Buying Opportunity In AI Pullback?... And Oil’s Next Move 10/19/26

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Melissa Lee (1:02)

Live from the Nasdaq Market site in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. A Coreweave conundrum, the Sauconene upgrade, but shares didn't seem to notice what the action today says about the state of the market and the future of neoclouds. An oil price is back in rally mode, Brent hitting new five-month highs in WTI above $103 a barrel. Is there more pain at the pump to come? RBC's Halima Cross will join us for a look at all the action in the oil patch. Plus, bank stocks can't catch a break. More C-suite changes at Netflix and Amazon jumps on a big bullish call from Wall Street. What's going to drive the gains in the name and just how much higher could it go from here? I'm Melissa Lee. Come be a lot from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Dan Nathan, Guy Adami and Julie Beal. We start off with that rosy Coreweave forecast by Goldman Sachs today.

Analysts there are upgrading the beaten down Neo Cloud to a buy, arguing the market may be too pessimistic about the company's growth and the cost of financing it. Coreweave stocks seemingly missed that message though. Shares down half a percent today have lost nearly a quarter of their value over the past week, and that's not the only potential concern for the data center space. Microsoft pulling out of a deal to anchor NScale's flagship UK facility, which is already grappling with delays tied to power constraints. It's the latest setback as NScale targets a $30 billion IPO valuation. All this on the heels of a Gartner report out last week, warning of a dramatic consolidation of new cloud companies in the coming years. The firm's chief forecaster joined CNBC earlier today. Here's what he said about all the players vying for a piece of the AI pie.

SPEAKER_4 (2:35)

Pretty much every market the Gartner is tracking in our AI race is likely to collapse down to a duopoly. Two providers getting most of the revenue from that particular market and the regular and everyone else in the market fighting for a niche position and living with a lower market share.

Melissa Lee (2:52)

Specifically, the reports at 80 percent would cease operation. So are these AI players really out of the woods? Dan, I'll go to you first.

Dan Nathan (3:01)

Yeah. Well, they might be in the near term, right? I just think from a stock perspective, it's got a little kind of compressed here. And obviously, this is not about the equity. This is about what's going on in the credit markets, right? And so that is the one thing that we have no idea how that's going to shake out. I do think it's worth noting that throwing some kind of whatever you want to call on the fire is probably not particularly helpful right here, because the buyers of this compute are very well capitalized, right? And a lot of those folks are actually building out these cloud businesses that are competitive to the Neo cloud businesses. That's where the name comes from, right? But the customer concentration has always been an issue. And one of the bottlenecks is like access to this compute. And if you're Microsoft, would you just mention the thing with NScale? We have no reason, we don't know why they backed out of that one way or another. But supposedly, that's going to get gobbled up by Anthropic. And so when you just think about all the ways in which the bottlenecks exist to get this compute, and you have a handful of companies doling out all of the contracts, that's Anthropic, and that's Coreweave, but obviously Microsoft and Meta and the other hyperclinics or hyperscalers, at some point, the demand is not going to be able to materialize because you're not going to have access to the energy to build out. I know this sounds really complicated, but that's the thing. It's this circular sort of thing. And so I guess the Goldman piece is basically saying that if you have hyperscalers pullback and you don't have the enterprise demand come from companies, then you will have a problem. That's when you get to the Gartner sort of situation. So I just think in the near term, there is a whole heck of a lot of pessimism, but at some point, I think people are going to have to take a breath and just say, okay, this was the panic that a lot of folks have been waiting for, but now we can move on because we're going to get these capex numbers in the next few weeks from the ones that are actually putting these businesses, neoclouds in business to begin with.