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tv   Tech Check  CNBC  August 4, 2022 11:00am-12:00pm EDT

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names to watch, especially as we try to understand the health of the consumer you have retail, casinos, travel, very different stories depending on which ceo you are talking to in each respective sector contessa, good to see you. thank you for joining us contessa brewer the dow is currently down about 57 points. that will do it for us on "squawk on the street. "techcheck" starts right now ♪ good thursday morning. welcome to "tech check." i'm carl quintanilla with jon fortt today. we are up 30 plus, market up currently 18 that market is on pace for the best since the ipo then results from baba, booking, ebay, what they tell us about the current macro environment. later on, service now and equinix. a busy hour, jon >> yes, a busy hour.
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kicking off with coinbase, up about 18%. it had been higher on a trading partnership with black rock, the world's largest money manager. for now it gives black rock's customers ability to own and trade. that said, given bitcoin is down 42% since early april remains to be seen how sustainable institutional demand is, but coinbase is down 60% for the year for now coinbase shares today having the best day since the first day of listing on a percentage basis up more than 45% just this week. here to help us break it down, kate rooney. hey, kate. >> hey, john this is definitely a sign of legitimacy for coinbase. it is good news and it has been trying to grow the more institutional side of the business, the retail trading side has slowed down with the crash in bitcoin and crypto prices in general, they've struggled with trading revenue in general. that's the bread and butter for a lot of the brokerage businesses, robinhood as well.
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the reason i'm told the stock is skyrocketing is a short squeeze. about 22 frs of the tradeable shares, the float, are sold short. s3 partners put it closer to 21%, but they say it is four times greater than the average u.s. stock right now coinbase is the 36th largest short right now in the u.s. market some short covering going on this morning, likely accounting for the huge rise in coinbase shares one of the most mentioned names on reddit so we may have a little bit of meme stock situation going on here, but the stock has had a pretty rough run in 2022. it has been down significantly so it is sort of a relief rally we are seeing and likely short covering >> and not just coinbase, right? as we look across the more speculative fintech names, they had a real down trend right until the end, through the end of june, or was it -- yeah, end of june. >> end of june, yeah >> beginning of july now it is kind of a nice
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one-month marker for example, affirm is up close to 90% in the past month similarly so, there's more going on perhaps than just today's short squeeze. there's also this risk-on environment. >> exactly you are seeing it in tech stocks, paypal as well block, which reports earnings later today, a lot of the beaten down fintechs had a pretty nice rally in july. there does seem to be a little bit of a reversal, potential a better risk/reward as the valuations came down fintech across the board is getting a boost here and some of the crypto-related stocks which had been hit the hardest out of the entire fintech sector, coinbase included. >> you know, kate, it is funny people are going back and reading the q2 call with larry fink from blackrock a few weeks ago in which he said the crypto asset has witnessed a steep downturn, but we are still seeing more interest from institutional clients about how to efficiently access these assets clearly he wasn't messing around >> no, no. and in hindsight he clearly was
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working on this behind the scenes, but it is interesting if you look back to 2018 as well, which was one of the last bear markets in crypto. a lot of the institutional interest kind of quietly came in during those couple of years where bitcoin language wished around even $15,000 mark so some of the long-term investors, the institutional money tends to come in when prices are depressed, when they see more of an opportunity versus what we saw in november when bitcoin was around 60,000 that's really what drew the retail crowd in. seems like moments now when bitcoin prices are relatively stable they might see it as a long-term investment and long-term opportunity. it seems to be hallmarks of the time institutional money comes in, and this is a big example of it blackrock is a big deal for coinbase here. >> very big. kate, thank you. kate rooney. for more on coin let's bring in long-time bull lisa ellis who calls the company, quote, the phoenix and has a $200 target.
