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tv   Tech Check  CNBC  October 26, 2021 11:00am-12:00pm EDT

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tax that doesn't yet actually even exist robert, thank you. i know you'll have more tomorrow appreciate it. yeah so just getting quick check on the markets. major averages are all higher. the s&p 500 trading at a new high 4594 is the level there. we have more earnings after the bell in the meantime that will do it for "squawk on the street," "techcheck" starts now ♪ good tuesday morning welcome to "techcheck" i'm deirdre bosa with carl quintanilla and jon fortt. look, you're here with me at one market this morning. today facebook's new north star after mixed results will shift toward young adults be the right direction? we'll discuss. >> tesla heads to the moon
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blowing past a trillion dollar market cap a breakdown of that stock's valuation. and finally adobe ceo shantanu narayen is here at one market. exclusive on cloud spent and its digital strategy all coming up, carl we miss you, by the way. >> meanwhile, guys, very interesting market day record highs on the dow and s&p. not too far from 4,4,600. it's been an interesting mix, jon, of earnings, pretty good guidance, some mix in there of upping guidance on margins or earnings from revenue some big industrials and of course we'll keep an eye on this hour how tech folds into all of that. >> yeah. speaking of earnings, our feed starts with earnings from facebook mixed results as apple's new privacy changes weighed on ad sales but user growth is strong and facebook forecasts big spending numbers on the metaverse and maybe the biggest concern for the business a plan to stem younger users from fleeing for other apps >> when we're retooling and make
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serving young adults their norm rather than optimizing for the larger number of older people. like everything, this will likely mean the rest of our community will grow more slowly than otherwise would have. but it should also mean that our services become stronger for young adults >> yeah. zuckerberg himself no longer qualifies as young under this demographic challenge. it's under 30, right, julia? julia boorstin with us now they have this challenge with younger users but then as we sort of discussed yesterday, this stock is down 2%. this is nowhere near a snap-level of stock concern this morning. >> yeah. but so, jon, just to refer to the comment about young adults i think it's really important to note how they defined young adults it was 19 to 29. they did not say teens teens are the area that they've drawn so much scrutiny for this idea that they're bad for teens
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and also the idea that they really are losing their stronghold on teens, which of course very quickly become young adults so i think it's really essential there that they're basically talking about people in their 20s. and a big piece of their attempt or their approach to getting those 20 somethings is going to be about reals and video content and then commerce and also, jon, we have to note that commerce is a great way for them to help circumnavigate some of the apple targeting restrictions >> now, dee, this is a great setup, i think, for the overall challenges in tech right now because here is a case of a strong company in facebook, continuing to be relatively strong despite what we saw happen with snap, and apple having an outsized impact on this whole ecosystem, even though sort of platform wise they're small. remember, apple is not windows apple is not android, but economically it's apower house >> right those privacy changes are taking
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effect i guess you have to wonder if this is sort of the peak, right? it hurt snap and did hurt facebook but not as big a disaster julia said they're looking towards different revenue streams you mentioned commerce, julia, you mentioned reals but the metaverse is a big play as well why do we assume that facebook is making huge investments in the space but will they be allowed to create the operating system there could be some lateral plays, we talked about nvidia, up 80% year to date, more than that and that could be a play, right? if you believe, snap, julia, could also come back here f you think this is an opportunity and be big players in the opportunity, why not pick up a snap that's valuation has come down a little bit since the latest earnings versus a facebook. >> dierdre, there's a couple of topics one is in terms of this apple issue, snap said it wouldn't be that big of a problem. they think it's fine if we work with apple's measurement tools
