a little being skimmed off the top of that big nasdaq rally. dow up 50. small caps, also up. take a look at treasurys. they've rallied. that treasury refunding announcement, nothing scary in there, the market was okay with it. make sure you join us tomorrow. "squawk on the street" is right now. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david faber has the morning off. final day of january, fed decision on deck, some wariness around mega cap tech earnings but more signs of wage inflation and does that build the case for a cut? our road map begins with tech earnings, microsoft among the names dragging the s&p lower. delaware judge strikes down

elon musk's $56 billion tesla pay package. let's begin with microsoft and alphabet, set to drag down the tech sector, despite beating estimates. light guidance with strong growth from azure while alphabet's ad revenue came in short of expectations. here's ceo ruth porat on last night's call. >> the step-up in capex in q4 reflects our outlook for the extraordinary applications of a.i. to deliver for users, advertisers, developers, cloud enterprise customers, and governments globally and the long-term growth opportunities that offers. in 2024, we expect investment in capex will be notably larger than in 2023. >> notably larger than '23, when they did $11 billion. this print, the street was not even at 10. >> i hope it's going to be larger. they have a lot to do. it's a very exciting time as we heard from lisa su. i think that this is a quarter that suddenly we didn't care

about google cloud? i was just praying that thomas curry put up some good numbers for google cloud. he puts up great numbers, and suddenly, we're shadow boxing with other things they're doing wrong. do i like how much other bets loses? no, come on, ruth, let's do better on that. look, the stock is down because it went up a lot. i thought it was a very good quarter. they don't like to specify how much they made in youtube, which does bother me. i was hoping they would give us some granularity on the sunday ticket. they did not. but this is still a tremendous way to reach customers. google cloud's doing well. if the stock were -- if the stock had not been pushed multiple times by people who said this is the cheapest of the significant six or whatever, then this wouldn't have happened. so, those who want to sell it now, be aware that there weren't any people on wall street that really said what to sell or downgrade, and one of the thing we've learned from the seven or six or whatever you want to call it, is that unless there are

downgrades, unless people come in and say, listen, we're selling, then what happens is you just look at the propensity of raised versus lowered and it's five raised versus three lowered. so, therefore, it goes higher. >> i think it's bernstein this morning calls all of this the burden of high expectations. do you think that's what we're looking at? >> yeah, bernstein esteems itself pretty well on some of these, and i thought that's exactly what happened here. those who do not -- my travel trust owns it. we sold -- i don't want to say a great deal of it, but it's my least favorite of the significant ones and that was because it ran so much. and because i don't like their advertising model as much as i like amazon's and i like meta's. but that said, i was also worried about google cloud not doing well. i'm not going to suddenly abandon the thing that drove it down last time which was google cloud being bad. ruth's fine. if you want to sell it, be my guest. it's probably going to be a mistake. >> as for microsoft, they're really slicing up the cloud revenue, wondering whether or

not the push to a.i. is sort of cutting out other cloud consumption. >> well, look, i think that they handled themselves very well. they were very methodical. once again, i want to use this ratio theory, because it's really worked for me over the years. microsoft had many, many people who loved it. we did not get a single target lowered. we had one, two, three, four, five, six, seven -- 13, 14 analysts firms raise price targets. they're going to be right. the sellers are going to be wrong. amy hood was as confident as i've heard her in many years, the cfo, who is just money. they should just change her name to money. she is saying, look, everything's going well. they did -- they lowballed how much a.i. is going to do and all the different iterations they're going to do with copilot. they're doing a remarkably well. we'll speak to lisa su too. they can use every single high-performance gpu chip because they have that much

business. remarkable. it's just a fantastic quarter. again, go ahead and sell it. i want everyone out of these stocks who doesn't understand what the hell they do. especially these people who are in these ridiculous etfs. you want to create an etf, carl? i'll create an etf that will be better than all these people. >> some of them have gone away. we won't get into that part. >> look, i know if you're an etf, you don't know the difference between microsoft or alphabet. these are very different animals. but the one thing that we do know, if you wanted to have one complaint, it's that when i was out there, they were talking about how what you use -- the use case for is summations, and that was three months ago. what did they all admit they use it for? summations. i was hoping they would have some new reason to use it, but what they did say was, look, we're going to hear what the customers use it for and then we'll populate it that way. >> really quick, this is bernstein as well. this might be a stretch, they say, but one could argue that non-a.i. azure growth slowing down bodes relatively poorly for other cloud consumption

companies. is there a read-through for amazon? >> no. no. and oslofsky and jassy, they're gunning. i mean, they're not -- they're taking no prisoners. the people who think they're not going to deliver, i think, are going to be -- are going to be motivated to say they won't deliver without looking at the facts. i would look out for anyone who thinks that amazon is not ready. amazon is the one that's most affiliated with nvidia. and they're -- i think they have genuine use cases. i think they have always been great at inference. the current h-100 is just king of inference. they have the -- remember, there's a big -- we're going to speak to lisa. amd does not have the training software that nvidia has, but it's turning up much faster than people thought, and amazon needs everything, every single chip. that's a company that doesn't sound like it's going to miss. >> we are going to talk to lisa su in a few moments. >> it's going to be great.

in the meantime, one of the big nontech stories today is boeing is its latest quarter, suspending guidance for '24. our phil lebeau is live with the ceo. good morning, phil. >> dave calhoun, ceo of boeing, fourth quarter, smaller than expected loss, but it's the guidance for 2024. you're postponing it. when will you give us guidance for 2024? i say "us." investors. >> not surprising, i hope, to anybody, our full attention, our full focus as a company is to make certain that we never have a safety escape again, learn everything we can from the accident, learn everything we can from the faa's audit, learn everything we can from the standdown that we had and all the ideas that were given to us by our own people, and that ret requires all of our attention, all of our energy. this isn't a vote of confidence or not confidence. this just isn't the right time. nobody needs additional time

pressure at this moment. >> the ntsb initial conclusions are expected any day, maybe within the next week or so, and the early reports that have leaked out say that the bolts were not in the door plug on the alaska airlines plane. if that's true, and we don't know if that's the initial conclusions, but if that's true, how does that happen? >> yeah, so, that's the credible question. i am not going to jump the ntsb. they are going to have a conclusive report. i'm looking forward to it. the process we use to determine what may have happened or not, it's a very, very, very good process. they have -- they get to take time. they get to look at all of our investi investigative work and then draw conclusions and they will publish when they're ready. everything we've learned about bolts, every opportunity for failure that we see by way of all the inspections that are going on every day, our job is to instantly respond to that, which we have been doing at a

very steady pace. but i'm not going to call out the conclusions before they get their report out. >> understandable. but you know that people will look at this report if these reports are true, and the basic question is going to be, boy, this seems like engineering -- not engineering. manufacturing 101. to my original question, how does it happen? how did it happen? >> if bolts aren't in place, it's a miss. it may involve one or two or three or four players. at the end of the day, we're trying to get everybody to be perfectly forthcoming, understand exactly how that window opened or didn't, and i rely on the ntsb, and i rely on our own investigators to know the answer to that, and i believe they will and do, and our job is to close it. that's the easiest part of the process. closing that. honestly, it's now learning everything from 100% inspection. that's where we get the hard work, and we go to work immediately. >> dave, jim's got a question for you. >> dave, almost 20 years ago, boeing made a decision, which i

think in retrospect was misguided, save a lot of money, have partners, spin off different companies, sell spirit to private equity, and one of the things that's happened is i think it's been very hard for you to take control of your supply chain, so it's very hard for you to identify what went wrong. wouldn't it be great to say, we're going to fix that, we're going to identify who didn't do it right and they're not going to work for the company. instead, we don't know where it's made and what it's made. if you -- your stock not being able to tell people when the faa is going to green light, you can't do that. they're the government. you're also stuck with this idea that you have the supply chain that was really made for boeing to make more money, that's okay, you're a publicly traded company. what happens if you went to the faa and said, what do you want? do you want us to redo the supply chain, take back spirit? do you want me to take a different role at the company? i want this thing moving. i want to do what you say, and then maybe lead this kind of moment where we say, i don't

know. i don't know what's going to happen. give us some choices. >> yeah, there's none of the "i don't know" or this or that is not going to happen. we have a huge team down at spirit. our job is to embrace everybody at spirit, work constructively to understand where there are quality opportunities. they have 12 stations in their line. i've seen them. since the time our team has shown up, we've added over 50 inspection points just in that process alone around just this plug. lot of learning. it will require an enormous investment on our part in terms of people and engineers and interactions. we're going to do it. we're going to learn from it, and yes, the subject of how we interact with all of our suppliers, that will be a subject that we will be working at for quite a long time. i've got experts helping us with this. i am -- i am absolutely convinced that we've got this

