anyway, apple? it provided the proof that it's way more than just a one product p can, and i think it's service revenue stream is transformative. oh, yeah, by the way, own it. don't trade it. much more "mad money" ahead. including my executive with h&r block. the company's newest spokesman, jon hamm, might be good looking, but the stock's been anything but. i'll ask the ceo how he plans to turn it around. then i'm diving deeper inside the iphone. i got one under the radar name that could come down tomorrow off of qorvo. and all your calls rapid fire in tonight's edition of the lightning round. so stick with cramer. ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. >>> with tax season rapidly approaching, what the heck is going on

this includes the apple tv, and the apple watch. should we be concerned? not really. a lot of the concern is around the apple watch, in terms of not being able to walk into a store and find one. they see the apple watch hit all-time unit sales for this q1 holiday quarter. not a ton of concern there. the cfo told us the apple tv launch at the end of 2015 compared to the end of 2016 aliday quarter really was discrepancy there of why revenue drop in the category. caroline: in the last 30 seconds, kick it on for us. it looks like it is fx. all hopes on the iphone 8? is coming up in the september quarter and will make up the majority of the for thq1 for the next year. they have been hinting at it since the iphone 7 came out last year. we have been reporting that it will have a new glass curve design with a display with more colors. there is a lot riding on it. we will see how it does one year from now. caroline: you will be there to cover it for us. fantastic analysis. that does it for this edition of "bloomberg technology." on wednesday, we have an exclusive interview wit

so, dave, is apple relying too much on the iphone? what about other services? guess, for a period of time it has been a huge moneymaker, two thirds come from the iphone —— yes. there are other things coming up, so from services like the app store, paintings, apple pay, those services, that was up again year on year —— pay things. and the success pokemon go and super mario, which i know you are a fan of. those games really drove income in the app store and helped the service is part of the business to grow, which is important for apple. why a decline in sales in the chinese market? well, apple, like several other us tech companies, are struggling to grow in china as well as first hoped. there was a time over a year ago when china was a huge growing market for apple. they were opening stores at a really quick rate. they have not been able to capitalise. they have blamed currency issues on why they are not making as much money but, yes, it seems that apple is struggling to continue in china, and they were relying on that country to help continue with growt

so apple ma'a apple maps out their products years in advance. i guess they're resting easier in cupertino tonight. it was a really nice number. >> what is next for them? >> i think the iphone has shown that looking forward, you have software as a service. rather than necessarily needing a device, you'll have, whether it be awarable, your phone or something else. that essentially tells whatever device you're near that you're near it and delivering your services. and apple has been delivering that for a long time with iphone and it bleeds over into the watch and the home kit where you'll have the internet connected devices running on apple software. you'll bleed over into the car where you'll have apple's car play software your digital life for you. so i think it has a long way to go. >> you said something interesting a moment ago. up apple has a plan. it doesn't look at the time line the way some investors look at the time line. isn't that an appropriate way to run a company? special lay technology company. >> absolutely. the advances in technolo

it's not just apple hitting a new high. techs are breaking out. apple is at a 52-week high. tesla, seagate, adobe, hitting new highs. regional banks like zion, for example, or regent gions financ are hitting 52-week highs in the bank sector. industrials, a large swath, general dynamics, honeywell, paccar, emerson, all 52-week highs. new high list is expanding nicely now that there are significant breakouts including the russell 2000. the etfs, tech not surprising. xlk. midcaps as well, metals and mining, the xme. vanguard pacific, stocks over in asia hitting new highs. vanguard's emerging market, vwo is hitting 52-week highs. in fact, global markets are expanding. let me show you an etf. you can own the whole world in the etf. this is the entire world x the united states. this is also just hitting a 52-week high as well. global reflationary trade has been swashing around the world. get a number of country etfs also at new highs today. chil chile is at a new high. commodity play, chile, peru, poland, and canada. you can see, carl, the reflation trade, whatever you want to cal

apple hitting new highs. a lot of people didn't think that would happen. >>> don't miss our own becky quick's interview with warren buffett later this month. 6:00 to 9:00 on the east coast. right here on cnbc. >>> we'll continue to monitor fed chair yellen, speaking before the house services committee today. steve liesman is keeping us honest on the headlines out of that. >> not much off monetary side, but robust discussion on what's holding back the economy. yellen not giving any ground. here's the back-and-forth with mr. high zynga from michigan and the chair. >> isn't it not true if we hoo throw out of the we watch a faster, steepers recovery. >> by dirt -- >> did you use the word unreasonable. >> the time of the gentleman has expired. >> that's what it comes down to, the argument from the republicans that dodd/flank and other regulations, yellen would later agree she is concerned about the regulatory burden just would would not agree as the general theory of the case that it's holding bat the economy. car

