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tv   Tech Check  CNBC  October 27, 2021 11:00am-12:01pm EDT

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over $1 trillion market value as we've said the stock now up 50% for this year was only a few weeks ago it was underperforming the general market no longer. to your point, ron barren has made $6 billion on that position alone. that's going to do it for us on "squawk on the street. "techcheck" starts now. good wednesday morning welcome to a big hour of "techcheck." i'm carl quintanilla earning break downs on alphabet, microsoft, twitter crypto crunch. why those shares are awfully close to an all-time low this morning. later on a new name to watch in chips and amds surge in sales. >> we'll start with results from
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alphabet and microsoft microsoft revenue grew by 22% in the quarter. fastest pace since 2018 with cloud the key driver of that growth that up 31% and the company's personal computing business grew 12%. the stock currently trading at all-time high levels $3.23 in change. strong results out of alphabet with revenue growth 41% year over year and all eyes on the potential impact of apple's privacy changes. the new features had only a, quote, modest impact on youtube. shares of both companies having a strong year. microsoft and alphabet outperforming the s&p since january by a wide margin carl, i heard you talking about this earlier with jim and david. the sheer scale of these numbers. i mean, when you put it in context, google search revenue was $11 billion more this year than last year at the same time. john, it just kind of begs
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disbelief. same with microsoft. i mean, firing on all different cylinders. we talked about cloud and pc and what about gaming heading into the holiday season >> this makes perfect sense. we talked about this set up on monday the contrast between the sort of consumerish targeted economy affected by the ios changes and the enterprise software market that is really not carl, i think google is an interesting case because when you look at search, search isn't about targeting a particular person that you need information on through ios it's targeted to the search query. youtube, similar specific content that you can target the advertising to. more first party data versus having to rely on the third party and the signal is different from having to get that signal on who the person is from the device or the operating system itself. so, based on strategy and based on the degree to which the companies themselves are relying on their own data, i think you're seeing this play out very
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differently. >> that's a great point, john. in search the user is coming to you and you're not tapping the consumer on the shoulder but i think microsoft 17 quarters of sales growth above 10 10 that's a low number compared to what we're looking at now and we were looking for stabilization in azure and even these law of large numbers microsoft continues to wow investors >> what about those comments you and i were just talking about this yesterday he said the exact same thing to you but hearing it on the earnings call in the press release really hit investors digital tech is a deflationary force in an inflationary economy. that goes back to the enormous strength in cloud that they continue to see. >> that goes to pricing power. as we look ahead into 2022, carl, microsoft planning to raise prices on office and it seems like, based on the demand that we're seeing here in these results, they can't afford to do that
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we'll see to what degree competitive pressure with productivity suites and salesforce, slack, different angles, different pieces of that but pricing and demand seems to be strong for microsoft. >> yeah, we'll talk about google a little later on. first, here to talk some microsoft is morgan stanley maintains an overweight rating on the stock keith, great to have you thanks for the time today. >> thank you for having me >> talk about how they're managing to do what they've already done and also what they need to do in the future to keep this trajectory going. >> it's really about a broader set of solutions that they have targeting really the entirety of the cio priority list. if we look at the current quarter, you mentioned azure and the cloud business but within that they have digital transformation vis-a-vis their platform and grown 40% plus. they're doing data analytics and
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it's really about enlarging that portfolio and targeting a broader set of cio priorities that is enabling them to sustain growth at this type of scale pretty remarkable. >> yeah. i think the title of your report, if i'm not mistaken, everywhere you want to be which is a credit card slogan. pcs, where do you think we are in that cycle and how much of it is tied to corporate i.t. reinventing as people figure out where work is and where work happens now. >> i think you hit it on the head there the strength in this quarter is really derived from the fact that commercial pcs are holding up a lot better than people expected as we start to go back to the office and as we understand this hybrid work environment is going to be the status quo on the go forward basisthat pc demand is still there. that was a big surprise to give investors. the other part of the surprise to investors is when the market shifted more towards commercial pcs so the big enterprises