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lisa, this definitely backs up your case. >> yeah, we couldn't be more excited. obviously having to reset our outlook for coyneinbase a bit we highlighted in our research that we're hoping, anticipating this crypto winter should be less severe, maybe shorter in duration, specifically because of what kate was just referring to and what we saw this morning with blackrock, which is the institutional money that sort of stabilizes the market and creates support for it starting to come in we love this play for coinbase we've been kind of pushing them on these types of partnerships, so couldn't be more thrilled to see them announce a big one with blackrock. >> so at this point do you want it to remain stable through an institutional lens what happens if retail decides we're in love with it again? >> well, yeah, well, i guess from coin's perspective a lot of retail participation is never a bad thing because that's how
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they make a lot of their money but, look, you know, when you hear this from brian armstrong and ot major players in this space as well, in many ways the retrenching that happens, the focused investment that happens through a downturn helps the industry and helps the companies over the longer term because they're not sort of scrambling trying to keep up with demand, but rather actually have the time to put some of the long-term infrastructure in place, get some of the big partnerships in place, get all of the regulatory compliance infrastructure all built out that then really creates the building blocks, you know, for the mainstreaming of crypto over the long term. as much as it is painful, it is a bit healthy for a longer term investor >> lisa, i'm trying to understand how durable this bounce is with today's move. coinbase is up more than 50% in the past week, and really the beginning of that move i think was the reaction to the fed rate hike the fed has been trying over the past few days various, you know,
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regional presidents to talk down that risk-on market reaction based on the idea that they're going to be cutting rates next year, saying we don't see that possibility really right now in the data so based on that, the sort of disconnect between by what people heard the fed say and what the fed is saying that they intended to say, is -- are fintechs, is coinbase particularly risky even after this bounce? >> well, look, as you guys highlighted and kate was highlighting, every sort of move or comment by the fed whips the fintech sector around a lot because of their interest rate sensitivity in their core businesses and as high-growth businesses, they're particularly sensitive to it. but that said, the other key point or event from earlier this week that has driven this boost in coinbase was the bill introduced in the senate
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proposing that the cftc officially regulate bit coin, ethereum and some of the other major cryptos, trying to eliminate some of the regulatory uncertainty and shift some of the major cryptos under the purview of the cftc. just clarity on that, that regulatory clarity, or the anticipation we might see regulatory clarity is the other thing giving coin a big boost this week. >> that clarity, is it the idea they're not equities, that they are -- you know, is that the clarity that would be causing that bounce? >> yeah, that debate i'm sure will still wage on and will take longer to sort out, but, yeah, the cftc has already previously asserted, at least from their perspective, that the big de centralized cryptos like a bit coin, ethereum, a litecoin, et cetera, are commodities, should
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be treated as commodities and regulated as commodities, as we already see bit coin is. that alone i think would help to have that clarity and sort of move it off. the whole debate with hundreds of thousands of other coins, trying to figure out what the rule set is what exactly is security versus at what point is it considered de centralized enough it is a commodity that gets to be hacked out. but i think what investors would like is to see the senate, congress, the government moving forward on this. they kind of keep saying, look, we can handle whatever regulatory framework you want to put around this and we can operate within that. we just need clarity on what that is so the industry can move forward. >> yeah, we have tried to pin them down. it hasn't been easy. maybe in the months to come. lisa, fascinating day. appreciate it very much. lisa ellis over at moffett jon. speaking of rallies, check out the nasdaq up more than 12% off the july
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lows, heading for another positive week despite today's small move lower senior markets commentator mike santoli joins us with a breakdown. hey, mike. >> hey, jon. obviously coming out of the depths there, that sling shot was pulled back pretty tight, especially at the mid-june lows that sent the nasdaq 100 up about 20%. here is where the bulk of the gains have come from if you take a look at some of the biggest components and contributors to the 20% move, amazon and apple this is since june 16th. this is from the broad market low that we experienced. amazon and apple have been responsible for about 40% of the net gains, the total points added to the nasdaq 100, and they're only about 20% of the weighting. it shows you kind of a rush into one a beaten down mega cap and the other a quality leader i have up here the xlk, the main s&p tech etf but this is the
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equal equal weighted nasdaq 100. almost all stocks are you have substantially. it has skewed a bit to the mega caps right there to me it seems like people feeling under exposed to the market in general it is a quick and efficient way of grabbing index-like exposure that moves faster at this point, guys. >> mike, interesting to me though, both apple and amazon were bucking the trend in earnings in their respective categories pc industry overall slowing down apples, mac business still healthy. smartphones slowing down iphone business still healthy. e-commerce seeing headwinds, retail in particular with mainstream consumers amazon didn't seem to see that is it curious that, you know, they're doing better than others but that others are doing well kind of despite those headwinds where those two seem to be bucking them >> i mean the rest of the stocks
