberance about deal flow or necessarily accelerating economy but it's one of those things that's not

at least sending an incremental negative message Morgan I wonder how closely you're watching these rebalancing and the op ex that we're getting tomorrow and some of these other sort of broader dynamics that are afoot in the market

right now. Yeah it's probably going to animate a little bit of the quarter end action. I saw some estimates about, for example, pension fund rebalancing. There's a slight bid toward equities. I do know there's some index reshufflings too. I think most of it's going to net out. Actually, one of the more mechanical things I've been looking at is this area around 5700 in the S&P. We fell short of that today and has kind of capped the rallies all week does seem like a significant one if we keep to sort of toggle above that then

some of the dealer you know hedging mechanics start to become a little more favorable but so you know it's always noisy I think that stuff is one of those if everything else is equal that's what drives the action but if there are fundamental and macro influences those are going to hold sway. Okay Mike Santoli we'll see a little bit later this hour. We have much more ahead on all of today's after hours action including results from Nike and Lennar. And up next an analyst weighs in on Microns earnings as that stock climbs right now in overtime. And later a firm CEO Max Levkin, is gonna join us exclusively

following a roller coaster week of trading for his company's stock after Walmart partnered with rival Klarna for a buy now pay later service. Overtime's back in two. Welcome back to Overtime Planet Labs reporting quarterly results. The builder and operator of the largest Earth observation fleet

of imaging satellites posting a loss of eight cents adjusted per share. Now it's unclear if that's comparable to the two cent loss that analysts were expecting so we're not gonna compare it right now. Fourth quarter adjusted EBITDA though that was a profit of 2.4 million dollars. That's the first time you've seen that metric turn positive for the company. Planet Labs revenue in line at 62 million dollars. The backlog surging to 498.5 million this was a 115 percent increase quarter over quarter after it inked a number of big contracts including one with Japan

Planet Labs co-founder chair and CEO Will Marshall says that they see a clear path to at least double our revenue growth rate in fiscal 2027 compared to fiscal 2026 supported by the significant increase in that backlog during Q4 so the revenue outlook though that's a little light they see Q1 in fiscal 2027 compared to fiscal 2026, supported by the significant increase in that backlog during Q4. So the revenue outlook though, that's a little light. They see Q1 revenue of 61 to $63 million. That's versus estimates of 65 million. Fiscal 2026 revenue for the full year,

260 to 280 million versus estimates of 275 million. You can see shares of Planet Labs are down about sixteen percent right now we will have Will Marshall the CEO of this space company right here on overtime tomorrow to break down all the details of these results though. Alright well Micron is heading higher about six percent at the moment after reporting Q2 results giving solid guidance for the third quarter with us now is Mehdi Hussaini, senior analyst at Susquehanna. He's got a buy rating on the stock, $120 or $150 price target. You'll tell us, what's the most important thing here?

It seems like the gross margins were a little on the light side, but the revenue picture sure looks encouraging now. Thank you. It's actually priced at $150. Yes, Micron has been communicating a lower gross margin due to the NAND business, which is much smaller than DRAM. But I think if you look at the guide, it's well better than expected.

It's primarily driven by AI and Micron being able to gain market share for the DRAM products that are shipping to NVIDIA for the AI application. How much tariff risk do they face? able to gain market share for the DRAM products that are shipping to NVIDIA for the AI application. How much tariff risk do they face because DRAM is used across all kinds of different electronics coming from everywhere? Right. The tariff risk is for everyone in the electronic supply chain.

It's something that I don't think anyone would be able to quantify. But the fact is that Micron is going from a single digit market share in the kind of DRAM that is used for AI to upward of 20% plus. That's six to eight billion of incremental revenue that is coming in. And yes, these DRAM products are made outside of US, but the key customer is in US,

NVIDIA, and even if there are incremental cost increase associated with tariffs, these AI products have better than corporate average gross margin. I think the incremental cost increase due to tariffs is more than offset by the increased volume that they're shipping to Nvidia. Interesting. I just want to know,

we have Nike results that we're going through those. We'll bring them to you in just a moment here. In the meantime, focusing on Micron, Mehdi, what matters more here? The demand they're seeing on the data center side, which is tied to AI or seeing an inflection in demand for PCs and smartphones? Right.