with apple. after steve died, we would looking through the collections of what was the best of the best, we discovered something very amazing. this was a tape that regis mckenna had made in 1980 of a 25 -year-old steve jobs making a 22 minute presentation at stanford on the roots of apple and his vision for the company. we have digitized that and we have put it on our website. it is never been seen before. we will play about two minutes of it tonight. i hope you will be as amazed as we were when you see it. >> we had no idea what people were going to do with these before we started out. we couldn't afford to buy a computer. we liberated some parts from hewlett-packard. we worked out of the design center for six months and decided we would build our own computers. so we built them. he was up till four in the morning for many months. everybody wanted one. it turned out that it took about 40 hours to build one of these. friends at similar companies that could liberate parts. we helped our friends to

show you what a big price move is for apple, apple is half the gains in the dow. almost 45 points $6 move in apple. that's why you get the dow outperforming. and it's a $640 billion market cap, remember that, on its better earnings report. february traditionally a weak month, worth bearing in mind where we're at, record highs on the index remember that. breadth has been bullish, sentiment is mixed, was bullish but gotten better. and reflation everyone's worried about, halfway through earnings here, revenue's up 4%, good news is recession in 2016, the earnings recession, it's over. here's the problem, very high expectations for 2017. if you look at these numbers 10% for q-1, technologies expected to be up 14, financials 16, this is a lot to ask for the market. the question is whether or not it can actually pull off that kind of gains that we're seeing here. so here's the problems right now. so far we've seen a number of revenue misses in the fourth quarter. just today johnson controls t tupperware came in light. forget tax cuts, nobody saying guidance is going to g

that is why apple is pushing into things like apple music. steps into television content as well as the app store which sells a huge number of products every year. apple's get a cut of that. caroline: this is alex webb, thank you for breaking in to a record day for apple. u.s. cybersecurity continues to be a major theme under measurement from -- president trump. a three-year, $4 million contract to carry out bounties across the -- hack bounties across the pentagon. we have the ceo to talk about the way in which your ethical hackers are helping shining light on the vulnerabilities of the pentagon. you have worked with credit card companies. how does working with an institution like the pentagon change things? reporter: it is not a whole lot different. the pentagon recognizes the threat is just as fast for government as it is for private enterprises. they are realizing the only way to stay ahead of the ongoing threat is to utilize the same hackers that are attacking them every single day. they're using the hackers for their advantage. they are

>> well, you know, i think apple has, even before president trump took office, we all know that apple planted a very strong flag in the ground over privacy and security of the iphone, and actually, all of its products, but particularly the iphone, and had that big public fight with the fbi. i think that fight is much harder under president trump. and to the extent customers here and abroad actually see it as less of a privacy-protecting product, that's going to hurt them. i also think the immigration thing is a huge issue for not just apple but everyone in tech. and you can see that by the way they've begun to come together in a very strong way on these legal briefs and letters and things like that. and it's not because of the very limited h1b visa program we hear about, which certainly could be reformed and certainly could be tied to better education and training for domestic workers -- it's because it's just in the culture. so many tech companies are run by immigrants. i mean, at apple, tim cook is not an immigrant, but johnny eid is a brit, and he designs everything. but it's just

do you think that the future is bright for apple tv? david: i do not think they had presented a transformative experience for the customer yet and from apple, that is what we expect. i think it is legitimately a disappointment after now up to the fifth-generation, there is not likely to be that yet with a transformative device even close to what they achieved with the iphone. i think they are basically in a market with a lot of competitors and i do not think they have distinguished themselves. i am interested in knowing the degree to which the content ambition, some of which may have talked about this week, might really be the key to moving it forward, as mark implied. caroline: -- mark: i think the content ambitions are well beyond what they have come out with to date. they have been releasing new music videos and different content through apple music, no original content otherwise. they are doing a new show later this year in the spring, but nothing like netflix or amazon. when they do stuff like that, that will be a push toward apple

hires a come, apple key executive away from amazon. what does it mean for apple's tv service? this is bloomberg. ♪ caroline: some streaming news grabbing our attention. new digital subscribers will receive free access to the world's largest music streaming service. a one-yearuy suspension to the times will get unlimited access to spotify which usually cost $120 a year. it's aimed at helping both companies. this has been previously tried and tested by me. by the british daily, "the times." and good news for those in the e.u. allow subscribers of online streaming services and one country to access a service while traveling to another. video-on-demand platforms like netflix and amazon prime amongse spotify and diva those mandated to be available. this is the first step to introduce a single digital market in europe. with streaming media, apple has hired the former head of amazon's tv. he lead the apple tv's product marking. it renews apple's focus on tv and prolifi looking for more cor their device. the move came out late yesterday. mark, break it down for us. it's going to get