plug completely under control. that is job one. and as i said, we're working closely with them. i will opine that on the subject of vertical integration, and did it go too far? yeah, probably did. but now it's here and now, and now i've got to deal with it, and we're going to do it with engineers and mechanics working constructively together. >> but look, my father was in world war ii and the pacific and we were losing and getting shot down, zeros hit my dad's boat and then suddenly b-29 appears, made by boeing. suddenly, we see, let's go fast forward. we got an outfit, spirit. i don't know who the heck they are. i know they were spun off. they're not you. i want boeing. i don't want spirit. i don't want to hear that spirit was involved. i don't know who the hell they are, dave. i know boeing. i know the name of a great american company. i want you to have ownership of

this. i don't care what the history says. that's recent history. why don't we go back in time to when you were king? >> jim, we own it. there's not a -- there's no other answer i can give you. i want everybody -- everybody on every airplane to know that boeing owns it. we own our supply chain. we own spirit. we own the results of our work. we understand that. we really do. >> dave, we talked with scott kirby at united airlines last week. you heard the interview. and he told us, this is the straw that broke the camel's back. he's not sure that he will get the max 10s that he needs, and he's thinking about shopping around, they are shopping around to see if it's possible to equity some airbus a-321. have you lost the confidence of your customers? >> i don't think so. was this a shock to them? absolutely. these moments shake all of us to the bone, boeing, our people, our customers, everybody.

so, our job is to just restore confidence at every level. but to reach out on the part of our customers to work constructively with us, and they have been a steady parade coming in here, it's been constructive. they want boeing to win. they want us to succeed. they're going to learn everything there is to learn about the ntsb report and then some, and they're going to help us every step of the way, and i am going to work my tail off and our team will to satisfy scott kirby, and i am sorry to put him in a position where he has to talk about boeing when he had a phenomenal quarter. >> you are not giving your long-range guidance. you're not pulling it, but you're not taking -- you're not pulling it, you're not reaffirming it, and it has people questioning this morning, is this maybe boeing's way of saying, we think we can get past this relatively quickly, and we can still hit 50 max per month in the '25-'26 time range? is that what you're saying? >> the premise is false. i do not want to get through this quickly. i simply want to learn everything there is to be

learned. and i want to implement it. like all of it. so, the notion that we're not giving guidance, it has nothing to do with a decision today other than, let's take the pressure off everybody. >> why not pull it? >> let's not guess when the faa is going to finish their work or not. that's not what i want to do, and it's not the pressure i want to put on our company. so, that's that. let's talk about guidance. let's talk about our long-term plans when the time is right. >> so, real quick follow. why not pull it then? why not say, we're taking it off the table? >> there's no reason to pull it. it's there. i've told you what we're doing now. we're going to pause as long as we need to pause. everyone will adjust, and my whole focus is we're going to pause as long as we need to pause. >> dave calhoun, ceo of boeing. you told me there's about a hundred more safety inspectors of some sort? >> a hundred inspection points

across all of this. and still developing. >> still developing. guys, we're going to spend it back to you. >> phil, appreciate that. phil lebeau with dave calhoun this morning. page one of the "l.a. times" saying a former employee says, "i would tell my family to avoid the max. kwlts >> we're dealing with a company that was the gold standard when everybody else was brass. when dave calhoun says he owns it, he doesn't own it. so, how do you say, own it? >> i'm not sure if we have phil at the moment. >> my problem is this. there was a great decision made by boeing, and i remember when the decision was made, i was -- i bought a ton of boeing because -- for my travel trust, because i realized they got rid of all the bad stuff where nobody was making money and all the union problems and suddenly

they became an assembler instead of a manufacturer. i went down to the museum in new orleans, really studied boeing, and what they wouldnever do is let someone else have a part of the process. but when you want to make a lot of money, you do this stuff, sell it to private equity. i think it was greed that made this thing so dave calhoun has inherited a machine that he is not in charge of. >> by former regimes at boeing? >> yeah, who, by the way, i applaud it because i never thought that it would end up killing people. i never thought it would end up with doors flying off. i figured they had control. but they didn't. >> is it that inheritance aspect that you think is the reason why calhoun is still in the spot? >> if i were in front of the faa, ilt would say, you know wh? you never gave us trouble. but bishop tutu said, you need

to do root and branch when something's wrong. look at history, pull the root, get rid of the branch, become a better company or a better country or a better religion, get rid of apartheid. he told me this at dinner. i was like, holy cow. root and branch. it works when you have a tragedy like boeing too. look back. don't just look forward. >> we'll talk more about it, and there's so much more to get to today. we'll get to elon musk and this $56 billion pay package voilded by a delaware judge. later on, an interview with lisa su. we'll get to starbucks, paramount, mondelez, novo, mastercard and more. ameritrade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk,

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board failed to prove the compensation plan was fair. musk took to x, following the order, writing "never incorporate your company in the state of delaware." jim, you had some thoughts on this as well. is it about the amount of money or the disclosure here? >> i think if they had disclosed properly -- but it's something that judge kathleen mccormick would say that board wouldn't. if they had discussed that almost every board member is compromised, that almost everyone's made a lot of money from him, that they therefore can't be as independent as you may like and understand that's who crafted the pay package along with musk, and there was no opposition to each other, they were done together, and if you still like it, then you can vote in favor of it, then the process would have been okay. obviously, the companies that screen these things were appalled by how much it was. a lot of, i think, people who don't know the process or maybe the process of delaware, would say, wait a second, he made a lot of money. so, we made a lot of money, and we wish everybody had that. but the fact is that the company

did not analyze a particularly crude form of delaware law which said there was no give without a get. what did tesla get after doing the give? the answer is, they got a guy who already had a lot of stock, so he didn't need to have more stock. in retrospect, he went and bought x. therefore, the economics went down, so suddenly, he has far less stock and then suddenly we get the discussion out of nowhere, hey, i want 25. well, in retrospect, it was almost like he was prepping us for recognizing he might lose this lawsuit, because now he doesn't have enough. he can go to texas, but what he really have to do is go to shareholders because he doesn't have a package right now. it's a 200-page ruling. by the way, if someone wants to learn about how people get paid or overpaid in this country, you should read the ruling because i think there are a lot of people who say, this was the most deserving man to ever get this money. i wish that we had other ceos who were aligned, but the --

that's not the issue. the issue is, you voted on a package, and you didn't know that the package was so-called corrupt, and i thought it was, given the state of the law, i don't know, maybe texas just says, hey, listen, here's a disclosure. we looked at it, and it wasn't just -- wasn't just elon musk's divorce lawyer. and then the divorce lawyer -- i mean, there's every -- it is so dripping with cynicism that it is just dynamite, and it's so musk. you want cynicism? you want craziness? you want looney toons and you want rigor? here it is, 200 pages, partner, enjoy. >> she calls the process deeply flawed. are you watching the discussion of whether or not tesla should worry about his involvement from here on out? >> i am, because i think the neurolink -- if i were -- you never want to say if you were

musk because musk is the greatest inventor of our time but there's a car that's a robot on wheels and then there is saving millions of people's lives by learning how to put a chip in people's heads. i think it's a higher calling than the model y. >> you will be okay if he leaves to go run nueralink full-time? >> no, he spent a lot of time wanting to put a man on mars. that should not matter. put a man on jupiter. i need a lot of money. but he talks about doing bigger things, and i thought -- this neuralink, maybe it's because i did the brain foundation gala last year, but that's unbelievable. it would be great if he saved people's brains as opposed to just made it so he could get from point a to point b. >> we're going to talk more about it, especially given the street's reaction to gm yesterday and what that's done to the ev theme. by the way, take a look at capitol hill this morning. there's linda yaccarino of x as the social media chiefs are going to testify today on the hill, including meta. tiktok's there as well.

