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tv   Tech Check  CNBC  August 30, 2021 11:00am-12:01pm EDT

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stock exchange. >> i will take it, dom, thank you. dom chu back at hq mike santoli said it at the top of the 9:00, the s&p becoming a growth index megatechs all up dramatically so far. that will do it for us on "squawk on the street. "techcheck" starts now. good monday morning. welcome to "techcheck. i'm deirdre bosa with jon fortt and julia boorstin carl is off this week. today, amazon partners with affirm as the buy now, pay later craze continues. affirm shares up nearly 40% this morning. then fubo tv gets into gaming as streamers have to get creative to retain eyeballs
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later inside the app store, apple and google facing regulation in south korea and here at home the profits sent, how they share them under scrutiny. >> we're keeping close watch on tropical storm ida and we'll be live on the ground in new orleans this hour all as stocks move to the upside, fresh intraday highs this morning for the s&p and nasdaq >> and that is where we begin at tech stocks and the market mike santoli is looking at how much is left in the tachknk for this rally >> plenty on the nasdaq side of things, on a long-termer term basis, the nasdaq and s&p up 20% year to date go back a year ago, the big faang stocks were making a very climactic peek that led to a 10% correction not seeing the same kind of trajectory but that is interesting here is that the -- both the nasdaq composite and fdn, faang index
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or faang etf, had a more normal run of it. meaning it had the regular pullbacks. there was a 10% pullback tech had a high single digit percentage decline in the spring that suggested if anything technology, software, faang stocks have perhaps been less extended over the course because they have been refreshed to some degree by some of those pullbacks. that's obviously one year or tactical basis how things look right now. the big question is great returns, not just since the march 2020 low, but going back a long way, five years, we tripled on the nasdaq composite. very dramatic looking chart, this is showing absolute gains, not percentage gains but how does it compare to the last time you had a megaextended nasdaq the five years leading into the 2000 peak, march of the year 2000, the nasdaq was up by 6 times, not 3 times and driven by less mature, less profitable
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companies. so, you know, we can talk about how it seems as if the market is giving investors a little more than it would seem like the underlying fundamentals or the overall economy has merited, but that's what markets do, they front load a lot of the gains and strong markets tend to remain strong in the short-term. so i think that's where we enter september, jon. >> mike, i wonder your take on some of these megatechs as i think you called them, i'm thinking specifically of names like apple, microsoft, alphabet, and amazon you know, alphabet, which, of course, owns google, had been underperforming for a while, and that has now been on a run but even apple seems to be having a bit of a stronger rally, even though both year to date and over 12 months i think it is lagging the other two in performance. what does that say about how investors have been treating these stocks and treating them differently even within that cohort
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>> there has been some differentiation. the big conspicuous one is amazon having been unable to keep up with the last year or so because it had such tremendous gains into the first part of kind of lockdown economy the interesting thing, though, i think that there is not always, like, a day like today, is anything going on within apple and/or microsoft that says this is the day that apple should be up 2% and microsoft up a percent and a half, whatever it is going to be or just a matter of they are -- these instruments that people grab for under certain market conditions. yields stay low, we have high liquidity, maybe getting concern about the cadence of the recovery, then these are the stocks we buy. they operate as both in terms of the overall stability and growth of the tech economy, in addition to being single company stories. i think over time those things get sorted out on a day like today, it is grab for this type of stock >> yeah. mike, thanks for that. we're seeing chinese stocks down because there is no end in sight
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for the china crackdown. the country now telling young gamers when they can and cannot play a new rule will ban video games during the school week and limit gaming to just one hour of play per day on fridays, weekends and holidays shares of roblox, just cleared for launch in china in december. and most popular among young gamers those shares are falling in today's session. you have chinese gaming company net down. we showed you more than 12% today. the complex at large, alibaba, up slightly, the big question, though, when does this end today's announcement did not provide details on how this measure will be enforced but separately want to bring up another story, the anti-corruption watchdog is cracking down on celebrity and entertainment culture. for example, several high profile chinese actors were singled out, profiles scrubbed from social media, and celebrity popularity rankings were banned from the internet.
