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tv   Tech Check  CNBC  December 23, 2022 11:00am-12:00pm EST

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to the santa claus rally it is the last final trading days of the year up 1.3%. at least we're off to a good start on the santa claus rally back to you. >> thank you very much down three-quarters of a percent on the s&p so far for the week that will do it right now for "squawk on the street. i will show you later on "closing bell. in the meantime "tech check" starts now. >> good friday morning welcome to "tech check." a busy day today markets seeing an ugly end of the year nasdaq down 9% over the last three weeks. where to pile in and what to avoid going into 2023. microsoft responds to the ftc. the latest on the tech giants battle with the government cyber security struggles, hitting its lowest levels since
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2020 what we can expect from that space next year. >> yeah. let's start with stocks. tech sector nasdaq back near the lows of the year the last few weeks have just been ugly. frank holland joins us with december's move and what it could signal for 2023. >> a lot of red here on the nasdaq a 9% decline this month. a 33% decline this year. apple having the biggest negative impact on december, dragging it down 147 points. tesla more than 109 points investors have a lot of concerns about elon musk running twitter. winbush lowering its estimate for deliveries chips again under pressure micron's disappointing earnings. job cuts weighing on the space overall. we're talking invidia. we are looking for names moving the nasdaq higher, especially today. likely names you don't associate
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with the nasdaq. trucker, old dominion moving the tech heavy index higher today as investors looking for other names in the nasdaq. and moderna having the biggest positive impact on the index in december in fact, it is one of only ten stocks moving the nasdaq 100 higher this month. back over to you. >> frank, taking it broader than the nasdaq, you know who's having a great year so far t-mobile up 20% box is up 17.5%. and ibm is up 5% on the flip side, more of those kind of newer start up names in carvana and vroom. affirm is down 91. of course coinbase as well it's just been a gut punch of a year for those cutting edge type of stocks. i mean, nobody is talking about
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t-mobile and ibm shaking things up but a lot of folks left box by the wayside after that activist pressure but some of those slow and steady it is the year of the tortoise. >> ibm, cisco, s&p, all of them having strong quarters i see a difficult few vehicles really, i think it depends on the exact business i was talking about this yesterday especially when it comes to the enterprise names under pressure it is about what do you do are you multifaceted ibm and cisco provide multifunctionality. >> frank holland this morning. >> wait, before you go, i notice you guys connected on the pound yesterday on the first try. >> yes indeed, yep. we made that work, frank we'll talk to you in a bit let's continue this conversation
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bringing in david katz, bullish on technology. it is great to have you. it sounds like you are willing to say there will be additional weakness short-term but beginning next year we will talk about the long-term potential around some of these franchises. >> exactly we're a value shop, so we're rarely excited about technology companies. in light of the 35% decline in nasdaq, in light of the 50% to 70% decline in a lot of companies, we are optimistic about these companies. we think the worst is behind them might be more short-term tesh l turbulence many are selling at 15, 16 times earnings we think it is a great time to be buying. you have to close your eyes to short term anything can happen. but we think a year from now a lot of these stocks can be 30% to 40% higher. >> amazon, google, qualcomm,
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apple, how does that conversation happen as estimates in your view will continue to come down? >> well, the testimates are coming down, but a lot of these companies sell at 30, 40 times earnings and today 50 and 60 times earnings right now the market is focused on negative momentum we think you have a negative year flush in terms of portfolio window dressing. but we think that people are going to look beyond a weak 2023, toward 2024, which is a recovery to say, hey, these companies are selling at 15 times earnings take amazon, for example they generally sell between two to three and a half times sales. the average is about 2.8 times sales. today they're at about 1.65 sometimes sales. so we think you are getting a lot of really good businesses, really good, long-term prospects. we're less concerned about the varied year term but long-term you are getting it at a good price. these companies will come back
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very nicely. >> but, david, it is interesting to me that they reset in different ways you mentioned alphabet i think it is back at q1 2021 levels paypal is way back to q4 2017 levels so are they at different points in their execution in the viability of their strategies? do investors need to be careful about seeing just that they're cheap? is there a reason some of these are cheap? >> well, there are different reasons why some of the names are cheap. in aggregate, the baby has been thrown out with the bath water you look to buy companies with good, long-term prospects. we're still wary about the zooms of the world and the pelotons of the world. but the companies we highlighted here all have very good long-term prospects. we like the management of most