we're going to take a lot of that live. >> good. >> important day for the information economy in this country. in the meantime, a lot more to get to on a busy day for rngsndheedn ck. don't go away. to duckduckgo on all your devie duckduckgo comes with a built-n engine like google, but it's pi and doesn't spy on your searchs and duckduckgo lets you browse like chrome, but it blocks cooi and creepy ads that follow youa from google and other companie. and there's no catch. it's fre. we make money from ads, but they don't follow you aroud join the millions of people taking back their privacy by downloading duckduckgo on all your devices today.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. let's get cramer's "mad dash" as we wait for the opening bell. >> i often talk, even at the top of the show, you want to see how many price target cuts versus raises. the ratio, very bad for state of texas, five target cuts, one up. but unlike most of the companies that came in hot, this one came in cold. it was in the low 100s and just cratered to $89.90 and i think that what they were saying is, you know what? these are bad. not as bad as you think when you dumped our stock and we're going to get better, not necessarily instantly. the problems here, just so people understand, are twofold, china, and basically laxman narasimhan saying, china, it's the economy, and there are lot of companies selling cheaper coffee and having a little inroads right now, but the high

end is doing well. and the united states, the problem was a misguided attempt by pro-palestinian people to link starbucks to middle east issues that were probably a specious move. and that forced the occasional -- to pull back. i know january wasn't that strong, but i know that laxman was assuring us that the long-term is good which is why the stock is having a good run. the brand is good. the product is good. the execution is superb, and i believe -- my travel trust owns it -- that it will come back. don't get too excited, because he's not saying anything's going to turn that soon. >> mobile now 30% of all transactions. >> right. >> and record gift card load. $3.6 billion. >> it always helps if you don't cash them in. i got one from a couple years ago sitting at my desk. i like the execution. what i don't like is if we're really coming out of the --

october was incredibly strong, and then you had -- >> november. >> israel invade gaza and the backlash. i would have thought the backlash had died down and the united states would come back. the consistent buyer, the loyal buyer, never quit, but the occasional hasn't been back yet. that has to come. and then china had a major step down, and i think china's -- we might hear from apple. china's not doing well in any way, shape, or form. >> no. november traffic was down negative single digits and then rebounded in december, but your point about china, jim, is good where, let's see, starbucks china comps up ten, but average ticket down nine. >> we were looking for plus 17. china is right now the achilles heel. the good news is you can slow up in a lot of stores and do well, but we know from the history of retail is that if that's how you make your numbers, then underneath, there's not strength. in his favor, this man knows how

to make coffee. and he is introducing new coffees everywhere. i don't want to minimize what he's doing for the company because that will end up making it so he makes a lot of money and he's very confident, and i think he deserves that. he came in at a really difficult moment, at a real frying pan moment, and i think he's not going to go into the fire. i think it's good. i like it. i just think, you know, today may not be a great day. >> we are holding 4,900, though, jim, and i know you've got some -- you're on not a mag seven framework now but a mag six, right? super six. >> yeah. you know, look, i thought it was great that elon said, listen, we go to -- maybe we go to texas. what i most feared was that one of the central tenets of the judge's ruling in delaware was, he was never going anywhere, what's the deal? and then the other day, he starts making these things -- i like that. the other day, he starts -- that's cool.

holy cow. >> you didn't know about that? >> no. what is that, celsius? i like celsius because of that curious taste. it's a combination. it's dow, dupont and lino basil. i don't know. i find that if -- musk just makes one comment, which just says, you know what? i'm really more turned on by space and the brain, i think people are going to freak out, because what they're going to say is, i lost in delaware, my pay package is not going to come for a long time, i need to accelerate the satellite business so it can come public. >> sure, sure. >> i need the money. >> how about morgan stanley last night, adam jonas on gm? the legacy auto business is short the ev theme. selling fewer evs is good for profit. >> the big worry, if i were gm or ford, is california. what happens in california? it's not working fast enough. you're not going to be able to sell i.c.e. in california after 2030. that's the only thing that's

going to stop them. i wonder howing. ford has the best hybrids. ford also had the most problem with evs, and ford has some warranty problems. ford has a lot of cash. as far as i'm concerned, evs are poison. >> meantime, as far as mag seven talk goes, b of a has the theory that money market ragts come down, a wall of money moves into equity income, utilities, real estate, areas that -- you buy it or not? >> what do we do? how about the 300 spartans? mag 85? they're not magnificent if there's 85 of them. there's no pulchritude there, pal. here's what i think the problem with that is that we get very excited about wells and jpmorgan and then someone says, hey, amd is down 25, and they're crushing it. go back. i mean, we can't resist. remember, january was all mag,

not mag 85. mag 85 listed -- were from november 1 to jan 1, maybe we go back -- i mean, i love the 85. where's brunswick? is that in there? >> your point is old habits die hard? >> old habits have been lasting since 2012. i mean, by the way, i love it that ruth porat doesn't have -- i wish people understood. when you're in the room with ruth, and i happen to have tremendous respect for ruth. my wife said, oh my gosh, that's ruth, she's in the room. you're talking with a titan, a heavyweight, but i read the notes and go, ruth porat doesn't know what she's doing. doesn't know what she's doing? she might be the smartest person i've met along with jensen huang. >> two names i want to get to. paramount, byron allen confirming his bid where he would sell the studio, keep tv and streaming. thoughts on that? >> well, how's he done on the

other things that he has -- do we put quote marks around his bid? i think it makes sense. i feel that lthey're -- i love their international football package. i think it's terrific. but i think that maybe it could be something he gets started with, but the stock would be much higher if it was being taken seriously. >> there's walmart and the three-for-one split. >> i'm so glad you brought that up. first of all, you know i'm very fond of walmart, both the ceo and the team and i love going to my walmart and the one thing i love is that sam walton always felt people should get stock and he didn't like fractional stock, and he was right. it's time for the -- a lot of the retail companies to say, who are are we really trying to have as shareholders? are we trying to have big hedge funds and make it easy to go in and out, or do we want individuals? if we want individuals, do what walmart is doing. walmart is true to its word. it's -- i think walmart's such a

great company, and they care about this, and it's sam walton's legacy, and a lot of the companies would say, that's so stupid. now the institutions won't buy it. it's $448 billion. >> b of a note today is brokers, rejoice. >> right, right. >> i think there's been -- i remember when dick grassley was here, and i used to talk about, everyone should split. when you split, it gets new investors in, and then it got to this period where they said, individuals don't care anyway, and they just do etfs. that's going to be wrong. we're going to work very hard on these companies. chargeoffs much larger than expected, related to some signature stuff. >> it is signature. puts them in another category they didn't expect to be in, so they have to cut the dividend. it's very grim. and i know barry stern llicht sd there's a hole. i think barry is terrific. this isn't sl green's going to go out of business.

stop scaring people. i don't like people who scare people, okay? stop it. i know it's exciting. i used to do that when i was younger. let's scare some people. i used to be a hatchet man. i remember when someone said, listen, i need a negative article about archibald cox, i know you'll do it, you're a acht man. i'm out of that game. >> we're glad. >> i don't want to scare you. i did that, and i got people out. i said, if you need money in the next five years, take your money out. one of the greatest calls ever, the market then dropped 5,000 dow points, and all people remember is -- i crucified jim cramer on a cross of gold. do we have her, really? we got lisa su? all right. speaking of heroes, i hope she didn't hear that i said jensen huang is the only smart one. amd shares falling, results for the fourth quarter were in line with expectations. these don't tell the story. i'm so glad that ceo lisa su joins us now, because lisa, you

used a number last night that's freaking everybody out. by the way, hello. >> good morning, good morning. >> hello to dan too. daniel, you, okay, all great. yo $400 billion total market for accelerated computing in 2027? lisa, that presumes that there's going to be an industrial revolution that will be bigger than microsoft, than intel, bigger than the iphone, bigger than the loom. how is that possible? >> well, first of all, it's great to be here with you, jim. nice to see you guys, and carl as well. look, i think we are in an amazing time. i'm so excited to be in this space. high-performance computing is driving everything that we do, and a.i. in particular, jim, $400 billion t.a.m. in 2027 is about changing the way we do everything. so, think about what a.i. is. it's the most important technology that has come over

the last 50 years. it's an opportunity for us to change everything that we do, how we live, how we do business, how we do research, how productive we are, how we ensure that we have the best capabilities, and really, every single person's life is going to be touched by a.i. so, yeah, i feel like this is a huge market opportunity, and we spent the last few years positioning amd as an a.i. company, and we've made significant progress in that, you know, here in the fourth quarter, as well as coming into 2024. so, i'm really excited about our a.i. opportunities. >> okay, i think one of the problems, lisa, maybe why there was some pushback is other than in the microsoft call, which we have a fabulous relationship, by the way, congratulations, they like the ny-300. what bothers me is there's amy hood and satya nadella talking about, we use it for summations. in our daily lives, we don't know how it's going to change us. how will it? >> i think it's still quite new.

if you think about some of the applications that are out there, first of all, for a.i. to work, we really have to train these large models. these models get much better over time. i think everyone has seen what chatgpt can do, the fact that you can get so much information in such a short amount of time. now, imagine incorporating that into every aspect of how you run a business, every aspect of how you make decisions in businesses, how you do research and make that more efficient, how you get better health care and the fact that it will make your doctors more capable and more efficient. it will make all of those processes easier. we're just at the very beginning, and the work that we're doing is we're really building, let's call it, the foundation, sort of the processing and the compute capability that will enable us to train these models and then also when you ask chatgpt a question, it needs to have very powerful computers so that it can answer you as fast as effectively as possible.