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buying pcs versus consumer that is a price uplift and they have more on the commercial side of the equation than the consumer, that helped the windows oem growth due that 10% despite deferrals from windows 11. put up that solid number and really surprising investors and expecting weakness in the pc market >> keith, unless i'm mistaken has not closed but they said it was going to close and expected it to close this calendar year that is a nod to the industry piece of microsoft's growth strategy, not only in healthcare, but being able to grow through practical solutions in ai. how important is it to see that play out as an investor if you're looking for further growth in '22 and beyond >> i think that's very important. you nailed it on the head. about industry solutions being able to provide not just the underlying infrastructure of the company within azure what we
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call infrastructure as a service which tends to be a lower growth margin business. being able to use the data and ai functionality you get from companies like nuauns and put that into a healthcare environment and build out a broader solution and a higher value solution that enables you to get at more dollars because you're solving more of the business problem for the end user it keeps both the top line going but as importantly keeps the gross margin ticking higher because you're providing a higher value solution on top of that cap x that you invested on top of the plant that they built out over the past ten years. >> we're in a period right now, keith, all kind of interesting ideas regarding tech m&a a fresh silo they could build organically or through acquisition that we haven't seen in this print? >> they've been pretty consistent in terms of what they are talking about looking for in their m&a strategy
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they want to buy either unique sets of users or unique sets of data to kind of flush out that portfolio. if you think of get hub and very unique set of data and developers and able to build out azure. if you think about what they did with linkedin. a giant data base and building out compelling solutions in hr and sales around that. that's where i would be looking for on the going forward basis of what the aqcquiqccusations c. social commerce is a hot topic and a lot more commerce going through those channels and trying to build out the functionality within dynamics 365 having the social side of the equation that you could sell into is a potential area of opportunity for them on a go forward basis. >> certainly one that has p people, their interest peaked at
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least lately good to get your guidance. >> thanks for having me on. lots of earnings to get through and turn to robinhood and shares are sinking below ipo price of $38 per share this morning. currently at $35.75. this is after reporting third quarter misses on revenue and importantly monthly active users. crypto being hit the hardest dropping nearly 80% in the past three months after the second quarter dogecoin fuel surge. guys, im stuck on this falling active monthly users being attributed to no meme stock or dogecoin phenomenal this quarter. the whole idea of robinhood it will bring in this young active user base and get them beyond the meme or doge frenzy and upsell them on different financial products and we don't see that happening yet still very reliant on these market moving events so, you have to wonder the competition john has also been
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increasing steadily over the months and weeks even. where is robinhood going to stand. this morning is a good example i'm looking at another coin, i won't mention the name of it, that has doubled this morning. they can't even capitalize on it >> yeah, well, first to put a pin in something that i mentioned a moment ago on microsoft. they did update on the call the nuance acquisition closing saying end of this year or maybe first quarter next year is what they expect calendar wise. when it comes to robinhood, are we surprised, carl wasn't this exactly the warning that the crypto was going to slow down and there were concerns about, boy, there was this hype driven trading that had, you know, really pumped up these results but investors still chased it and now it's doing what i think frankly, you know, laws of physics one should expect it to do. that doesn't mean they're not going to be able to build, you know, that more stable base going forward, but it's not going to happen in a quarter or two. you know, there's a difference
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between -- >> it will take time >> the hype around the stock and the mechanics of building out a strategy >> that was cramer's point this morning. nice to have it in place right now because in the meantime you're getting things like charles schwab with an increased price target yesterday at morgan stanley because these other players are not standing still and they also have the capability, some argue, of retaining and attracting some of those gen-x and gen-ys >> a huge threat with the sheer number i think it was more than 30 million active users that they can get on their platform. anyways, we'll talk about this and joining us is john said this was a long-term bet on a active user base but robinhood isn't monetizing them quick enough and relying on the old tricks that got it here. do they get there? is this a good long-term bet >> yeah, i believe the robinhood model is, you know, still a good
