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Terranova: Beware Nuance Play On Apple Spike


As Apple stock hit another high Thursday, trader Joe Terranova singled out iPhone 4S supplier Nuance Communications.

After Hours Action: Nuance Communication

“This is the one trade we did not want you to own,” said Terranova, citing a similar call he made Jan. 24, as Apple set a previous high. “Understand that the relationship they have with Apple is unknown.”

Terranova said the company, which produces the voice-recognition technology behind the iPhone’s Siri digital assistant, has not disclosed how it is getting paid.

“There’s some that believe they’re getting a fixed fee from Apple,” he said.


NEW SLIDESHOW: Top Fashion Stocks for 2012


Terranova also noted a first-quarter earnings missand lightened guidance for the second quarter, along with a recent statement from the company that called its relationship with partners more complex.

“That’s problematic,” he said. “This is not an Apple second derivative play at the hype had suggested.”

Jon Najarian, cofounder of, said there wasn’t much options action, although he did see “an awful lot of retail speculation” from investors chasing the stock higher, setting a 52-week high of $31.15.

Nuance Communication shares closed at $30.45, up 3.8 percent. But the stock dropped to the $26 range in after-hours trading at 5:44 p.m. ET.

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Trader disclosure: On Feb. 9, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long TBT; Terranova is long IBM; Terranova is long EMC; Terranova is long AXP; Terranova is long TRLG; Terranova is long AAPL; Terranova is long SNDK; Terranova is long MCD; Terranova is long OXY; Terranova is long FXE; Terranova is long CNX; Terranova is long SBUX; Terranova is long SU; Terranova is long CSCO; Terranova is long UNG Puts; Najarian is long AAPL; Najarian is long BAC; Najarian Is long JPM; Najarian is long CSCO; Najarian is long EMC; Najarian is long VMW; Najarian is long AAPL; Najarian is long DMND; Najarian is long CIGX; Najarian is long CBOE; Najarian is long CME; Finerman’s fund is long BAC; Finerman’s fund is long JPM; Finerman’s fund is long IBM; Finerman’s fund is long HPQ; Finerman’s fund is short SPY; Finerman’s fund is short MDY; Finerman’s fund is short IWM;

For Mike Khouw
No disclosures

For Gerard Cassidy
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For Jerry Howard
No disclosures

For Tim Ramey
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For Carter Worth
No disclosures

For Dan Dicker
Dan is long UPL

Dan IS long XEC