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china's common prosperity drive against wealth and excess finding its latest sectors too punishing. what is interesting about this, the way it is connected, we have been talking about the crackdown in terms of the platforms and data, when we think about how are they going to enforce things like video game time, this is precisely why the government is cracking down on these platforms and they're trying to get to the data before sort of the companies can lock it away. >> i guess so. julia, my question this morning is we saw china crack down on for profit education, right? the tutoring, all of that. that kind of, i guess, helps the pat parents who want the kids to focus on education but don't want to spend a lot of money on it now they're cracking down on video games, which gives them more timewith their homework, perhaps. what about the software that is game phied that helps kids learn? is that okay is that going to be a loophole that these companies are going to find, they'll change their
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game, do a multiplication problem in between >> i'm sure there will be loopholes created here f if you look at the scope and scale of this, 110 million minors playing video games in the country f yo they're not spending as much money on the platforms, but really, jon, it just speaks to the scope of this crackdown. and really raises questions about where the chinese government might crack down next >> it does now, let's come back domestic, look at shares of affirm this morning. they have been surging as we saw them surge after hours on friday now up more than 40% after news amazon is teaming up with the company to roll out a buy now, pay later service for customers in the u.s., starting friday with a broader rollout planned for the coming months. this move gives affirm access to
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potentially hundreds of millions of new users within amazon's huge reach, reminder that amazon beat out walmart this month to become the world's largest retail seller outside of china this partnership is just the latest news from a booming lending space that saw square buying affirm competitor after pay for $29 billion earlier this month. we have had klarna's ceo on as well i think this is interesting, i mean, a big -- a major affirmation for affirm, first of all, and this buy now, pay later space. but as interest rates go up, you know, a lot of people think there is going to be this dual effect that happens. on the one hand, you're going to get more consumers looking for cheaper credit, which would benefit some of these players. then at the same time, you're going to get more consumers defaulting the ones that don't have great software, don't have great algorithms to judge credit worthiness or even if their
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algorithms are good don't have great access to capital, they could be in trouble. >> the companies themselves like to say, we're very early in this buy now, pay later craze and we'll have to see how this works out, especially in terms of the defaults i want to bring up a note, they said we believe the sheer headline in partnering with affirm could launch it into higher orbit, making it the fear of competition from apple pay earlier this summer seem like a long forgotten bad dream so, julia, is amazon doing big tech a favor here? this is what i wonder. amazon already does this in a way through its credit card, the partnership with affirm, if it launches affirm into a higher orbit, and as we can see, stock price is up 40% this morning is this sort of an antitrust play, saying, look, we lift up the smaller guys, we can do partnerships, we're not going to do all of this ourselves because a lot of folks think amazon could do this themselves and actually already are in a way. >> well, yes they certainly could go more directly into the space, but i do think that this does help in
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that antitrust defense but i also think if you just look at this practice of the buy now, pay later, affirm was so closely associated with peloton and these bigger ticket purchases in their early days, this, to me, shows to have this mainstream, the most mainstream of all the e-tailers, the amazon embrace this format and affirm in particular, how meaningful could this be in driving adoption of this practice. how many more people will now see this as an option for the lower cost items the $75 items and change that behavior as a result of it, jon? >> i'm not sure the upside for amazon doing this themselves they got so many things they can do with their cash why do financing with it when there are other people more than willing to use their cash to help amazon's customers spread out payments might be a use of capital issue, julia. >> well, that's right. we'll see how it all plays out, jon. meanwhile, streaming service
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fubo announcing it is launching a new business free to play gaming starting on september 2nd, this new service will -- a broader rollout in the coming months -- this new service will work like this subscribers can play free games while they stream these sports games with questions, they'll be prompted to answer like who will score first and who will win the game and with those answers they'll be able to earn points and then win prize money fubo found that these games keep their subscribers engaged. they did a beta test of the gaming and found minutes watched increased as much as 37% that make these games a valuable way to keep people engaged and to grow ad revenue fubo is a subscription and also shows ads. this also builds the use case for gambling ahead of fubo's sports book, which is set to launch later this year so, to me, jon, this is, of course, very different from