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obviously are getting kind of washed higher in the general move of this relief rally. macro relief, i would argue, with yields coming down, peek fed hawkish is potentially behind us. obviously the gas price is coming down, too, just negative sentiment that got extreme at june lows. what is interesting in the amazon/apple d amazon/apple dynamic, yes, both outperformed but with apple it is not as though it had been punished where there was a lid on it and people expected grim things. whereas for amazon, you had the course of a year and a half of frustrating the bulls. people essentially walked away and were rediscovering it when it seemed as if they executed pretty well in the quarter >> mike. thanks great explanation for what has been going on why we've been rallying the last couple of
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weeks. the company like many others getting hit on the guidance for next quarter with data dog shares are down five this morning and massively underperforming since beginning of the year. 45% off the highs, although btig still bullish, calling it, quote, best in class and at least for now maintaining a target of 175. jon, they said some customers are beginning to, quote, manage costs in response to macro concerns, and that did impact usage growth among some existing customers. >> yes interesting whether we will continue to hear that kind of bubbling up of cost concerns as we've been talking about all week coming up, speaking of enterprise software demand, servicenow's bill mcdermott on where the growth is and his competition. plus, speaking of software, confluent as those stocks skyrocket, up significantly again today, more than 28% "techcheck" is just getting
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of these names similar to datadog. down big, a cut to guidance. a 17% plunge taking it down to a double digit loss since beginning of the year. definitely thematic purity today, jon. >> indeed, carl. meanwhile, a software we've been watching closely in the market is servicenow the nearly $100 billion market cap enterprise software company has warned of longer lead times on deals in this macro involvement, but during a fort knox 101 i taped with them yesterday, the ceo told me he's bullish on growth in markets like europe. >> the european economy needs to go for the cloud if you look on a per-capita basis, the united states or the u.s. economy has gone for the cloud much faster than europe. europe is doing that now, but europe has a sensational opportunity to get some the cloud. to take what it has invested in in the past and innovate around
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it, on top of it and really drive productivity, and they have to drive productivity we are a deflationary force because we take so much cost out of the equation. the work doesn't go away, so you have to automate >> i also asked him about the need for productivity from workers in this environment, specifically mentioning alphabet ceo sundar pichai's recent comments to employees about the need to do that. >> i think alphabet is a great company and i think sundar's message really was scarcity brings clarity no matter how great a company is or how much a company is growing, once in a while you just have to take an inventory of things. how is the house doing you know, are we really investing in the right things? are we taking the long tails out of the equation and focusing on the next vectors of growth where are we going the next 10, 20 years who can argue with that track
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record they've done such a great job. >> carl, it is almost like a parlor game when i talk to bill. i try to see if there are any cracks in his optimism, right? i mean the guy is so focused on his mission, on his message. he's still on it and sees growth just a matter of focusing on the right things >> i think people say about bill he could sell igloos to eskimos. i think it is true part of his pitch is the risk. if you are going to cut head count, you have to keep the client experience the same and he would argue it is through soft software >> he is arguing among customers they will choose what they can implement more quickly and his argument is they're relatively quick to implement versus the legacy software names that haven't built out for the cloud to the same degree carl, i'm going to stream out that fort knox 101 today or
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tomorrow, getting that together. he talks about his personal story as well. definitely one to watch. meanwhile, one big enterprise winner today is confluent. as we mentioned, the data infrastructure company seeing a post-earnings pop after beating on the top and bottom lines for the second quarter including more than doubling their cloud platform revenue joining us confluent co-founder and ceo jay krebs. jay, welcome how difficult to read is this macro environment when you are dealing with customers and how much of that is perhaps moderated by the fact that you're clearly as such a young company growing share? >> yeah, it is definitely a more difficult environment, there's no question about that we saw increased pressure on deals, things taking a little longer you know, certainly a handful of companies are putting more inspection on where money is being spent, but we came through it you know, i think it helps, times like this it kind of reveals which things do you
