'Fast Money' traders talk the pullback in the tech sector

Brian Sullivan (Anchor) 00:00.150

what what what what is all this telling us talking

Brian Sullivan (Anchor) 00:04.670

to gaia die

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i understand well about

Brian Sullivan (Anchor) 00:06.630

it thanks for watching everybody matt money starts right

Brian Sullivan (Anchor) 00:09.150

now what is all this telling us about the AI trade one

Guy Adami (Director of Advisor Advocacy) 00:12.430

of the terms we've used is the sanctity of capec and

Guy Adami (Director of Advisor Advocacy) 00:16.230

i think for a long time people felt like the capec spend was somehow etched in stone

Guy Adami (Director of Advisor Advocacy) 00:21.790

as it came down from the mountaintop on one of the you know slabs of of fred flintstone like granite

Guy Adami (Director of Advisor Advocacy) 00:27.990

it's not etched in stone and i think we're learning that now and

Guy Adami (Director of Advisor Advocacy) 00:31.070

i think the whole most of the market in my opinion sort of built on this capex spend and if it's

Guy Adami (Director of Advisor Advocacy) 00:36.270

vulnerable and if you start questioning the financing around it then you have problems i'll say

Guy Adami (Director of Advisor Advocacy) 00:41.310

this nvidia to me is sort of ground zero one sixty seven was the low in september

Guy Adami (Director of Advisor Advocacy) 00:46.350

we closed around one seventy one today that's a bit of a line in the sand but you get

Guy Adami (Director of Advisor Advocacy) 00:50.590

through there and people are going to start talking about the reversals and moving averages being crossed so

Guy Adami (Director of Advisor Advocacy) 00:56.270

nvidia is the one you have to watch in this entire thing brian all right

Brian Sullivan (Anchor) 00:59.390

tim seymour nvidia down yeah listen again down two and a half three percent it's not some huge

Brian Sullivan (Anchor) 01:04.350

haircut i do worry that we don't we don't want to make too much of this but oracle

Brian Sullivan (Anchor) 01:09.110

is oracle its own thing or is it symbolic of something else

Tim Seymour (Founder and Chief Investment Officer) 01:12.710

blue owl may not love oracle but blue horseshoe does love anicott steel just to be

Brian Sullivan (Anchor) 01:17.430

clear really anyway

Tim Seymour (Founder and Chief Investment Officer) 01:18.910

so you know i

Brian Sullivan (Anchor) 01:20.270

yeah really you know it was great the the

Tim Seymour (Founder and Chief Investment Officer) 01:22.830

fast money wall street trailer by the way guy it's

Guy Adami (Director of Advisor Advocacy) 01:25.870

unbelievable

Tim Seymour (Founder and Chief Investment Officer) 01:26.630

it's a must watch you can find it out there on the i

Tim Seymour (Founder and Chief Investment Officer) 01:29.990

you know oracle

Brian Sullivan (Anchor) 01:30.950

to me holiday you may celebrate

Tim Seymour (Founder and Chief Investment Officer) 01:32.590

yes well oracle is being pushed well below the valuation it started here which is what's

Tim Seymour (Founder and Chief Investment Officer) 01:39.230

fascinating and and ultimately they could make a decision to not be as capex heavy to not necessarily chase the order flow from companies that may or may not be worth a half a trillion dollars or not so

Tim Seymour (Founder and Chief Investment Officer) 01:50.990

what i think is more interesting on a day like today this is mister glass half full is that the other four ninety three were flat

Tim Seymour (Founder and Chief Investment Officer) 01:57.830

effectively not that's not fair but the equal weighted S and P is effectively flat

Tim Seymour (Founder and Chief Investment Officer) 02:02.270

and those that benefit from AI may actually be having a a pretty good run here so

Tim Seymour (Founder and Chief Investment Officer) 02:08.350

the market is a bit over its skis i think in some of these trades and i think there's a lot of momentum that still could could come out here

Tim Seymour (Founder and Chief Investment Officer) 02:15.550

but if you're looking to own oracle you know and and unless they are going to spend like a drunken sailor i think this is a valuation that you're getting any of the AI optionality for free

Brian Sullivan (Anchor) 02:30.190

given their spending i just be careful you don't want to insult drunken say look

Tim Seymour (Founder and Chief Investment Officer) 02:33.990

i mean because this

Brian Sullivan (Anchor) 02:34.990

is all going to be debt spent sometimes

Tim Seymour (Founder and Chief Investment Officer) 02:36.870

they buy some good stuff get fueled spending

Brian Sullivan (Anchor) 02:40.830

and we're looking at a stock then nathan that arguably has had an unbelievable run but

Brian Sullivan (Anchor) 02:46.470

yet we showed the credit default swaps there's a tension being paid to oracle what do you make of

Dan Nathan (Principal) 02:51.470

i mean it really hasn't had an unbelievable run relative to the other names you associate with this trade i mean it kind of

Dan Nathan (Principal) 02:57.110

joined the party last year it was a distant four fourth place in in this cloud business and to your point

Dan Nathan (Principal) 03:03.070

earlier i mean they can spend however they want but they don't have the money to spend so they

Dan Nathan (Principal) 03:07.030

have to raise the debt that's why a blue owl is so important to this pulled out for them right and if

Dan Nathan (Principal) 03:11.910

you think about the hyperscalers you know they were already building these clouds and they were ready to build for you know this AI sort of trade and they

Dan Nathan (Principal) 03:19.070

had many of them their own models and if you're not your amazon you're investing in anthropic you're investing supposedly in open AI right now you're putting those models on

Dan Nathan (Principal) 03:26.350

your cloud service so you can sell that compute and folks you know their customers can use it you know the problem is brian you

Dan Nathan (Principal) 03:32.510

just said this you remember CDS right credit default well the last time we saw you

Dan Nathan (Principal) 03:38.070

know this is like OK first inning sort of stuff is going to go back to the financial crisis but the last time we're really focused on that

Dan Nathan (Principal) 03:44.030

you know you would have thought a lot of these arrangements a lot of these contracts between these financial institutions you would think that there was some sort of sanctity this guy likes to say about those sorts of deals they had with each other they were until

Dan Nathan (Principal) 03:55.750

they weren't right and so when you think about

Dan Nathan (Principal) 03:57.670

some of the stuff there can be some dominoes and the other thing is if

Dan Nathan (Principal) 04:00.830

the market is saying that oracle is not going to be able to fulfill these contracts you know from open AI and others well you would think neo clouds like core weave would be trading much better right