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fortnite or candy crush or the guys that netflix is building, but more about making sports viewing interactive. >> this isn't a game, really it is a gateway drug for gambling, isn't that what you see here we know they're moving into that area and this is getting people used to those gambleable moments, can he or can't he, place your bet, maybe not with money, once you feel like you're winning points, you think i can put some money on it. >> sports and gambling go very well together. but, julia, it is like every company is a gaming company. you mentioned netflix. it is all about getting the engagement numbers up and trying to find the next revenue stream. >> not in china. >> good point. >> and speaking of gamification, jon, you were talking about the gamification of education with these ed tech companies and then, of course, talked so much about the gamification of investing with robinhood >> yeah. full circle there, julia
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meanwhile, we're certainly keeping a very close eye on hurricane ida. and it might have been downgraded to a tropical storm but by some estimates more than a million people are without power. our shepard smith joins us with the latest. >> more than a million people in louisiana and southwest mississippi further. we got the latest update from the national hurricane center, tropical storm now with 40-mile-an-hour maximum sustained winds, 40 miles southwest of jackson, mississippi, and headed in that general direction. four louisiana hospitals were damaged. 39 medical facilities operating on generator power, according to fema remember this, every hospital was full with covid patients serious concerns about people who may have been injured. louisiana national guard is activated 4900 guard personnel, 195 high water vehicles, 73 rescue boats not to mention those from private citizens that are out there. and listen to this, 34 helicopters in the areas where the winds have calmed down further, 30,000 utility workers
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are making their way in now. well more than a million people well without power serious concerns in jefferson parish, louisiana, authorities say 500 people who said they were going to stay behind in areas that were flooded in jefferson parish, specifically port fourchon or lafitte, louisiana, began setting out dozens of boats to try to account for everybody and start rescuing them this morning the jefferson parish president cynthia lee sheng said this morning unfortunately the worst case scenario seems to have happened she says that some houses are flooded with water that is up to chest high, though some of it is receding at this point and high water rescues are under way. port fourchon of specific interest to viewers. this video was taken sunday 6:00 local time, yesterday evening, and not a lot of contact in there since. highest wind gusts there, 172 miles an hour where ida came ashore port fourchon is a critical hub
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for u.s. oil and gas infrastructure 9 we just got an update from royal dutch shell saying they're assessing the damage to their norco refinery and chemical refinery chemical plant and the gieseman chemical plant. no word on how bad it was. in new orleans, the levee system upgraded since katrina more than $12 billion in taxpayer money, the levee system held. the flood protection system in tact but the entire city now with no power from the entergy electric company. let's get to liz mclaughlin live in new orleans liz? >> reporter: you can see the sun is shining here in the french quarter of new orleans but that may be the only light source for residents here for quite some time. no clue when that will be able to be restored the utility provider saying more than 1 million are without power and that's raising concerns due
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to the heat for the health of residents here and also as you mentioned the hospitals already strained by one of the worst coronavirus outbreaks in louisiana in the nation. so that is a growing concern that was catastrophic transmission failure is what the entergy said it was when the storm came and caused some damage you see the destruction behind me here. we have got a roof that was ripped off, like the lid of a tin can in the french quarter and secenes like this all over the city the full extent of the damage and loss of life still very much to be determined there is also shredded trees, downed power lines and some are still stuck in their attics, awaiting help from first responders who are only able to come out today for their search and rescue efforts live in new orleans, liz mclaughlin back to you. >> thank you very much an update on the power transmission lines, eight of them, have collapsed in southwest louisiana. southeast louisiana. including one that fell into the mississippi river along with
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major power lines. that's halted river traffic along the mississippi river and caused widespread outages. the entire grid system for ten louisiana parishes has collapsed according to local officials and could take up to six weeks to restore power in those areas. one last note, the port of new orleans critical for river traffic and transportation of necessary goods and services up the mississippi river. the port of new orleans sustained no major damage after an early assessment this morning and they'll be working to get it back up and fully operational as soon as possible whatever that means. jon fortt back to you. >> serious situation thank you. catch the latest coverage on ida from shep throughout the day and in depth look tonight on the news with shepard smith, 7:00 p.m. eastern here on cnbc. meantime, as big tech gets bigger, so do their lobbying dollars, so says a new study on tech's power over washington that's next. "techcheck" just getting started.