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long-term bet. you had previously on cnbc the ceo who also talked about the model that they, you know, similar models but the disruptive models. they really brought in a new audience into investing. so, yeah, we're going to have quarter to quarter, you know, periods of revenues which weren't frankly as high as expected last night when they reported. but, you know, again, disruptive and i think they are changing the industry in the long term. >> right at the same time, we have been seeing robinhood deal more in crypto and there's always this sort of really tricky balance that robinhood and coinbase face which is being fast and quick versus being safe and complying or at least appeasing regulators you see that this morning with another meme coin trading on coinbase, but not on robinhood they seem to be taking their
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time we saw this also with dogecoin how do they navigate that space especially when competition is increasing >> i think on their call last night was a good example they're both being very conservative the regulators, frankly, you know win so they're going slow with their products they're trying to get as much, you know, preapproval or, you know, some sort of communication. >> but isn't moving quite as slowly any more. the latest meme trading on coinbase but on robinhood. why are they moving at different speeds all of a sudden >> i'm not going to say they're not going to launch individual products, individual coins like that but they are going through a different process of working with the regulators overall. if not, you know, they're going to run into issues they've even run into issues when they have talked as was the case with coinbase and their
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lend product >> rich, what convinces you that robinhood really has changed the game here. i think metrics wise the cost of customer acquisition it seems that it might have been more the environment around meme stocks and around crypto that was driving a lot of the engagement and interest. plus in a bull market it's not a surprise to see a lot of individual investors get in who also sometimes get out at the first sign of a down turn. to me i'm not convinced yet that they have this sort of airbnb effect of having such a strong brand that they don't have to spend the marketing that their competitors do why do you think so? >> i think you're right, john. i think the environment helped and probably helped more than what we're aware of. in fact, you know, the whole dogecoin effect. i think we would have been talking about some of these issues unless robinhood wasn't in an opportunity to sort of position to capitalize on
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dogecoin in the second quarter but that's being said. this company has been innovative they have the ones that really brought to the forefront free trading commissions. they still have, you know, excuse me, a relative narrow product set. and they are working on things that, you know, could significantly expand the, you know, opportunities like a crypto wallet, as well as retirement accounts. and other types to invest, ways to invest in crypto investment so innovative, you're right. they did have a tailwind in the first half >> okay. we'll keep watching. richard, thank you for being with us. >> thank you. meanwhile, spotify and twitter maybe shedding some light of nuance on the apple ad apocalypse
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spotify and twitter both out with results spotify about a four-month high. twitter about a four-month low julia boorstin is breaking it down >> the twitter shares now down 8% some concerns about user growth, but it is worth noting that
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twitter did show some rezsiliene to the same factors that slammed snap the operating system change and 85% of its revenue is from brand ads with a smaller percentage coming from the direct response ads that are more impacted by apple's limits to ad targeting twitter is saying that the impact is modest and see opportunity to improve the relevance of their ads snap warning about a pullback from advertisers impacted by supply chain constraints twitter did benefit that half of its ads are for digital goods or services its user growth, though, fell short of estimates raising concerns about market saturation particularly here in the u.s. and revenue guidance on the lower end of the expected range and weighing on the stock. now down over 8.5% this morning. now, meanwhile, spotify shares are surging this morning on better than expected revenue
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growth with podcasts helping grow ad revenue 75% in the quarter. spotify ceo daniel saying apple's changes did not have a significant impact because of the services strength and first party data because users log in to spotify and able to understand who those users are now, no comment about any impact of those supply chain issues saying that the biggest factor for the fourth quarter is going to be, once again, growth in the pod cast industry. so, really interesting here, guys, to see how these two companies are managing the same issues very differently than what we saw snap deal with >> yeah, i mean, it's kind of shining some light on the models, isn't it, julia. goes right back to what adobe ceo was telling us yesterday around the importance of first-party data and argues tools like adobe that help people get access to that first party data content and grow that relationship that's sort of what spotify has.