I think AI, data center, everything's understood. I think what is not dialed into the share price is the fact that Micron is gaining market share against Samsung. I don't think Samsung is gonna be able to supply to Nvidia, and this is something that investors have been struggling with.

And the fact that Samsung is going to lose market share is something that is not well understood, which is catalyzing six to eight billion of incremental revenue into Micron, primarily due to share gain. That is not dialed into the stock. Do you buy Micron here? Yes.

Okay, great. Mehdi Hosseini, thanks for joining us. Thank you. Up next, we'll break down Nike's quarter and what it says about the health of retail at large and the state of the consumer. And a rare shakeup at Apple. The company reportedly looking to change up internal teams after delays to its artificial intelligence rollout in Siri.

We will discuss what the move could mean for shareholders when overtime comes right back. Welcome back. Nike earnings are out and Sarah Eisen has the numbers for us. Hi, Sarah. Hi, Morgan. Well, there were some low expectations here that Nike seems to be surpassing. Revenues better than expected. Eleven point three billion dollars. And that marks a decline of about nine percent. But the street was looking for more like down 11 percent.

So that was better. A big earnings beat, 54 cents per share was much better than the estimate at 29 cents per share. Though margins were kind of soft to inline, 41.5 to 41.8%, which was the expected. Digging through some of the key markets here, North America, the home market, important, and also a beat at $4.8 billion. But China was a little bit soft,

down 15% in China, in the greater China during the quarter. That is a disappointment. And I can tell you after speaking to Matt Friend, the CFO, the China market is being reset. They are cleaning up inventory and making shelf space for some of the new styles. That's pretty much the story with Nike overall this quarter and where they are right now.

The win now strategy, that's what the new CEO, Elliot Hill, is talking about. In my conversation with Friend, we are expecting guidance to come during the call, but it's only gonna be fourth quarter guidance, not the full year guidance. And it will incorporate the new tariffs, the 20% increase of tariffs on Chinese goods. Remember they make a lot of the sneakers and products in China. One sign I just want to share with you from the conversation, it's anecdotal but I think it's important here because the numbers matter less in such a sort of dramatic turnaround and that is the company is starting to see orders from wholesalers for performance categories and new sportswear

almost fully offset the weaker sneaker declines in terms of these new orders. That is what they see as a leading indicator and some proof that they're seeing some early results, Morgan and John, when it comes to new products, some brand heat, some buzz. They had their first Super Bowl ad in decades and the Pegg Premium, for instance, has sold out.

Starting to see some early results, and that might matter more to the straight this quarter than usual. Some great color. Sarah Eisen, thank you. Thank you. Shares of Nike up 4% right now. Well, joining us now with a reaction to those results

is Oppenheimer's senior equity analyst, Brian Nagel. Brian, what a difference 24 hours makes. It's great to have you back. We were just talking about this yesterday. So I'm gonna start right there. Your takeaway from these results we just got. Yeah, look, nice seeing you again. Look, I think Sarah said it very well.

That the real key here is this was a low expectation quarter. So these numbers, while they're slightly better than maybe the street forecasts, but they're not reflective of a true healthy Nike. But again they're against a low expectation backdrop and really right now we're seeing the stock here goes pop a bit

after market I think the key is you know things did not get worse. And maybe we're starting to see some early signs of progress. In this very significant turnaround that's happening at Nike. Yeah the commentary about new orders

offsetting declines. Got got my attention for sure. But the weakness that they consider to see in China and this idea of a quote-unquote reset, how important is that right now, especially in the context of trade dynamics and tariffs, which sound like they're going to start to get factored into guidance here? Well, look, Nike in total, the whole company is a work in progress at this point, right? I mean, they've been resetting merchandising everywhere, including the United States.