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every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. big tech's lobbying power back in focus this morning a new report suggests established players face less competition. therefore alleging they don't are to invest as much in innovation the companies can spend on
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lobbying to maintain their competitive edge the report says big tech's lobbying mirrors a similar pattern by the oil and pharmaceutical industries. joining us now is the author of the report of the american economic liberties project reed, thank you for being with us the idea that big tech can rely on lobbying versus innovation doesn't really feel like that's what we're seeing. a few examples, facebook moving into the metaverse amazon into streaming. google into commerce those are all outside of their core businesses, are they not? >> that's correct. sure the point of this study is more about the broader social and citizen arms of monopoly power this looks at a number of studies including pharmaceuticals, oil and gas and tech it finds just on balance that as markets concentrate those same industry players increase their lobbying in following years. it also shows the opposite is true, when the industries are less concentrated, when there is more competition, we see less lobbying in washington by those
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businesses so we already know that those spending dollars have been increasing for the big monopolists and from other literature that business lobbying is generally counter to majority will and dollar for dollar more effective than grassroots lobbying. in a very real way, it has threatened democracy and goes to the question of who governs. is it people or is it the biggest companies? >> right, but are these lobbying efforts really working look at who the administration has taken on to crack down on antitrust. lina con, tim wu, jonathan canter, all seen as regulators that can be very tough on big techs. so what have the companies been spending on for many years if this is going to be the outcome, we know scrutiny is increasing >> sure, yeah. so to that point, right, there has been a pretty substantial increase in scrutiny by government, but i think that is mostly because very recently
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people have woken up in government and society to these broader set of harms we know it harms workers and consumers, but also has broader social harms and, yes, there is some disheartening movements we have seen from the federal government, there are a number of cases as you mentioned from the doj and ftc, a number of state cases and laws being considered at the state and federal level. this is just sort of the beginning of the movement against this for, you know, 20, 30 some odd years, substantial lobbying that has entrenched their power in significant ways and we're in a moment where people are waking up to those harms. i think it is critical to seize that moment and double down on making the economy competitive again. otherwise we're going to continue to see the harms multiply. >> but, reed, to follow up on your -- in your report, you clearly lay out the correlation between the size of these companies and how much they're spending on lobbying my question is there a correlation between how much they're spending on lobbying and what happens on capitol hill or
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are those two things disconnected we are seeing this bipartisan push to crack down on the tech giants, particularly from an antitrust perspective. is this spending on lobbying actually having an impact? >> it is sort of tough to tell because we are in the early stages of a lot of the enforcement and the legislative actions that the government is considering. you can be sure that the biggest tech companies are spending as much energy and resources as they can to dampen that for sure but you have seen in the past that there has been a pretty substantial benefit that they have gained from lobbying just in the last several years. there are constant reports about how the biggest companies benefit from lax regulations and substantially lower taxes. so i think it is more a point that proves the problem we're seeing that, yes, the big tech companies are stepping up lobbying precisely now as they see a potential threat to their monopoly power it is more of a threat than it is something that we should take
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solace in. >> there is data out there whether it is fair to compare union advocacy spending or lobbying with corporate lobbying but unions spend a lot too on behalf of, they say, labor and workers. is that similarly a concern? does it counterbalance what companies and what big tech is doing? >> i think there is a substantial amount of literature about this and what it tends to show is that, one, lobbying by groups that are not business groups just honestly tends not to be as effective. so even if we were doing a dollar for dollar comparison between union lobbying and big company lobbying, you would see sort of the power balance that comes out from that is not necessarily enough to stem the tide of these harms.