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at the same time having the big chunk of twitter business in brand advertisiadvertising. that is not a good thing all the time if you're not able to target your advertising. i am reading that right? >> well, yeah, absolutely. first-party data is always more valuable you just have a better sense of who your customer is you don't have to worry about tracking them when they're off your platform. the first data party thing and the brand advertising is funny in a way because twitter was not criticized for more direct advertising. it was considered a key string for snap and facebook and others and this is where twitter wanted to be. they were slowly growing the direct respect business when they announced the operating system change. the lack of a direct response business turned out to be a strength once apple announced this change and now twitter does have an advantage in that they can build out the direct
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response business with full knowledge of all of those apple constraints where snap and facebook have to retool their direct response businesses that they julia, we saw google was dn slightly and twitter was up and kind of speaks to the year that they both had. twitter being an underperformer and best performing faang and see that trend continuing into today after those results. thanks for that. meanwhile, excuse me, advertising was just one of many tailwinds that was actually helping google do it again raking in more money than ever before for second quarter in a row, let's break things out with colin sebastian and machine learning for much of its success. it was interesting, didn't even kick off the call talking about advertising. he started by saying that alphabet is now an ai first company and sort of did the whole call through that lens
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>> yeah, good morning. so, it's really a story about inv inv inno innovation harvesting the billions of dollars in investment they made on machine learning and technologies that make their services work better we've looked at it through the lens of higher expenses and they're getting better at deploying apps to consumers and something they have been criticized for in the past not doing as good a job with >> right so, they're doing a good job and able to avoid apple privacy changes but at the same time, that is not the biggest threat it's regulatory. we saw last week they cut the commission fee in app stores is that in your view one of the biggest threats to the company >> yeah. there isn't a legitimate threat against their core search business just the scale and reach and the innovation there almost impossible for someone to disrupt them so, regulators are looking at
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that and they can put handcuffs on google at various stages. we don't think that they'll do anything that is extspotential d they are open to working with competition so it seems to us they're doing a lot of what they can do at least before the regulations become more formal >> on twitter i wonder if you think some of the weakness today is the realization setting in that reaching their long-term monetizable target is going to be a challenge when you look at in a year or two-year period is this, we keep asking this question is twitter just destined to be on a relative basis. >> looking at twitter through
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the lens of what happened to apple and facebook i mean the real story here is twitter has to spend more up front to drive more product innovation to try to capture an inflection in usage and users. we haven't seen that happen yet. they're throwing a lot of innovation at the wall, so to speak. and some of it is working, you know, some of it is not. quite frankly to get to their now two-year out targets, they have to drive significant growth in users and i think that's a big point around what's causing investors some hesitation today. >> colin, given alphabet's results. given spotify's results, given what we heard from adobe's ceo yesterday about first-party data and privacy being fine what do you think now of facebook's argument and framing of this that apple's ios change is not about privacy but it's about control and that it's
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actually bad for small and medium business. this seems to be playing out in a way more nuanced than that >> well, i think both are true clearly the changes that apple made have benefitted its own advertising business they don't play by the same rules with their own data. so, there is that. secondly, it is about privacy. they are putting constraints on sharing data on people, on individuals. if you built your advertising business relying on using that data, you're hurting right now if you built your business on your own first party data, like google has, for example, and others, then you're not feeling the pain as much so, i think it's really about both obviously, it's very self-serving from apple's point of view. >> and google is well positioned for it colin, a few words on cloud and said there wasn't any one particular thing and you saw losses larger than the street expected, as well. what is your thought
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>> well, i mean, google cloud i would say they are very much a legitimate third player in that market that's no longer a debate. a year ago we were asking questions about that so, the pace of growth is going to be a little bit bumpy we saw google and cloud next last week and the week before some real inoization in terms of machine learning ai in the cloud. that is a growth driver going forward and a very competitive market with amazon and microsoft. not like search where they can grow the size of three twitters in one quarter it's much more about how do they differentiate from amazon and microsoft. long term they're in a great position short term it is a real battle >> wow three twitters in one quarter. colin, thank you we'll talk to you again soon >> thanks very much. well, twitter does have one big name believer this quarter cathie wood buy more than 1