so, that's what we're doing. and i would say we're at the very, very early innings of this compute revolution. >> the reason i started with the $400 billion total adjustable market is there is a sense that there's only going to be one way. there's going to be nvidia and a lot of h-200, which is going to be faster. it trains better. and you've got an older system by that point. if it's $400 billion, and there's a lot of companies that are embracing yours, then what i think to say is that there is so much room for everybody to make a lot of money. am i being too bullish? is it really zero sum and i'm missing the point? >> no, i think you're absolutely right. i mean, if you think about just how much progress has been made just over the last 18 months in the industry around a.i., and then with amd, you know, we ramped, we launched our mi-300 here just in december, and we said we were going to do over $400 million of revenue. we exceeded that. we said we were going to do $2 billion of revenue in 2024.

we've now updated that to over $3.5 billion in revenue. we have dozens of customers who are really using mi-300 in their datacenters and really getting a lot of capabilities out of that. so, this is the very beginning, and i completely agree with your point. with such a large market, you're going to need a lot of different solutions, and we love the partnerships that we have. these are partnerships that, as you know, we've built great partnerships with our server product, epic, through the italian cities, and now we're adding our instinct and mi-300 portfolio. >> lisa, there's a lot of work being done right now, trying to figure out whether or not the a.i. push is already making itself seen in productivity or a wave of layoffs. others argue it's really right now, at least, more about supply chain healing and being in full employment. when you see stuff like that, what is your take? >> you know, my take is we are definitely seeing the stages where a.i. is making us more

productive. we're using a.i. throughout the work that we're doing, even internally at amd, when we think about how we design chips, how we market better, how we have better processes. i think a lot of enterprises are starting to figure out how they use it. and it will definitely make us more productive going forward. i don't see it as, you know, layoffs, per se. i see it as making knowledge workers that much more productive, and that can only be good for our overall economy and how we get more efficient and effective. >> all right, so, lisa, i do want to deal with some of what i regard as transitory issues. there's some slowdown in some of the xilinx business. when i looked at the fourth quarter of 2021 of xilinx, it was the same amount of revenue as now, which i found disappointing. and the significant weakness in gaming, is that transitional or that's a secular decline that i should be worried about? >> thanks for that, jim. i think it's important for people to understand. the semiconductor industry has

gone through just a lot of lift. i mean, think about the pandemic-driven demand. we were building for a very, very significant demand. we saw significant growth, and what happens in those periods is you also get a situation where customers have perhaps purchased a bit more than they need in the short-term, and so there's a little bit of a, you know, customers normalizing their inventory. there is nothing that is fundamental about this. frankly, i'm very excited about the xilinx business. we've made tremendous progress in design wins across the board. people love our portfolio. the fact that we're taking sort of the leadership of the xilinx business together with the embedded processing from our, you know, amd processing capability, we saw design wins grow by over 25%, and so over $10 billion of new design wins. we're absolutely gaining share in the market, and yes, this is a transitory, let's call it,

first half of the year. we expect a bit more sort of correction from a customer inventory standpoint, and then we'll return to growth in the second half. >> lisa, how about an update on hiring, retention, comp, whether or not there's a sufficient labor pool to continue to grow this part of the business? >> yeah, we're absolutely focused on continuing to grow overall. we're investing in r&d. the work that we do really extends over sort of the decisions that we make today are really road map for the next three to five years. i think there's a good pool, especially for a.i. talent. it is a very competitive market. but we're doing very exciting things at amd. >> all right, i just want to go over, finally, what we might be -- regular people might see as the first a.i. you've got a leg up on everyone when it comes to the pc a.i. you did not call a bottom right now, but you did say the second half could be strong. we know that intel is in the category of not as bad as it used to be. will you be able to keep a

high-end pc a.i. relationship between, say, you and hp, working closely with microsoft? this could be the first interaction that regular people have with a.i. >> that's such a great point, jim. i really like the a.i. pc category. i believe that a.i. is everywhere from sort of the largest clouds to the end points in pcs, and you're absolutely right. a.i. pcs are something that we can all look forward to as making ourselves more productive. we are absolutely leading in this category today. we've shipped millions of a.i. pcs. i think we have over 90% of the current market of a.i. pcs is amd. we're absolutely driving that road map significantly over the next couple quarters. we're excited about the work we're doing, together with microsoft, together with our largest oem partners like hp and lenovo. it's a wonderful opportunity for us. i look at this as, it's only going to keep getting better, so as excited as i am about the

2024 opportunity, i actually look at this as a multiyear opportunity for us to continue to make a.i. pcs as well as a.i. datacenters much, much more productive. >> well, when i met you, this was at five. you said similar things. i was skeptical until it got to eight, and then i realized i better get on board. i'm skeptical at $167 until i get on board right now. lisa su, ceo of amd, i'm so glad that you came on. great to see you. >> thank you so much, jim. >> absolutely. >> stock actually climbed a bit during that conversation, jim. >> well, i mean, look, the analysts were very skeptical of the gigantic total adjustable market. i think that lisa su doesn't ever -- she has never overpromised and underdelivered in my years. when she schooled me -- and by the way, it was schooling. it feels at polo, and she was saying, when you stop being an intel-aholic and listen to facts, youmay understand that

our stock is going higher. she's always been within to admit if something's really wrong. she did say there's a pause in the gaming cycle. she did say she wants to stick by the embedded, even though the revenues were the same in 2021 as they are now. but the amount of business she's doing is a lowball figure. the $3.5 billion. it's a lowball figure. she'll do more. there are some bench testing versus nvidia that i think people -- there's a forbes bench test that makes it seem like nvidia's better. nvidia is loaded with software, but the fact is the clients love -- they love this mi-300. who am i to tell nadella, you know what, i'm doing some benchmarking and nvidia's faster. what the heck do i know? >> chicago pmi came in roughly in line, just a little bit below expectations, jim. we did get a halt and a resumption of trade on nycb. >> when jpmorgan bought republic, that was smart.

>> yeah. >> but you buy signature, and you kind of didn't know what you were getting into, and they seem to be a little bit over their skis. >> it doesn't resuscitate your fears about what happened last spring, for example? >> no, no, what it says to me is, not all banks are equal. some are more equal than others, and these guys are not equal some are equal to others. these guys are not equal to j.p. morgan. in 1990 there were a lot of banks that bought other banks and didn't realize they were buying big banks. >> let's get the chicago pmi numbers with rick santelli. good morning. >> good morning. 46.0 is what the january read on chicago pmi is but 48 was expected. maybe the most interesting feature is this means 12 out of the last 13 releases have been under 50. this is the weakest level since october. and we've only had one reading above 50 going all the way back to august of '22 and that reading was last november.

you see interest rates moving lower. this is another reason why. weaker data. we had strong confidence but it flies in the face of a lot of other data fronts we've been covering. we saw the size of the quarterly refunding for threes, 10s, 30s is up. even though yeeleds two down. counter intuitive, most likely about the fed. later today expect action and we're back to carl. >> appreciate that. by the way, busy day for rick and all of us. eci .9 as this rages or less of a pressure at least. >> interest rates here we go again, they're tame. interest rates are tame. >> a three handle on the ten year back to three nine five today. >> this is the non-mag 85. >> yeah. b of a, this is one you have to go to chatgpt and say come up with something better than mag 85.

that's what she needs to do. just summarize. >> adp 87. as for washington d.c., the social chiefs to hill. look at mark zuckerberg making his way into the room. linda of x is in there. the head of tiktok we saw a moment ago. i wonder where do you think the line of questioning goes on some of this? >> well, look, i think that when you've been grilled the way mark was on this, you kind of know where to go. there's always some smoking gun that is an alleged smoking gun. i think they tried really hard to get it right. the american people have moved on, the congress hasn't. >> we'll see how educated they are on that process. it's been checkered in the past. >> i think that mark will -- i don't know. in my times i talk with him, i think he'll not be as -- i don't want to say disrespectful, he wasn't disrespectful but i think

he'll be more collegial and therefore helpful. >> we'll get some of that hearing coming up in the next hour. we mentioned bonds lower across the curve this morning with another three handle on the ten year as a result of the eci number. maybe the chicago pmi pmi number, all leading up to the fed decision this afternoon at 2:00 p.m. back in a minute. with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting

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let's get to jim and stop trading. >> so many headlines. we go vie, which is similar to mon jar row. no one knew,os owe arthritis, it works for that. what is this thing? this is better than sham wow. 365 million people including myself have this. they finally have something so that your knees -- maybe i could run again. i was a great runner i haven't

been able to run in 15 years. but it works osteoarthritis. >> another 50 billion. give it a musk. take the 12. >> how about tonight? >> you have to read that. that thing leads great. thermo fisher and otis. this is the genius splitting up raytheon, united technologies, judy marks is crushing it. double beat that is a good looking chart on otis today. >> the chart is so great. she goes to china more than anyone else. we'll find out how china is doing. maybe grab a couple of starbucks there. >> good show. see you tonight. take you back to senate judiciary live with the ceos of n'goths.ap, tiktok and oer dot away. go. and go and go and go. (tense music) but what if you.