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we should figure out going with the apple measure tools. facebook has been raising red flags about this ios change and the limits to theirtargeting that it would bring for so many quarters now so, they actually were taking very proactive steps to create their own ways to get around the measurement and targeting limitations and they're making some progress there and sheryl sandberg talked about how they will make more progress in the fourth quarter, but they do have, you know, to really build out their own way to manage measurement when they lost some of that access through apple there's that issue in terms of metaverse, i want to point out that it's essential to note that they are now going to be talking about the metaverse in a different reporting category that's really important because that's where they're going to be spending a lot of money but not making a lot of money. >> julia, what is it >> the reason they're separating it out, jon, is because they want to make sure that you understand that all their apps are continuing to grow and make money and the metaverse, which may make money down the line. >> julia, the metaverse, what is that even? is that just a.r. and v.r. and a
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bunch of stuff to be determined? analysts are trying to figure out a black hole and trust facebook because they grow stuff. but isn't this the same stuff that facebook has failed to grow up to this point and they just sort of rebranded it and said it's the future >> well, they're calling it facebook reality labs. it's frl and i think that for now it is about a.r. and v.r and hopefully if you're an investor in this stock, then these become more revenue generating things in the future, but jon, the question is sort of how does communication and entertainment and commerce and all of these different things move from being on a web or a mobile platform and into this more virtual platform. >> facebook wants to be synonymous, right, for the metaverse and there's a metaverse etf and other plays. jon, i can see you shaking your head in person now. >> it's better than frl. >> there you go. carl >> we'll see, guys
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3:20 we asked cramer this morning whether or not he thought that might be the low and he said he thought it might be we'll see overtime meanwhile, tesla is putting the t in trillion joining the likes of apple, microsoft and amazon mike santoli has a look at that valuation. mike, we said this morning it added two fords to the market cap gain just yesterday. >> yeah. obviously tesla and ford operating really in different galaxies, feeding off of different investor energies and really mindsets and sendries you might say. how many macy's and walmarts did amazon consume on the way up that's maybe the way to think about it tesla no doubt being sort of valued as a software and kind of world-changing story, not necessarily as a manufacturer. i have a year and a half, just about a year and a half chart up here because i want to show how the kings of gains and these sprints that tesla has is not something unique to right now. so this right here shows you when tesla announced a stock split, august of 2020, in three
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weeks the stock went from 275 to 500. it's a nonfundamental input. it shouldn't matter to the valuation, it mattered to the stock. as soon as you got to that split was effective, the fever broke that was when faang and other mega cap growth fell apart for a month to two months. that was the decline then s&p says it's going to add it to the index, the s&p 500 index. it goes on another run and peaks right at here at 6:75 the moment it got into the s&p 500 and also backed off we had the other run the early part of the year and that actually worked for a while, but we actually were under water if you bought it through the s&p 500 index for a lot of this year now we're on another one of these sprints. it's not just about hertz ordering 100,000 cars. it's about everything. it's technical momentum. it's the fact that you had a good quarter it's the fact you have people on the street putting $1,200 price targeting on it and the fact that there's stupendous amount of money placed into short-term call options in this stock as of
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the last couple of day helping to shoot it high so it's self re-enforcing in the very short-term, but that's getting pretty vertical as it did right there. look at the other stocks preceded tesla into the trillion dollar market cap range. the first lesson you would get from this chart is that it hasn't acted as any kind of a ceiling, right so these stocks powered through. you want to talk about apple in august of 2018, you know, doesn't really matter which one you put, but it's right here it had $265 billion in revenue that year. $60 billion in earnings. you have tesla this year supposed to do 52 billion in revenue and 7 billion in earnings the only one that really compares in terms of the valuation on earnings is amazon. when it got to a trillion dollars in september of 2018, 232 billion in revenue that year but, 10 billion in net income. famously amazon restraining its margins. tesla doesn't restrain its margins. and basically similar story for microsoft and alphabet as well
