Meg terrell is here with a special report. One of the widely held stocks in america hitting all time highs. Microsoft surging on a big earnings beat. Last time it was at these levels was december 30th of 1999. Guy adami was just 15 years old. What does it mean for the rest of big tech earnings . Dan nathan, what do you say . I think this is pretty microsoft specific. We got guidance from microsoft for q4. We know they had a solid q3. Microsofts cpcbusiness was down, the other stuff is making up for it. They have two hats, they have the cloud business, which is private and public, and thats growing. The aws piece, azure, excuse me, grew 140 . Thats what they want to see. We were all just talking about it. You own the stock, this is one of the reasons you think its going to be a 100 billion market. These guys are well positioned behind amazon. Its hard to argue with the growth youre getting out of azure and office 365. These guys can now say weve transitioned the company from the dwindling pc business. It gives analysts the ability to forecast their business. These guys say they have an annual growth rate of 12 to 13 over the next four or five years, which is why they get a little bit of a premium. The success of management in turning this boat gives Satya Nadella and his team a premium that management trades at transparency. Thisc stock trades at a premiu. Stock sounds pretty good. Buy at the alltime high. Tradingwise, today, die buy it up 5 , probably not, i would probably shy away from that. That being said, i would look at it on a pullback. Everything these guys said is exactly what everybody in this market now wants. Theres very few stocks out there that have this type of growth, that have a dividend, that have a strong management team. You can probably count them on two hands. Microsoft is probably going to attract a lot of investment money. On pullbacks, you can be a buyer. I agree with everything brian said. I missed quite a bit here, i dont know that i want to jump in now. It is interesting to note, 60ish, traded 17 years ago. The p. E. At the time was 72, right . Now its i dont know 18 or so. A lot more attractive here, needless to say. He whats kind of interesting about microsoft, we want to extrapolate what this means for the rest of tech and what are the closest comparisons. I think of ibm, not because ibm is executing like microsoft, but because its a company that really had a legacy business that it needed to get away from. This last quarter, we all sat around a couple of days ago and said, these numbers are not that bad. Do you like ibm because you see the same sort of current or does it make ibm look worse . It says ibm may start to see traction in their turnaround. Heres a really important point, microsofts legacy business was down 5 . Intel, what we saw there was, yes, their Enterprise Business is being cannibalized by the chips theyre selling into these Services Businesses like aws and azure. When you think about it here, theres going to hit a cycle here, in this quarter they just printed 22 billion in sales. 12. 7 billion of that was that legacy stuff that declined 5 year over year. At some point you may see cannibalization start. I am not a beyuyer at alltime highs. What does that have to do with anything . Why do we talk about alltime highs like its relevant to anything . It spent the last three months consolidating between 56 and 58. Ive been on this network on numerous occasions during that point saying, before this cycle is over its going to go back and hit those highs. A lot of people think about those things psychologically. Ive said on numerous occasions, this thing is going back there. Were you short . Theres better shorts in the market, okay, and theres better longs than buying something at alltime highs. I dont think that people are underweight microsoft. Its got that great dividend, it trades a little above the market. Thats why the stock actually traded at a premium. Its also a mega cap name where guys can put capacity when the market doesnt have a lot of places to feel comfortable about value and growth at the same time and a decent dividend yield. Tims point, and your cpoin about ibm looking like microsoft prerun, i think thats accurate. I would rather ibm over microsoft, based on price only. Really . What do you think it means for amazon and google . Anybody with a cloud business. Anybody with a cloud business. Those are the big players. Im hopeful for google that there is a lot of growth left to be had. Well see next week. Both report on thursday. I want to make one point about that. Microsoft has a little bit of the salesforce. Com stuff, a little bit of the aws stuff. When you think about software as a service, the public cloud, and the private cloud. Theyre much more diversified, you throw in the linkedin, whatever they can do with that, putting these pieces together across selling, more ai, more data mining, that sort of stuff. Thats probably some secret sauce were going to see in 2017 when they close that deal. We know linkedin listen, this is a huge money loser on a gap basis, microsoft is a very profitable company. We have to ask the question, ifc werebulled up on aws, theres a question about what gets to be a commoditized space. You cant have it on both sides. You have got mega cap players continuing to dominate a business. Everybody