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really need to have and which things are actually helping you save money and free up, you know, critical employee resources to put on the most important things we feel like we pen fitbenefitem that in the quarter. >> how are you recalculating that in this quarter and how is the partner ecosystem influencing that >> this is definitely a situation where anything that helps give lenkverage to the organization is useful we have had strong partnerships with the cloud providers, with other tech companies we weon partner of the year awards from microsoft and from longo db we talked about that in the earnings call. they obviously help us you know, being part of the stack that is being put in place, that is allowing more efficiency, that's the thing that customers want to get to, is definitely a good place to be >> your number of customers with annualized recurring revenue over 100,000 was up close to
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40%. what does that signify about this market and even about net revenue retention? >> yeah, the exciting thing for us is there's a major new paradigm around data, which is data in motion when we think about data, we mostly thought about, hey, how do i store it, how do i keep it locked up in different places in the organization the problem now a lot of companies have is how do you put all of that together how do you build something wholistic where all parts of the company act together, and that weighs we do so what that means is it is a big market opportunity our expectation is to grow even through harder times and that means we are continuing to adds customers. we are excited about all of the new customers coming on board with new use cases and we were excited to see that through the quarter. >> how is the market affecting competition for talent are you seeing a lot of hiring freezes, some lay-offs, some calls as you were just mentioning over at alphabet for increased productivity out of employees
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you know, stock is a big part of comp in the valley how are you managing that? >> yeah, you know, that's one area where things have gotten a little bit easier. you know, we've been able to hire great people through every up and down, through the pandemic, all of that. you know, i think that's ultimately about what is the opportunity for the company and people are excited about what confluent is doing but, you know, in a situation where there's less hiring happening, where a lot of companies are freezing or cutting back, that does mean there's more great people out there. so, you know, we're continuing to hire aggressively and that's a great thing for us it means there's, you know, amazing talent out there and we're happy to talk to all of those people >> all right continuing to hire aggressively. the stock is aggressively higher this morning by almost 0%. jay kreps, ceo of confluent. thank you. >> thank you it's been a rough ride for lucid, down almost 10% today, cut in half since january. we will get some more on these results that are sending the shares even lower. stay with us
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welcome back to "tech check. i'm karl quintanilla with jon fortt and julia boorstin the dow is down 185. 45 and 46 on the s&p some key names you might be buying or avoiding tonight let's get a news up today with contessa brewer hi, contessa >> hi there, carl. good to see you. in the last hour the u.s. justice department revealed it is charging four current or former louisville police officers with civil rights violations that contributed to the death of breonna taylor during a drug raid in 2020 the doj accuses the officers of trying to cover up illegal conduct after taylor was killed. a moscow judge just sentenced brittney griner to nine years in prison for bringing cannabis oilinto the country. a u.s. official says russia has not responded substantively to
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washington's offer of a prisoner exchange and it is clear the judge just rejected the wnba star's excuse it was an accident neither donald trump jr. or ivanka trump invoked their fifth amendment right when they testified in new york state over the fraud investigation. that's according to a report by nbc news citing two sources close to the negligence. nbc says the son of the former president appeared last week and ivanka testified yesterday in west texas, lift-off for the sixth plu origin sub orbital flight with people aboard. among them, the first folks from portugal and egypt to reach space. unbelievable all right. i'll send it back to you, jon. >> contessa, thank you now, lucid and tesla headed in opposite directions this
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morning. phil lebeau is here to tell us why. not exact opposite but tesla is flat phil >> tesla is not moving ahead of the annual meeting that will be happening a little later on today. let's start first off with tesla -- or lucid, excuse me the reason lucid is under pressure and it started after the company reported q2 reports after the bell, it is about the production guidance. they cut it by 50% for the full-year production, down to a target of 6,000 to 7,000 vehicles remember at the end of last year they were planning to build 20,000 vehicles this year. the primary issue right now, logistics. when i talked with the ceo after the numbers came out, peter rawlinson said we have an immature logistics systems right now. they're bringing in a new head of operations and they believe they're making the changes necessary to improve their production and hit that 6,000 to 7,000 target as you the a look at shares of lucid, keep in mind their reservations for the lucid air have gone up to 37,000, but it is going to be further out before many of those people, if
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it stays at 37,000, actually get their lucid air because they simply have not increased production as expected meanwhile, with tesla, the annual meeting is today and about 5:30 eastern time. the main thing people will be asking is when elon musk talks, will he give some kind of an update in terms of what is happening with production, particularly at the giga factory down in austin, texas. is the cyber truck still on schedule then again, they will be voting on the stock split three-for-one stock split. remember, they did a stock split last year, so now you are getting another stock split. my guess is it is likely going to go through. this will not change the valuation of tesla, as we take a look at shares of tesla, but certainly it gives them a lot more opportunities it makes the stock obviously much more affordable or brings it down to the average investor they might be more comfortable buying at $300 a share as opposed to $900. that's what we're waiting to see after hours, guys, what does