i do not know what apple is going to be able to add to apple tv make it so indispensable it becomes a major part of their product marketing. i would be curious to ask mark, what is it that apple could do with apple tv to really make it fundamentally different from everything else that is a ready out there? mark: it really comes down to the content. right now apple does not have the content deals to fill their own service. it promotes competing services from what they wanted to do from sony playstation as well as directv. if they can nail the content, they can own more of the experience. they like to integrate services -- software and hardware -- with the iphone. what if they did the same for tv and own the hardware software and the services? caroline: we have seen how much amazon plows in in terms of content and netflix as well. what about the content, will he go down that path? mark: apple has hinted in the past and as recently as the past earnings call they are trying to get more original content. they will start new this year with more video content tailored to apple music. there h

present looks phenomenal for apple. apple is really hitting it hard. pete has been a long-time believer. i'm a guy who gets in and out, stick and move, stick and move. more like a boxer. pete's just been, you know, carrying this thing for three, four, five years just holding on to it. >> you bought calls going into the print. >> i bought calls into the print because they were buying the 121 calls yesterday. aggressively. so just out of the money calls, and they were buying them in big numbers late in the day. so i bought back in, too, along with pete. the previous quarter, judge, the number after basically a match on revenue and earnings, the stock fell $4 in over the next week fell another $10, over the next two weeks, rather, to $10. $104. they weren't pricing in much of a move yesterday. 3.6% or something like that. we've almost doubled that on the move so far here today. so i told the folks that i thought they weren't bricing in properly, the potential that pete talks about all the time. services could be as well as iphone sales because of the sams

wasn't just apple flirting with an all time high. we had netflix. >> netflix, you know where my stand is on netflix. i think netflix continues to go higher. we've said it a while. reed hastings, one misstep, maybe two during his tenure. say there is a huge cash burn which by the way there is. competition. i don't know what the competition is. you asked about netflix. i think it goes higher and i think it is an acquisition. >> what do you think about tech overall? >> google and then facebook. i like it. they should be at all time highs. the market is at an all time high. they had been the leaders going into the sxleks then lagged. i think they'll be back. for me, i like the facebook and google business model much better than the hardware model of apple. >> i want the facebook model as well. last night you asked, what do you think going forward? what's one stock? facebook. i believe that. they have great drivers. zuckerberg is magnificent. he is obviously beating everybody. you talk about who is really winning in the instagram world? w

this includes apple pay, apple music, all the other services that apple sells to consumers around the iphone. what was interesting is what tim cook said in the earnings call, that is that the services business could be as big as a fortune 100 company. it was worth about $7 billion of revenue in the latest quarter, the goal is to double the size of this business. it's really key here. how he goes about that will be quite interesting. one thing he did mention on the call was this idea of investing in original content. this could be very expensive and a risky bet for apple. they have to be careful about how they create original c content. >> it makes one's imagination run wild on whether apple, years from now, could do a google. if the services division becomes a dominant thing, whether they become this conglomerate that they already are in a sense in terms of branching out into being a multi-faceted player. >> what happapple has done in t past, they owned their own software, they have made the hardware. by doing that, they control everything. that's how they can serve their customers wi

plus, we dive into apple earnings. ceo tim cook said the company's services business will be the size of a fortune 100 business in 2017. here he is with more. >> it was our best quarter ever for services. with almost $7.2 billion in revenue. app store customers broke all-time records during the holiday, including $3 billion in purchases in december alone, making it the app store's single best month ever. ♪ ♪ caroline: fitbit had a rough week, plunging 16%. the company is eliminating 6% of its workforce because of falling demand. that is about 110 jobs. the fitness tracker is forecasting full-year revenue grew 17%, down from a previous forecast of 26%. and another big mover for the week, apple shares popped after reporting first-quarter revenue of just under $78.5 billion. that is up 3%. also encouraging investors, a beat on iphone unit sales, 78 million units in the quarter due to strong demand for the iphone 7, and its services business saw 18% revenue growth. that includes itunes and apple pay. a principal analys

apple and airlines. are more than tripling its position in apple, now holding 57 million slayerhares. that's today. but in today's prices it would be north almost $8 million. in some cases more than triple down. berkshire buying 24 million shares. 24 million more this united and 54 million had in delta. we knew last quarter they had invest in the southwest but we didn't know how much. today we learned that berkshire holds 43 million shares in southwest. we are digging through more of these holdings and others and will come back swoon more details. >> thank you very much. leslie is pouring through the filings here. what does that tell you? in the laugh quarter, apple's range. any place you pick it, it is a profit. what do you do? >> i don't think you initiate a new position. i think this story will be for the whole year. it is ball the iphone 8 coming in september. so you'll get a chamnce. don't buy just because you heard buffett bought it. >> especially with you're listening to a guy like warren buffett