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of them. we think they have great prospects yet. you are buying it at 15 times earnings we're less concerned about where the levels are back to and concerned about the valuations and the prospects for the next one to two years we think it is a great time to be buying them if you are willing to look a year out it is a painful time to be buying them if you are buying them today. >> yeah. are you concerned that whatever growth comes will have to be organic given that m and a will face a lot of regulatory scrutiny given international pressures, how much of it will have to come from the core business >> it's all going to have to come from their core businesses. we think for the near term, m and a has been shut down so it is a question that you have got really good, long-term businesses google is the largest search engine in the world. yet, it sells at 15 to 16 times earnings we think there are many, many prospects like that. qualcomm doesn't have to buy anybody. they will be a dominant chip
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franchise for wireless communications, for the internet of everything, for automobiles if you are buying at ten and a half times earnings for the 2.7 times yield. we're not looking for these companies to acquire we think they will get back to growth and they will get a significant multiple expansion as the earnings bottoms out and people look forward to '24. >> with everything you said, i wonder if you considered the micron news and the call there and some of their guidance for next year, sort of an affirmation of your view that things may get worse before they get better or if it was just so -- so bearish and with so many fall-out ramifications that it made you maybe second guess this theory. >> well, again, our thesis is based on a 12-month outlook. and generally technology companies will bottom out when the news is bad. we think the news is pretty bad, especially for semiconductors. so that's consistent with what we're seeing we think that by the time people
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think they're bottoming out, the stocks will move well in advance of that. what you are seeing is micron went down a lot more when things were really good now that things are really bad, it is going down at a slower pace that will be the start and then it will go up again, we prefer qualcomm or texas instruments. >> all right do you think -- if technology is your favorite trade, is its biggest competition going to come from the likes of industrials in sort of classic, old economy companies or maybe just fearful y ful utilitiutili? >> we think it's market psychology once the market stops being fearful the fed will raise rates forever and throw us into a deep recession, we think people will come back to looking at businesses at a long-term basis. we think technology is a base people come back to. we think industrials will come back financials are well positioned for next year. the things that did well less
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year we're less enthusiastic about. we think that's going to slow down we're less enthusiastic about energy as well. >> interesting, david. we will put this play book to the test in the coming months. see you soon happy holidays. >> thanks a lot. you as well. all right. microsoft responding to the ftc after its suit to block the $69 billion acquisition of actisigs bli blizzard microsoft arguing we're just a lowly number three. >> that's basically what they're saying they have been making the same rgmentes since the deal was first announced in this response to the ftc lawsuit the big thing here is microsoft wants to offer call of duty on rival platforms for ten years and is willing to make that enforceable by the courts. the lawsuit raised concerns about making call of duty, which
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is a multibillion dollar gaming franchise, exclusive to microsoft platforms. brad smith offering an olive branch to the ftc to settle saying in a statement, quote, even with confidence in our case, we remain committed to creative solutions with regulators that will protect competition, consumers and workers in the tech sector as we've learned from our lawsuits in the past, the door never closes on the opportunity to find an agreement that can benefit everyone so what's next year in this case both sides are expected to meet in court early in january to set a schedule for the following months they will go through discovery and all that process but there is always a chance they could reach a settlement before the trial happens also, don't forget, regulators in the eu and uk are scrutinizing the deal. shares are still trading well below microsoft's offer of $95 a share, so we know how confident investors are that this deal
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will get done, john. >> steve, the narrative changes whether you are talking about the reasons for the deal and then the reasons for regulators not to block the deal. but if microsoft is just going to give call of duty access to everyone, what is the point of buying it? >> there is a lot of points. they're really going after them because of its mobile business in this response microsoft lays out, look, wedon't have a grea presence in mobile, and this is going to help boost that mobile gaming business, which, by the way, john, that's where most people play games. they play games on their phones and tablets, not on these consoles at the same time, call of duty makes most of its money off platform, off of x box, off of pc you have to take into account playstation and other platforms that call of duty is on. microsoft saying, hey, look, we're spending $69 billion on this company it makes no sense for us to make call of duty exclusive because