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they basically had far larger business scale when they got to trillion dollars even if the stocks could not be considered cheap on an outright valuation basis except for apple perhaps. >> mike, there's this piece on the wire right now look at yesterday's action on tesla. they point out the hertz order, passive fund buying. >> yeah. >> squeeze on short sellers but then the options, the bullish options bets and the way in which market makers had to buy to hedge is it a comment on how options are increasingly powerful dynamic on individual names? >> absolutely. been the case for about a year and a half and in the short term it's absolutety thing that creates this force behind the buy. now, it only can happen if you're going to have fundamental owners of the company that are not going to be active sellers into it in a very urgent way and we do know from tesla it has a never sell core shareholder base that is allowing that to happen in the short term again, the fever ultimately breaks a lot of those options literally
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expire on friday they're weekly options you have to see how the market navigates it from here. >> mike, i like how you called them the never sell, john. we also call them hog lers, right? it's important to remember that tesla got to this point $1 trillion market cap, made a lot of retail investors rich along the way. it wasn't just institutions, hedge funds, but tesla has been this hot consumer company. now it's this sort of fleet company, right i heard an analyst talking earlier today saying, okay, the competition is coming. it will be online by 2025. that's a lot of time for tesla to figure out what works with hertz, potentially go into ride sharing logistics. >> yeah. but i mean, i'm not a stock analyst, but i've been a tech reporter for a while and this reminds me of some previous cycles where sometimes investors start thinking of what's familiar is normal. and in unusual times, things that become familiar, like really high valuations and people believing in either one stock or one person or you know a group of stocks, that's not
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necessarily normal so, don't get used to thinking, oh, because tesla has been high for so long it's going to be high forever because it had this valuation for so long, that's just the valuation it deserves forever under all circumstance people have to figure out what they really think this company is and how much they believe that and therefore how much they're willing to lean into that even elon musk at code last month was scratching his head a little bit about the stock action so, don't say he didn't warn you. >> right he does warn you but are you throwing cold water on tesla's valuation or that whole idea of sort of creative metrics that a company may be worth more because it won't just be in that one industry, like a tesla is not a car company. >> far be it for me to throw cold water on a valuation. i'm just looking back over time and i remember a bunch of stocks that were hot in 2000, right, and sometimes what happens is if something stays familiar in that space for long enough, people start coming up with justifications for why that's just the new normal or going to stay that way and then maybe it
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doesn't? ouch >> fair. fair you mentioned inflation and we're talking tesla. so, let's talk about kathy woods. she had some comments on the inflation debate and technology. yesterday was jack dorsey, today it's elon musk cathy, new technologies will keep prices in check in the short term at least. woods funds have underperformed year to date the ark innovation fund is still negative and worth noting too in the third quarter all six of her funds underperformed and she puts it in terms -- she look at next generation technologies like artificial intelligence and saying that these will ultimately be deflationary sources and after the bell today we're going to get two very important indicators of this microsoft and google apartment alphabet. last time you spoke to satya nadella with comments on inflation and cloud forces at work. >> i was asking him about how microsoft is raising prices on
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microsoft 365, on office in the coming year. and i think around march the prices are supposed to go up and while those prices are going up at the same time he was arguing that what they're working on is deflationary in the sense that you're going to be able as a business to get work done and spend less money doing it so there are these sort of micro economies, almost like little micro climates, i guess. when we're talk about global and the world. i think there's some deflationary micro economies, perhaps within companies, within industries and so, for an investor, i'm not sure it's relevant how much inflation is going -- like if you believe in a.i. and certain companies having an advantage because of their skill, because of their cloud heft in those areas, i'm not sure inflation affects it that much if you look back over the past couple technology cycles, mobile, cloud, et cetera, you know, open source, did inflation or deflation really -- not
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really those are just game changers >> right >> carl? >> all right, guys when we come back, adobe shantanu aryan is back and look at coin base and robinhood ahead of earnings today. "techcheck" is just getting started. it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. only comcast business' secure network solutions give you the power of sd-wan and advanced security integrated on our activecore platform so you can control your network from anywhere, anytime. it's network management redefined.