So when I heard, you know, when Sarah said that for China, I mean, on the positive side, it tells me, look, they're addressing issues in China as well. Now, China is very, very difficult to assess, you know,

especially for an analyst sitting here in the United States. What we've heard lately is, you know, there's some, maybe there's some pickup in China consumer demand, there's some, maybe there's some pickup in China consumer demand. There's some stimulus effort

on part of the government there. That's all positive. The negative, and again, I think what you're alluding to, we just don't know. You know, we have this trade war brewing, and that could very well at some juncture impact demand for US goods in foreign countries like China. I don't think we've seen that yet,

but that's definitely a risk out there. Brian, it seems to me like if you're an investor, the important parts here are, are those wholesaler relationships mendable in the nearer term, and is Nike's innovation factory gonna come back perhaps sooner than some might have expected?

Are those the kinds of things that we really need to listen for to see if Nike management to start to lay out the benchmarks to measure their improvement and get that trust and valuation back? No, John, that's exactly right. I mean, I'm gonna say the same thing you said. I mean, the absolute two most important factors here are one, product innovation. Nike's got to get back on its game of developing high quality products that consumers want. The second is, like you're saying, repair these wholesale relationships.

Nike made a big mistake, as have other chains, going too far into digital. Again, I met recently with the company's new CEO, LA Hill. He's all about this. These were his two big messages. Bring product innovation back, reestablish relationships with key wholesale partners. I was on Academy Sports, a smaller sporting exchange here in the United States. I was on their conference call earlier today. They're there talking. What they're really excited about in their business is they're getting the Jordan brand and they're getting more Nike a Nike product here in Next civil quarter. So, you know, there's a retailer big retailer in the United States very excited about what they're seeing from Nike

So but I think that's exactly what has to happen here. All right, see if Hill can continue to climb Brian Nagle. Thank you Thank you. Well, I got breaking news from the White House. Megan Casella has the details Megan Hey, John, that's right. So we are just watching this event, just getting underway in the last few minutes where President Trump is gearing up any moment now to sign an executive order meant to dismantle the education department and doing so fulfilling a pledge he's been making

for years to eliminate that agency. Now this is not something that the president has the power to do without Congress. There's already been some legal activity questioning his executive authority here. But what the White House can and will be trying to do is to sort of render the agency ineffective, potentially reducing the funding that's available to it. They've already cut the workforce in half. They say more job cuts will be coming and they'll be eliminating any programs specifically focused on topics like gender equality as well as diversity, equity

and inclusion. But the White House has sort of acknowledged today some of the limits to their authority saying they're not going quite as far. Some of the critical functions of the agency will remain intact. That includes the public student loan program as well as Title I funding to low income schools and funding for students with disabilities. So sort of acknowledging some of those limits here even as they have this event today to sort of make a big splash and show what they're doing. And just John, one final point. I also want to flag that the president just in the

last hour signed a handful of executive orders that we are just learning about now. It was not open to the press when he signed these orders, but reportedly according to the wires, one invoked the Defense Production Act to boost the U.S.'s ability to produce some critical minerals, including coal. Another was about consolidating government procurement for both goods and services into the General Services Administration. So two to watch there that we'll be looking to get more details on. For now, we know the President is holding this event that you can see there to dismantle the Education Department at least as much as he can. Guys? Coal. Interesting. You get to hear more about that.

Megan, thank you. Cole's important to advanced manufacturing. A lot of people don't realize it. Oh, well, of course it is. It's also sometimes dirty. Time for a CNBC News update with Bertha Coons. Bertha? John, a US district judge has just

ruled that the Trump administration's response to a request for more details on those deportations of hundreds of Venezuelan migrants was, quote, woefully insufficient. In an order just now, Judge James Boesberg gave officials until March 25th to explain why the administration's failure to return the Venezuelans back to the U.S. did not violate his order. A senior Israeli delegation is set to visit the White House next week to hold high-level consultations about Iran.

Axios reporting the officials are expected to discuss the Iranian nuclear program and possible negotiations between the U.S. and Iran. This will be the first time the most senior group for U.S. and Israel on Iran's nuclear program has met since President Trump's return to office. And less than 24 hours before a Trump administration deadline to shut down New York City's congestion pricing, Transportation Secretary Sean Duffy extended the deadline by 30 days.