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million shares in the company after those numbers along with more than 625,000 shares of robinhood. plus, the quarterly results are in breaking down the winners and losers in the semi conductor space amd, texas instruments and more report. "techcheck" is back after this leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit hi, my name is tony cooper, and i'm going to tell you about exciting medicare advantage plans that can provide broad coverage and still may save you money on monthly premiums and prescription drugs. with
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. welcome back to "techcheck." we're watching stocks turn negative here pretty much across the board. s&p is roughly flat watching yields decline at the back end of the curve as growth outperforms value today by a pretty wide margin tesla the largest gainer for the week we'll talk about that in a moment first a news update with seema mody >> general motor shares falling about 4% q3 results topping estimates but guidance was lighter than forecasted they expect the chip shortage to
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last through late next year. stocks falling more than a percent. flaws in its 787 dreamliner. free cash flow topping estimates but losses per share were triple what analysts had expected mcdonald's is one of the biggest gainers in the dow this morning. earnings fueled by a rebound in international sales and higher menu prices. the company expects double-digit sales growth to continue in the u.s. durable goods orders falling in september for the first time since april, however, the decline was smaller than expected despite parts and labor shortages excluding aircraft, durable orders rising nearly a percent. deidre, back to you. >> seema, thank you. she mentioned chips. semis one of the many sectors on the moves with amd, texas instruments reporting results and first josh lipton has more tech stocks to watch >> let's get to some of those movers payment stocks not looking pretty in today's trade so far
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check out paypal down again today and now basically flat on the year and about 25% off its high and square also down today a different looking chart there. still up about 20% this year f5 one to watch. check out that move in the green in today's trade better than expected results and analysts note robust analyst growth some of the gig economy stocks interesting, as well uber is slipping here and doordash and fiber are down. 50% off its february high. back to you all. >> josh, appreciate that very much. amd is continuing its run. stock is in the green as sales up 54% on heightened demand. we talked to lisa sue earlier this morning in the 9:00 a.m. and talked about her plans for growth take a listen. >> we believe, you know, this, this vision of the next five to ten years whether you're talking about high performance computing, machine learning or the metaverse. you need more performance and
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tailoring and customization of compute capabilities >> stock continues to hit more records. now the top tech gainer on the nasdaq 100 for the year. up 90% almost since january as investors continue to watch some tailwinds like facebook's dive into the metaverse under the radar stock microelectronics shares up a little bit after posting raising guidance speaking of which john did raise q4 revenue guidance, at least, as we continue to look for more signs about shared gains against intel. >> she is gaining share. amd is and really getting that supply from tsmc that is so important for them still, though, the match sets a bit of an issue. gaining even more share, if not for some of the constraints on other components that are keeping customers from putting machines together. but still the trends very much in their favor i'm looking forward to seeing
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what she got and what amd's got next year. a lot of announcements around graphics due to come out then. i expect that we'll hear from nvidia and intel and the competitive chip market the likes i have never seen. >> that was really an incredible interview because i know you guys were asking about competition in the space and alluding to intel, but just felt like lisa sue doesn't really even see intel as competition. i know she was probably, you know, talking up a big game and just talking about the high performing chips that their competitors or rivals don't have and that issue of, that deal is supposed to be happening and where is it. it was always supposed to be by year end does that give them another leg up on intel, john? >> perhaps but got to remember intel is still coming out with chips and
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as a matter of fact, they've got an event today intel innovation. you know, we can talk about delsinger has certainly laid out this aggressive five-year plan to rally the ecosystem behind this transformation strategy and i was just speaking with him yesterday while i was in san francisco ahead of this event that kicks off at the end of this hour and i asked him how it's even possible that he can both fix the company's manufacturing process and accelerate it to reach five process in just a fraction of the time intel has managed to achieve that historically. take a listen. >> we said, you know, we must get back to process leadership and, you know, our process teams they kept innovating even though the manufacturing teams weren't successfully bringing them to manufacturing scale. we had a rich trove of ideas of and innovation sitting here ready it a move forward. as i looked at that, we have
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pretty cool stuff ready to ge. i just have to release that congestion that we had in that innovation machine we essentially doubled up. we used to one run team and we're now running two. they will go twice as fast as a result >> that is the code name of the latest chip. we're going to get some stats on the desktop version today. that's going to be important and, of course, pat's got to do all of that with process technology that he talked about while also standing up a competitive foundry business and competing in disgreet graphics we'll have more of that conversation including some incredible back story i hadn't heard before on how he decided to come back to intel as ceo with this as the strategy. i'm looking forward to sharing that >> that's quite a teaser i'm curious about that, too. as you just laid out, john, a very tall, ambitious task.