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gut check on coin base it is up more than 40% since just the start of the month. citi initiating a buy today price target of $415 trading lower by .1% this morning but cit says shares are positioned to make higher highs and lower lows because of crypto volatility coin still has not reached its highs from its ipo back in april and take a look at shares of robinhood. they are in the green this morning. ahead of its earnings report after the bell that stock is just up over 4% since its ipo. more than 50% off of its highs, different trading in these names certainly over the last month kate rooney joining me on set. thank you very much. >> good to be here. >> as we look ahead to earnings
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it's all about the viral events which is really what drives the trading in robinhood, that drives its revenue. >> absolutely. first quarter it was gamestop. second quarter was dodge coin. and crypto currency and the mix of transaction based went from equities to crypto. >> essentially crypto. >> and it was more than half of transaction-based revenue. robinhood really was looking like a crypto company in the last quarter they guided in the last earnings report crypto will slow down, trading revenue will slow down and they set the stage for slower growth. >> there been a viral event in q3 there wasn't a gamestop or amc. >> analysts said this social media stock market interaction or crypto interaction is not going away but it's just not predictable. this is going to continue to be
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a tail wind for robinhood. there will be more viral events we don't know what they are. >> this quarter are investors look for the diversifying revenue stream we know that robinhood is trying to sell different, more financial products take advantage of the huge, young user base but at the same time they have competition you broke the news of paypal's venmo getting into stock trading. >> that's a big one to watch mix of revenue whether it's equities or crypto payment order flow how much is still making up robinhood's revenue and other subscription based revenue or any other financial services coming in to supplement payment order flow. robinhood executives said we don't think it will be ban and if it is we'll find another way to make money. the crypto side the rebates are make up a big portion. >> we have that call on coin this morning and now robinhood monetizing some of those users fascinating to see and i know you'll bring us all the headlines from that call. meanwhile, let's get over to
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jon who just went down stairs ts talking adobe. over to you down there. >> dierdre, thank you. i'm here with shantanu aryan great to be in person with you it's been a couple years almost since you've been in in-person interview. >> feels great to be back. welcome to california. >> thank you i plan to pop out here often as we're talking about digital media and digital marketing, i want to start off with just the upheaval in the digital marketing space that we've seen from snap, from facebook over these ios changes. you guys, as we've been talking about over the last few days have deep insight into data and what's happening in marketing and with retailers how is that affecting you guys as your customers are hungry for data that's telling them whether their business is working the way it should? >> jon, first big picture i think everybody realizes that it's going to be a digital-first world. and so it doesn't matter whether
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you're a government, doesn't matter whether you're financial institution, all businesses are saying how do we engage with our customers digitally. i think in that journey you have to navigate as you point out what you're doing with the security of information, what you're doing with privacy. but the big conversation that we're having with every company is instead of focussing on third party data, how do you really take advantage of your first party data how do you create a trust relationship with your customer. and so, i think we're seeing a transition, even from the advertising, where the focus was on acquisition and where third party data was important and people talked about the cookieless world what can you do with first party data when a customer engages with you, how can you create that experience that tail wind will continue and the focus will be on ensuring that your first party data is viewed as an asset and i think the other thing that i think all of these companies would say is that that trend is
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only going to continue and therefore adobe will welcome more relevant in that journey. >> and that creative content that gets created in premier, photo shop, illustrator, in design so many others is sort of what creates that relationship that gets you the first party data so, let's talk about max what are the most important announcements out of this? you've been leaning heavily into a.i., into content attribution which goes to the security stuff? >> there is so much again at max. and you know, it's just this incredible event for our product folks because it all comes together we're going to miss the part where we were with the community and you have tens of thousands of people with us, but last year we had over 10 million streams couple of key announcements, the first is as you point out, artificial intelligence and adobe. all of our products are being infused with this. so new versions of photo shop and illustrator and light room are certainly coming out the frame io acquisition i know