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elon musk say during the annual meeting. >> phil, i know we talked about this yesterday with cramer, pelosi's visit to taiwan in the words of morgan stanley, sort of resets the global battery race and will force investors in adam jonas's view to think about tesla different >> absolutely. china has been the growth engine for tesla over the last year and a half, and it will be a big part of future production and future deliveries. remember, if the largest auto market in the world, the largest ev market and a government that is pushing, pushing hard for ev adoption, it is much different than here in the united states and in europe where, yeah, there are incentives and people are trying to help the industry move toward lek velectric vehicle adoption it is way different in china over there the government is saying, oh, we're going electric
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come hell or high water. that's why tesla has done so well with production in the shanghai giga factory. >> that's our phil lebeau talking evs this morning investors trying to work through results from ebay and booking, bracing for a few more out from expedia and lyft. mark, it is great to have you back, evercore isi on booking, i wonder if you think the street is making too much of what is called room night deceleration >> well, carl, there is room night deceleration and airbnb showed it too. i don't know why you wouldn't see it from expedia tonight. there's a little bit of an extra warning for expedia in that booking holdings seemed to have relatively strong north american growth not only will you have this kind of deceleration across the industry, the travel trade is over but you also will probably have market share pressures on ex peeled ya'. i'm cautious on expedia going into print tonight
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you have to ask yourself if you are a trader or investor if you are an investor, the action question now is as booking and companies like airbnb done enough voinnovations they can grow faster post-covid? i think they have put in enough innovations and that's why i like both of those stocks. >> that's explains trimming your target but keep the out perform? >> yes, carl especially with a name like booking. look, it is a high-quality asset, trading close to 19 times gap earnings bullet-proof balance sheet they buy back stocks, 30% margins, well-tested business model, very geographically diverse. i like some of the newer initiatives that are better incorporating flights into the offering, and then they rolled out payments as a segment for the last year and a half those are the two things i think helped them come out of all of this, growing faster than they were back in '19 that's why you can have a multiple where it is now or even rerate a little bit higher
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>> mark, where have uber and i guess to some extent just takeaway set the bar for doordash tonight and to what extent is that food delivery and just general delivery growth trend normalizing back to pre-pandemic or not? >> well, so there's a lot that's going on in doordash the biggest risk i think you have is the recession risk, and all of us have to ask that question you know, are people going to do as much delivery are you going to pay, you know, $80 for that hamburger delivery that you did, you know, six or nine months ago as the family budgets get tighter? that all said, you know, we are seeing continued signs of market share gains by door oordash. it is the fastest grower in the delivery business. uber guided us all to flattish delivery bookings from june to the september quarter. what's in the street numbers if you work out the acquisition of
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the european delivery company, if you strip that out it seems to imply a sequential decline for dash i don't feel there's dramatic risk to dash, but i don't feel we will have a lot of upside i do worry, any of the high-multiple stocks that miss now will be punished severely. in terms of the trade, i don't think it is that attractive. i like the investment long term on dash and i think they continue to gain share so i'm willing to stick around even with short-term volatility. >> uber seemed to say that driver supply had improved it was at at least a recent high and gas prices have eased off a bit. doordash was trying to help dashers out with those kinds of costs. could that be some kind of a margin signal? >> yes, it could, but i do think that trend is actually starting to turn now. so all of these companies, the delivery companies had to impose this fuel surcharge about three months ago they put it in. it was like 50 cents per each order. it did help their couriers, they
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needed it. now whatever we are, 51 days in, the gas prices are dropping every day. my guess is the next move there -- let's talk about the next call, the next move there is my guess is they could take away the fuel surcharges then there is a little bits of a hedge in all of the business models, you know, the upside to the downside the upside to a weakening economy is that more people are going to need that side hustle, that extra earnings opportunity, and dash is a food delivery and rideshare, are really easy ways to get the extra income if you need it. it is a little bit of a hedge in these models >> overall, mark, i'm just wondering as you gauge client interest in tech right now, are you getting a sense that this rally is beginning to spur more belief or more disbelief that it deserves to be turned around >> we had a buyer strike carl, in the first six months of the year, no question about it this segment, consumer tech, got