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the company is just not worth that much without call of duty everywhere all at once that's why we're offering it that's what they're saying. >> i was trying to decide whether or not we graduated from large companies playing mr. nice guy to playing tough but then i thought about the fact that meta has been trying to get elena kahn to recuse. >> yeah. there is a much smaller case with the ftc suing meta to block their acquisition of a small vr company. that's this whole thesis against her tenure as chair of the ftc we want to stop these mergers before they can turn into something big. they look at instagram and what instagram became because facebook was able to buy it and become a dominant force in social media they don't want that to happen to again whether it's in the metaverse or in gaming. >> i don't know. $69 billion for a mobile
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business seems like a lot. and then do you really want to marry somebody and still let them date other people >> they bought minecraft eight or nine years ago. they still keyed it on every platform because that's where it makes money. >> it wasn't $69 billion that was like $2 steve, thank you. our next guest still sees microsoft as a winner for 2023, naming it one of his top picks plus, meta playing a quarter of a million dollars to settle a class action privacy lawsuit linked to sharing information with cambridge analytics sebastian joins us on why he sees 2023 as an uphill battle. "tech check" just getting started.
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- this is "the more you know" like you've never seen it before. - these are real talks... - real experiences... - used to spark real action. - join me and others... - as we get personal about making an impact.
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♪ let's get a check on tesla today. seeing a massive fall from grace.
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down nearly 40% in three weeks, losing more than half a trillion dollars in market value since the beginning of the quarter one person jumping ship has been elon musk saying he will not share any more shares until roughly 2025, but he did make similar shares in april. since then he sold $24 billion in stock and $39 billion since the peak in november of 2021 a lot of different discussions on that twitter space, john, about the economy, about fed hikes maybe being the most damaging ever in a hike cycle. >> sure. i was mentioning yesterday that tesla, walmart race. they're still neck in neck, right? walmart was a little ahead at the beginning of this session when tesla was down big. it's since rebounded a bit tesla is still down one-and-a-half percent i like that comparison because walmart is that kind of old school retail value play that does relatively well in a tough economy. and tesla, that's been one of
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those names that really went gang busters during the easy money cycle as elon musk seems to be eluding to how they play off of each other from here i think could be, again, interesting for now let's turn back to microsoft. the stock gaining popularity on the street as we head into a new year with morgan stanley evercore and now oppenheimer all calling microsoft a top pick for 2023 here with his bull case for the stock, timothy welcome. it makes me nervous when everybody likes something. what's the bear case that you are protecting against here at microsoft if everybody likes it? >> great point i have been following it now almost seven years and it's always been the most loved stock in my universe it is nothing new here and the reason is they really have the dominant tech platform for enterprises and the cloud platform for enterprises
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they're really at the stage when they can upsell a lot of new products and services on adjacent markets both vertically with software and more infrastructure products at this point. obviously there are risks. this year they got hit from currency they got hit from russia the biggest longer term risk is probably china it is probably 10% of their profitability, between 5 to 15%. the macro economy is obviously a risk but i think they're in a better position than most in a weaker economy. >> is there a risk from unbundling i keep hearing that in the enterprise space right now customers are trying to say we don't want this other stuff that maybe we're not using as much because we're trying to drive productivity if that starts to happen in the marketplace when you go to market and then you have this activis blizzard thing, does that perhaps throw them off. >> that won't affect microsoft's
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stock price that much. it is less than 4% of the firm value. it is nice to have they're trying to create gaming as a service on their cloud platform it is more of vertical integration. i don't know if the ftc will be able to stop it or the government regulators around the globe at this point because they basically are creating a brand-new product. on the unbundling front, that is a risk for the tech industry microsoft is so dominant and so early in bundling, they are getting into security. they are getting into crm, erp they are bundling networking in with their networks and services so they are going to customers and telling the customers, we'll charge you half the price of what you're paying now for about 10, 15 new products and services if you want to save money. and i think customers basically have to use microsoft for a majority of enterprise customers for a majority of their tech needs. so microsoft is really a winner from customers looking to save