at apple headquarters in cupertino, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ >>> good wednesday morning. welcome to "squawk alley." jon fortt, kayla tausche and myself here at post 9 this morning watching these markets, about a 100-point gain on the dow essentially has been lost. joining us, global technology managing director walter pryce and piper's tech analyst mike olson. jon? >> and apple snapping three straight quarters of falling sales. the company posting better-than-expected quarterly results thanks to its services business and the iphone 7 plus. our josh lipton is at one market with the details. josh? >> well, jon, apple beating on the top and the bottom, driven by more than 78 million iphone units. apple's stock moving higher this morning, hitting highs it hasn't seen since the summer of 2015. tim cook telling me apple saw more android switchers and upgraders in the december quarter than ever before. and on the conference call, he also touted the company's services business. >> it was our best quarter

let's kick off with apple. >> a big day for stocks, in part because of apple. we have the three major averages finishing at record highs for a third day in a row, and apple andthe top for the s&p 500 the nasdaq, finishing at its first record high in two years. be of this, the stock could undervalued by $15 per share, but the bigger story, when we take a look at the two-year chart, apple two years ago hit record highs, then fell an amazing 30%. that, on disappointment around the iphone 6 asked. 7rong demand about the iphone helped it recover. we hear chatter about an iphone eight super cycle, plus the possibility that services could kick in. apple trading at levels last seen in 2015, and analyst think there is more to go. a lot of bullish action for stocks and technology and apple. caroline: talk to us about, with apple's help, it seems to be tech, one of the best-performing sectors on the day. if you are digging into the s&p 500. it seems to be, perhaps it is not all that pretty for some sectors post-election. >> tech was hit initially out of the election, but

apple need to. there has a lwa ys on that? apple need to. there has always been a slump just before a new model comes out because people do not want to spend money on a phone and find out it has been replaced in a few months' time. people think that this new phone will be very special since it is the 10th anniversary. i think there will bea 10th anniversary. i think there will be a lot of pressure on apple to create something quite remarkable with the new iphone. especially because parts of the business are growing quite impressively but apple really still does rely on that money coming in from the iphone. if it does not keep that success coming in it will be a real problem for them. all right, dave, thank you very much was staying up for us. see you soon. does the new us administration pose the same category of threat to the european union as radical islam? that is the startling claim made by the president of the european council, donald tusk. in a letter to eu leaders, he told them to "use the change in the trade strategy of the us to the

hey, apple. i got into apple. >> if you mock people for flip-flopping, though, i think -- it's funny. >> i haven't flip-flopped. >> the truth is, the best investors are flexible. you have to say, all right, i had an opinion about this, it turns out not to have been true. >> it has been true. it has been true. >> no, you were wrong. but it's good -- >> hold on, hold on. hold on. the fundamentals -- >> something every day. let it go. >> the fun bells -- one thing you're wrong about -- the fundamental is not rolling, whatever you do. >> the ceo got paid down, they have not innovated. the stock has done well in the bear market early on. >> i get paid on where the -- >> how about when you set records across just about every single -- >> let me ask a question. >> i'm just curious. >> if a company did $1,000 in revenue last year, any company, right, and their target was $1,020 but instead did $1,001, that's a record, isn't? >> sure. >> jim just giving an example. >> it depends on what targets you're tal

apple is designing a new chip. they could take on more of the functionality currently handled by intel processors. that is according to people familiar with the matter. the chips are being used in the latest macbook pro. more on this story later in the hour. it has been called the front page of the internet. we will catch up with the reddit co-founder and why he thinks trump's travel ban is potentially unconstitutional. next. this is bloomberg. ♪ caroline: hewlett-packard is ramping up its m&a with the purchase of a security startup that uses machine learning and data analytics to find security threats. the deal will help connect everything from computers to handheld smart devices. hpe is continuing to look to spin off other assets. leaders had a visceral reaction to president trump's travel ban which bans people from seven prominently muslim countries from entering the u.s. the ban hit a chord for the reddit co-founder. he took to the social media platform to share his family's immigration journey calling it dee