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s slacked. are people in there buying with two fists? no are they starting to step in on the dislocated, higher quality names? absolutely, yes, especially if they put unp an inflection poin. i have two so far. amazon shocked everybody and showed the power of real innovations in their business model can be, faster delivery, greater in-stock uber gave you free cash flow finally. now it is going to ramp materially you get an inflection point with free cash flow on some of the names and the stocks can really rip. i like both of those names going for, amazon and uber to answer your question, yes, i'm starting to see more interest >> that's interesting. one of the trading desks this morning, they were trying to explain the outperformance in tech they said, if we have seen the high in yields, and we were at three, four, eight in june, and we will remain in a low-growth environment, then mega tech is
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arguably the best of the yield curve. i assume you go along with that? >> yes, but stick with the high-quality names all of the ships aren't going to rise i have been waiting for two things for consumer tech, estimate cuts and the moderation in inflation, therefore the moderation in interest rate pressures. well, we got it now. is this the bottom i don't know, but it certainly feels like we're within, you know, months of this bottom. it is not a 23 trade off this growth equities can start coming back. i think maybe now, maybe it is happening. it is so hard to know. or it is this fall but the timing is very near term >> mark, great stuff certainly we have a lot of fuel to work with this week especially thank you, mark mahaney. >> thank you, carl paramount having a volatile ride after results more on those numbers and reports of changes at warner otrs discovery that's next. we will be back in two
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♪ it has been a morning of media headlines with paramount reporting results and lots of talk about shelved content, strategy changes coming at warner brothers discovery ahead of its earnings this afternoon julia boorstin is here to help us break things down julia, we ever going to see "bat girl"? >> i don't know about that, john before we talk about "batgirl" i'm going to fill you in on paramount because paramount reported a better-than-expected
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19% revenue growth and a 3 cent per share earnings beat. that, of course, is all bolstered by "top gun: maverick." paramount shares first dropped on screening that missed estimates, now we see paramount shares are nearly half a percent higher after optimistic commentary on the call about streaming and also advertising paramount ceo bob bakish noting with the addition of nearly 5 million subs it had the most signups and net additions of any u.s. streaming service in the quarter. while pluto tv, the free ad-supported streamer, its 7 million subscribers was short of expectations, the company reiterated the top target of topping 100 million streaming subscribers by 2024, and also the expectation that its direct-to-consumer losses would peak next year now, also amid concerns about an ad recession, bakish said
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advertising headwinds are a short-term problem he also said there's actually some ad tailwinds such as strong ad spending around travel as well as around political ads so now the question is what kind of an outlook we're going to get from warner brothers/discovery this afternoon we are expecting ceo david zazof to share his plan for combining hbo max with discovery plus. we got signs of that today in announcements that chip and joanna gaines magnolia network would launch in september, similar content coming to discovery plus we know that he likely will be pressed on plans for cutting $3 billion in costs across the company. john, back to your question about "batgirl" the company decided to shelve its $90 million "batgirl" movie rather than release it on streaming a lot of backlash there. i'm hearing it is due to a number of factors, including the
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fact they did a test screening and the reaction by fans was not positive of course, they get an accounting benefit if they write it down as a loss rather than releasing it on the streamer guys >> yeah, i had heard the tax excuse interesting about the test screening. just an amazing story, julia meanwhile, "the journal" puts on page one this piece about netflix building an ad machine they spent years resisting and talking about cpms that would rival the cost of, say, nfl games i wonder if you think that's too optimistic or not? >> it is very optimistic i mean, look, you have to break down why would it be a good thing for netflix to be showing off how expensive its ads would be what they're basically messaging with that is saying our ads will be so effective, we're going to have such amazing ability to target an also measure those ads' impact that we will be able to charge these kinds of crazy high prices that you really only see for a premium sporting event. that's saying they're incredibly
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confident not only in the types of content that they will be showing but also in the effectiveness of the platform, but we are still a ways out from them actually having something to launch. that's very much the vision of the future remember, the ceo and the kh co-ceos talked about how the ad-supported will be a revolution it will be a while before we get those kind of cbms >> there's so much media news this week, and we are going to get a lot more in the days ahead. julia, thanks. julia boorstin it has been a volatile ride for qorvo today. shares plunged, leaving us thffty much where we legitft o wi a recovery. more on the action after the break. don't go anywhere. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place.