The matter also remains in court after the MTA here in New York filed a lawsuit arguing that the federal government does not have the legal power to stop that program. Back over to you, John. Bertha, thanks. Up next, new signals on the home front as we await earnings from Lennar. We'll take a look at some housing data that surprised the street today and what it says about the broader economy. And do not miss our exclusive interview with Affirm CEO Max Levchin with his read on consumer spending and increased competition from upcoming IPO Klarna. We still have a lot left to this show.

Stay with us. We'll be right back. Welcome back to overtime Mike Santoli returns for a broader look at the housing sector as we await Lenar earnings. Mike yeah John better than expected existing home sales this morning. It part of that report includes the inventory,

so the number of homes now for sale on the market pretty big jump in year over year terms in terms of how many homes are in inventory. That's the blue line here so you see it's better than 10% year over year gains in terms of how many homes are in inventory. That's the blue line here. So you see it's better than 10% year over year gains. That's good because you needed to have more supply on the market, soften up asking prices, maybe get affordability going, get volumes moving again.

Here though you see that the number of months worth of inventory at the current sales rate is still around four. You want that to get up toward five to look like something a little more normal. By the way, that spike was housing bubble stuff. That's what you don't necessarily want to see, is when nobody can sell a home. Now take a look at the valuation of home builder stocks. They've given up about a year and a half's worth

of outperformance over the market in several months. And now they're kind of back toward their typical, let's say decade long price to book value. So certainly no longer more expensive on this measure, but not yet a bargain, and you have to have a pretty good call on the housing market going forward to really feel like they're compelling here, John.

Mike, unlike a lot of other markets in housing, the link between increased supply and lower pricing can take quite a while to play out, though, can't it? Well, yes, because you have the interplay with what interest rates are doing so you have six and three-quarter percent 30-year fixed mortgages and that's obviously putting a lot more people are gonna buy as much house as they can afford on a monthly payment we know that and so that equilibrium is is definitely not yet very favorable for buyers yet. All right Mike Santoli thank you. Up next a firm

CEO Max Levchin joins us exclusively on rival Klarna's wave of new buy now pay later partnerships and if he is worried about the outlook for consumer spending. And later, why Apple is reportedly making a major shakeup at Siri and what it says about the company's struggling AI strategy. We'll be right back. Welcome back to overtime.

Shares of Aff firm have fallen since Monday after reports of Klarna replacing a firm as Walmart's exclusive provider of buy now pay later loans. Meanwhile, a firm's foray into the UK is growing by expanding their partnership with FinTech platform Aiden. Joining us now is a firm founder and CEO, Max Levchin. Max, good to see you.

So fundamentally, what's the difference between you guys and Klarna? Well, the best way of comparing the two is they are a replacement for debit cards, and we are a replacement for credit cards. The businesses are quite different. If you look at their public filings, you can see that our margins are roughly four times theirs. And it's a pretty good sort of a comparison to debit cards versus

credit cards. One is a short-term cash-like experience. The other one, what we replace, is a pay-over-time considered purchase. That's what we do. That's what they do. And they supplement their business with a lot of marketing revenue and advertising and we stick to doing the hard thing of underwriting transactions and helping people buy couches and tickets for travel. So make the case for me on why that distinction is important for the business models longer term. I mean I buy a lot more smaller things than I do big things but the big things are where credit matters a lot

more. So where's your advantage longer term being able to gauge credit worthiness on the big things and access to capital? That's exactly right. So you nailed it in that last sentence. We've been doing credit underwriting very seriously with a lot of very smart people for well north of 12 years. We have an enormous data asset going back

through ups and downs of the economy, including the very strange COVID time. We know how to underwrite folks from the super prime outfitting your COVID era gym in your spare bedroom all the way down to buying a little bit more that is comfortable for a mid-sized party on Easter Sunday. And so that's where credit matters. That's where you have to be very smart.