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money. >> you know, we had a discussion a moment ago about the ftc and blizzard how do you characterize their level of stubbornness to make that happen, how far they're willing to go to make it close and if it doesn't turn out and if they had their sights set on something other than in a big cap space. >> well, i think the government feels they have been burnt with some of the hyper scalers and platform companies making acquisitions where they were able to dominate a sector. facebook has done a few of these things they're trying to set a precedent where they're making it harder for the large tech companies to dominate new industries but they don't have a lot of legal standing in stopping this. microsoft has to pursue this as aggressively as it possibly can for this acquisition but also future acquisitions and make targets comfortable that microsoft is going to really defend them if need be
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once again, this is creating gaming as a service, which is technically not really been possible until we create cloud infrastructure more edge based, low latency. and it will be a brand-new product that customers and consumers we think offer a lot. >> you mentioned that microsoft is one of the most loved stocks in your coverage universe. another is t-mobile. and it's arguably been underloved because it is up 20% year to date and probably not a lot of people saw that coming. what's next year's t-mobile, something that is perhaps underloved, everybody doesn't have their focus on but could do pretty well? >> the one that everyone hates in my yuniverse is verizon. their network is improving quite a bit. you know, we think cap x is coming down, cash flow improving quite a bit. t-mobile is loved by my
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investors. verizon at this point we think is underowned and very underappreciated >> yeah. i wasn't saying that t-mobile is not loved, just underloved like it should get a little more, right? >> yeah, for sure. >> timothy, thank you. >> thank you meantime, sam bank man freed out on a $250 million bond kate rooney joins us to spell out what comes next for the crypto mobile. >> that's right. he is heading back to his parents house in the bay area after getting that record breaking $250 million bond he appeared in a manhattan court yesterday after being extradited from the bahamas he was granted bail on the condition he hand over his passport and stay in california. he has to submit to mental health counseling. he's wearing an electronic
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monitoring bracelet. the judge decided bank man freed wasn't a flight risk since he's gained, quote, sufficient notoriety, making it impossible, as they put it, to engage in more financial crimes without being recognized his parents both stanford law professors put uppicwity in their home to secure that loan it will be signed by one non-family member. bank man freed doesn't need to post that, but his parents are on the hook for that if he flees or fails to show up in future court appearances. the u.s. attorney says this is the largest ever pretrial bond 25 times bigger than bernie madoff bank man freed was indicted earlier this month his next court date is january 3rd. back to you. >> kate, appreciate that we'll see what happens in a week
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or two. cyber security is taking a major beating this year, as you know we will break down the outlook for the coming year right after this break to adapt in a fast changing world, you could hire a professional pit crew. go, go, go. sorry. nope. okay. fresh donuts - hot coffee! they deliver real time data and business forecasts when you need it. i think it was fine how it was. (air tool sound) to help you stay ahead of the curve... or you could use workday. the finance, hr and planning system that helps cfos make better decisions faster. on the other hand, we had a great fourth quarter. for a accelerate your decision-making world. workday. for a changing world.
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if you wanted to hold my hand... [ gasps ] all you had to do is ask. i am down to my last life. when you only have one life... that's what makes it special. go get 'em tiger. welcome back to "tech check. we are looking at the outlook for cyber security coming up in the new year markets hanging on to a positive outlook. >> here's what's happening at this hour. a flood of mostly encouraging economic reporting going in to the christmas weekend. inflation gauge watched by the feds prices rose just 5.5% over the last year. that's the slowest pace in 13
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months personal income rose four tenths of a percent outpacing inflation and street forecasts personal spending rose but less than expected because of gas and home furnishings consumer sentiment is on the rise thanks in part to lowered inflation expect expectations the outlook is down to 4.4%. that's an 18-month low and the massive winter storm pounding the nation has led to more than 3,700 flight cancellations, tracking says seattle is hardest hit. more than 400 flights have been scratched due to heavy ice and snow shippers are also getting hit. ups and fedex say the storm may delay the deliveries of some packages past christmas, guys. hopefully you have a backup plan there. >> okay.