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good wednesday morning welcome to another hour of "squawk on the street" i'm sara eisen with carl quintanilla live for you as always from post nine of the new york stock exchange. david has the morning off. look at stocks here in the early action. nasdaq comp is where the pain is today down 1.2% reacting to underwhelming earnings, amd, alphabet, microsoft we'll talk about some of them. dow up little change ten points. we are going to get a fed decision and a press conference this afternoon. ahead of the fed it's quiet. there's buying of bonds with 10 year moving south of 4%. what will jay powell say about the time line for cuts? that's going to be the big question today. no change expected on rates. the two year yield sensitive to policy. 4.2%. ceos from the world's biggest social media companies set to get grilled this hour about

senate lawmakers about keeping children safe on their platforms. we'll take you live for the q&a as it starts. here to talk it through is julia boorstin and emily wilkins. julia, what are you expecting? >> i think we're going to hear from a lot of these companies, if not all of them -- that they are really working to address this issue and that the fact that there is this see sam or child sexual abuse material on their platforms is not what they want. but the question is whether they can take the intent to solve the issue and translate it into removing this content from their platforms. i think we'll hear from several ceos they're advocating for legislation. zuckerberg is going to talk about age verification and parental approval when teens down load apps. and evan spiegel is going to

endorse this kids online safety act, which would require tech firms to provide more parental controls. this is a piece of legislation that has drawn some concern for potentially being an issue when it comes to privacy. and so, there's been some concern from the aclu and others that this would potentially lead to censorship. so interesting positions on which will will emerge from the forefront. i do expect there to be a push for action. >> here's my question. they're all going to outline the numerous steps they're taking to make your platforms safer for kids, right? and how it's been a priority and they've been working towards this. is that working or is there evidence that they're failing? >> there's evidence that there's just a proliferation of this content. and even if they're getting better at catching it, there's just more and more of it.

to cite some of the number here. the reports of child sexual abuse material on online platforms grew from 32 million in 2022 to a record high of more than 36 million in 2023. and a lot of the problem is this isn't just a domestic issue, 90% of reported see sam is uploaded by people outside the u.s. so this to a certain extent is a whack a mole issue and the idea there has to be a wholesale change how this is addressed. one thing i think we'll hear about from the people asking the questions, from legislators, is the question whether section 230 which prevents the social platforms having liability for the content on their platforms, whether that needs to change and whether we have to see them held liable and open to lawsuits for the content on their platforms. this is a running conversation. we talked about section 230 reform but i think it's sure to come up again here if they're not held liable, the question is

how important it is for them to actually get to the bottom of it if it's not a legal responsibility of theirs. >> it's tiktok that's going into the hearing with fresh news on the dispute with universal music group which talks about a tidal wave of hate speech, bigotry, bullying and harassment. i wonder if that puts the spotlight more fiercely on ti tiktok. >> it could. the tiktok ceo didn't say anything on his way into the hearing. but that's certainly something that could come up we're outside the senate judiciary hearing right now where lawmakers are about to begin questioning. we're expecting a confrontational hearing here based on the testimony we've seen, what we've heard from lawmakers. there's a lot of frustration and a sense too that congress is trying to push the idea that they now need to step in to help protect kids online because social media companies haven't done a enough.

we spoke with senator blu blumenthal, he said i know companies and done a lot over the last year but he said he feels it's performative. he doesn't trust the companies to do the right thing at this point and he plans to ask if they'll support the kid's online safety act. we know snap is going to promote that. but it'll be interesting to hear the response from the other ceos in the hot seattoday. lawmakers have been pushing this issue with senate majority leader chuck schumer he said it is important to get something done, be that the kids online safety act or other bills. but it's the senate, there are a lot of other priorities going on and so easy for stuff that doesn't have a clear deadline to get lost in the shuffle. >> indeed. on a day we're watching taxes as well. thank you for that. we'll monitor it with your help. turning to big tech

earnings. microsoft and alphabet sliding despite beating estimates on the top and bottom lines. breaking it down for us is jeff phil. a buy and raises alphabet from 170 to 175 and keeps the buy. great to see you. even though the price action this morning isn't that inspiring we did have, i think, 15 price target increases on microsoft. i imagine you were one of them? >> yes. microsoft is continuing to out perform, carl. if you think about what's happening with a.i., they're so far ahead of their competitors. they're taking market share. you have price increases across the platform and the really a.i. moment for microsoft hasn't started. meaning they haven't even monetized this yet and many of these co-pilots they're launching are still not generally available. so it takes through 2024 to get the co-pilots out.

you it takes us deeper into 2025 before you see the real meaningful revenue. so that means there's continued goodness, in terms of accelerating top line growth and then the big surprise was the margin upside from microsoft. microsoft is now saying that they're going to show one to two points of operating margin improvement. i think many people believe that is an incredible feat given the investments they're giving a.i. that they could show margin expansion. so you're getting revenue acceleration as well as margin upside. and at this point you're taking pretty big market share across the work. microsoft is squeezing in against google and amazon and winning, winning more and more contracts given the portfolio that they have. so this co-pilot model is not one or two co-pilots. it's a fleet of pilots that are going to be inside this cockpit. that they're going to unleash.

and again, you can start as a developer, as a call center worker, you can start as a business user. you can start as a ceo, in the mail room. it doesn't matter. everyone has an impact. >> i think that's why -- the street is trying to get educated on what get hub co-pilot is versus everything else to your point. as for balphabet, is the headlie about cap x do you believe we're in a cap x race you can't afford to let your competitors develop anything new before yourself? >> yeah, i think that's it. google and microsoft continue to accelerate cap x it's a cap x war for a.i., for new users for this new platform. the google results were a yawner. they weren't very inspiring. google cloud snapped back in q4 but other than that, everything else was in line. so it wasn't really exciting. i think everyone felt that given

the ad market and the strength across the advertising market and the meta checks which have stood out above that at google, i believe that google would have a much better number, and again, given they don't guide and give you any color, kudos to microsoft for doing this, everyone on google is just kind of scratching their head, what's next, what will they have to do in a.i. to catch up? everyone knows, you know, from a perception, they're somewhat behind in the enterprise obviously they're trailing against microsoft but in the consumer segment i think google is in a phenomenal spot and our view is meta and google will win the consumer and the enterprise it's really a two-horse race between microsoft and amazon for the enterprise user. >> rights. we come back from the line, going to make them dance. fascinating and we're far from done for the week.

thank you were brent thill. let's continue with tech. the u.s. and eu trade and technology counsel holding the fifth meeting in washington yesterday. antony blinken, gina romano and margaret vestiar among others discussing building resilient supply chains and derisking and diversifying economies. margaret vestiar joins us exclusively. commissioner, welcome back great to see you. >> thank you robert costa william barr great to be with you. >> it's great to have you especially on a day we're watching this hour, the heads of social media companies, x and meta and snap and tiktok on capitol hill testifying. which -- about child safety. it's a stark reminder that congress hasn't really done anything to regulate social media and the companies themselves have proven inadequate when it comes to

protecting children. who do you blame here? >> well, in europe, legislation has been passed. so now these companies will have to do a risk assessment if their services can be damaging for instance to mental health. they cannot do targeted advertising to children anymore. and these are just two examples of improvements for children in europe. and if i were one of those businesses i would find it difficult to argue that i would protect children in europe but not in the u.s. >> right. so is it a blueprint for a regulation that should be done here? you have the transatlantic partnership and the meeting yesterday. why isn't it being shared in. >> you know, we have different political systems and different political dynamics. but that has not prevented us from doing quite a lot of progress. for instance, in the approach to artificial intelligence, to make

it easy for businesses to develop while protecting us as citizens from the associated risks, we've been working on semiconductors to make sure that we do not get into the same shortages again. we now have a common early warning system for that kind of problem. so i think it's important to respect that we have a different political dynamics, but to see how can we solve things where we have the same approach and where we find there are thingswe can do that are useful. >> in your protections in the digital services act, specifically on social media, does it shield children from anorexia targeted ads or child sexual exploitation. other sort of mental health issues? how specific does it get? >> well, it goes quite far. so if you are one of those very large platforms you have to make a risk assessment. can this service that i provide