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we covered and collaboration is a big theme in what we're doing around collaboration another theme is everything to do with how people can engage in the web as people are increasingly working in different places so, we're going to be previewing versions of photo shop on the web, illustrator on the web, some really new products like what we call canvas on the web where people can really engage and participate and create for all. how do we make our products more accessible, more fun, more enjoyable for a much broader set of community >> how much potential is there to expand the market for high and creative tools i mean, i'm looking at what canva has been doing and you guys have been over your tenure not letting anybody run away with any markets, but how much of what's happening now is using the web to enable people who might not see themselves as inherently creative to use these tools? >> i think increasingly everybody has the story to tell. and our mission of enabling
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people to tell that story is the golden age of design and creativity new devices are emerging new ways of consumption are emerging new formats are emerging, the power that you're seeing with chips and everything moving to the cloud. i know there's a lot of conversation around the metaverse as well. and so when we think about the opportunity for adobe, it's never been greater and whether that's the web business surface, mobile as a surface, collaboration, new media types. you know, our product teams have been incredibly excited about the canvas on which they can create stuff. >> you mentioned chips i'm going to talk to pat at intel while i'm out here in a couple hours there's a lot of talk about apple, the m1, the pro and the macs that's a lot of power they're putting out there and it will take. they're relying on you, right to make the best use of that. how much potential is there to expand the productivity and just the creative capabilities of
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your customer base from what seems like an unprecedented amount of competition and innovation that's happening on cpus and gpus right now? >> if you take a step back you can never have enough computing power or never have enough band bandwidth. we laugh it up i remember how old i am when i think of the first operating systems and what you had in memory but in terms of translating that power whether that's the m1 chips, 80% faster than it used to run or what we're doing with gpus and the opportunity for intel, it's really about that instant creativity so when you're rendering a film instead of waiting for it to be processed you can immediately see what that reaction is and it accelerates the process. as people are working remotely, you know, the entire film industry and broadcast industry has moved to working remotely. so how can people engage in that editing in realtime, sort of the
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google docs what they did for word processing, what we can do for creativity it's incredibly exciting but our engineers will lap up any amount of power that you give them and one more. >> you mentioned remote work finally you got this vaccine mandate december 8th employees if they're not vaccinated go on unpaid leave but you are leaving room for exceptions, religious, medical. why is that important to do? >> well, as you know, first there's the executive order and the executive order requires every company and adobe falls in that category where you do federal work that you have to satisfy the executive order. from our perspective, you know, my personal belief certainly is that the vaccination and science has been the true hero of this pandemic in terms of what they've been able to do. but it's a delicate issue. and so we recognize that we have to give the appropriate accommodations and exemptions to people but in this case, we're
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satisfying the executive order that exists and we will, you know, be very accommodating of people as we navigate through this >> as we navigate it's good to be back in person doing this it's great to do it over software, but it's also great to do it in person. shantanu aryan, ceo, thanks for being with us on "techcheck." >> thanks for having me, jon. >> carl? >> when we come back apple's conflict with the ad giants. how reshaping business models across the internet. plus, snapchat shares may be down almost 30% since the drop last week, but cathy woods buying purchasing over 360,000 shares, selling paypal and n'gowaest. dot ay.
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i'm carl quintanilla with jon fortt and deirdre bosa stocks broadly higher today. got record highs on the dow and s&p. just a few points now from 4,600. thanks to some strength from apple and amazon today
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nvidia at the top of the nasdaq. more on that in a moment first a news update with rahel solomon. >> good morning. here is what's happening at this hour consumer confidence rising unexpectedly this month. that's despite rising inflation or consumers are planning to buy homes, cars and major appliances also, the conference board says that nearly half of americans plan to take a vacation in the next six months that's the highest proportion since the pandemic began speaking of new homes, sales surging 14% last month, the fastest pace in six months the sales growth coming despite rising prices. the median price of a new home rose 9.5% over the last year to nearly $409,000. u.p.s. shares soaring. hire shipping rates, the company also raising guidance for full-year operating margins. and shares of lockheed martin now down 11% also trading near they lowest level in eight months