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i think what comes to down to is the fact that this is, again, another call for more substantial regulation, more substantial antitrust scrutiny because it seems like one of the most effective ways to count they are is not necessarily this sort of speech against speech in this case, it is to deconcentrate the economies or the markets that are generating all of these democratic -- >> issues we continue to track reed, thank you for being with us today we'll talk to you again soon. >> pleasure, thanks. south korean legislation email conseg concessions and $11 billion in revenue the heat over the app stores that's next. plus, move over mark zuckerberg. bytedance is joining the metaverse. what it is calling its entry into the space read all about it on isis-k. why is it the best wireless deals require a trade-in? right now, at t-mobile we're getting rid of the trade-in headache.
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welcome back to "techcheck." resetting at the bottom of the hour, i'm deirdre bosa with jon fortt and julia boorstin kara swisher joins us in a moment to break down the heat facing app stores at home and abroad, not hurting the stocks, though, alphabet up nearly a percent. apple 2.25% let's get a news update with rahel solomon. >> good morning, everyone. here's what's happening at this hour tropical storm ida is maintaining strength, sustained winds still 40 miles per hour. continuing its slow pace north through mississippi. manufacture many of the storm warnings have been discontinued in louisiana louisiana search and rescue and damage assessment is speeding up governor edward says 1600 people have been deployed state wide to find and help survivors. more than a million people without power, half of all utility customers in the state so far the port ofnew orleans says it found no major damage to its commercial facilities.
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the pentagon says it has now helped evacuate more than 122,000 people from afghanistan. that's as isis-k claimed responsibility for a rocket attack on the kabul airport. military officials report no american casualties. a senior general says they are, however, ready for more attacks. >> forces retain the inherent right of self-defense and are authorized to meet threats with the swift and forceful response. force protection is paramount in this phase of the operation. >> you're now up to date guys, back to you. >> thanks, rahel checking in now on the continuing app store saga for months now, apple and google have been battling a bill in the south korean legislature they say could imperil their lucrative app store businesses and speaking of just how lucrative that app store business is, google generated $11.2 billion in revenue from its mobile app store in 2019
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that's according to a court filing unsealed over the weekend. offering a clear view into the store's financial results for the first time for more on how app stores have been on defense lately, let's bring in new york times contributor and host of sway podcast kara swisher i'm so curious to get your thoughts on so many things that these companies are facing right now, including that settlement that apple did last week but let's start off with south korea. how important is this, could this have ripple effects outside that country >> yeah, absolutely. this is an issue, it is interesting, i had andrew ross sorkin on pivot last week and we talked about this, the amount of money they're making because they're monopolies in each of their areas is massive that's the one thing that is really probably will stick in the minds of courts and things -- and people are making legislation. apple is involved in this epic lawsuit. they may win there they might try to outrun this. they're not going to ever outrun
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this completely. there is going to be coming legislation that happens where the stores will be regulated in some fashion, no matter what they do. they can make all the claims they want and some of them are valid. but they're not going to outrun the idea that consumers should able to choose what kind of payment systems they use in systems like that and allow developers to have relationships with those customers >> they may not be able to run that -- outrun that idea, but it seems like the settlement that apple made in the u.s. here on thursday night is very different from what could happen in south korea and that there is a lot more friction involved in that app settlement in the u.s., it is more about allowingi ithe ap developer, and this would be much more dramatic with those two things in mind, how does that all play out and which of those do you think could end up being the model going forward if either? >> well, apple, as you know, has made little tiny steps toward
