tv Tech Check CNBC November 17, 2022 11:00am-12:00pm EST
inventory and expense management those shares are up after the bell that will be in focus and more tech names, specifically applied materials and palo alto. meantime, stocks are lower treasury yields are higher the dollar slightly stronger gold is under pressure and that will do it for "squawk on the street." "tech check" starts now. ♪ ♪ welcome to "tech check." i'm jon fort, with deidre bossa and carl quintanilla the tech stocks are seeing another day in the red and is there hope why some are pointing to sisco and nvidia as travel demand continues to serve the company launches a bunch of new tulles and sonos ceo, patrick spence, listen up. speaking of listening, and
hearing from sirius xm, their sales come in better than expect eggs and the shares are heading a bit higher on the news, carl >> we'll kickoff today's feed, jon, with hope for the bulls this morning cisco and nvidia. cisco beats on the top and bottom line and cisco coming in at 84 and 86 cents and nvidia shares is are lower after gross margin came in well short, bulls are pointing to their forecast and revenue short of expectation and higher adjusted gross margin and that would be 1% off the last year's numbers when shares were trading above $300 a share, jon. gaming down 51 you have the inventory charge of 700 million. it is clear that they are waiting for the channel to clear although some of the sell side research argues that might be a 23-story indeed this is my feeling of caution
here this is not a period where the enterprise is leading and this is about what happens with the consumer and that will enterprise, and so many companies seem to be making these projections based on where things are right now and it seems to be pretty uncertain and just talked about that yesterday. based on the way things look now, don't need any workforce reductions and talk to me again in '23 >> there may be glimmers of hope and has the narrative changed that much? what's the trajectory of interest rates in terms of nvidia, underperforming the sox this year and the chip etf a lot of investors still take issue with the valuation and even though has underperformed still well above its peers in the soxx and the imports of china predictions and bernstein has a note, carl, that says its new
a.i. chip aimed at navigating those limits blunt the impact and still a lot of questions out there as jon points to >> indeed. we'll talk more about that for more on nvidia's earnings let's bring in needham's rajia gil. on the recovery and gross margins would be a start, right? >> yes definitely the gross margins they were guided to 66%. in the quarter that the company margins were lower, they took a big hit and inventory charge in china so that's been cleared out. so the more important focus has been the guidance on margins and they guided back up to 66% and this brings them to levels that they were operating in the past with the inventory correction,
which was 66% to 67% and that was very important to see. secondly, it was solid results in guided light and several headwins the company was facing. obviously, you have the export controls in china that impacted their business and you have the crypto overhang. you have inventory and gaming and yet when you look at all those factors they're still guiding the data revenue saernt to grow sequentially into the q4, the gaming segment will also grow sequentially and very modestly, but the -- they will be clearing out all of the inventory in the channel by the end of q4 so this is going on for shipping and demand for excess inventory that piled up in the gaming segment. so as you look to calendar 23 and you will look to calendar
'24 in terms of more of a recovery year, we think the company is set up better than most going into next year. >> right does the notion that data center re-accelerates in the april quarter and is that one of the catalysts in the year ahead? >> the data center business is going through an upgrade cycle to the newark tkt you are and the hopper architecture and the h-100. we're seeing a pretty big uptick with customers adopting h-100 and that's from verticals whether it's oil and gas or financial services and hyper scalers whether that's meta or microsoft or amazon. they just recently announced a multi-year collaboration with microsoft to build a massive a.i. cloud that's going to be over a multi-year period and it's a very big endeavor we are seeing adoption of the