is saying that guy will dominate in a business that ultimately margins will go down. Does that mean youre less optimistic . If thats what youre saying, you extrapolate that prices are going to be its going to be a commodity business and margins will be pressured not yet. Youre praising microsoft for that . Good question. Well see better margins than i would have feared. Right now i dont think theyre in danger of margin degradation. I actually think this could increase margins and market share. But what are we talking about, two or three or four years out, im not going to bother trying to extrapolate that. This is a case where you have to be watching that. This stock right here for this market, at this valuation, for these numbers, can go higher. Dont you think ibmc and microsoft knows its going to be commoditized, thats why they have watson, theyre giving you tools to build on top of this commodity, they know its going to be that way. Once you build on top of it, its sticky. Its difficult, once youve built something on top of that cloud, to move it to aws. Aws in my view doesnt have the analytic tools the others have. Youre not buying microsoft. No. You would rather i would rather wait for a pullback. If you want to talk about the comparison to 1999 and y2k, there was a ton of startups, a lot of enthusiasm. When you think about everything as a service and everything in the cloud, theres a huge buildup going on, an arms race going on. Its google, its ibm, its microsoft, its amazon. Think about the supply chain, the component suppliers. It obviously benefitted from this. This is why intel was at sevenyear highs or tenyear highs because they transitioned away from pcs that were declining into these server chips. All of this stuff is cyclical. It has the potential toc cannibalize. It has the potential to basically become commoditized too. We have this euphoria in technology, everybody is obsessed with mega cap tech stocks because they offer value and dividends. I hear what youre saying, but youre talking about a Company Trading 50 times. Thats in line with the market going lower. My personal view in 2017, theres going to be much more scrutiny on valuations, even mega caps, even amazon that traded at ridiculous valuation. Youll see value become an issue. Then youll see some margin degradation, deceleration. Its a 140 stock. Microsoft conference gets under way in just about 20 minutes. Ahead, good news for housing turning into bad news for housing stocks. Why it has one of our traders so worried. Senator Bernie Sanderss tweet has shareholders in one Biotech Company running scared. Media legend and former fox executive peter cchernin joinss from the vanity fair summit. What he thinks the next big thing in media is. Much more fast money, still ahead. Ur order. Thank you. Thanks. Dont you hate that . When they dont tell you how much something costs . And you have to ask . Right. I do. Maybe thats why i always make sure to. Bring up the costs associated with your services. I know. Hey, im nothing if not predictable. Lemme guess, the salmon . Being transparent about our costs. Its a big deal. And its how edward jones makes sense of investing. The es and es hybrid. Its your daily retreat. Get up to 5,000 customer cash on select 2016 models. See your lexus dealer. On a perfect car, then smash it into a tree. Your Insurance Company raises your rates. Maybe you shouldve done more research on them. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you 24 7. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Welcome back to fast money. Time for our move of the day. Check out shares of bk. Bk got worried about this, why . He. You had what isc ostensibly very good news for the housing area and all of a sudden, xhb, itb trade off, trade down, close near their lows. For me that says thats as good as it gets. Youre going to the ford f150. Sentiment reading. So what im saying is were seeing cracks in the economy. This is another crack. I shouldnt say its a crack in the economy. Investors are getting ahead of this crack, is what i think. It sounds like youve been smoking crack. I actually think the Housing Market is very slowly building and building at a right pace. If you look at household formation, where we are on supply, where Interest Rates are, they will get their way into it. Lending is only starting to pick up. I think the Housing Market is one of the gradeat places to be. Pulte is the company i want to own. Theyre buying back stock. They werec defensive from 2008 through a couple of years ago and have started being aggressive again. You have a little bit more money on margins, interest margins. And theres more lending potential because more people want to buy. That would be good. Probably not as good for wells fargo as it normally would have been, that was their sweet spot. Mortgage activity is a good thing. Other big moves of the day, rumors on the street, a game of deal or no deal. Get your whiteboards ready, guys. At t sinking, time warner soaring on a report that at t is considering taking over the media giant. Hold up the boards here. Deal or no deal . What do you guys say . Hold on. I got deal. Wow, its a split. A deal on this, my left. To my right, no deal. Our next guest not why . Im always wondering, why did this leak, what do we know about this, whats somebodys agenda . A