pose a risk to mental health. if something is put up like child abuse, you have to take it down because it's illegal in europe. you cannot do targeted advertising to minors. because we're all vulnerable but obviously children are much more vulnerable than an adult person. i think this is absolutely crucial for the trustworthiness of these services for parents to be feeling safe that their children are using online services? had. >> yeah. or they can just ban it for under 16 or something, like florida is looking at doing. you're investigating x i know, speaking of social media companies, for misinformation relating to october 7th, terrorist content, extremist content. how is that going? what information are you looking for and what kind of cooperation are you getting? >> well, we were watching for quite some time what was on x

after the hideous terror attack on israel. and we found that none of the safeguards that you a you are o to have in europe thanks to the digital services act seem to be there. so we opened an investigation and now collecting evidence trying to conclude within a reasonable time frame but i do not have conclusions yet. >> what about tiktok, which has been found to have lots of misinformation on this war and pushed terrorist propaganda? >> it may be that we will open other investigations. we have the resources and, of course, we stand ready to do so. already tiktok cannot be on my phone. it cannot be on the phones of eu officials. if we find reasons to do so, of course we'll open investigations also with the other companies. >> speaking of the compliance

with the digital markets and services act, apple released a new beta software version with changes to address some of the regulations. have you seen that at all and are you seeing similar plans from microsoft and amazon and meta? >> well, we are encouraging those very, very large businesses who have new obligations in europe to share their tests, their approach with market participants. because we cannot have an ivory tower approach just to look if we have compliance. we need the back and forth with apple, with meta, with google and with market participants to see if they are compliant or not. that goes with the fee structure, with enabling more app stores on your phone. making dates available. you know, all these obligations that come. i'll be very interested to hear

how market participants find these suggested changes. if good and compliance, well that's a success. if not, we stand ready to open noncompliance cases. >> i believe you just met with some of the tech ceos, right? you met with tim cook, among others. how did those meetings go? what are your expectations? >> i think they came over quite strongly that they invest in being able to comply, that they are looking into the changes that compliance will mean for their businesses. of course, that is also what we're looking for. now remains to be seen if they go the full mile to comply as can be expected. compliance there is on the 7th of march so they have some time to go. >> speaking of apple, i believe you're still pursuing the

spotify complaint. why are you still doing that if it's seemingly addressed by the digital markets act that you guys have passed through? >> spotify largely complained with us quite some time ago about the unfairness of them having to pay the 30% fee while apple music not doing the same thing. and being -- making it very difficult for spotify to tell their customers that they could have a cheaper offer somewhere else. so if we have a case where there is a suspicion that an abuse had been ongoing for quite some time of course we have an obligation to do that -- to do that case, even if for the future, the markets act will ask for a different behavior on a company like apple. >> because it seems like it addresses the same issues. you started talking about a.i. and potential cooperation here. i know that you guys have the a.i. act in europe.

it still has to be voted on by member states. and i'm just wondering if you're, again, out front and the only one regulating a.i., does it matter when some of the biggest a.i. innovators are coming from the u.s. and china, both countries seeing it as a strategic geopolitical priority? >> i think the interesting thing here is that weer very aligned with our u.s.partners on the approach to artificial intelligence. we agreed on that already when we met the first time more than three years ago, to have a risk based approach to look for the use of technology. if technology is used to decide if you can get a mortgage, be accepted to university, can you get an insurance? well, here really important that a.i. does not discriminate you. and what i see is a full alignment between our a.i. act, the presidential order here, and the g7 code of conduct in order

to enable us to trust artificial intelligence while giving, you know, full scope for innovation and for all the important use cases that we see right here ahead of us. not even in the far future. >> well, i have a feeling we'll talk about the a.i. act as it moves forward. but i do know that you are looking specifically into microsoft's investment into open a.i. what concerns you here? >> well, i think everybody followed, at least i did, very closely what happened in those, the three, four days when sam altman was out and then not out anyway. anig microsoft investment. and from a law enforcement point of view, what was important for us is to see if there was a change of control because if there is a change of control, then it is de facto an acquisition. so this is why we have been asking questions and we will soon have a conclusion as to

whether or not we think so. >> is it just a fine? people are seeing that for big tech as a cost of doing business in europe. >> well, actually some of big tech companies they have a better business in europe than they have in the u.s. europe is a very attractive market. you find a lot of people who are movers on technology. you have a lot of people being very well connected to our digital infrastructure. i do think that it is worthwhile doing business in europe. >> all right. we certainly appreciate the answers on so many different investigations and areas that you're focused on as always. commissioner, thank you. >> it was my pleasure. good the see you. >> good to see you, too. in washington today where not too far away those social media ceos are testifying. as we head to break, we are keeping a close eye on the testimony before senate lawmakers, talking about online child safety. meta's mark zuckerberg among

them. we'll take you live as soon as the q&a begins. up next, the ceo of mondelez. what he told us about the state of the consumer and ha he's ei aunthwod. "squawk on the street" back after a quick break. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term

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with the largest fastest reliable network. give your business a head start in 2024 with this great offer. plus, ask how to get up to $1000 prepaid card with qualifying internet. the street." a lot of earnings movers today. look at mondelez, under pressure after quarterly results. q4 sales did rise though volumes

fell and the company's guidance, a key sticking point for the street. i sat down with the chairman and ceo to go through the numbers. here's what he said about that. >> first thing you need to look at the volume mix underline which we think is going to be positive in 2024. but there's a lot less pricing. you have to take into account last year we took quite a bit of pricing. we have to take pricing again, but cocoa prices, sugar prices, hazelnut prices are going up again. but at the same time the pricing effect into next year will be less. but the underlying volume makes performance which is how much the consumer is buying, is going to be pretty good going forward. >> you also say that there's greater than usual volatility as a result of geopolitical uncertainty. you have the emerging markets world, more global than most

u.s. companies. how do you see the geopolitical uncertainty and volatility impacting consumers? >> thinking about the middle east where there's clearly skepticism about western and north american products. we see the consumer pulling back a little bit probably effecting our region volume by 1 to 1.5%. we think that will continue in the first half of next year we assume in the second half of next year it will be less. the other one, there's a number of countries around the world where there have been big devaluations. argentina in the first place, we have nigeria, egypt, morocco. so we see a number of companies where the consumer is heavily affected by the economic conditions and that is affected in their consumption. >> you mentioned the inflationary costs which are still there, in particular cocoa. so how are you planning to deal with that if you can't have the same kind of price increases that we've seen.

in chocolate we are going to go with the price increases we need to take. we're in the middle of negotiation of that. happy to report that in north america those price increases have been agreed. in europe the price negotiations are still going on. but i would say the majority of it is already done. and then in emerging markets we do not tend to increase prices much we tend to play more on mix and keep the price points which are important for the consumer there. i do think that in particular chocolate the price increases pass. in biscuits there's going to be a lot less pricing that we take and that's the effect i was talking about that we see in the top line, that's why the top line is coming down a little bit. >> what about the gl 1 debate it's died down since we last talked about it a few months ago but now that you're seeing early data and trends i wonder how you think about how it influences your portfolio and future.

>> yeah. our view is not really changed. the penetration of the drug, ie the number of consumers that are on the drug, is exactly in line with theprojections. even a little bit less i would say. so if you extrapolate that for the next ten years and assume that 5 to 10% of the u.s. adult population will be on this drug, as an example p the calorie effect, intake is going to be 1 to 3%. if we look at that forus, we think the volume ten years down the road, might be affected by 1 to 1.5%. and at the moment that's the margin of error of our estimates where we'll be. nothing is changed. we have more data that confirm the assumptions that the effect is not going to be that dramatic as assumed and it's going to be quite mitigated. >> given the factors wonder you how think of your portfolio.

you 'been inquisitive the last few years or so. how do you feel about it now and do you feel like you're going to continue at this pace given the current m&a landscape? >> well, we -- yes. we want to continue. i would say contradictory to what you would believe, the valuation of companies have gone up, which doesn't make sense with the high interest rates. but i think there is more interest maybe a little bit more need from other companies to make acquisitions. so we're going to stay financially very disciplined. we don't want to do acquisitions we can't get very good return on. so discipline is first. but we are looking around the world, is there anything in the biscuit and chocolate arena that is of interest to us. but the environment is more difficult than it was. so you might see less activity from our side. >> the ceo of mondelez we 'going

to have more from him in the next hour of money movers, including some of the changes he's seeing from consumers around the world as far as snacking and spending on snacking. one of my takeaways there from mondelez. i think the stock is down because the organic revenue guide was 3 to 5% which was a step down in growth this year. they're seeing, like starbucks mentioned yesterday, some of the geopolitical impacts. boycotting or shunning of american or western brands in the middle east. something he expects to happen the next few quarters and then come back to normal. that was the theme in starbucks and expect it from mcdonald's as well because they've warned they're feeling it. >> and coke. you're right about the guidance, the eps looking 7 to 9, street at 11. makes sense you'd be more cau cautious on m&a. >> sensing changes on the consumer. they have pricing power, they have to pass on the high cocoa

prices which are a problem but not as much in the cookies or biscuit parts of the equation. that's where the growth for these packaged food company is around pricing. >> when you have goose eggs on volume in a couple big consumer names in the last week, prices got to follow, right? >> you would think you see a shift as prices come down, volumes recover a little bit. i would say still talking to a lot of these ceos. volumes have held up well given the double digit price increases they've seen. it hasn't been a push back from consumers but the dynamic is shifting and you're seeing issues with like mondelez and others, across the food and products base. >> and on a day the journal does the piece about companies requiring five days back in the office i wonder what that does to snacking. when you're home all day -- >> snacking at home. >> yeah. >> i don't know.