h-100. we also hope to see that gaming starts to rebound off of the very weak compare starting in april and slowly ramping throughout the calendar 23 it is an issue and that's something we noted in the past and we've been highlighting that quite frequently china, as a percentage of overall sales is in davis center is about 25% that continues to be under pressure >> raji, how confident do you feel in this guide given where we are in the economic cycle and the amount of uncertainty out there about consumer demand right now much less in 2023 because it certainly seems like yes, inventories are being worked down, but there's a lot of discounting going on and perhaps some demand being pulled forward and you know, if the demand doesn't last throughout the holiday season and there's been demand pulled forward, that could point to a very different
'23 than some of the names are suggesting am i overly worried about that here >> no. not at all these are great questions, jon, and this is something that we've been navigating through this entire year. we're more cautious on the broader semi cycle we have for the last six months and we continue being cautious into calendar '23 i would say a few things to put things in context. nvidia has for the most part taken a large hit already to its customer base. so unlike other markets, say for instance, the automotive market or industrial or iot, those end markets where we have not seen the inventory correction or the drop-off in demand we've seen a drop-off in demand for graphics the gpu business is going to be down 30% to 40% this year. it was down 50% the last two
quarters number one, we've seen a fairly big drop off in demand in graphics and number two, the data center revenue is being impacted by china. they took a big charge so we're seeing that impact kind of flow through the model so we're expecting a modest china data center and we've seen that already or at least part of it there is uncertainty around the gaming market and the consumer demand, but we're in the midst of an upgrade cycle on the gaming side and the data center side >> raji, you're saying here that the pain appears to be priced in, right? how do you value nvidia? does it deserve the massive premium still even though it's come down that the bears take aim at >> well, the pain incurred from the fundamental earnings perspective as well as it a large extent from a valuation
perspective. so their end markets have taken and have corrected and they've taken huge inventory charges and if you've taken the last two quarters they've taken 8.1 of inventory charges. so from that perspective, the financials have taken a hit. the valuation has come in. it is expensive, yes, relative to under semis, but i would argue if we go to calendar 23 with nvidia incurring the correction in the end markets, it could be the first -- those markets could be the first to return to the normal cycle and you can start to rebuild next year whereas other end markets have not seen the weakness in automotive, industrial segments of iot those end markets start to see the hit later into next year >> that would be interesting sorting rolling downturns depending on the end market,
raji, it would be interesting to see. thank you so much. >> thank you take a look at shares of alibaba. the company reporting mixed results for the september quarter. earnings beat, while revenue did come in under consensus top line growth year over year and that is not holding the stock back up over 7.5% and a lot that has to do with the terrible performance of the last 12 months. daniel jung outlining the resurgence of covid, inflation, weakening consumption despite an onslaught of headwinds overseas and particularly in china. satya nadella still optimistic about opportunities in the region shared his outlook in an exclusive interview with cnbc neighbora. have a listen. >> we're very, very bullish about what's happening in asia and we're investing in 11+ regions in the data centers so we are absolutely committed to all of these countries and in china, too today, primarily work to support
multinational companies that operate in china and multinational companies out of china are going out. that's really what our focus will remain. >> nadella also calling india a, quote, massive market in the post-pandemic landscape. you are hearing more optimism about china and there's hope that the zero covid policy closes and a shot of beijing traffic and you haven't seen that in a while and pictures from the ground and economic activity certainly increasing over there. >> i want to hear more of exactly what he's saying and i'm not sure if i interpret that as china, with asia supporting multinationals with a presence in china of course, you have to have computing resources there on the ground, carl, but that could be different from purely china growth we'll see. especially when it comeses to
azure and the cloud growth that microsoft is targeting. >> yeah. as for expense reduction and head count reduction, dee, framed it as you measured the company responsibly. >> which every ceo is trying to figure out at the moment meanwhile, we have airbnb ceo and co-founder brian chesky up next we're just get bting started on " ecchk."th ec ♪ ♪ at fidelity, your dedicated advisor will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect.