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what made him sort of take on all of this. looking forward to that, john. according to ubs, you could be waiting a while up to maunth here in the u.s bullish sign for apple the firm sees shares heading to 175 bucks. stay with us we're right back we love our house, been here for years. yeah. but there's an animal in the attic. (loud drumming) yeah yeah yeah yeah!!!! (animal drumming in distance) (loud drumming) drums! drums! aaaaaahhhh! at least geico makes bundling our home and car insurance easy. we save a lot. aaaaaahhhh! ohhh! (loud drumming) animal! aaaaaahhhh! for bundling made easy, go to
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time for a gut check on the deala that sent tesla to the trillion dollar club hertz plans to order 100,000 for their fleet. shares up 30% this month for context they're trading at more than 155 times forward pe forward stock trades at ten times earnings half of that hertz fleet it turns out it is going to uber to allow drivers to rent a tesla if they can't buy an electric car of their own carvanas is selling used car and not a stock we talk a lot about and shares were popping on that partnership. ube uber was up earlier today but perhaps came back to earth
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because a lot of things still have to be put in place and it's funny we're talking about hertz again. i remember it as the original meme stock because it went bankrupt and only held on the promise of $100,000 tesla fleet partnership with uber and carvana and might have just got the meme crowd looking at it >> mark field now running hertz, john, who has had critical things to say about tesla's space versus the legacy. but i mean the deal is the deal. and that's what you get if you have your product sort of up and ready to go. example of first strike advantage. >> i'm curious how this is going to work when people rent a tesla and drive it out of the hertz and do they know where they're going to charge it and stranded teslas and people are excited but i want to know how things work lots of questions for me still
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>> there are supposed to be super chargers everywhere, but i suppose the same way you have to figure out where to fill up your car with gas and return it charged or not charged a tesla charger is smaller than a gas station and all the rental car outlets. perhaps. it's still some time off and, carl, i know when you guys are talking about the competitors as well and one analyst saying 2025 until concept in all the other competitor evs are on the road in the meantime, tesla is collecting a lot of data >> a lot of test driving and adam jonas had a note this week on how for the legacy oems not a given they will make more money than on internal combustion. fascinating to watch. bitcoin trying to hold on to 60k. "techcheck" is back in a moment.
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well, after going from 110 to 180 in about a month, cloudflare coming to an end? downgrading to hold after shares did surge more than 60% in october. after the break, another deal that is testing investor appetite is ceo of informatica
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enterprise cloud data management company opening below ipo price and joining us now informatica ceo. congrats on the return to the public market. you are in such an interesting position given we're talking
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multi-cloud all the time and you kind of uniquely are managing data across all the big cloud providers and you recently hit what was it, $1.2 billion in annualized recurring revenue what is the growth trajectory from here? >> well, john, first trajectory from here? >> john, first of all, great to be back here it's a great day for informatica employees and our customers and partners for bringing us here. it's the help of the product innovation and the platform and intelligent management cloud ask we put 1.2 billion and our goal is to continue driving cloud from here and we are driving 40%-plus rates and that continues to be our strategy going forward? >> what will continue to drive that is it the sales force that's the strategic pedal to step on here? is it partnerships what's the strategy? >> this is a unique nexus. it's our own sales organization and our partners' organization
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driving. obviously, we have this great base in this ecosystem we have 5500+ global customers like kroger and eli lilly and we continue to expand in those organizations, but we have this unique pace as you said earlier that we are great partners with all of the cloud providers and whether it's microsoft, snowflake, ewc and data breaks and our partnership with them will continue to help our customers modernize and get to the cloud faster >> i mean, i wonder if you can weigh in every ceo now is being asked about the macro inflationary environment and disinflationary, but a lot of it does keep coming back to productivity and the way in which the cloud aids that what does the pitch sound like when you're talking to companies about managing costs through enterprise and through software. >> i think our goal has been -- first of all, i call it the
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great freeway and the highway which can go around faster our goal has been to invest in a.i. and through clear, we're helping customers intelligently automate and predict things that continues to help them drive productivity and get to things sooner than before. >> how different is informatica from the last time you were public i mean, a lot of people might not know the model transformation that you've been through. summarize it for us. >> john, it's a day and night difference we were a single product company then and today we are in a multiproduct platform company. we have the magic quad rant leader and the platform intelligent data management cloud running at 22 trillion cloud transactions a month ask it doubles every six to 12 months and secondly, the whole scale which we operate we connect everything and anything.