trial ballo jn potential trial balloon. To see how its going over . Im skeptical at this point. Think back two years ago, we know there was a deal leaked by fox for time warner, they rejected an 80 billion deal, when this deal leaked, it was a 60 billion market cap. Time warner is a company thats growing earnings in the midteens, it trades in midteens. Its very attractive. Unless this is going to be at a major premium. Look at the changing landscape of the media, look at comcast universal. At t time warner becomes like a comcast . I was at at t the other way, whining about my phone bill. Tmobile and sprint are giving away free iphone 7s. Do you know what at t said to me . If you sign up for directv we will take a hundred dollars off of your bill. They have to go back to bundling. Thats why they need the content that time warner chas. Wireless data pricing is going to zero. Why doesnt time warner do this deal . Everything has its price. Right now this company does not trade to the sum of its parts. It would have to be over 80 billion. Why would they sell the top of the market youre referring to 1999. You should be a buyer here. A buyer of time warner. Right . If you really think on tuesday there was a big roll on the Options Market. I know friday at 5 30. Somebody rolled out time has expired. It was profitable and they rolled out to the january 82 1 2 calls, good size, 12,500, lucky timing . I dont know. Lets see what our next guest says. Mike mccormick has a buy rating on the stock. He put out a note moments ago outlining why the deal is unlikely. Thanks for phoning in, mike, i appreciate it. You do believe the two parties are likely talking . I guess ill try to break your tie here with the noc dea comment. I wouldnt downplay the fact that the two parties are talking, as we all know directv is in the midst of trying to launch over the top products. They do have a relationship with the Chernin Group. To the extent they want to get into offers of unique video product, i expect they would be talking to folks like time warner. In our view, at t management has been very clear, the plate is full, the executives are extraordinarily busy on directv. Small deals are possible but a large deal like this is not really possible. We can talk about the reasons why. I missed what you said, which company has a relationship with the Chernin Group . We happen to have an interview with peter childrernin group la in the show. At t. Can you see what the strategic desire would be for a deal like this . Is there a rationale . Thats the biggest challenge from our perspective. I just dont see any synergy opportunities. Theyre not going to be able to have exclusivec content throug time warner. Im certain that any deal that goes through the sec, if they would approve it, which i highly doubt they would, there would be stipulations all over it saying they cant do things like that. I just sort of fail to see the strategic rationale of combining the two entities. You cover at t, so youre approaching it from that perspective. Do you see this as at t wanting to do a deal, if not time warner, theres somebody else . At t has said smaller deals are possible. And, you know, in their own words, theyre saying something south of 30 billion is the more appropriate level to be thinking about. I think if youre looking at the sec and you guys mentioned earlier comcast nbc, in our discussions with the sec, our takeaway was they wouldnt have approved that deal had they had the chance again today. Its the combination of distribution and content that is i couldnt speaking to the sec. I think at t will be very hesitant to put anything in front of any regulator unlessc there was complete certainty that they would get approved, after the failed tmobile deal. Mike mccormick says no deal. What do you guys say . Do you change your mind . No. He certainly has a much better read on the at t youre like, no, i dont believe mike mccormick. He covers at t, i dont care what he says. He certainly has a better insight into the management than i do. But i think my point would be, at t needs to make some changes. Exactly what dan highlighted when he was complaining, they need to make changes. I think this is one they would do. At t has sold off dramatically before this news on the back of rates rising. They have numbers out next week. Youre getting to a place where the stock looks very interesting. With time warner, were about 16 times, this is very cheap to the sum of the parts. Turner is undervalued. I think you can buy that one on its own merit. Maybe you need to do this tomorrow. The interview with Peter Chernin should be interesting. Still ahead, check out shares of cmicrosoft, alltime highs in the aftersession. Well hear what ceo Satya Nadella has to say right after the break. Im melissa lee. Youre watching fast money on cnbc, first in business worldwide. Heres whats coming up on fast. Im loving it announcer but investors arent loving shares of mcdonalds. And something happened in the market today that could spell more pain in tomorrows earnings. Well explain. Plus what one biostock did one day after a Bernie Sanders tweet. Well tell you which names he could go after next, when fast money returns. 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Com and get up to six hundred dollars. Bill ly joel is fine. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Welcome back to fast money. We kick off the second half with all the afterhours action. Microsoft jumping, Advanced Micro Devices sinking. Josh lipton gearing up for the microsoft call report in a few minutes. Deirdre, well kick it off with you and paypal. Take it away. Thats cright, melissa, payl reported earnings in line with what the street was expecting. We did see the stock fall initially because investors were a little bit disappointed because of a miss on total payment volume. That came in at 87 billion versus 88 billion expected. But the stock has of course changed course, now up slightly. Markets were able to digest its forecast. The margins story is a very important one because of its recent deals with visa and mastercard. While these partnerships will help paypal move deeper into the payments ecosystem and achieve some scale, investors were worried they could dilute earnings. The ceo spoke about the benefits of these partnerships on the Earnings Call just moments ago. Along with our agreement with visa, the deal with mastercard exempts paypal from current or future digital loss fees and provides cost certainty for years to come. Thanks to our agreements with visa and mastercard,c paypal n has a seamless, quick, and simple way to activate paypal payments at the point of sale. Now, active users, as well as the growth of its venmo app, the app processed nearly 5 billion of paypals total transaction volume. That is up 131 from the yearago period. Its a money transferring social network that all the young kids are using, at least that is what my friend told me today when he asked me to venmo him money for baseball tickets. Thats a millennial. He wishes. Shares of microdevices are down after hours despite beating expectations driven by sales of custom chips. Fourth quarter guidance a bit disappointing. They announced their partnership with Alibaba Cloud to Deploy Services across data ccenters. Lets put this into perspective. Shares are up about 120 year to date having to do with its turnaround efforts. Plus the consolidation were seeing in the broader Semi Conductor space, melissa. Thank you very much. Well check in later this hour with Satya Nadella, microsofts ceo. Paypal. Im not as concerned about mastercard and visa. It basically sounds like theyre hedging, locking in market share. This is such a secular story in terms of digital payments. The growth in emerging markets is extraordinary. 21 times for a company that actually is not spending a ton of cash. Theyre focusing on buying back stock. It was spun from ebay last summer. Youre right on valuation, youre talking about eps growth and high single digit sales growth over the next couple of years. The deal they did with mastercard and visa arec great. The venmo part, the peer to peer thing, that will only be growing. They talked about mobile payments, point of sale. This is ail strong secular shift. I think you want to stick with it. I agree, the venmo part is very interesting. Its not what right now is moving the story. The rest is not a crazy, expensive price. The whole space is interesting. I kind of like it. I dont know enough. I like it too. Its more than just venmo. They got venmo when they bought braintree, call it the moonshot type of thing. I think theres a lot more coming out of that. That growth is unbelievable. 100 plus percent in a year. Thats incredible. The alibaba deal is interesting. China cloud is one of the legs of the alibaba story. Its an exciting story. You wonder whether these guys are truly going to be let into that business. Let in meaning its a u. S. Chip Company Supplying to a Chinese Company in china . Yes. That was my first reaction when i heard that. c optically thats a graeat l for them. They just raised a billion dollars in early september. They wanted to retire some debt. So theyre getting their Balance Sheet in order. They know the stock is up 150 or Something Like that. In the near term that 6 level is probably something you could trade against. I think they sold maybe about a half billion dollars worth of stock, at 450 it converts. The point is tim was skeptical that they would be allowed to supply chips to china. Theyre going to be an agency. I dont think this is a deal thats going to bind them. The premium and the name is also something thats how much more can you put into this name . This was a 2 stock in the lows in february. A developing story in the biotech phase, senator Bernie Sanders and representative Elijah Cummings sent a letter to ariad, questioning the price increase for one of its drugs. Could be next. Senator Bernie Sanders sending out a tweet today to illustrate this letter they sent to ariad. Tweets are never good for the biotechnology industry when they come from politicians, death by a thousand tweets for the biotech industry. The tweet says, ariads outrageous sales tactics indicate it is more concerned with its profit than with its patients. Looking at their cancer drug iclusig which raised the price to 199,000 per year, it was 115,000 when it entered the market. You look at the price increases, they really increased a lot over the last few years. Here were looking at what could be the next targets in the industry, because ariad isnt a company like a valeant, like a turing. What folks in the Pharma Industry are worried about is