. >>> apple snaps the slump. the iphonemaker reverses three straight quarters of slumping revenue. >>> and president trump selects neil gorsuch, which could be a contested pick. it's wednesday, february 1, 201, "worldwide exchange" begins right now. sunset ♪ ♪ >>> good morning. welcome to "worldwide exchange" on cnbc, i'm sara eisen. >> i'm wilfred frost. good morning to you from me as well. a pinch and a punch, first day of the month. do you remember that one? >> no. >> first day of the month. >> is that a british thing? a pinch and a punch? >> for the first day of the month. let's check in on markets. we did see gains across the board for these three indices for the month of january. albeit we ended down about 0.6% for the dow. the nasdaq and the s&p basically flat for the day. as i said, gains for january. there they are. the nasdaq the best performer, up 4.3%. the dow up 0.5. back to the futures today, we are expecting a positive open. gains around the rest of the world as well. 38 points higher for the d

also on apple, we are talking deals there and maybe lack there of when it comes to apple. alex: right, apple has this enormous cash pile, hundreds of millions of dollars, and tim cook has signaled over the past 12-18 month that apple may be willing to do some bigger deals. they have not really done deals over the 40-plus history of the -- 40-plus it year history of the company. they have really grown products organically, shying away from m&a, but tim cook promised they will do something big. we have not seen it. my colleague alex webb dug into that to figure out why they have not done this. they are not really structured to do big deals as a company. they don't have a big m&a team. they don't like working with investment bankers, so the mechanics of being able to do a deal is not easily there for them. not to say they won't, but the investing community has scratched their heads and set, look you saidk, , you wanted to do deals, but why haven't we seen it? maybe their culture is not structured to do this, unlike at&t and time warner. they have spent hundreds of billions of

in terms of apple i'm extremely worried. the issues that trump has surfaced about apple and others, manufacturing goods outside the u.s. and shipping them into the u.s. is a major problem. and apple is right there. it's not just trump who's raised this. raised during the obama administration. and democrats have been focusing on this for a very long time. that at some point will come home to roost. they're not only an abuser of our tax code. we know they've abused the european tax code as well as witness the $14 billion assessment that the eu has put gains them. that will hurt them. and the trade war with china and losing market share. they're losing market share in india. this is the upgrade cycle. i'm following the other lemmings going along, hoping i'm smarter anthem and get out before them. i wasn't referencing you and your cash. the stock price less than the cash. which by the way, tell me when that's ever worked. >> well, how about in the last year. >> right here, at $3 shy or whatever we are shy of an all-time high, is

the venture from that back to apple, cisco, and google apple, cisco, and google announced that longtime partner jim ghosts will be stepping back. he is famous for leading the investment in whatsapp, whatsaph was acquired by facebook for $22 million in 2014. he will be passing the baton on to soeonmeone who co-led the venture business since 2007. up next, more takeaways. facebook's latest earnings report. still record highs. this is bloomberg. ♪ caroline: facebook's earning call continues and the stock is still higher. what is encouraging investors? the 51% jump in sales. mobile advertising continuing to drive facebook's growth. the company gained on its number one mobile ad rival, google. for more, i want to bring in our bloomberg intelligence analyst. give us some highlights. maybe the future is really about instagram. 5 million businesses advertising on the service? >> 500,000. caroline: give us a sense of instagram's future potential. >> this is just the start for instagram and video. talking about one billion, roundabout that run rate. the potential here is massive. like the delta

let's look back at the most interesting results, starting with apple. >> apple shares popping in after hours trading, reporting its first-quarter revenue of just under $78.5 billion, 3% year over year. also encouraging investors, the beat on iphone unit sales, selling almost 78 million units due to strong demand for the iphone 7 plus, and its services, well, that includes apple pay for example, saw 18% revenue growth. i'm speaking to the cfo, and what was coming across was they are doubling down on the services area in particular. they say they will double the size of this unit, which is as big as a fortune 100 company. how much do you think services is the right bet? >> i think it is absolutely the right bet. you know, certainly, until they start selling other appliances, there are only so many smartphones and apple tvs you can sell, so there is upside in services, like areas like apple pay where there is relatively low consumer adoption in the u.s., so there is a lot of upside. >> revenue was up 3.2%, and the stock is up 6%. is that justified? >> we can start with what did not go tha

apple leading the way. apple is part of the dow jones index. and its shares are up 5 and a quarter percent right now. checking in on the broader markets though, the dow is now up three quarters of a percent. 19,932. >>> well, speaking of apple, the stock is sitting near a record high. the iphone 7 plus has been very successful. record 78.3 million phones were sold in the holiday quarter. their average selling price also rose to a record $695 with customers willing to shell out big bucks for the latest gadgets. the 10th anniversary iphone set to launch this september will be pricey. apple's quarterly profits by the way, $17.9 billion. apple quarterly revenue, $78.4 billion which is a record. >>> volkswagen has agreed to pay 1.2 billion dollars to settle another phase of the emissions scandal claims. the u.s. district court in san francisco approved the settlement that covers 75,000 vw and audio porsche cars with larger diesel engines. older models will be offered buy backs and compensation. cars that can be repaired will get up to $16,000. if it