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50,000 plus connectors and running things at scale across the globe. we are pretty much undercutting the company and sell everything on subscription with cloud and we completed that transition together and it's a $44 billion ahead of us, it's a platform company that's scaling rapidly as we speak. >> amit, this is a return to public markets you guys went public after 15 years as a public company in 2015 was it easier to make that digital transformation as a private company? do you think that public market investors perhaps less forgiving, less patient to sit by and watch that transformation >> any given day data. i think the transformation that we did, to be honest was done being a private company. we invested $1 billion to build out our new products and build out our platform and build out a.i. and that was just hard to do in a public market.
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secondly, we went from being a licensed company to being pretty much a subscription company and it takes all of the pressure off the p & l and we were able to do that outside of the public eye of course, as we are building these partnerships we are investing ahead of the curve and all of that investment gives us flexibility when you're private and as we finished all of these transformations we felt great about coming out now and as we stand here today >> yeah. investors are getting to take a fresh look now without arguably the market being too overheated. amit, thanks for being with us on "tech check". >> thank you so much a pleasure being here. >> cloud names like t twillio, check out the podcast and download any time anywhere wherever you get your podcast. "tech check" is back in just a moment
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debut and really, guys, this ipo will test how wall street and the economy plays and by nature depreciates after each wear and or goes out of fashion the company and this is what folks focussed in on and using an adjusted financial metric to wall street called gross profit excluding product depreciation and that has raised eyebrows because it is a core cost of the business, but remember that adjusted ebitda method has had a mixed response for ride sharing companies both uber and liyft. lyft trading near its ipo price. airbnb and doordash and this is a measure of profitability and they've seen their valuations soar as public companies john, julia, carl, rent the runway is an interesting indication julia, you and i were trading
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e-mails about the consignment model and that wasn't loved by public market investors either >> well, i think what's so important to acknowledge here is that tech companies are -- they hate having inventory. investors hate it when there's any inventory depreciates, but what rent the runway has been doing is acknowledging that they want to move from being relying on owning inventory and they've been shifting this model where they have brands that give them access to clothes without them paying any up front or any meaningful up-front fees and then they share in the revenues and they've been effectively eliminating that inventory ownership for a bigger piece of their business and in the s-1 they talked about the asset light sources for the products that have grown from 26% in fiscal 2019 to approximately 54% in fiscal 2020 we are talking over half of the products now sourced without them having to own those products and worry about them depreciating >> certainly, investors have had
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practice dealing with some of those custom metrics and not a bad opening trade and on an upsized deal that priced at 17 and the high end of the range and tonight we get to ebay before we move forward tomorrow night with amazon and apple. let's get to the judge and the half carl, thanks so much welcome to "the halftime report." i'm scott wapner front and center this hour, big earnings beats from microsoft and alphabet our investment committee debating the best mega-cap tech stock to own right now. we'll set you up for apple and amazon tomorrow, joining me is stephanie weiss, and joe terra nova we are still on s&p 500 watch and it's peeling back a little bit and what was a gain on the dow is now a loss of 130 points just shy of this nasdaq's the winner today, no big surprise given what microsoft and alphabet delivered and microsoft a new all-time high


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