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time for a gut check courtesy of stevens. changing its best idea to crowdstrike following the bravo acquisition or intends to acquire ping identity announced this week, says the stock has strong competitive across all facets of the security industry and is well-positioned for a recessionary environment that said, crowdstrike is down about 6% today "techcheck" is back after th n'
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if you want more techcheck on the go, be sure to follow and subscribe to our podcast. you can listen anytime, anywhere you are. back in a moment. to adapt in the changing world, you could hire a professor of theoretical mathematics.
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welcome back. what is the forecast for data centers? if you ask investor jim chanos, it's cloudy at best. he revealed a short position in the space, targeting digital realty. arguing their problem is technical obsolescence and their three biggest customers are turning into their biggest
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competitors. since that call, equinix is up about 3 1/2%. after the company posted the 78th consecutive quarter of growth. is there opportunity here or not? joining us now, ceo charles myers. welcome. part of the argument here seems to be, you are growing, but not nearly as quickly as the hyperscalers and if we get into a bad economic environment -- if demand comes down -- the hyperscalers are going to keep using their own systems but maybe not those of outside data providers. why is that wrong? >> first of all, thanks for having me. i think the premise that the cloud is just this large scale compute node facilities from a handful of hyperspace providers is not accurate. it represents an underdeveloped understanding of how the cloud works, how it is architected,
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and the role and how enterprises are re-architecting their idea for digital. right now, we play a critical role in helping companies moved to the cloud and i think our business is showing that. >> i certainly do understand. i think jim chanos would say that he understands that the cloud isn't just about the public cloud. there is hybrid. it's distributed across both their owned and operated data centers and others. when you look at their rate of growth and the amount of capital investment that it's taking you to do what you do, the question is, is there enough profit in the model for these evaluations to make sense? >> i think one key thing is the sedimentation of the data center market between the center providers that are working to provide these hyper- scale data centers. these large-scale, dedicated, committed centers, versus those
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that are building this inter cloud interstitial data center that are really the digital edge. points of aggregation in the digital ecosystem that really allow the cloud to work effectively and allow the customers to extract the value from their digital transformation. our business is growing very nicely. we think we have the balance sheet to drive that and the returns. if you look at our returns, they are exceptional in terms of how we are delivering af over share growth. >> very capital intensive this business is though. interest rates are rising. when you talk about your balance sheets and wonder what demand is going to be like, how much are you going to have to outlay to continue building and is that going to get more expensive for you over the next couple of years? >> at some level, i think that will. inevitably, we are an investment graded company so we can raise that under very
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attractive terms. definitely, the cost of debt is going up with interest rates. i think our ability to raise a combination of equity debt to fuel the business and our ability to price services in accordance with the value delivered to our customers and therefore maintain consistent returns even in an environment where that capital might be slightly more expensive i think is slightly more robust. >> if there is an advantage to having a prominent short seller on you, it is going to bring a lot more attention to your model and to your growth area charles, thank you. >> thanks for having me. >> one more thing. more tech earnings this afternoon. door dash, lift, square, drop locks, expedia. also, warner brothers discovery. amc and sky works. that is all over the place in industries where a lot of those
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growth names that did well during the pandemic and then fell off. you sort of wonder with the picture easing, are people looking at education again as a possibility? >> it's possible. the incentive to invest in an education for a while was being called into question because the job market was so strong. i will add that this is really the last big push in terms of maximum earnings prints per day. we are going to get 50+ today. from here on out, maybe 10 a day at the most. we've made it through the hardest part of earnings season. also, keep your eye on oil. for a moment there we were below 88, unbelievably. that might have some ancillary effects on the consumer. their ability to spend on things other than gasoline. >> door dash comes to mind. we mentioned this with mark. if driver demand is up like
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uber saw, they've got a good supply of drivers and if they don't have to pay as much for gas, maybe that's good. but if the consumer doesn't have as much to spend on eating out, maybe that's bad. we will see, carl. >> yeah. totally unwinding the premium that oil had built in. after the russian invasion, gas prices down 50 straight days. tomorrow, we will watch the wage component ahead of cpi next week. let's get to the half. welcome, everyone to the halftime. scott wapner. the stunning run those stocks have staged. how far they can keep going. we take that to the investment committee joining us for the hour. steve weiss, joe terranova, and jenny harrington. let's check the markets. take a look at the down negative along with the s&p. we've been focused


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