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trying to get this not to the extreme that where they have not as much control of the app stores i think you'll see them continue to do that to placate legislators, to understand where the wind is going essentially on this one and so you're going to see a lot more of that to show they have flexibility and that they're friends to developers and friends to consumers the fact of the matter is they have a real problem here across the world where they -- this is not a level playing field for most developers and consumers. and payment systems. and they have this grip over not just apple but google also and it is lucrative. it has all the signs, all signs point to regulation. and so that's the question of what kind of legislation, somewhere in the middle, but they are not going have the hegemony they had over the past ten years. >> yeah. i got to agree with that kara, i'm skeptical that this south korea thing will have much bearing on what happens outside of south korea there is so many different sort
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of little local laws and differences there. but overall, even if you handle some of the payment stuff, i was looking at some traffic on twitter, you may have seen it over the weekend too from an app developer talking about the process of getting updates to an app approved the number of hoops they have -- that's not even the financial part that's just the fact that apple and google are like these governments in the digital realm that can, you know, do this or this or, even to where you're allowed to get your update in front of the public. they control that economy. >> friction is not the word you want it is total control. they could point to each other, but people use androids don't use iphones and vice versa they do control the app in their operating systems, i think it is not going to be allowed to go on they have to have some sort of regulatory scheme to go on to allow people to have maximum flexibility and to give developers more rights this is not an issue going --
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even if they lose a court case and they have to come forward in some fashion or it is going to be imposed upon them i just don't see any other -- they're not going to outrun this, no matter where it is. i have four letters for you, gdpr it happens like it does have impact and they have to -- this is going to go all the way around the world in terms of app stores, countries recognize this issue. >> well, kara, in terms of korea what is interesting about the country and the internet landscape there is they have their own robust players like navr it raises the question do they need protection or are these dominant players in that market evidence that american big tech isn't so dominant? >> well, there is two big phone systems in this world. there just are there is two that's it. android and iphone and i think there is lots of vibrant developers, lots of vibrant things, but one gatekeeper to this app universe. there is two gate keepers, really to this app universe and
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i just -- i -- it feels like whatever happens in korea, there is going to be a worldwide idea of what should happen here and i think that it will be interesting to see what the biden administration does because, you know, if you remember the obama administration defended tech when europeans were trying to do various things, but all these laws passed. and so that's the issue. if we're doing this here, if the government takes the side of some of these cases that the koreans are on, that's going to be a problematic for them to say, you know, don't touch our u.s. companies when they themselves are pursuing similar avenues of reform. >> carol, interesting what the biden administration does and what concessions come from the two giants thank you for being with us today on this very big topic >> thank you coming up, our meme stocks having the last laugh f y if you look at last month, maybe. they hope to continue gains this week lots more "techcheck" still ahead.
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let's get a gut check on pinterest. removing the stock from the
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focus list they believe the lower guidance is due to a decrease in online sales as traditional stores reopen shares are in the red this morning, down over 1% and down more than 13% this year. as we head to break, noted apple analyst reporting that the iphone 13 will support satellite communications, meaning that you'll be able to make calls and send messages in areas without 4g or 5g coverage. catch that story at there's p. diddy stay with us (vo) this is more than just a building. it's an ai-powered investment firm with billion-dollar views. a cutting-edge data-security enterprise. yes, with a slide. a perfect location for the world's first one-hour delivery. an inspiration for the next workout cult. and enough space for a pecan-based nutrition bar empire. it could happen.