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♪ ♪ ♪ ♪ welcome back let's get a gut check on tesla down 2% right now. could a new ceo soon take the reins of elon musk it has identified a potential successor for the ev company according to a board member at yesterday's trial that's about musk's 2018 pay package. investors clearly not happy about that news. tesla was the biggest drag on
both the s&p and nasdaq yesterday. shares downer i nearly 20% justi month, dee. >> take a look at travel names on the move this morning despite demand holding up for travel, airbnb underperforming the nasdaq year to date. the company taking steps to attract more host to increase the supply of listings and joining us is airbnb ceo and co-founder brian whisky. when we spoke in september you said there was no let up in demand is that still the case have you seen any change in the last weeks or months or any change in trends >> no. since i saw you in september just a few week ago we announced that we had a record q3. we did nearly a billion dollars of free cash flow in the last year we've done $3.3 billion and this
not have been possible without robust travel demand we're focusing on getting even more hosts prepared for the next travel season. >> right that is a big focus. that's what yesterday's event was about. ramp ramping up supply and i know you're listing your own home to show how easy it can be. the rate of churn on a three-month moving average appear to be the highest in years and for the first time since the pandemic that made up for a net loss in listings are you having trouble keeping hosts on the platform? >> no. turn is really stable and hosts are making more money than ever on airbnb and they made significantly more than the start of the pandemic and it is so popular that we want to make it even easier for more people to get started and the average hosts when they list get a booking within 50% of hosts get a booking within three games of listing and we want to make it
even easier for people and we have a product called airbnb setup by matching you to super host in the area and we're providing more protection with the cover where we'll increase damage protect from $1 million to 3 million i hope that when we do those things more people will consider hosting. 8 billion people in the world and we're still a strong dent into hospitality >> brian, do you -- are you saying that churn has been stable over the last year? have you seen a difference since the pandemic obviously, there are less home available. >> churn has gone down churn has gone down. >> airbnb data, how much weight do we put into that? >> i haven't seen the report that you're referring to, we have the best data of airbnb our platform >> let's talk a bit about prices
and like much of the travel industry and inflation of airbnb has been elevated and it is 40% pry are than pre-pandemic levels and especially on the host side, as well and you'll experience this, i suppose in terms of cleaning costs and how are you making it more affordable. >> last week, we announced that we'll be moving to showing the total price up front when you book on airbnb there will be a toggle when you turn it on and any fees and fixed costs will now be shown up front. so if you turn this on you're not going to see it. we will also be ranking higher and the very best value homes on airbnb and to set discounts and as we enter into the recession, probably the most important things for guest will be affordability and that's what we're focuseded on and if we get more hosts that will also help because a lot of people will be renting extra space in their
home and they'll often provide a great value and you know, part of just to go back to one other thing, why am i putting my home on air bmb, i want to show people if i can do it, they can do it, as well and people create products that are really great and great products for themselves and that's something i wanted to do >> great move. >> good to see you in person and it's been quite a while. you talk about affordability and i think of it being as a premium product in terms of the type of consumer who are is approaching it it seems to be different from the target shopper that you heard this week is more price constrained and i wonder within the airbnb customer component and that might happen if economic conditions worsen we are a very high bnbs and we
are very much a budget travel option for people and generally bnbs and they're cheaper than a hotel and remember, when people do like for like averages and there are multiple bedrooms versus onhotel room. they might be trading down more likely than what they might be doing, and and the biggest expense is if you're going far, and my anticipation and you will see international travel to domestic travel and going somewhere nearby, but we'll have to see what are you doing with your employee base? are you at all tweaking repricing equity are you -- are you doing anything different even with how you're bringing people into the office or off-sites to engender
better culture cohesion >> we're not doing anything differently, people get an nul st every single year. some years the price will be different and a couple of years ago they got pre-ipo equity that did very, very welcoming up next year they'll be priced differently so it all balances out over the long term and we don't make major changes unless there's been major change and the stock has dropped and there's not been something dramatic as far as work, we've chosen to be on the more flexible side i think the future will be flexibility. i don't think it's purely remote and i don't think it's purely five days a week or four days a week i think after compensation, flexibility would be the most important benefit for employees. i think the best people won't be in silicon valley and in new york and the best will be everywhere you want to compete you'll need to have a more flexible policy some jobs will want people to be physically together. even us, we want some creative
teams to be creative in person i don't think peer remote is necessarily a good thing long term either because i think people will get very lonely and people's bubbles get very small and it's hard for young employees to kind of be apprentice apprenticed and learned and hybrid might not be three days a week and you have a lot of flexibility during the summer and there are periods of time when you come together if the office didn't exist, if it did would it look like today? i don't think it would >> i asked you a year and a half ago whether you had plans to encrypt it into the business what are you finding out in the space right now? >> there are a couple of things there. it's been a very popular request. we've been looking at it for a while and i think there are exciting opportunities within crypto it just never made it to the top
