Coreweave’s Impact On AI Trade… And Netflix Results On Deck 10/16/26

SPEAKER_1 (0:00)

At Edward Jones, we believe rich isn't about having life all figured out. It's opening yourself to all the possibilities. That's why your dedicated financial advisor provides long-term planning built around you, meeting you where you are, and helping you get closer to where you want to be. So no matter where you're starting from, you can move forward with confidence. The key to being rich is knowing what counts.

Let's find your rich, Edward Jones, member SIPC.

SPEAKER_2 (0:30)

If you're a small business, the right hire can be make or break. Indeed Sponsored Jobs gets you quality candidates when you need them most. Join the 3.3 million employers worldwide that use Indeed to connect with quality talent that fits their needs. Listeners of the show will get a $75 sponsored job credit to help get your job the premium status it deserves at indeed.com/podcast.

That's indeed.com/podcast.

Terms and conditions apply. Hiring now, then this is a job for Indeed Sponsored Jobs.

Melissa Lee (1:01)

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 tab tonight. The core of the problem, here's the Coreweave erasing all of yesterday's gains and closing near the lows of a very rough week. Does the drop signal more pain for the AI trade? In a streaming glitch, here's the Netflix dropping on C-suite change, but will earnings next week at the stock to stop buffering? Let's dive into the options pit to find out. Plus, an early read on foldable iPhone demand. Why is Walmart so much more expensive than Amazon? And Nike sprints to its best week in three months as the athletic giant finally got its mojo back and how much higher can shares run? I'm Melissa Lee. Coming to you live from Studio V at the NASDAQ. On the desk tonight, Tim Seymour, Courtney Garcia, Steve Grasso and Bano and Eisen. We start off with a gut check for markets. As the AI sell-off picks up steam, the NASDAQ leading declines in major averages today down over 2% for its worst day since July. Coreweave still at the heart of the tech-led decline, dropping another 12% today. Failing to build on yesterday's rebound, the NeoCloud has lost a quarter of its value since Monday, with investors questioning the impact of higher borrowing costs on highly leveraged data center plays. Other pockets of tech not immune to the selling. Software stocks also pressure with the IGV dropping nearly 5%.

And in semis, the SMH putting in a ninth straight down day, its longest losing streak going back 25 years. Meanwhile, signs of rotation continue to take root. The equal-weighted S&P fairing better than cap-weighted index, though it also closed in negative territory today. Defensive sectors mostly staying afloat. Utilities and consumer staples each higher by more than a percent. S&P healthcare sector managing to hit fresh intraday records, though it did close in the red. So what is the rotation telling us about the direction of the AI trade and, because of the direction of the AI trade, the broader markets? Courtney, how worried are you that this is going to be persistent, the AI decline?

Courtney Garcia (2:52)

Well, this is very similar to what we saw earlier in the year, right? Where you were saying value was way outperforming growth earlier in the year because people were very concerned about this CapEx story. And then you saw earnings came out in summertime and it justified a lot of this spending that's happening on AI. But now we're coming back to that. And I think people are questioning, is Coreweave, the canary in the coal mine here, is this going to continue to be an issue? Because if you're looking at bonds which are trading upwards of 15 percent yields, I mean, that's clearly showing that investors are concerned about them being able to justify this high of cost of capital. So they're going to really need to show that it's there. The demand is there. It's just how far out are the returns going to be for them. So I think the big next hurdle here is going to be when we see all of the big AI companies reporting earnings here in the next couple of weeks. But what I do like to see is this broadening happening, which means people are not just selling everything in the markets. It's not panic. They're saying, no, I want to go back to quality and we're going back to value. And that's where I think you want to continue to broaden out your portfolio.

Steve Grasso (3:47)

When you look at Coreweave, Coreweave has become the canary in the coal mine or the poster child. But it's not even a semi, right? It's not classified that it's debt ridden. So you have a company that has a huge amount of debt that's really shepherding the whole segment. When you look at the SMH, the 50 day and the 200 day, the 50 day is about 12 percent higher than the 200 day.