more Traditional Companies seeing pressure, areas like multiple sclerosis, insulin, where weve seenc large price increases on drugs made by biojen, eli lily. That had been the line in the sand, a company like a valeant or these other alleged price gougers out there, they acquired a lot of the drugs and jacked up the pricing, but there was a line in the sand, that biotechs need to develop their own drugs, they sort of had a right to have high prices. Now that whole thing, that whole notion is being questioned. Thats right. And thats what people are really worried about here. Even Hillary Clinton in some of her plans that shes laid out, a lot of people took solace in the fact that it seemed like she was targeting older medicine that had seen drastic price increases. Some of these companies have done that with older medicine, even if they didnt acquire them recently. Ariad developed this drug. It makes the point its invested more than 1 billion in r d. It has accumulated losses since its founding of more than 1 billion. Its argument is it needs to recoup that investment. With Hillary Clinton at the moment seeming to be thec like winner, how much damage do you think there still is to potentially be done if she gets her way and the u. S. Government is able to negotiate over drug prices . Thats the main prices. People are not so much worried about Hillary Clinton becoming president but about the house turning democratic or having democrats in control, theyre nervous about the idea that medicare could negotiate drug prices. If it seemed like legislation could get pushed through, there could be more to go. People are nervous about that, and were seeing people on the sidelines. After the election, if that doesnt happen, if democrats dont take over the house, people expect there may be some upside at the end of the year. Meg, thank you. Any reason to step into biotech right now . I dont think so. Prop 61 out in california is going to be on the ballot. And what that does is essentially lowers the price of all drugs. That could be a precedent i would stay far away from. I would just say this, i said it about biotech last night, i do believe Hillary Clinton is Bernie Sanders. Elizabeth warren. Both of these sectors, if youre worried about what happens when she becomes president , you shouldnt become worried. The sentiment is terrible. At some point, even if its so bad, it has to turn, like the surers did when obamacare came. You dont want to pick it company by company. Your stop is 245 if you want to play it here, its pretty well proven. Ahead, Peter Chernin joins us to tell us what he thinks the next big thing in media is. Plus does he think at t and time warner will strike a deal . And the trade or sink has a lot further to fall. What has got them so nervous, next. Much more fast straight ahead. , unless youre a barista. Cdw implemented Dell Poweredge servers with intel xeon processors to allow people to work from anywhere, so lucky me. So nobody wants coffee . hey, can i get a couple copies . Enhanced mobility by dell. I. T. Orchestration by cdw. Welcome back to fast money. Cnbc has been speaking with the biggest names in media. The vanity fair summit in san francisco, our own john ford is standing by with a special guest. Im here with Peter Chernin, chairman of the Chernin Group with broad experience in media. First off, theres news, perhaps, rumor out there that at t is looking to perhaps combined with time warner and at t as a partner. Of course you know the content business well. Feel free to share if you know anything about the possibility of this deal specifically. But what it be a good idea, given the trends in Media Distribution right now . I dont know anything about the deal. I do have a partnership with at t. You know, what i would say is two things. First of all, they are great partners. Theyre visionary, theyre terrific to workc with. I think as much as any distribution, they understand the content business, theyve now had directv for a year, and our venture is about 2 1 2 years old. Again, i cant speak to this deal. Its the biggest content company on earth, time warner. If you assume the world is going direct to consumer, it probably has the largest direct to consumer presence than any Media Company because of hbo. Theyve got great sports rights, cnn, a competitor, still a valuable asset. Again, i may not have read what you guys have read. Theyre both great companies. You have great insight into the Classic Media business and youre big in streaming with this partnership with at t and of course your work at hulu. Whats been the impact of streaming . Its killed the dvd business for all intents andc purposes. Does it get to a point where its as big as or bigger than that business was . Streaming overall is already bigger. For the content folks. For the content folks, writ large, its probably also a little bigger. If you take the money that netflix is paying in Television License fees, that amazon is paying, dvd revenues have declined 50 . And movie digital reverence arent quite as high. Overall, the Digital Businesses is the by far driving growth in the Media Business and will be the Significant Growth driver for the next ten years, which is clearly why i spend most of my time in streaming media. Youve got insight into the asian economy in part through your investments in