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yeah bertha, thank you. meanwhile, tech is down continues to be an issue bug hitting multiyear lows back to 2023. stocks leading lower including the cloud security company zscaler. the lowest recent earnings re report, zscalers founder joins us now with his outlook for the company and cyber security in '23. jay, welcome good to see you again. the billings outlook challenged by the macro at the same time, i was talking to rubrix reminding me that economic downturns tend to see a spike in hacking activity. how does '23 look overall? >> so there has been a significant increase in hacking and cyber security attacks we recently released a report
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for 2022 the number of attacks in various categories have gone up over 40%. now, hacking is impacting many areas. in fact, one of the biggest ones recently we're seeing is holiday shopping that's actually impacting consumers as well. but on the enterprise front, our customers are telling us that cyber remains the number one priority we aren't seeing or hearing from my customers where they're reducing the cyber security budget and with zscaler, which is not just doing cyber security, it is also helping reduce costs and complexity so i feel very good and bullish about our business opportunity >> so is 2023 going to be a consolidation here for cyber security in particular i mean, we could talk about enterprise software overall, but are the stronger players and we could include zscaler in with that group, going to buy more
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struggling players with good technology >> yes customers are tired of lots of foreign products so consolidation is going to happen more and more but it is more than consolidating with cyber security products. zscaler in net books products, security products, so it simply improves user experience, reduces cost and improves cyber posture. the combination of all those things with a true zero trust detection that's built for the wall to plug is really what's helping us contrast with some of the legacy fire wall security vendors. you can go on a buying spree and buy ten products or ten companies and stay on the platform provider. that doesn't make it a platform. a platform is the integration of products in a meaningful
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passion. we are the switchboard that connects any user to any application without being on the network. hence, eliminating the actual tech boom. that's really why we think our business will be strong in 2022. sorry, 2023. >> '23, yeah i know we're all going to be writing '22 on our checks. jay, i wonder how you would characterize the frequency of cyber breaches lately. do you think they're getting fewer and farther between? and at this point, would a resurgence of activity, in breaches i mean, be positive for budgets or at this point do companies think they have spent what they're going to spend, period. >> i think every cio understands that cyber is a big risk i do not think we need one more to convince the management that they need to spend more. we are seeing strong interest from the board level, ceo level, cio level to beef up cyber
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security the root cause of cyber security also lying in having the network architecture that's traditional where things move on the lateral side by changing the network and security together is how zero trust achieves better security, and that's what we do. that's what sets us apart from traditional net book security vendors and our customers have seen significant savings from us that's why over 40% of the customers trust zscaler to protect them in this new world of cloud and mobile world. >> what about the geopolitical impacts on your company specifically and the industry, sure, but with the uncertainty in europe, with that war continuing, with the uncertainty coming out of china, what is the impact on your ability to sell into those markets >> you know, i made the decision years ago that we will not sell
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to companies in russia and china, okay? i said there is plenty of market out there, so don't sell in those markets. it has an impact on us there is a big market outside those countries. but those two geopolitical areas are having an impact on our customers. when it comes to china, our customers who are doing business in china, they want to make sure the access from china by their employees to the systems in the u.s. comes through a zero trust architecture so we are seeing much higher demand for zero trust architecture from zscaler to handle that. when it comes to russia, it is similar things, but our customers in europe are especially worried about it. it's also put a lot of financial pressure on them so our customers in europe are especially asking for consolidation, cost reduction and simplification and that's what we're doing.