at apple park in cupertino. it's 11:00 a.m. on wall street, and "squawk alley" is live. ♪ here comes the general, ladies and gentlemen ♪ ♪ here comes the general, the moment you've been waiting for ♪ ♪ here comes the general, the pride of mt. vernon ♪ ♪ here comes the general, to washington ♪ ♪ we're out-gunned, out-manned, out-numbered, out-planned ♪ we've got to make an all-out stand, and yo ♪ ♪ i'm gonna need a right-hand man ♪ ♪ >>> good wednesday morning. welcome to "squawk alley." jon fortt, sara eisen and me at post 9. markets once again chasing some record highs, eight straight gains now for the dow, which, of course, hit a record intraday high earlier this morning. that's a 13% jump for the industrials since the election. joining us this morning, paul christopher, head of global market strategy at wells fargo investment institute. paul, it's good to have you today. >> thank you. >> as the debate goes on about how much of this is fundamentals versus political expectations. you think it's the

doesn't that, though, describe apple too? apple produces a pricey device with a built-in steady stream of revenue that grows and grows and grows. it has a fabulous buyback and a rapidly increasing dividend. sales are strong around the world regardless of the strath of the globe's economies, yet the stock sells for a paltry 15 times earnings. better than the 13 times earnings it traded at when ceo ti tim cook came on when so many analysts were writing it off. so you should trade out of it, not own it, i position you know a steadfastly oppose. it's ironic pelts goes after procter & gamble versus say an apple, but procter is more in his wheel house as pelts is a wizard when it comes to producing soproduc producing cost savings. in keeping. you have to wonder why its stock does trade at such a discount to the average stock in the s&p. you know what? i think the answer is the analyst coverage. see, analysts specialize in spefblg sectors and apple, of course, gets grouped in with tech stocks. but if you were to move apple over to t

i know, why is apple overbought? >> again, you can argue whatever you want and it indicates momentum and things overbought. >> the amount of time that parts of the market have traded, it has gotten to the point of saying maybe the market itself is overbought. you see a number of new stocks hitting all time highs and it raises some questions. >> the question is, is it a trade or do you want to be in the name? so "fast money." okay. a trade. if you want to be in the name, you like what's happening torsion try to get out. it is a little overbought and then find the right time to get back in. that seems very, very hard. to get that right twice. out and in. >> so going back to that conversation, where is overbought? and i'm just pointing it out. things are ridiculously frothy. if i look at it over 21 years, it is up 21%. that's not too crazy. >> i don't agree the frothy comment. >> okay. when i look at the huge volumes that i see coming through options world. oh, february has been a pretty strong month. by 28, i look at i

plus, we dive into apple earnings. tim cook a said the company services business will be the size of a fortune 100 business and 2017. here he is with more. >> it was our best quarter ever for services. customers broke all-time records during the holiday, including $3 billion in purchases in december alone, making it the app store's single best month ever. ♪ caroline: fitbit had a rough week, plunging 16%. the company is eliminating 6% of its work because of falling demand. the fitness tracker is forecasting full-year revenue grew 17%, down from a previous forecast. aftershares popped reporting first-quarter revenue billion, upr $70.5 3%. , 78at on iphone unit sales million units in the quarter due to strong demand for the iphone business sawrvices 18% revenue growth. a principal analyst with forrester research joins us with more. make up theles majority of revenue at this time. while the we look at global smart phone subscribers, that will grow 50% over the next five years, but apple makes a lot of money selling phon

that includes itunes and apple pay. a principal analyst with forest research joins us with more. >> iphone sales make up the majority of apple's revenue at this time. while we look at global smart phone subscribers, that number will grow about 50% over the next five years, but apple makes a lot of money selling phones, unlike some of their competitors. if we look at the markets they are pursuing, middle-class and upper-class, that growth will not be as high. when you take all of that into account it is doubly impressive, , the numbers that they have posted for 2016. caroline: what was coming across was they are doubling down on the services area, doubling the size of this unit, which is as big as a fortune 100 company, they say, doubling that over the next four years. how much do you think that services is the right bet for apple? >> it is absolutely the right bet, until they start selling other appliances like refrigerators and cars, there are only so many smart phones and apple tvs and smart watches you can sell. i th