streaming and content there. Whats your sense of the health of that consumer right now and the hunger for content consumption through these Newer Technology needs . Our asian media is focused in two areas,c india and indonesi. Both of those economies are doing really well. The indonesian economy dipped and has come back pretty well. Both of those countries, you have tens, hundreds of millions of people entering the middle class, highly educated, very young, and all of a sudden having access to vast amounts of content that they never had before. We obviously believe they are fruitful areas for investment. Melissa . Peter, thanks for joining cnbc here. I want to go back to the reports of the at t time warner deal. I understand youre limited in how much you can say or know, but as somebody who has been in this business for a long time, should there be mergers of content developers and the distribution mechanism, the broadband provider, for instance, do you see more of those deals happening . So first of all, i am limited by what i know. That is my limitation. But yes, i do see more of those deals happening. I thinkc in my mind, arguably e biggest trend in the technical busine Technology Business over the last three or four years has been this huge pivot toward media. If you look at the facebook timeline, five years ago it was a way for your friends to get in contact with you. Then it became a way to share photos. Then it became a way to share articles. Its now primarily driven by video. You look at the impact youtube has on google, the impact that itunes has on apple, how many money amazon is investing into prime. I think what youre seeing is all of these formerly distribution players beginning to realize that media is the key differentiator, what drives usage. So i think that my guess is you probably will see more mergers like this. Say, a comcast Nbc Universal which tied up distribution along with content, is that what you mean . Yes. Okay. Ironically, i spent go ahead. No, go ahead, im sorry. Go ahead. c no, i was going to say, i was close to comcast during that merger. So i spent some time, they hired me as an adviser on that merger. I obviously believed in it then. All right. I want to ask you, youre a former board member of twitter. Twitter has certainly seen its share of ups and downs, more downs lately, bidders seem to have walked away from the company. What do you see as the future for a media property like a twitter . I dont know if you would even consider it a media property. Well, first of all, i am a general believer that these distinctions end up being a little phony. You know, things are platforms. Theyre delivering things. I think twitter is both a platform, a Technology Platform that delivers media, 140character media. Im not sure its a distinction thats one versus the other. I think the issue for twitter, which is a great platform, i use it every day, its phenomenally valuable, i think theyre wrestling withc a big growth multiple and are having trouble justifying that growth multiple. But its an extraordinarily valuable service. Peter, you used to run news corp. Fox news, which is a very profitable property, is in a state of transition, roger ailes being out. If your last name were murdock, what would you do right now with that . I would largely do what the people whose last names actually is murdoch are doing. I would try to stabilize the position, which i think is what theyre trying to do. Does that mean keep megyn kelly . Absolutely. Pull out all stops . Absolutely. Where roger was at his best was he was extraordinarily good at developing talent over time. And i would pay a lot of attention to what the Talent Pipeline looks like over the next three or five or seven years. Rupert is as smart at this stuff as anyone i know. Would you be worried about trump tv . No, not even remotely. c wish we could go more into that but well toss it back to melissa in new york. Our thanks to Peter Chernin. Interesting comments here on time warner. Can i go to twitter . Go ahead. Twitter. Theyre talking about this valuation thing, right . Enterprise value is 10 billion, it was just bought out at 6 1 2, its trading four times. To me, theres a lot of ways you can justify a higher price for twitter. You talk about its delivering media. It delivered a guy to the top of the gop ticket. When you think about it, without twitter, trump wouldnt be where he is. He might be winning, we dont know. Im connect some dots, that he was an adviser, right, in the comcast Nbc Universal deal, which means he believes in this model happening, which would effectively be an at t time warnerlike model. It makes sense and validates netflixs model. Theyre not necessarily the pipe, but they are certainly a conduit and a way to getc the streaming directly with their own content. Time warner has tremendous content. Hbo on its own is worth a lot more than where its trading right now. Bad news on buzzfeed. A year after making an investment of 200 million in buzzfeed, Nbc Universal is doing it again, investing in another 200 million into buzzfeed, the digital publisher, at a valuation of 1. 