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>> okaym cuts both ways they need the technology but they also want to deal great insight. meantime, google low per performers at high risk in 2023. that story when "tech check" cos ckn st cplof minutes. aoue that occur in their lives. for them it's the biggest milestone, the biggest accomplishment, the sale of a business, or an important event for their family. for them, it's the first and only time. we have seen this literally thousands of times, in thousands of iterations. ♪ ♪ i am vince lumia, head of field management at morgan stanley. whether that's retirement, paying for their children's college education, or their son or daughter getting married, our financial advisors need to make sure that they are making objective decisions, every step along the way. every time you hit a milestone, an anniversary, a life event, the emotions will run high. making sure that you have somebody, a team of individuals that have seen it before,
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it has been nearly a decade since microsoft ended its stacked ranking program, a controversial bell curve approach where employees get categorized as better, best and no good, kind of automatically but that might be coming back into focus for tech in general as google tells employees more of them might be at risk for more rankings when it comes to performance reviews. jennifer has that story. jennifer >> john, that's right. employees were told that they -- more of them will be at risk of low performance and corrective action in 2023 than in years past we had found that the company had -- executives told employees that a new performance overall will result in 6% of employees getting low marks as opposed to 2% in years prior.
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27% of employees will be eligible, likely, for high marks. 22% in years past. so really what's happening right now is the context of the timing of this. obviously employees are very worried about layoffs and they're seeing this as a sign that the company could be reducing head count in the new year without actually using layoffs. >> well, sure. and maybe using layoffs also jennifer when we were first saying productivity needs to be higher, that seemed to me like a shot across the bow saying either everybody will start working a lot harder all of a sudden or there will be cutting. when companies move into that mode, they need some sort of data backing up who they will cut. if most of the employees were above average in the past, like it is harder to do isn't this just laying the ground work for making some kind of cut one way or the other?
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>> john, that's what employees seem to think. this is a data company they will use data to justify a lot of their actions so employees are kind of getting the sense that that could be coming for them. and especially coupled with the fact that they are constantly asking employees we listened to the recent all hands call and many questions around how distressing it is around this potential change and the economy right now the way it is, seeing layoffs happen across the industry so it is very likely and executives have been pretty quiet and have not answered directly the questions so it is kind of laying this ground work for what employees are fearing. >> that's interesting. i mean, whether it's the comments earlier in the year about being more efficient, clearly your story today i just wonder, where do you think the delta, the difference is between aggressive, hard number actions the way meta has
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taken and why google has taken more time? >> yeah. well, first of all, i think, karl, it is important to separate the two companies for one, i think google employees don't expect super mass layoffs the way we saw at meta they're different companies. google has been a lot more stable and the cfo has been a lot more responsible but i definitely think that they are a bit smarter and they handle -- the cfo has a lot of experience handling these types of situations in all conditions of the economy and so i think that they have probably set themselves up to use this as a last resort but try to avoid and it move it slow until they know exactly what's going to happen. google for the most part has been knowledgeable and, you know, wary of the holidays coming up and not making any huge decisions as far as that.
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>> jennifer, thank you yeah having google search and your own first party data not be affected by ios changes helps very much. remember that seinfeld episode with who has hand in the relationship, right, between labor and management now management has hand. >> we knew it was going to turn at some point. meanwhile, the sky is falling. the first trust cloud computing etf down 5% this week. we'll check in on one of the companies dragging it down see if y c gouanuess in just a couple of minutes.