is apple losing china? the latest numbers from idc shows the tech giant had the first annual drop in sales there. >> the domestic suppliers, the vendors, have upped their game. they are cheaper, but they have upped the number of services and innovations. flexible screens, rounded screens, a number of things that give it the apple quality look. and a lot of people in second and third tier cities, maybe they are looking at these other options. keep in mind as well, something that has been underreported, do you need to pay $800 to $1000 u.s. for a phone that a lot of people are actually looking to axe to give those kinds of services? so, you can get a cheaper phone app that doesan everything you want it to do. let's bring up the top four vendors. apple has fallen down to number four right now. these move around quite a bit based on various trends. rishaad: you asked me if i had ever heard of oppo before. number one. shipments grew to 78.4 million shipments last year up 122%. huawei, they also make handsets and

lauren: mention apple. strong holiday quarter for apple. record 70.3 million iphones in the quarter thanks to strong demand for the iphone seven and seven plus. i don't revenue rise to $70.4 billion. and reverse three straight quarters. apple shares rising 3% in premarket trading on the news closer to record high of 24% in the last year. lauren: facebook report earnings after the close today. the media companies topped expectations for earnings and revenue for five quarters. today they'll be watching for the latest user numbers of how facebook and studio with an expected slowing of the newsfeed add growth around the middle of this year. dishes so many ads you can't really fill the newsfeed with more. facebook ranch and not into television as well. "the wall street journal" reported facebook is developing a sunup for streaming tv boxes. facebook shares up 1% in premarket trading. lauren: donald trump and democrats getting ready for fight of the president's pick of the supreme court. >> the qualifications of judge gorsuch are the undisputed.

-- the earpods from apple? guy: not many. richard: it takes time and it is very rare and it may not be the place you need to look at apple for innovation. guy: really interesting conversation. thanks for taking us around what is going on in the tech space and the politics around it. richard kramer. up next, the first fed decision of the trump era today. rates are inspected to stay put, but what effect will the president's actions have on the fed's future policy? that is a discussion we will have next. these two people, front and center. this is bloomberg. ♪ matt: welcome back to bloomberg markets. this is the european market open. i want to turn to the fed right now. we will be talking about it all morning because the fomc is due to release its rate decision at 7:00 p.m. u.k. time. here is bloombergs mike mckee with a preview. mike: the economy is strong and inflation so signs of creeping higher, but there are no details available for president trump's economic policies. economists and analysts say we will no

and obviously the nasdaq strong on apple. the dow strong on apple as well up 69 points out of the s&p up 6.5. nasdaq up 32. quick look at the -- well, see, they panicked because we only have five seconds. >> it's for us to go. we'll see you tomorrow. time for "squawk on the street." good-bye. ♪ >>> good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla, jim cramer and david faber at the new york stock exchange. dow stronger after three days down. stock's going to open at a 15-month high, of course it is fed day, europe's up about a percent. adp crushes expectations, biggest jump since june and yields in the dollar creeping up on that. roadmap will begin with the apple rally and earnings beat. shares up more than 4% premarket

apple can't innovate apples over, et cetera. they do it every single time. >> you also brought into if conversation to the entire tech sector. every one that was cautionary about the concerns of, well, rising inflation, president-elect trump does not like the sector. we're going to have an issue as it relates to globalization being put to bed. technology has come right back once again and we're now focusing on the things that matter. corporate tax cuts repatriations. you want to talk about large cap? tech companies, how about the recovery in your favorite name, irk bm. ibm getting back to 180. >> indignation. >> a level it hasn't seen since 2014, i believe. you're mining for opportunities in technology beyond apple to find what the next potential one it could be. >> i was hoping when you were leading into that you were going to bring up cisco systems which reports on wednesday. but it's another one of these companies that's so under the radar, and ibm, i'll give you that. but cisco is going to hit a new ten-year high any day now

can apple continue its run? joining us now is jim from citi and kim from ford pick capital who is more cautious. jim we'll start with you. now that it's cracked 133 on the close, how much further do you think apple shares could climb? >> well, we actually think in the next 12 months apple stock could reach $140. we have the iphone 8 super cycle catching on and the company's services continues to gain traction. now, many people may be fearful about the saturation point has reached but different companies such as india are very much maim you're the and likely to follow the same ways that china did. so we still see upsides ahead. to directly answer your question we think the stock can get to $140 within the next 12 months. >> okay. kim, you're not so sure. why? >> well, i guess it's tough to be in my position today because clearly the market thinks i'm wrong, right? but that being said this is a consumer device. consumer are notoriously fickle especially with phones. everyone is pointing to services saying this is