7 billion. This according to recode. As a disclaimer, Nbc Universal is a Parent Company of cnbc which also has a minority investment in recodes Parent Company. Thank you very much, seema mody. Next, well hear from microsoft ceo Satya Nadella. Plus mcdonalds one of the worst performing stocks this year, there could be more pain ahead. Well explain why. Youre watching fast money on cnbc, first in business worldwi worldwide. Rldwide. If youre going to make a statement. Make sure its an intelligent one. E. The highly advanced audi a4, with available virtual cockpit. Welcome back to fast money, im josh lipton. Microsofts stock surging in the afterhours. Ceo Satya Nadella taking a victory lap on a conference call, pointing out the success that his company is having in the cloud. Take a listen to what hes telling financial analysts. Customers continue to choose the microsoft cloud to help transform their businesses and organizations. Our commercial cloud annualized revenue run right now exceeds 13 billion. We remain on track to achieve our goal of 20 billion in fiscal year 18. Once enterprise customers choose one of our cloud services, they continue to adopt more services. Its not just the growth and momentum in the cloud business. Its also that improving profitability. The companys cfo pointed out the commercial cloud gross margin percentage clocking at 49 . In the previous quarter it was 42 . The cfo has not yet given the companys guidance. Well keep listening for that and bring you the headlines when they come. Melissa . Thank you, josh lipton. Aftersession highs here but no guidance still. Hes saying that the commercial cloud is going to grow 38 by 2018. Theyre doing it right now, margins are going higher for now. At some point they come under pressure. But were not seeing that. You wouldnt buy it . Not only because its up 5 in afterhours at all time highs. That does matter. To tims point, what does it matter if its at an alltime high . When i buy low and sell high is when i make money. Its not going to go higher. You could buy high and sell it higher, csure. Oddswise, i would rather wait for a pullback to buy it, thats all. Wait for the guidance. I mean, come on, people. Well, yeah. To me, the size of this company and the ability that people have to throw capacity into this, im talking about big funds, means more people will be able to pile onto this thing with confidence. There are x many shares. Somebody owns them. I mean, index funds need to own them. I dont get that argument. Well stick with earnings. Mcdonalds reporting before the bell tomorrow. There are some bearish people in the options pits. Mcdonalds reports tomorrow before opening, stocks down 6 on the year, down 16 from its all time highs. The Options Market for earnings is a little below 3 . The average of the last four quarters is 3. 5 or so. Theyre coming up with the anniversary of their allday Breakfast Menu change which saw a decent surge in earnings. Valuation, trading about 20 times. Its got a 3. 4 dividend yield. Heres the kicker. We know the dollar has had a very nice boost over the last couple of months here. With the anniversary of those menu changes and of the restructuring, the stock has kind of come down here a little bit. Its been in a welldefined down trend, right here at very important technical support. This was the gap last october when it broke out. It went up almost 30 on a lot of the changes that they made. I would keep an eye on the support level im talking about. A little bit of an air pocket down to the low 100s. Thats where it broke out last year. If it gets a gapfill on depressed guidance, thats probably a good entry point, near 104. Thanks, dan. Check out options action tomorrow. Next, final trade. Stay tuned. Hey nicole. Hey i just wanted to thank your support team for walking me through my First Options trade. We only do it for everyone gary. Well, i feel pretty smart. Well, were all about educating people on options strategies. Well, dont worry, i wont let this accomplishment go to my head. Im still the same old gary. Wait, you forgot your french dictionary. Oh, mucho gracias. Get help on options trading with thinkorswim, only at td ameritrade. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley hey, jesse. Who are you . Im vern, the orange money retirement rabbit from voya. Vern from voya . Yep, vern from voya. Why are you orange . Thats a little weird. Really . Thats the weird part in this scenario . Look, orange money represents the money you put away for retirement. Save a little here and there, and over time, your money could multiply. See . Ah, ok. So, why are you orange . Funny. See how voya can help you get organized at voya. Com. Final trade time. Tim . Paypal secular growth in the valuation and the chart. You can buy. Also with growth, valuation, google. The rails look very shaky today. Sell the transports. Dan. Microsoft, lets not get too deep, alltime highs, a 460 billion market cap here. Come on, man, make up your mind. Thanks for watching, im c medic melissa lee. Maam money with jim cramer starts now. My mission is simple, to make you money. Im here to level the Playing Field for all investors. Theres always a bull market somewhere, and i promise to help you find it. Mad money starts now. Hey, im cramer. Welcome to mad money. Welcome to cramerica. Other people want to make friends. Im just trying to make you some money. My job is not just to entertain but to educate and teach you. So call me at 1800743cnbc or tweet me jimcramer. Dont overstay your welcome. Dont dig in your heels and