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shares tumbling of nutanix on this report that hue lit packers ended talks to acquire the company. confirmed in a statement to cnbc that, quote, there are currently no discussions with nutanix. shared jumped in mid-october when the company reportedly was exploring interest from firms and strategic buyers we were down ten plus earlier today but getting a big part of that premium back. >> if you look at that chart, you have to remember back the last day of august before that earnings report, nutanix was at
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$17.30 yeah, it is down to $26, but that's better than the $14 at the lows for the year. our next guest, meanwhile, lowers his estimates across the biggest ad names including amazon, meta and paypal. "tech check"ilbe bk a wl acin couple minutes if your business kept on employees through the pandemic, can see if it may qualify for a payroll tax refund of up to $26,000 per employee. all it takes is eight minutes to get started. then work with professionals to assist your business
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let's get back to the internet sector today. our next guest lowering estimates across the board on names like alphabet, meta, and paypal thank tuesday a slower economy in e-commerce and online advertising post pandemic. in addition to expectations and softening labor market joining us this morning the analyst behind that call collin, great to have you back welcome. >> good morning. thank you. >> i'll ask you in the meantime, though, obviously cutting estimates is nothing new it lends a more interesting question whether or not the expense control can keep up with what we may see in lower earnings down the road >> yeah, hopefully you can hear me, carl
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i think that's a key silver lining while top line revenue trends are likely going to remain under pressure in particular a recession scenario more companies within the sector have been more proactive in terms of managing expenses in advance what we think will be an acceleration of digital trend in maybe the second half of the year or 2024, a lot of these companies are going to bein a stronger position from a cash flow and margin perspective. >> so does that mean when you say your return to quality growth picks are names like amazon and meta, is that chargely leading on some of that call production? >> i think the other part, though, in an ironic twist a recession next year would mark the end of what's really been a long string of headwinds, you know, for these companies from the recovery on travel and retail, supply chain, issues with privacy, europe, et cetera. so looking beyond that and
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you'll see secular growth trends reaccelerate, and that's certainly a part ofthis call a well in addition to the expenses >> i was talking to jennifer elias about alphabet and google looking like it's putting together something like the old stack ranking when it comes to employee reviews, which tends to be a step that gets taken before layoffs happens. is stock ranking coming back across the sector? are we going to see stocks start to move higher not so much on revenue out-performance but on cost controls perhaps even driven by layoffs throughout, you know, maybe q2 or beyond in '23? >> well, john, i think that once the market slowly embeds slower growth and that's probably why we cut our numbers this week is consensus estimates still looked like they were factoring in accelerating growth. as those expect eggs come in
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then i think the focus on margins and cash flow can be more of a catalyst i do think that companies like alphabet are in the process right now of reviewing expense structure, not just capx but operating expenses and head count. i think you will see more in the new year from companies like amazon and alphabet. and that combined with more realistic top line expectation that's the scenario where these stocks can work again. >> we're looking at a wall graphic here of some your top picks by category. ebay makes some sense, but explain ea and alphabet. >> yeah, i think alphabet the resiliency of google search meaning people will still come to google and look for information and advertisers are still going to spend on paid search, customers are literally one click away and the search tends to be the last channel of advertising cut back in a recession.
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we saw that happen in prior downturns. more profitable diversified revenues overtime. i think for ebay in a recession scenario it's a value price marketplace. so as people are looking to pay lower prices on inflation on every day products, that for a marketplace like ebay can reemerge and be more attractive to consumers we're also buying back stock it's a very profitable high margin company, which doesn't hurt >> it's going to be fascinating as we clear out the holiday dynamic and start talking about longer term trends on consumer spending for '23 our best to you. we'll see you in the new year. >> thanks, guys. really appreciate it >> if you missed part of the show today or any day this year, don't forget to follow and subscribe to our podcast listen anytime, anywhere, wherever you download podcasts tech check is back in a moment
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one more thing and that's what's coming ahead in 2023, carl, as we sort of look back
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oon '22. the nasdaq is lower once again, which seems like a good theme to look forward to. i think 2022 was about buyers remorse. elon and twitter, buyers remorse. everybody but elon and tesla, buyers remorse crypto, if anybody bought crypto they probably have buyers remorse in '22 i think in '23 the theme is going to be window shoppers remorse. we have people that watched these stocks go down to these levels and said they look kind of cheap but not cheap enough to buy. at some point ip'23 people are going to be saying should have bought that. >> people like a sure thing, and by the time you get that clue it's a little too late shorter term everyone talks about santa, but we forget how late his arrival classically is. in 2018 the last time we had a down december you had to wait until the last four sessions which is essentially where we are.
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as cramer said earlier this morning maybe yesterday's reversal is the beginning of something we can cobble together to at least salvage at least this month >> well, in this weather it's going to have to be a rudolf rally because santa might want to get here, but unless rudolf's nose lights the way -- and hopefully it's a blue nose as opposed to red this year >> have a great holiday weekend. merry christmas and happy holidays let's get to sully and the half. carl and john, merry christmas. welcome to the half time report, everybody. and merry christmas eve, eve it's certainly not been a merry month for technology but however it's been a good quarter for stocks with that in mind what is the next move for the money and the market with five trading days left in the year we've got much to do and


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