of the prioritization list we have so many things to work on the airbnb. i think when we look at the broader space, i think we were all in the nightclub and it turned on. i think we have to be careful about too much euphoria in tech and technologies because people can lose sight of the fundamentals and that people still want to create great value and there's still excitement in all these spaces and sometimes too much money into a space is just as bad as giving a company too much money and when there's too much money there's not enough discipline and lower accountability and oftentimes there's a hangover right after >> we saw that with the ftx and even though it was one of the most requested thing in the platform how come you resisted and giving in to that moment, with crypto where it is now, do you think
that's more unlikely that you will allow people to pay with crypto or move into the space? >> i mean, i think that the reason was the number one voted thing on twitter is because a lot of people on twitter were evangelizing crypto and they wanted more people to adopt it i totally understand it. we just had real fundamentals we want to focus. we wanted to create customer service and an entirely new search experience and even more protection for our guests and hosts. those things turned out to be the highest priority in the company and it's a simple decision and you can do everything you want in your life and you have to make disciplined prioritized choices and although people want crypto ultimately. what most people wanted was better service, more homes and higher selection with a great new way to search. that became the highest. as far as where we are now, i don't want to get too caught up in trends whether it's hot or not hot. if a technology is interesting, if it can solve people's problems we'll be looking at it
regardless of how exciting it is for other people and we're still looking at these things and it's not nearly the top of the priority list at this point. >> brian, you are also a twitter user and some of the changes on the platform, it has an unconventional way of approaching marketing. i don't think you would market now, would you >> we don't do too much. we still do nutritional advertising. i like to zig when people zag. because people are so focused on digital media, we do media and billboards as far as twitter, what i would say is i think twitter had a decision is it a protocol, a utility or is it a community? and i think it made a decision a long time ago that it was probably a community and so if you're a community then ultimately owning twitter is to be in the community managing business and they'll get into the nitty grit of
balancing a lot of stake holders and that's what he'll be doing for quite a long time, and i wish him the best. >> brian, thanks for being with us today talk to you soon brian chesky, ceo of airbnb. sonos, we'll break down quarter with patrick spence and talk about what that might mean for the consumer and shares were open in a three-month high stay with us at humana we believe your healthcare should evolve with you and part of that evolution means choosing the right medicare plan for you. humana can help. with original medicare you are covered for hospital stays and doctor office visits but you'll have
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sales of luxury goods. higher income shoppers also helped kohl's beat estimates, but the retailer says its four middle income customers are getting squeezed the company polled guidance due to weak sales visibility housing starts dropped last month with new construction of single-family homes falling with a two and a half year low even as highers mortgage rates pressured homebuyers despite high-from file list of in the tech sector starbucks workers say they'll hold a one-day walkout at 100 stores. organizers say they're protesting illegal retaliation against union organizing today's also starbucks annual red cup day, when free reusable cups is given away and this is one of the busiest days and some customers are getting an earful.
macy's surging and up 12% after raising its earnings forecast and counting fresh inventory for the holidays and it's the latest retail name to report slowing sales over the past few weeks as investors continue to question the health of the consumer. sonos results coming in better than expected even as the company reports higher inventories if you break down the quarter with patrick spence. good to see you. so trying to figure out the difference between say the walmart-target customer who is pincheded by inflation and doesn't have money left over at least as much to spend on things like clothes and food and perhaps the sonos customer, you expect would have revenues could be flat into 2023. how is this economic environment affecting the sales patterns >> you saw we took an adjustment in june in terms how it changed in the trajectory.
we are able to deliver the quarter as you mentioned and we've seen it really stabilize we've seen a great response to our new product, the sub mini and that's been ahead of the sales and i'm feeling good about where we are today we appeal to a little more of that premium customer, but it's attainable, right? our products are in the $200 and $800 range and it's still attainable for people, but it is more premium >> what's your approach to discounting here in q4 >> i keep hearing that that will be key to moving inventories that a lot of consumers even on the higher end are feeling some debt fatigue and might not spend through the whole season what are you prepared to do then >> so we, our products are so different than most products in the category and our products last for ten years so we don't feel that same urgency to clear out the way
retailers and manufacturers do the good news is because of the inventory situation we will run a promo this holiday period, but it's back to where we were three holidays ago and the last two holidays, you'll recall, we had such intense supply chain issues we weren't able to run a promotion. so we'll run one this holiday and it's controlled and we stay within a tight range of gross margin of 45 to 47% and the inventory will burn down over time and these products last for a long time so we don't get too worried about the inventory position >> a lot of the signs are pointing to consumer electronics. do you think you're immune to that trend that year on year some time in the last year you'll see prices lower than the year before. >> we're seeing prices in terms of the supply chain crisis come down we've seen a whipsaw after chasing demand for two years you are starting to see that happen, and so i think the question of transitory becomes one of what timeframe are you looking at, right?