And we did it right. We did it without crutches. We don't charge late fees. We don't compound interest. So it's an honest product that helps consumers get the things they want while taking risk on them over three months, six months, 12 months, all the way out to 48 months sometimes. So that's a difficult thing to do.

That's why our margins are significantly wider. It's a business that we really think is unique and we quite enjoy being very good at it. I think there are other businesses like doing many small transactions and advertising to the consumers that do that. So in light of that, Max, what does it mean to see Klarna stepping into this partnership with Walmart? What does it mean for a firm? Financially, not that much.

Obviously, we value the Walmart relationship greatly. We think they have been a great partner to us, and we continue to help them until we are told we're no longer necessary. But they do amount to a very modest size of told we're no longer necessary, but they do amount to a very modest size of the profit pool that we generate. And I think as far as our shareholders are concerned, our financial targets are well within our reach.

I think we shall see how the next chapter of the story plays out. We think we're very good at lending money, especially for things that are like TVs and bicycles, et cetera, and our competitors are not. So in light of that next chapter, what are your expectations, especially as you do start to strike out with international partnerships in a bigger way? Exactly right.

I think what we're doing competitively is we're bringing our game to the stronghold markets of our competitors. In the UK, we are hearing great demand from merchants that continuously tell us, we love that you guys are not focused on taking a number dividing it by four. That's easy. That's what everybody does. Help us make things more affordable over six months, 12 months, 36 months. And so we are bringing that product to market so far, so good, with lots of demand. Obviously, we've teased big partnerships launching there, so hang on. There'll be some cool announcements.

Okay. Well, Max, you sound a lot more confident than you did a couple years ago when you and I talked and you said you had stopped drinking wine with dinner while looking over credit worthiness reports. But the consumer is stretched again, especially that consumer that needs a buy now pay later service to pay for big ticket items. So are you going dry again? For long past January, I enjoy adult beverages on occasion. I think the exact quote you're referring to I said on Sunday night, I don't drink because

Monday morning is credit review. In the numbers today, this is not a Monday, but I look at these things more frequently than once a week, US consumer is strong. We are not seeing any kind of a drift against prediction on repayment. Also, we're not seeing a slowdown in demand. Tomorrow is tomorrow. I can't predict that. But right now, I think it's more of a vibe session than a real preview to a recession. Consumers are obviously not lying when they're saying they're stressed out, they have confidence drop, but today they're shopping and they're paying their bills back, which does mean on Sunday nights, I'll be dry prepping for the Monday morning credit review because I don't want to miss the moment where something changes

But right now US consumers strong. It's interesting to hear you say that we heard very similar commentary from Bank of America CEO Brian Moynihan on CNBC yesterday So there's echoes of that and what you're saying right now. What I'm curious is how much of that is reflection of the macro and sort of the broader state of health of the consumer versus the fact that you're taking more market share?

It's really hard to piece those two apart. I think if you're looking at USC commerce growing at sort of a high-ish single digits, if you look at growth of credit card transactions growing at a very low double digits, and then you compare that to us, I might add growing revenue at roughly twice the rate of our Swedish competitors.

It's hard to tell whether we're just taking share from existing payment methods or actually somehow able to uniquely find people who are more prone to shopping and paying their bills than than other payment types In the world of taking share, you know victories a victory. So I'm pretty happy with our numbers Okay, Max Levchin great to have you on the show. Thanks for joining us. Thank you the CEO of a firm We have a news alert on US Steel those shares are lower here in overtime after the steel maker issued first quarter guidance the company expects a Q1 adjusted loss per share of between 53 cents and 49 cents and

adjusted EBITDA of about $125 million. Now the company also says it continues to assess the benefit it expects from President Trump's recent tariff policy announcements. You can see those shares are down 2% right now. And John, we've seen a number of U number of US steelmakers, American steelmakers adjust their guidance here in recent days. Yeah, alright. Well, Apple's recent troubles with AI are reportedly prompting a rare shakeup at the

company. Got details straight ahead. And Tesla taking investors on a wild ride today. The EV maker recalling more than 46,000 cyber trucks over a piece of decorative exterior trim that could fall off and increase the risk of a crash. Welcome back to overtime. The fallout from Apple's AI delays perhaps widening today as the company reportedly prepares

to shift its executive ranks. Last week we talked to noted Apple blogger John Gruber about the company's delayed launch of Apple intelligence in Syria. This is a case with the Apple Intelligence features that were announced at WWDC, their developer conference last June, where they over-promised and now had to admit last week that they're under-delivering this first year for Apple Intelligence.