i snack at home, on the go. i think snacking is one -- that's why mondelez and pepsi have been able to outgrow the other food companies because snacking is a sweet spot. the interesting tidbit is on how retailers are getting more aggressive, demanding fewer price increases, because they want to drive traffic and growth and always a tension between retailers and the package food makers and he gives good color on that too. >> that's good. especially a day we're watching walmart for other reasons, too. >> ceos of the big social media companies including tiktok and meta's mark zuckerberg getting grilled on the hill this morning about how keeping children safe on their platforms is taking. q&a is about to begin. we'll take you there live as soon as that begins. stay with us.

keeping a close eye on senate judiciary this morning as the heads of tiktok, meta, x, snap and others testify in front of the senators about keeping kids safe on social media. we are waiting for some of the opening statements to finish up and when they get to q&a we'll

take you there. the major average on track for a three month win streak and january is shaping up nice. >> we're up 3%. that's the good news. the bad news, hoping for broadening out of the market it's not happening. the sectors, this is where you can see the influence of the biggest stocks out there because they move the sectors around. semiconductors lead the pack because nvidia is up. communication services leading because we get big moves up in meta, for example. and with health care doing okay because of the pharmaceutical companies. you see energy is kind of flattish, even though oil is up 7%. exxon is the only thing up, not really doing anything. industrials are flat. boeing is killing industrials. but whirlpool is not doing well. the banks aren't doing much. there's the effect of tesla, tesla down 20%, that's a

discretionary stock. even the cruise lines are weak. whirlpool as i mentioned weak there. if you're hoping for a broadening out story, the equal weight s&p, it's flat. that's the blue line, s&p 500, market cap weighted up about less than 3% right now. so the broadening isn't really happening right now. it's the last day of january, it's the january pa pa baromete. as goes january as goes the year. 74% of the time the s&p 500 performance the full year as it does in january. since 1938. 74% of the time when january is up, it's up. and you get the idea. now here is the question. suppose we're up 3% we're up about 3% this year. suppose we end this year only up 3%. all the gains happened in the

month of january. what are the chances the other 11 months will see a gain? so the odds here on 67%. the next 11 months will follow january and be up, 67% of the time. that's what this is saying here. there's the january barometer. >> here you see, i want to talk about the stock splits. walmart announced the 3 for 1 stock split. this is unusual because stock splits don't happen much anymore we talked about this, 20 years ago all the time. and it doesn't happen because most trading is done by institutions they're buying on a dollar basis not share basis. put up the first one. i want to show people has created stock splits in, palo a alto, tesla, alphabet, amazon, nvidia, have all split but it's mostly tech stocks.

walmart is unusual. this introduces the question. what do stock splits do for people? these are the recent splits, all tech stocks as you see. the academic evidence, generally they're good for companies, shareholders. number one trading volumes tend to rise. number two liquidity improves. what's liquidity? the ability to trade a lot of stock without moving the price. that's liquidity. you want that. generally it increases the shareholder base for the firm. this is i think the exact reason that walmart did it. they issued a press release citing this. put that up here. the important thing is -- here's what they said. the stock mitt is part of walmart's ongoing review of optimal trading and spread levels and its desire for its associates to feel that purchasing shares is easily within reach. there you go. the academic evidence. and walmart essentially

acknowledges that. what's fun, you and i used to do stock splits all the time. it's just rare these days. >> walmart was the tip of the spear on wages. years ago they raised wages for their front line workers. wouldn't it be interesting if a lot of companies with a lot of front line workers started making stock part of the comp. >> wouldn't it be amazing if they encouraged that a little bit more. they don't much more. >> i think it's nice that walmart made an appeal to their employees saying we want our employees to be able to buy it. that's the way to say they want the shareholder base to stay as broad as it does. >> seeo we have the fed this afternoon, feels like there's a lot of excitement and anticipation in changing in posture towards easing. even more so than the last fed meeting. i wonder what the scope of disappointment is now -- >> very high. here's the problem, political risk is coming up, hitting now.

so what was it, like two months ago, a 90% chance of a cut in march? what's it now, 50%? >> less. >> it's going down. so now we're not in march. now where are we? the one after that -- >> june. they're looking at june. >> now you have political risk. i don't think they want to look like they're cutting rates going right into the election. here's the question. do they care? i think they do personally. let's ask jay powell today. >> i'm sure they will. >> do that, i want to know. >> politics does not factor into their thinking. >> i think it does, but go ahead. we have to go. >> i know. goldman still in the march camp. we're watching it closely, bob. we'll talk soon. bob pisani, boeing shares headed higher. dave calhoun not mincing words. >> i want boeing. i don't want spirit. i know boeing. i know the name of a great american company. i want you to have ownership of

this. i don't care what the history says. that's recent history. go back in time when you were king. >> jim we own it. there's not a -- there's no other answer i can give you. i want everybody, everybody on every airplane to know that boeing owns it. we own our supply chain, we own spirit, we own the results of our work. we understand that, we really do. >> phil lebeau joins us this morning. part of that interview. phil remarkable moment as dave calhoun talked about vertical integration. >> and talks about what's happening with the 737 max nine investigation. the conference call with regard to the fourth quarter results and analyst questions that's just begun. you can bet there will be some questions about the fourth quarter as we look at the three pieces of news that came out this morning. yes, they did bet e than expected in the fourth quarter. smaller than expected loss. but it's the guidance.

that's what wall street wants to talk about. boeing is postponing the 2024 guidance and with regard to the long term, 2025, 2026 guidance building 50 max planes per month they're not reaffirming it, they're not pulling it. they're leaving it. here's the q&a with dave ocalhon about why they're not pulling it. >> there's no reason to pull it. we're going to pause as long as we need to pause, readjust. and my focus is we're going to pause as long as we need to pause. >> reporter: the question is do analysts read into this they might reinstate or reaffirm the guidance at some point? the ntsb report regarding the alaska air max 9 incident, that's expected soon, whether it's this week, next week or the week after, the belief is it's

coming soon. the faa has limited max's production. they told boeing you can't build more than 38 per month until we say it's okay to do so. as you look at shares of boeing. one other stat. their free cash flow, it's for all of 2023, came in at $4.43 billion. that's important because their guidance was free cash flow for '23 between 3 and $5 billion. back to you. >> i don't know if we had a chance to chat with you about these reports that scott kirby of united went to talk to air bus about maybe folding in some planes if the 10 never comes on time. what did we make of that? >> reporter: we've confirmed they are in discussions with air bus. keep in mind this is an ongoing conversation. air bus just doesn't have these sitting around. it's not like united can say i want ten of those that are parked over there on the tarmac. they would have to work out an

arrangement in terms of the order book with air bus. would air bus love to replace the 737 max 10 in united's order book? absolutely they would. that would be a huge feather in the cap but too early to say it's going to happen. it is fair to say that united is looking at the possibility. they'll see if they can work out something that works for united and works for air bus as well. quite a test of leadership for dave calhoun now you've spoken to him a few times since the crisis has unfolded. >> yes. >> you also spoke to prior ceos when boeing was dealing with the crises, when they had the crashes with hundreds of people dying. how is the response different? what has he learned from it and how is his approach different? >> far different. the max crashes back in 2018, at that time, there was very little discussion between muilenburg and the faa administrator.