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news on paypal kate rooney has a scoop for us kate >> hey, deirdre. paypal is exploring the launch of a stock trading platform. this is according to sources familiar with the matter i'm told the company held talks with potential partners in the brokerage industry to roll this out. it would be a similar strategy or could be to how it launched cryptocurrency trading earlier this year with that partnership with taxos we have details around a new hire as part of that move into stocks the company brought on rich hagan, the former founder and ceo of trade king, which was bought by ally invest. his job title now on linkedin says ceo at invest at paypal, a previously unreported unit of the company.
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paypal did point us to comments by dan shulman, the ceo at investor day earlier this year he's talked about the long-term vision for paypal and how that could include many more financial services as he says including investment capabilities he also mentioned things like high yield savings accounts and cash checking. shulman described paypal as being a super app. stock trading would fit into that long-term strategy there and another source telling me that this will not roll out this calendar year. it will be next year at the earliest it comes amid more competition and in fintech, especially with stock trading. the likes of square and robinhood, so i sofi as well. >> kate, not just that, but we opened up the show talking about amazon's partnership with affirm that's another big company, sort of expanding its tentacles into fintech and affirm also has visions of being the super app it already has savings accounts, everybody seems to be talking
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about being a super app these days, coin base as well. i wonder if you have conversations with analysts or others, an analysis on what this kind of risk exposure could do even to some of these established companies that now seem to, you know, be getting more comfortable with this market that we're in >> that's a great question you mentioned affirm, paypal has things like buy now, pay later they're all launching similar products that seem to overlap. square, robinhood is mentioned, becoming its own super app you're spot on with that in terms of finteches being the alley pay, what you see in china and things that really right now don't exist in the u.s they want to be the one stop shop for finance that brings on more regulatory scrutiny a company like amazon, a lot of companies that are not banks, affirm is not a bank paypal is not a bank they have money transmitter licenses, so it would be the appearance of having everything to do with financial independence for a consumer will
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definitely bring on and has brought on more regulatory scrutiny one reason why big tech has been a little bit more likely to partner versus trying to get things look a bank charter then you have square going in the other direction, getting a bank charter, moving in, looking a lot more like a bank lately. it is interesting to see sort of these different companies launching similar products and seeming to overlap more than ever >> different companies launching similar products you just mentioned square. square offers stock trading through the cash app , sofi offers stock trading companies will need to be a one-stop shop. i don't know if there is a sense that consumers really want to lock in with one of these fintech companies and not be using multiple different companies for different services. >> that's a great point too. it could be competitive pressure when i look at a company like square, seen as a rival, and
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saying we need to have this so that we make sure the customers don't have a reason to leave, but too soon to tell if that's what consumers want. we'll see when it comes to consumer choice. >> all right, kate rooney, thank you. coming up next, marvel technology shares on a tear, up almost 30% in three months 5% from the highs for the year the company just reported earnings last week, the ceo matt murphy joins us with a look at the future on the other side of this break "techcheck" back in two. i think you're going to like it here. umm, why is everyone... throwing things at me? look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me.
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♪ the tech earnings train continues with cloudary and zoom reporting after the bell today catch the latest coverage on "techcheck." broadcom, docusign and a whole lot more report numbers throughout the week. stay with us we're right back (vo) at t-mobile for business, unconventional thinking means we see things differently, so you can focus on what matters most. whether it's ensuring food arrives as fresh as when it departs. being first on the scene, when every second counts. or teaching biology without a lab. we are the leader in 5g. #1 in customer satisfaction. and a partner who includes 5g in every plan, so you get it all. without trade-offs.
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we're committed to seek the truth, find the truth and tell the truth. the facts, the truth the news with shepard smith. welcome back marvell technology delivering an earnings beat. 60-plus over the past 12 months. joining us in an exclusive interview, marvell's ceo good morning big picture, though, in this quarter, you started breaking out where your revenue is coming from kind of by category in a way you haven't before the cloud percentage is interesting. give us some color on that and how it lines up with the rest of the chip industry. >> yeah, good morning, john.