Steve Kovac joins us now with more on this potential shakeup, Steve Rare. Yeah, very rare here. And let me tell you, this is coming from a Bloomberg report today that there's an executive reorganization happening here after the failure to ship that AI upgrade to Siri. So let me tell you what the changes are going on here. Apple AI boss, that's John Gianandrea, we're showing him here, is losing the Siri team. And now another executive executive Mike Rockwell

Who's currently in charge of the Apple vision Pro team? He's gonna be running Siri instead and by the way This is something of a coup for another top Apple executive that would be software boss Craig Federighi Rockwell reports to him now So overall it's gonna be on Craig Federighi to get this new Siri update out there. And lots of folks are asking today, John, why is Gianandrea only losing the Siri team and not his job? Tim Cook in the past has fired leaders, including Scott Forstall, after that Apple Maps debacle back in 2012.

Another interesting angle here with Rockwell running Siri. Yes, the Vision Pro, it did ship on time and works exactly as advertised, but that product isn't exactly setting the world on fire. And getting Siri AI right is far more important to Apple's immediate future than getting the Vision Pro right. Now, no word from Apple on how things

are going to turn around, no comment today. And all they've really been saying is they need more time to get AI Siri working properly. Already some chatter that won't happen until next year at the very earliest and for those investors out there who believe in AI iPhone super cycle is going to happen you're going to have to wait. What's remarkable to me about this when I think about it is that the AI function wasn't reporting up to Craig Federighi all along. Right. I mean, AI is software.

Everything that Apple does outside of the phone itself is software. So they're announcing the stuff that's relying on AI that's reporting to Tim Cook separately. Maybe that was a mistake. It could have been an organizational mismanagement going on there. But putting it all under Craig Federighi ultimately

does make the most sense. He's the one out there every year at WWDC, that's their big software event, right? He's the one out there showing off the new iOS features. John-Gene Andre is not very forward-facing executive, they barely put him out there. And he's been, he was a big hire, actually. He came over from Google to a lot of fanfare,

super well-respected. I profiled him last year ahead of WWDC, and everyone I talked to loved this guy, and they said he is a great AI executive, he's a great technologist, he really cares, he has a huge and amazing track record and resume. But this was a rare-ness for Apple in a very big way, and they have to really restore confidence now

that whatever they show us next on the artificial intelligence front, it's real, they can demo it, they can show it's gonna work, and better yet, it's actually gonna ship. Do you think this is actually affecting, or do analysts actually think this is affecting consumers' purchases of these iPhones right now?

They do, and in fact, we saw last week after this announcement came out, Eric Woodring and Morgan Stanley, for example, cut their estimates for how many iPhones are gonna ship based on this, and it's especially prominent in China. No Apple struggling there. We know iPhone sales are down, not just in China, but globally.

They were down year over year in that very important December quarter, the Christmas quarter. And the hope was that, OK, Apple intelligence, this new big AI Siri update was going to come out and spur those Chinese customers, spur people here to upgrade their phones so they could get that feature. Without that, we're seeing cuts to these order estimates down a couple of million because the Siri AI isn't happening. Now, doesn't mean it's never going to happen, but it seems like it's pushed out at least

until the iPhone 17. All right. Steve Kovach, thanks for joining us and breaking it down. Well, we are counting down to FedEx's earnings call. Up next, a top analyst tells us what he wants to hear from management. Let's get another look at FedEx while we wait for the earnings call to begin.