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aerospace defense company says that supply chain issues and other external factors are hitting sales and profits. you're up to date now, carl. back to you. >> thank you all eyes on names like facebook and tesla today but josh lipton has other movers of the nasdaq. >> let's get right to movers here check out nvidia it is on a roll up strongly today. hitting a new all-time high, in fact now up about 90% in 2021 it's not just nvidia, though amd and broadcom hitting new all time highs this morning as well. amd, ok, reporting results after the bell on the downside, look at logitech back to you all. >> thanks, josh. meanwhile look at facebook again it is falling after an initial earnings like snap the company is warning of head winds lowering its outlook reflecting, quote, the significant uncertainty from apple's new ad privacy changes. apple faces own scrutiny the information reporting that the
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company will indeed likely face an anti-trust lawsuit from the doj. while the financial times has been reporting that apple's in-house ad business has become a giant business overnight joining us now for more on this is former facebook vp sam lessen good to have you i know that you pointed out that chart as well, just the growth of apple's ad business in light of these changes which have benefitted the company but apple is giving users the option and users are choosing. they don't want to be tracked all over the web anymore on their phones >> have you gone through that dialogue and made that choice? choice is an interesting question i think in the end of the day -- >> yes >> i mean, the interesting thing about a lot of these decisions and how they're set up is if for those users who have gone through it it really wasn't much of a choice. that is how these dialogues and the nuances a work many companies are criticized over the years for this but it's very, very hard to give users a fair and fully informed consent
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choice in a single beige dialogue what they want to choose what apple did, which is business smart, right, but explains that incredible growth in their advertising business was they basically made it so that at the end of the day it was pretty darn hard to not choose to opt into their policies and their framework. and look, they found the perfect cover. you have to give apple a lot of credit the absolute perfect cover was basically framing this as a pro-privacy thing. who doesn't want privacy right? then putting it in the context where they have this very nice enemy that they created in facebook that, you know, from a political perspective is very expedient to beat up on. at the end of the day, you want to talk about monopoly power, that's exactly what it looks like. >> sam, are you saying that apple simplified it too much, users didn't know what they were opting in or out of? it does seem simple to a lot of people do you want to be tracked or not? people don't want to be tracked. >> do you know -- i think the
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question is do you know what -- do consumers know what tracking means and the implications of that do they know what that means the ability small businesses to get them the goods and services they want at good prices. do they know what any of this stuff means, the answer is no. apple knows that and they did something that's extremely expedient from their perspective. again, the thing what apple has done is they basically pulled the microsoft play book from the 1990s but pulled it off, right they got way better pr and they set themselves up in an incredibly advantageous position as a result. look, regulation is coming and it's complicated and not clear that washington knows how to deal with this stuff either. but it san interesting question. people used to joke about this click-through agreements where you scroll through pages and pages and just hit accept. that's what apple did in reverse. which is you make a question so simple, right, that everyone says, yeah, of course i want privacy. who doesn't want privacy what does that mean? i don't know right? so it's just fascinating to watch it all play out honestly
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it's making me somewhat cynical about the industry and the government again i'm coming around to that perspective. >> well, maybe some might argue, sam, that instead facebook shouldn't have allowed their model to become so reliant on their product? >> well, that i agree with this is actually -- if you think about the future of the metaverse and where things are going, yeah. it is really rough to build on someone else's platform. and you know, in a world that android and ios is not a world any other technology company would have chosen. but, it is how the world played out. partially because it's so expensive to get into that game. and to have been built those platforms. so, we do exist in a world that's basically a doopoly with apple controlling all the valuable customers which is an interesting world to be in look at tech platforms that love the web or looking for new platforms to build you can understand why because they hate being on top of these platforms. >> sam, i feel like that's exactly it it's hard to build on someone
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else's operating system so that's what facebook is trying to do in the metaverse, right, build its own platform where it can potentially have more control, charge commissions itself i wonder then if you think that facebook at this point the downside is already priced into shares you take a look at the valuations, forward pe ratios facebook is roughly 20 times fiscal 2022 earnings apple is 26 times. it's expected to grow its revenue 3% only next year. so do you think that investors are sort of undervaluing the company right now and this could sort of take off, especially if those metaverse ambitions prove to pan out >> look, i think what's going to happen to the next generation of platforms is the question that every venture capitalist cares about right now. it's not so obvious it will be a repeat of what happened before where you'll have an app store and controlled platform. if you look at what's happening in crypto where the vast majority of early stage interesting deals are coming from right now, right, crypto is the future of these platforms