first with apple, he's added 42 million shares in his position of apple. that's more than tripling his position. we're not sure if that is buffet himself or one of his deputies. either way, it's a huge vote of confidence from berkshire hathaway. we saw big adds to the airline holdings. berkshire more than doubled its position in american airlines. in delta, he added 54 million shares and added 24 million shares to united. some new positions as well, he also increased or added a position of 8 million shares to monsanto, which, of course, signed a deal to be acquired by buyer in october. that deal is still pending, he took a stake in sirius xm as well. the company adding 166 million shares. these are as of the end of the year. we're still digging into the numbers a bit more and we'll get back to you soon. >> sold out of walmart, sold down from verizon, leslie, thank you. >> there's a lot happening here, the sirius position is interesting. >> it's a company that's in the drama. there's some clustering there with in billionaire value investors, i wouldn't be s

so this thing, it looks a lot like apple. and facebook. >> apple the way you view apple? >> no no. i men the price action over the course of the last year and a half. it topped out in 2015. you think this is going back to those highs? >> i think it tests those highs. i think just because the fundamental story is there and the head winds of espn as much as they were there, i think they're starting to pullback. >> so let's vote. ready with the white boards? okay. >> he love pete. it is very hard to bet against pete and this is an outstanding company of i continue to be concerned about espn. great company but i'm not buying it. >> i don't really love pete. when i look at what apple did, a surge, i think this stock has the opportunity to get there. i think you might want to buy call spreads. you my want to buy something closer to the money and sell it out of the money. have a call spread. >> or own the stock and sell the call. >> that's very pete-like. >> so funny. so what level did pete mention they were buying calls in june? did you pay attention? what price? you were not paying atte

the apple tv did not do that well. they said watch sales were ok, but other segments shrink, and yet the iphone, it did great, partly because the competition went up in flames with the samsung note. but yes, 78 million iphones, an incredible quarter for apple. >> facebook share surging after hours. check it out we are at all-time highs if we hold onto these gains. the company reported a 51% jump in sales to $8.8 billion, topping analysts projections. the biggest driver, advertisers push to reach consumers on mobile phones. the social networks user base continues to grow. it reported just under 2 billion monthly active users. amidstere any clouds silver linings here? >> clouds, i can't really think of any. i'm sure there are some people who would be upset that the numbers aren't better than they are, but i mean, come on. analysts were expecting some incredible results, and pretty much everything beat it. i can't see any clouds there. >> when i look at growth drivers and think of where the real prospects are going forwar

is there is a about the apple exuberance about the apple business model? alex: it did take a boost off the earnings call, and the expectations for the next iphone sales, but since then, it has taken a spill two weeks ago, and since then the forecast for the present quarter and how that could imply sales will go for the next iphone have kept people very optimistic. caroline: i mean, if i am digging into analyst recommendations on apple, one sell, 41 buys. that is on this particular stock. are we likely to see this stock rally continue? alex:, well that is certainly the implication of those stats, yes. but we are getting close to the target price. it is not vastly above where it is now. i think $142 is the average on the system, so it will be interesting to see how it -- in particular by the end of the year how compelling the next iphone is, how they attract new customers, particularly asia and china, and that will speak to the attractiveness of apple as a brand. we have seen that the competitors in asia have increasingly succeeded in developing phones which

apple helping a bit. apple a few points away from an all-time high. s&p is flat. >> the movers on the session today. gilliad sciences one of the worst on the s&p. despite the drug maker's better than expected earnings yesterday. they expect the revenue from the hepatitis c treatments to come in between 7.5 and $9 billion, well below street estimates of $6 billion. the shares are down more than 9%. cancer drug maker tesaro is popping the biotech reportedly discussing options investment banks after receiving acquisition interest from several drug makers. the company declined comment and the shares with up nearly 13%. >>> time for a cnbc update with sue herrera. >> here is what's happening at this hour. the ninth district federal court of appeals announcing there will be no decision on president trump's immigration executive order today. the court also said it will provide advanced notice of 60 to 90 minutes when a decision is imminent. former alabama governor don siegelman released early from prison. transported early this morning. he was convicted over

the apple tv did not do that well. the watch did not do ok, and yet did great, partly because the competition went up in flames with the samsung note. 78 million iphones, and incredible quarter for apple. >> facebook share surging after hours. hold ontoighs if we these gains. the company reported a 51% jump in sales, topping projections. , advertisersriver push to reach consumers on mobile phones. grow,er base continues to and reported just under 2 billion monthly active users. were there any clouds here? clowns, i can't really think of any. i'm sure there are some people who would be upset that the numbers aren't better than they .re, but come on analysts were expecting some incredible results, and pretty much everything eat it. growth driversat and think of where the real prospects are going forward, it is truly the global nature of their business. asian revenue was up 69%. that is really impressive. world, 52t of the percent. so even though the numbers are small, this is where the opportunity is long-term. inamazon