as you go through it and we're seeing shipping rates come down and the component rates come down and it will come out over the next year. for everybody, there's still a lot to work through in the supply chain and you see broadly have too much inventory and as you bring that down, you will see thing moderate >> the other question i have is how levered you are to mobility, right? you get a new house, get a new apartment and maybe you upgrade and have new components and the low percentage of respondents who are planning to move in the next 12 months is that material for you >> i don't think so because a lot of people have moved in the last couple of years, and i think what's going to happen over the next little while is a lot of those people will look for ways to improve, right so not everybody, when they bought a new house bought sonos. over the next couple of years, we enhanced the new period
we see kind of steady and stabilized as we said in our outlook for the year, but it's pretty steady over time as people do homeimprovements and some people as they move in and we don't expect that to overly impact us. >> patrick, good morning i it's deidre. it could include devices like alexa and i wonder if this gives you an opening what do you think? have market forces rectified what sonos has called an anti-competitive position with the big tech giants in the space? >> it's a big question, d. we're zigging while others zag we are investing in four new categories so i see a lot of people that are refrenching right now, and you also saw in a lot of that that it's become so clear on something that we've talked about for a long time which is a lot of the companies that have been losing a lot of money trying to get the hardware into the market we've been profitable for four years. we continue to be disciplined in
how we're investing. we're gaining market share right now and i expect over this period we will continue to gain share and we're looking at how we expand and get into new categories and i'm super excited about the future it will be a year where we're watching it very closely, watching the consumer very closely, but as we think about the long term, we're opportunist in optimistic and get share into new categories >> how are you approaching the mechanics of customer acquisition and a lot of d to c companies and that is part of what you do and you've had to adjust how you handle digital marketing because based on what's happening with ios and based on what meta and others are reflecting the economics have changed there. are you tilting more toward the channel, toward even brick and mortar retail for sonos product or are you in a different position because of word of mouth and loyalty to drive through digital, as well >> great question, john. >> i think it's an interesting
time for the last 20 years, still today the number one way that new customers come into sonos, you've heard in an existing customer and it continues to be the number one way that continues to come in second to that it's the digital efforts you have and you see us experimenting more advocates for the product and short video that we're doing in digital, and we've ramped up our channel in retail and we're doing more there and we want people to experience the products there so if it's more distributed than it was with heavy focus on dtc and now you're seeing it moderate back to the omni channel approach and we like the position >> very interesting and it will be a story of this holiday season patrick, thank you >> thanks, jon and quote, never in my career have i seen such a complete failure of corporate controls than at ftx" says their new ceo this morning and he was the lawyer for enron's bankrupt
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regulators this candle is the enron moment for the crypto industry. in the new ftx ceo who helped lead enron following their bankruptcy said in a delaware court filing quote, "never in my career have i seen such a complete failure of corporate controls of such a complete absence of trustworthy, financial information as occurred here. ." he spoke about his own exchange's assets on "squawk box" this morning. >> there's an operational fund for the business itself. that should be a combination of cryptocurrency's stable coins and every different business can allocate that differently depending on the business model and so even today, we are profitable and sustainable our allocation is about a third in stable coins and a third in some of the larger, and also, we
keep the bnb, that we have in ouraccounting. >> okay. let's dig in to stable coins which make up about 30% as he said of operating profits and crypto exchanges there is a tendency to treat stable coins like cash because they're supposedly pegged to the dollar and they've remained stable as wilder events and they're only pegged to the dollar because the market collectively believes so. collectively pegs it so. a loss in confidence can cause a run and this is a $66 billion, $23 billion with no oddity ands no way to know if they're leveraging their reserves themselves these have been called the black swans of the crypto space for years. guys, those kinds of events no longer seem like the black swan events and the fallout, many have argued, jon, has only just
begun and it is worth keeping an eye on stable coins this morning. >> people have been talking about black swans and the whole crypto ecosystem can be filled with a murder of crows, i think, is the question. how much is this -- people said that's one bad apple that's one bad apple when we saw genesis happening, they initially said hey, we're fine not directly connected to ftx and then they went under gemini has said we're not connected to ftx, but they had this deal with genesis and so at least now on the lending side they're strong do some explaining to their customers. and so, you know, my questions going forward and how much of the soil is just bad in the crypto ecosystem and fomented and encouraged a type of behavior that is now falling down and leaves relatively stable players in the ecosystem
with an incentive to inspire belief to prop up the overall system just so that people don't withdraw funds from it and endanger business models that have been profitable up to this point. if people stop trading so much how long does it stay profitable >> that's when you start talking about a real ice age and if you get doubts in the centralized protocols. what happens to decentralized and trust no one that's basically the message of the last couple of weeks in the wake of the ftx fallout. guys -- >> one more thing, carl. c.z. saying he'll go out and pick up some of the fallen companies for pennies on the dollar it does beg the question about finance and we take a look at pitch book and that's pretty good talking about what private companies have raised 11.8 million according to pitch book has raised their investor
list and the whole slew of investors and prestigious ones and ftx, you have to wonder where are they getting the money with sam bankman freed did in the summer and rescue the companies albeit in a cheaper price in this environment. >> morgan stanley dumping sales force for service now, find out why when we come back after the break.