dave calhoun has been in touch with mike whitaker on almost a daily basis he's gone to washington to meet with senators. i said what was that like? he said it wasn't fun but i wanted to let them know we're here to hear their concerns and let them know what we're doing. big difference compared the first max crashes. >> some comments hitting the wires now, saying we caused the problem behind the alaska air blowout. now is not the time to give the outlook. it's been remarkable to watch you travel the country and talk to the leaders of the legacy air carriers. they do seem to have at least support about flying these planes today. >> they do. i have not called -- i have not talked with one airline executive who said i'm not crazy about flying the max. they do -- their own mechanics, engineers are looking at this. and the remedies that were put

in place by the faa, alaska, united, they're flying the max 9 again. it is important to point out, carl, as you listen to some of the executives, like michael o'leary, he's like you want to criticize boeing, get out of order, we'll drop your order for maxes, give them to us we're happy with the plane we'll take more. so there are many airline executives who believe once they get past this they want to see them increase max production they're happy with the max. >> good to have you there phil. important day for the company and arrow space in generally. let's get back to washington d.c. as q&a is beginning with the heads of the social media companies. very much support adding more resources for the cyber tip line and modernizing that along with more resources. be very open to having conversations with you and your

team to talk through the details of the bill some more. >> sure would like to do that because if you intentionally or knowingly host or store, i think you ought to at least be civilly liable. i can't imagine anyone who would disagree with that. >> it's disgusting content. >> it is. that's why we need you supporting this content. mr. spiegel i listened closely to your testimony here. and it's never been a secret that snapchat is used to send sexually explicit images. in 2013, early if your company's history, you admitted this in an interview. do you remember that interview? >> senator, i don't recall the specific interview. >> you said when you were first trying to get people on the app you would go up to the people and say hey you should try this application, you can send

disappearing photos and they would say oh for sexting do you remember that? >> the idea was around disappearing images. the feedback we received from people using the app is they were using it to communicate. we changed the name to snapchat and found that people were using it to talk visually. >> as early as 2017, they identified snapchat as the case of the pedophile's go to. the case of a 12-year-old girl, lw, shows the danger. she was groomed, sent sexually explicit images over snapchat. he admitted he only used snapchat and not any other platforms because he, quote, knew the chats would go away. did you and everyone else at snap fail to see that the platform was the perfect tool for sexual predators. >> that behavior is discgusting.

we provide inapp reporting tools so people who are being harassed can report it in the case of harassment or sexual content we respond to those in 15 minutes so we can provide help. >> when lw sued snapchat hervic snapchat, her case was dismissed. do you have any doubt that had snap faced the possibility of civil liability that the company would have implemented even better safeguards? >> senator, we already work extensively to proactively detect this type of behavior. we make it very difficult for predators to find teens on snapchat. there are no public friends lists, no public profile photos. when we recommend friends for teens, we make sure that they have several mutual interests in common before making that recommendation. we believe those safeguards are important to preventing predators from misusing our

platform. >> mr. scitr new york city, smaller servers rely on server owners and community moderators to define and enforce behavior. so how do you defend an approach to safety that relies on groups of few er of 200 sexual predatos to report themselves on things like grooming or sexual extortion. >> our goal is to get all of that content off of our platform and ideally prevent it from showing up in the first place or from people engaging in these kind of horrific activities. we provide a ride array of techniques that work across every surface on discord, and we recently launched something called teen safety assist, which works everywhere and is on default. that kind of acts like a buddy that lets them know if they are in a situation or talking with someone that fly-by-night, so

they can report that to us, and block that user. so, we -- >> if that were working, we wouldn't be here today. >> senator, this is an ongoing challenge for all of us. that is why we're here today. but we do have 15% of our company is focused on trust and safety, of which this is one of our top issues. that's more people than we have working on marketing and promoting the company. we thake these issues very seriously, but we know it's an ongoing challenge and i look forward to working you and our tech peers to improve our approach. >> i certainly hope so. mr. chu, your organization, business, is one of the more popular ones among children. can you explain to us what you are doing particularly and whether you have seen any evidence of csam in your business? >> yes, senator. we have a strong commitment to invest in trust and safety, and as i said in my opening

statement, i intend to invest more than $2 billion in trust sk and safety this year alone. we have 40,000 safety professionals working on this topic. we have built a specialized child safety team to help us identify specialized issues, horrific issues, like materials like the ones you have mentioned. if we identify any on our platform and we do do detection, we will remove it and report them to other authorities. >> why is it tiktok allowing children to be exploited into performing commercialized sex acts? >> senator, i respectfully disagree with that characterization. our live streaming product is not for anyone below the age of 18. we have taken action to identify anyone who violates that and we remove them from using that service. >> at this point, i'm going to turn to my ranking member, senator graham. >> thank you, mr. citrone, you

said we need to start a discussion. to be honest with you, we've been having this discussion for a very long time. we need get a result, not a discussion. do you agree with that? >> ranking member, i agree that this is an issue that we've also been very focused on since we started our company in 2015. >> are you familiar with the earned act authored by myself and senator blumenthal. >> a little bit, yes. >> okay. do you support that? >> we is -- >> yes or no. >> we're not prepared to support it today, but we believe -- >> section 4 of the csam action. >> we are not prepared to support today z. >> do you support the shield act? >> we believe that the cyber tip line -- >> do you support it, yes or no? >> we believe that the cyber tip line -- >> i'll take that to be "no." the project safe childhood act, you support it?

>> we believe that -- >> i'll take that to be "no." the report act, do you support it? >> ranking member graham, we very much look forward to having conversations with you and your team. >> well, i look forward to passing a bill that will solve the problem. do you support removing section 230 liability protections for social media companies? >> i believe that section 230 is needs to be updated. it's a very old law. >> do you support repealing it so people can sue if they believe they're harmed? >> i believe that section 230, as written, while it has many downsides, has enabled innovation on the internet. >> thank you very much. so here you are, if you're waiting on these guys to solve the problem, we're going to die wai waiting. >> mr. zuckerberg, trying to be respectful here. the representative from south carolina, mr. guffey's son got

caught up in a sex extortion ring in nigeria using instagram and he was shaken down, paid money, that weren't enough, and he killed himself using instagram. what would you like to say to him? >> that's terrible. i mean, no one should have tlo o through something like that. >> do you think he should be allowed to sue you? >> um, i -- i think that they can sue us. >> well, i think he should and he can't. the bottom line is here, folks, is that this committee is done with talking. we passed five bills unanimously that in their different ways, and look at who did this. graham blumenthal, du durbin/hawley, blackburn and

ossoff. we've found common ground here that is just astonishing. and we've had hearing after hearing, mr. chairman. and the bottom line is, i've come to conclude, gentlemen, that you're not going to support any of this -- how do you say your last name? >> yaccarino. >> do you support the earned act? >> we strongly support the collaboration to raise and distribute -- >> no, no, do you support the earned act? do you support -- in english, do you support the earned act? yes or no. we don't need double speak. >> we look foorward to supportig and continuing our conversations, as you can see -- >> okay, but you have -- the reason it's important, you can actually lose your liability protections when children are exploited and you didn't use best business practices. see, the earned act means you have to earn liability protection. you're given it no matter what

you do. so to the members of this committee, it is now time to make sure that the people who are holding up the signs can sue on behalf of their loved ones. nothing will change until the courtroom door is open to victims of social media. $2 billion, mr. chu. how much -- what percentage is that of what you made last year? >> senator, it's a significant and increasing investment -- >> well, you pay taxes. 2% is what percent of your revenue? >> senator, we are not ready to share our financials in public. >> well, i just think that $2 billion sounds like a lot unless you make $100 billion. the point is, when you tell us you're going to spend $2 billion, great! but how much do you make? it's all about eyeballs. well, our goal is to get eyeballs on you. z and it's not just about children if damage being done, do you realize, mr. chu, that your

tiktok representative in israel resigned yesterday? >> yes, i am aware. >> okay, and he said, i resigned from tiktok. we're living in a time in which our existence as jews in israel and israelis under attack and the danger, multiple screenshots taken from tiktok's internal employee chat platform known as lark show how tiktok's trust and safety officers celebrate the barbaric acts of hamas and other iranian-backed terrorgroups, including the houthis and yemen. >> senator, i need to make it very clear that pro-hamas content and hate speech is not allowed on our platform -- >> why did you resign? >> senator, we also do not allow -- >> do you know why he quit? do you know why he quit? >> we will not allow this -- >> my question is, he quit -- i'm sure he had a good job. he gave up a good job, because he thinks your platform is being used to help people who want to

destroy the jewish state. i'm not saying you want that. mr. zuckerberg, i'm not saying that you want, as an individual, any of the harms. i am saying that the products you have created, with all the upside, have a dark side. mr. citron, i am tired of talking. i'm tired of having discussions. we all know the answer here. here's the ultimate answer. stand behind your product. is . good wednesday morning and welcome to "money movers." i'm sara eisen with carl quintanilla. more from that social media hearing in a moment. just getting a little testy there. senator lindsey graham going after tiktok for one of tiktok's top executives in israel resigning over anti-semitic content. first, coming up on the show today, mondelez on earnings. why the parent company of ritz and oreo saw a drop-off in demand. >> one