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and how that weaves into the metaverse and future technology is not clear how many times can you fool someone on having an app store and controlling that and what the implications of that are at some point people figure it out. so i think what you'll see is technology future and what the metaverse sand how facebook plays and way more interesting and modern and complex than the current world we exist in. if you're asking from a pure value perspective, it is interesting to watch i think investors priced in the fact that it's hard to exist on someone else's platform. and you know, that's the game. >> right but if they're building the next platform could be an opportunity here you got this ratios on your screen there >> to be clear -- go ahead. >> to be clear, i think the push in the metaverse is i think a good one for facebook. at the end of the day it will be another one of those exercises extremely expensive and time to build. very few companies can actually lay the ground work the way someone like a facebook can and invest consistently to make it happen but i do think that i wouldn't expect an app store the same way
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to exist again in the next generation of technology i think all the technologists in the world we have seen this play out. and it's not going to happen again. i think crypto provides an opportunity to move forward. >> right good point we know that facebook has been trying to make moves in crypto too. sam lessin, thank you for joining us today talk to you soon. >> thanks so much. meantime microsoft, alphabet, twitter, ad, we have what to expect what those results roll in after the bell. we told you about the new mastercard partnership that sent shares surging yesterday giving some back today more "techcheck" continues after a short break. when the only thought on your mind is “finally” this is financial security. and lincoln financial solutions
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♪ time for another gut check and some intel on intel, bmo downgrading after the earning selloff on friday takes the bull right and calls it a market perform. the problem isn't the foundry investment impact it's the underlying assumptions bmo could not wrap their heads around price target down to 52 from 60 with a downside scenario of 45. that stock at about 48 and change right now jon, you're speaking to gelsinger later today. it feels like it's been a critical juncture for intel for many, many years now and if not gelsinger, it's an
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ambitious plan. >> it's one of the most ambitious turn around plans that i've ever seen in technology part of what's unusual about it is gelsinger is laying the whole thing out and saying here is what we're going to do and here is what we have to do. it usually rolls out in secret and people gradually believe but this is like oceans 11 what are the chances of them pulling off that heist in the movie they do. can he do it in the semiconductor market here we have a lot of analysts betting against him. >> skeptical. >> because it's -- who has ever done this before especially carl, when it comes to that annual growth rate of 10 to 12% which intel has never hit in the past, but if they pull off this plan, maybe they can. >> yeah. it's going to take some time and that's certainly why the market has sent intel shares now negative for the year. in the meantime, over 90% of analystings covering microsoft
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and google have buy ratings on the names but after the big runs already this year, can they beat expectations and keep going higher we'll talk about that in a moment stay with us you could be working with someone outside your company and wait for back and forth e-mail, or a call to be rescheduled for the third time. orrr... you could use slack. and work faster with everyone you work with, together in one place. - [narrator] introducing slacthe grubhub guarantee:rks.
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massive cloud revenue growth from both names. with us this morning paul meeks of independent solutions wa doesn't sound like much is cheap right now. what's your thought going into tonight? >> i actually think that google is trading 27 times. s&p is trading around 23 google is much more profitable and faster growing that could be viable i'm always hesitant about buying big information download like you have tonight microsoft is, i think, very expensive. you have a company that even if things go right it's trading at a peg ratio or p-e to growth at about four times its natural growth rate and of course, all these companies had some sort of benefit during covid they were beneficiaries and at some point they would start to naturally slow don't worry about google >> it does sound like google is
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your favorite faang name, at least. how do you think they've managed to escape the conversation regarding regulatory risk relative to their large peers. >> that's what i'm going to be looking for tonight because what ails facebook does not necessarily ail google or at least not to the same, nasty effect, but there will be some discussion particularly since these companies report so close to one another. let's see what happens in the meantime, the fundamentals are grade they do have slightly different advertising models and google is more insulated by what apple is doing for the opt out for the app developers, but we'll have to see i expect numbers will be good and google will report year to year revenue growth at least 40% and have an eps growth rate of about half that pace and i expect also a pretty good forecast for the next quarter. >> paul, i think it's interesting that outside of google, microsoft and netflix, some of the names that you like are semiconductor names.