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let's get a gut check on service now. morgan stanley calls the stock a top pick replacing the previous favorite sales force it gives it a price target of 520. the company's well positioned to benefit from a growing market. morgan stanley also heighting the names saying they should have cash flow growth of 30 +% guggenheim upgraded on october 24th which we took note of back then and moffett on october 27th three is a trend maybe >> could be. could be, carl speaking of enterprise software, this week i spoke with the nutannic ceo here in new york.
he's offering customers multiple options for deploying the software because flexibility helps manage costs >> what we find with customers these days is they are more and more concerned about cost and making sure they're getting a return on investment and making sure that the business game is solid skills are solid as they work on these projects. these projects are still very strategic for them you're all looking at how to use the cloud effectively so those tend to be very strategic positions. >> and given what we're seeing in big tech layoffs and a stagnant ipo market i asked him about hiring and where he's finding talent >> it's actually coming from two places one is called all the megacaps but the other is -- that got funded during the last few years and then less loss and more retention. >> kind of helps to be in the middle >> meanwhile the nasdaq is down
about 0.9% this morning. check out the biggest laggards you're going to see the travel names. some of the biggest winners, chinese names. on nearly 40% just this month ale. tech check is back in a moment another busy day? of course - you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network. from the most innovative company. bring on today with comcast business. powering possibilities.
u.s. relations with china increasingly in focus at least when it comes to chip production but while some look to diversify supply chains with domestic players names like microare betting big with another country, and that's japan. k >> there's offshoring, reshoring and now what the biden administration is calling friend shoring, investing incountries with like minded countries to safeguard products its plant in hir seema japan with a $32 million investment from the japanese government and the diplomatic support of the u.s. the ambassador who visited the plant this week along with micron's ceo tells me in an interview from tokyo the companies now are prioritizing stability over cost. >> russia and china have shown you you never, ever leave yourself economically vulnerable to a despotic government that's tried to upend the global order,
and that's why i call it a major restructuring or reordering of the global economy >> the white house doesn't have comprehensive data on how many of these investments have been made so far but point to the intel expansion. of course china is taking umbrage. emmanuel says china started it >> we're reacting to china china is the one that created economic coercion in 2016 on critical materials they did it to australia, lithuania, to the philippines and did it to taiwan what the president is doing is reacting to that >> while we're focusing on chips now the ambassador says pharmaceuticals and energy will be targeted next guys, back to you. >> wow, okay
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one more thing before we hand it over to the half we'll get a read on cyber security demand this afternoon when palo alto reports results the stock is down 16% on the year but outperforming the nasdaq by a wide margin. 88% of analysts are calling it a buy ahead of results we know the street loves these names and cyber security because of its resiliency. we should note palo alto underperforming this month down about almost 10% versus, you know, the broader markets which are up >> yeah, cyber security is not just one thing and i think that's something investors are going to get pretty acquainted with over the next couple of quarters the companies on consumption models that are selling on a per seat basis that affects net revenue attention and affects some of the value eggs here
quite possibly we'll see if that's reflected in these results. >> i know cramer has obviously been constructive on cyber and palo alto in particular. guys, as we're talking session highs quickly here dow's down only about 40 points oil at a six-week low going to be interesting and in addition to palo alto tonight we've got amat let's get to the judge i'm scott wapner front and center this hour the bullard beat down clearly rattled by his remarks although as carl just said stocks are getting off the map this hour. joining me for the hour michael farr, josh brown show you exactly what the markets are doing here just past 12:00 noon in the east we're at the highs of the session, so we've rallied a bit off the bullard beat down and we called it that becausee