Shares are down about 5% right now here in overtime. Joining us now is Jonathan Chappelle from Evercore ISI. Jonathan, it's good to have you on. Want to get your initial thoughts on this print, which saw freight shipments much weaker than expected, but it looks like peak season, at least here in the U.S., was pretty solid. Yeah. Thank you, Morgan. So a bit of a complicated.

Let's just take the easy takeaway first on why the stock's down 5%. It was a slight miss relative to consensus on EPS, and the guy came down. The midpoint comes down by over $1, $1.20. So I think that's what the stock reaction is. I think most of the analysts were already closer to that, the consensus, our estimate below the low end of the prior range, so expecting a little bit of weakness into their fiscal fourth quarter. But we dig a little bit deeper into the numbers. It's a complicated quarter. US did pretty well. US revenue better than expected, shipments, yields even, international much weaker than

expected. I think that goes into a lot of some of the trade uncertainty and as they called out in their guide step down, the weaker industrial economy. The cost side, we haven't fully fleshed that out yet. You mentioned as we went into break, what do we want to hear from management on the call? We want to hear that they're still on the path to attaining their full year,

2.2 billion cost takeout target. They did reiterate that in the press release. We'll see what they did in the third quarter and how realistic that path is for 4Q. What matters more here, them being able to continue to pull that cost lever and achieve greater profitability or the macro picture, especially as trade headwinds seem to materialize here?

FedEx for the last two years has been a company-specific cost takeout story. So I still think that that matters more. That being said, they're clearly not immune to the macro. So it's really tough to kind of bake out how much of this miss and lower so to speak is the macro I feel like a lot of it has to do with that until we get a breakdown of the cost takeout in third quarter. But you know, again, it's not going to be immune. So we've seen the entire transport complex sell off pretty aggressively. In the

last two months of recession fears have kind of emerged and people have been concerned about global trade flows surrounding tariffs. So there will be an impact on FedEx stock associated with a weaker macro backdrop. But if they can execute on what they've laid out specifically relative to their peers, it should be a better performing stock. Jonathan, I see a headline here saying that FedEx's outlook cut assumes no additional tariffs, given that we've been getting headlines about additional tariffs for most of this year. How much downside risk exposure does that imply?

Yeah, that's correct, John. Nothing incremental, but still talking about the weakness that's really been endured in the industrial economy for the last two years or so. If we were to assume a real bear case scenario of global trade flows being impacted across most of the markets they're in, it's tough to say what the exact magnitude would be, but rest assured the low end wouldn't be what they just placed in today. So I think there's just more uncertainty than impact. We put out an update on the railroad industry today and we've spoken to all the management

teams in the last five days and they've all said the same, which is they've seen no tariff impact yet. It's really kind of the uncertainty in how they plan for the quarters going forward. So I really wouldn't expect FedEx to have seen it or to put it in this guide, especially assuming that this guide ends on May 31st. What'll be more interesting then is how we look at the next fiscal year if there is some escalation of the reciprocal tariffs globally. At what point is this one really cheap?

We're getting there. I mean, we're at a point right now where if you look at the split off of the LTL business, even with much lower multiples for the peer group, our most updated sum of the parts on this business is just under 280. With words indicating right now, that's almost over 25% upside on relatively depressed values

for the peer group. So I think we're really getting there, kind of rip the bandaid off here on the guidance, which again, I think most people kind of expected it's really gonna be the outlook going forward and their ability to execute on these cost cuts above and beyond fiscal 25. Jonathan Chappelle, thank you.

Thank you. And Morgan, whether it is Nvidia or it's FedEx, there are so many companies that have some headline exposure to what happens here with tariffs, you know, just how easy it is for them to sell their goods overseas and then to get, you to get goods or parts that are being produced overseas into product that they want to sell here in the U.S. Yes, and I expect to hear some commentary on that from the Nike call, which kicks off in this next hour as well. I just note, Newcore, latest steelmaker to offer guidance that's below expectations.

That stock is under pressure right now, too. But in general, a down day for the markets. We're still poised for for gains at least for the Dow and the S&P on the week right now. Yep. That doesn't press here at overtime.