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tell me how you view their prospects especially in light of the fact that the hyperscale cloud providers have so much influence especially in the data center side over how the semiconductor players have to lay out their road maps and how they have to customize >> excellent question. i'm a little bit more hesitant than i had been on the semis not necessarily due to what you just alluded to, and the fact that even semiconductor companies needed raw materials and their supply constraint. a lot of people blame what's happening on the supply chain and yes, they're infected too and it will hurt them. but yes, i think over time that the ones that are high end cpus, gpus will continue to do well and continue to gain share and continue to see a more verticals in which they can integrate their products, but yeah, they're pretty expensive, too.
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should have come down. micron, i have a contrarian view that's very cheap and the front growth is sustainable, but some of the other ones and it's a little bit expensive going into these prints >> paul, what are you expecting out of alphabet's cloud unit still unprofitable and investors willing to look past that considering how much cash they're bringing in. is there a point where investors will be looking to be profitable is that important to them? >> well, sooner or later, yes, but in the meantime, it's all about growth and it's all about taking some market share from aws and azure. we know that google brought in new leadership in cloud, very aggressive sales guy from oracle has been taking some share, and if you take a look back, in 2006 when amazon started showing some traction, not in our e-commerce business, but in aws, that's when that stock went on a multi-year run i think this is a real nice catalyst maybe not in the
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near-term, but in the long term for google >> it's going door an interesting 48 hour ahead with these big names coming in, paul. always good to get your take thanks so much paul meeks >> sure. meanwhile, take a look at texas instruments also reporting today and citi is telling investors buckle your seat belts and opening a negative catalyst call on the stocks as they expect shares to sell off following disappointing guidance and shares are down 0.9% and shares are down 0.9% we'll be right back.! andwhat do you mean?0.9% we'll be right back.! it makes it easier to develop great relationships with our suppliers. now everyone, everywhere loves jerry. they sure do. they do. they really do. mmhmm. workday. finance, hr, planning and spend management for a changing world. trading isn't just a hobby. it's your future. so you don't lose sight of the big picture,
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one more thing it came up earlier that apple is likely to face an antitrust lawsuit from the department of justice, according to the report from the information the doj has made significant progress in recent months on its probe of the tech giant which began in 2019. the flurry of activity over the supper includes doj lawyers inquiring how apple maintains its strong control over th iphone over a fresh set of subpoenas sent to apple's business partners. it's funny, sam wesson more sam wesson, please because there's so much anti-facebook it's hard to have an all-in pro-facebook voice he was saying -- >> one of the few people who would say that, by the way, but
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go ahead >> hey, you have to have that balance. all of the premium customers are on apple that's so interesting because over the years we've seen samsung, right biggest chipmaker display maker in the world challenge apple on phones they should have been able to figure that out, but they couldn't we've seen google, massive advertising player, massive tech company challenge apple to get more smartphone market share with apple and still not be able to command the premium, but annel is a monopoly. i look forward to what the d, j's case is. >> even when we talk to sam wesson, it's hard to argue that users don't know what they're opting in or out of. i think that they do and apple has built this brand around privacy, whether you believe it or not and that's what the average consumer and perhaps lawmaker may believe, so it might be harder to go after apple, but you take a look at google and they halved the google play store commissions
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before any ruling came down. so perhaps this will weigh on apple. >> we'll see >> apple ostensibly is doing it for the pr purposes as sam would argue, but because the customers see value out of it. the story with the information, a lot of lessons regarding apple today. of course, in the morning we will get coke, mcdonald's, boeing let's get to the half. carl, thanks so much welcome to "the halftime report." i'm scott wapner front and center this hour, the record run for stocks and the big question how long can it last we'll ask the investment committee today and find out what they are buying and selling and joining me for the hour, stephanie link, degas wright and jon najarian and founder of rebellion.com. investors digesting earnings report you see the dow, s&p, nasdaq all in the green transports are hit

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