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and you're right we have an outstanding q2. and one of the highlights was that we decided to break out for the first time our business by end market and what you could see from the results was that in the second quarter, data center was our largest end market of which the cloud is the biggest portion and also the fastest growing and that's about 40% of the company's revenues to put that in perspective, that's about 2x the next largest segment, which is our enterprise business, closely followed by our carrier business, which is where we have our 5g products. so it was an outstanding result in our data center group and we also had a very strong guidance for next quarter and the third quarter we guided that business up sequentially over double digits. and it would roughly double in revenue from a year ago in the third quarter. so a great momentum of the data center business. >> you and i were talking about this last week, right after
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earnings and a yellow flag for me and i'm a reporter so i always have to look for the potential downside on this cloud number was, megascale players out there that seem to be eager to pull things in house. so when it comes to chip design, when it comes to that manufacturer, how much of that is at risk if you were telling me that the raw number of different products that you're selling into the cloud and the insight that that gives you, it is some protection can you expand on that >> sure. well, i think first, the movement to more custom silicon designs from that class of customers is a tailwind on marvell's business we're in the business of working with large companies to help enable their different, you know, efforts around custom silicon. so a number of our engagements are around that. a lot of our growth year over year driven by custom products so that's a tail wind to our business but second, to your point, we are very diversified within our
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net set of customers we have over ten product lines that we sell into that market. each one of those is going through its own unique set of ramps. everything from security products, networking, high-speed optical, custom products, computing products based on the arm architecture we're one of the broadest supplier of advanced silicon into the cloud and so that gives us, you know, a degree of diversification that maybe others don't have. >> matt, tell us about supply constraints and what your outlook is for those supply constraints going forward. >> well, business is good. so i think for ourselves and for a number of other players in the industry, we had very strong year over year revenue growth and looking out to the third quarter. we actually are showing that to accelerate so we're able to get incremental
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supply every quarter it's not enough. and i think as we look out in '22, you're still going to see some level of constraint in the industry and that's primarily because the demand drivers that certainly we see arevery, very strong heading into next year that could be continued growth in cloud we're still at the early stages of the 5g infrastructure deployment globally. there are many geographies now deploying 5g services. we're on the infrastructure base station side of that and then enterprise is actually coming back very strongly, as you can see, from some of the forecasts from our customers so that will be another tailwind on our business. so, yeah, business is strong supply is still very tight and it's really across the board from the foundries to the back end companies, even advanced substrates there continues to be a little bit of an imbalance still between supply and demand. >> great getting your insights into the nuts and bolts of the cloud and more
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ceo of marvell, thank you. meanwhile, as we watch the broader markets, the nasdaq is up about 0.9%. paypal spiked higher on kate rooney's scoop the idea here that paypal is going to get into stock trading, perhaps inevitable, but when you think about the sheer league that aproduct like venmo has, digital wallet 50 million users to say robinhood's 18 million users these are people that already have accounts introduced to crypto trading and now perhaps stock trading. this could be huge >> it could be, but how many of those people already have fidelity or vanguard, have 401(k)s through their employer i know i do. >> different audiences maybe >> but how big is that other audience and how much marketing dollars are they going to have to spend in order to continue to grow i wonder what the costs are here, julia. >> yeah, the cost and also the question of what consumer demand
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is for having everything in one place or multiple apps for multiple services. will people feel like they're getting a better service if they can pick the custom services just for them as opposed to having everything in one place >> yeah, we'll see meanwhile, we see the megacap tech names higher today. alphabet hitting a new all-time high let's get to "the half." >> thank you very much welcome, everybody, to "the halftime report. the markets marching higher. big tech, a big part of the show we're at new record highs. posting nice gains for the month but, i mean, what's new? this juggernaut of a market. the question now is really, just how much left is in the tank for stocks could a correction actually come this fall? i mean, we haven't had one in about 18 months. we will debate and discuss all of this with your investment committee on this monday brenda,


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