time. 20%. the ceo saying a plan to finalize the number of store closures are in motion. he said, we're at a point where the current pharmacy model is not sustainable. are you back here tomorrow? >> i'll see you tomorrow post debate. i asked breen chessky, he's staying at an airbnb in aspen. >> you're in studio tomorrow? >> no. i'll see you from here. we'll have all the reaction. >> that's right. i'm losing it too. my name's joe. join us tomorrow. "squawk on the street" is next. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer. futures are getting challenged.

micron, levies and walgreens down 20%. chips under pressure. micron fails to top the revenue forecast despite executives expressing optimism about a.i. walgreens plunges ahead of the open, slashing profit guidance in a challenging consumer environment. amazon climbing again after becoming the fifth u.s. company to cross the $2 trillion market cap. let's begin with micron, not getting that a.i. boost in the premarket. the memory chip maker a lagger. last night there was optimism about a.i. demand. >> we expect spikes throughout canada in 2024 despite near term demand in pcs and smartphones. as we look ahead to 2025, demand for a.i. pcs and smartphones and

growth of a.i. in the data center creates a favorable setting that gives us confidence that we can deliver a substantial revenue record in fiscal 2025. >> jim, you're talking to him to tonight. >> yeah. do people know sanjay? he's solid and been around for a long time. there's a way to look at what sanjay talks about. i've had many calls with sanjay. it's always like, sanjay, why didn't you give bigger guidance? it's like, that's not who i am. i'm like, it's going to hurt the stock. he said, i don't do it for the stock. i don't want to lead people on and create expectations. you buy the stock -- it was down ten at one point. i think there's -- there is some benefit to age. it's hard to find. other than my daughter's tweet

that i put up. sanjay is a person who has a style and we have lots of coaches who have styles. i've seen andy reid say, listen, i don't know we're -- there we go. that's of course a real live picture and a reincarnation. i don't know why people don't understand who sanjay is and what he does. this was typical sanjay. two calls ago i went out with something positive and he someone reign me in. i changed my view because i didn't want to get ahead of the story, but that's him. he's reigned in because, jim, come on. i'm doing the best i can. you've created unreasonable expectations. i love the guy. i think he's one of the best executives in the country. he's done a lot of things. he's got this new york building and there's a problem with bats.

i kid you not. not baseball bats. >> i remember reading about that. >> we're focussed on the bat issue. i just really want people to understand that this stock has moved up a great deal. >> yes. >> this is very typical, the actual -- if you go back to '94, you get a two-year run. i'm talking about -- i'm talking about 30 years of being a volatile stock. you get a two-year move. you don't get a move since october. that's the benefit of age. i remember the '94 decline. it was one of the most brutal ever. when you have a major advance, it doesn't last three quarters. people should understand the history rather than shoot from the hip. they don't because they're young. >> true. goldman reiterates a buy. the jpmorgan desk not feeling panic. the bear arguments center around

the cap ex guide which was heavy. >> he immediately says we can't meet demand. what's he supposed to do? is he supposed to say we can't meet demand so we won't meet demand. they want to meet demand. the younger people are used to the idea that as soon as you increase your supply, make more machines -- by the way, if you want to profit off that, by lambert. just do it. i don't give a damn. >> the cap ex is in instruction. >> they have to. i want to emphasize that he has no choice. the thing that people don't seem to realize is he's getting more positive on telco and pc. nobody gives a damn. nobody give as darn. sorry. >> it worked for rhett butler. you're okay. >> i do feel strongly this is

quintessential sanjay and those who are troubled by it should read between the lines and recognize -- we're going to get good pc numbers. >> that's interesting. we'll talk retail in a minute. just to put this -- these charts in perspective semis versus the s&p, first six months of the year best in history. >> best in history is amazing. you're dealing with '95, '97 where you had intel with every different iteration. that's incredible. you have amazing numbers from lambert. if their numbers were great, that would be flooding the zone. inventory has -- i remember in october sanjay said, jim, inventory is -- when you speak to this man, he's a person.

i emphasize person. there's a lot of automatons. this man is not. >> we had the nvidia meeting yesterday where they talked about trillions of heavy industry that are going to get automated. take a listen. >> the next wave of a.i. is set to automate the $50 trillion in heavy industries. soon robotics factories will orchestrate robots that build products that are robotic. we devolved a virtual world simulation platform where the physical and digital world converge. >> they're saying chatbots. >> no. i mean, i didn't -- they weren't supposed to say anything important to me.

in millions of these meetings, they never say anything. what is he saying? the biggest market in the world is building factories. you build a factory to see what it looks like so you don't waste a lot. sometimes up to 30% waste. the germans have embraced it. the south koreans have embraced it aggressively. the united states, not much. that's a shame. if you're going to build one of these gigantic cargo ships, one that takes containers, it's so much easier to build it in the digital twin and move it to the other. one of the reasons i was not -- yeah, the apple call didn't mention this. i thought they should have. digital twins can be done for autos. they want to work with apple. hasn't happened yet. it could happen. i asked tim about it. anything can happen. lowe's is using it.

i think this is important because it's too abstract for people. everyone understands we have robots and they walk around and bring you a cup of coffee. how about if you have a plant that you know is going to cost a fortune and -- mercedes does this. instead of building the plant and making the changes while doing it, think about anyone who had to do a change for a kitchen and they realize that design's not right. that's where the real costs come in. >> remodelling your house. >> right. if you're building or remodelling, the changes -- i remember once speaking to rick arbor, the biggest problem is architectural changes. no, we can't do that. geez, that was a mistake. that's eliminated when you use the omniverse. the koreans have adopted and the germans have and we haven't, why, i have no idea. >> these are big things.

we'll talk more about an apple call out of bernstein. let's get to walgreens. down in the premarket. posted a quarterly missed. announces more store closes. the company continues to face a more difficult environment. jim, they say 75% of stores account for 100% of profitability. there's room to cut. >> they got to close 2,000 stores. they have to get out of -- i tell you, i was disappointed here. why? i think tim is an amazing investor. that's a fantastic manager. he couldn't get his arms around this. he came in october. the tim i know is more aggressive. this problem's got to be bigger than he thought when i met with him in january. it's an existential problem.

look at what amgen is doing. amazon is coming in hard after these guys. you can order it in the morning and have it at your doorstep versus going to walgreens and waiting for a person to open the key. it's suboptimal. you have to open it. it's really -- i find this depressing. i think tim is so good. he's done so much good in the health care industry. this may beyond. i mean, this -- >> the shrink and security element of physical retail is bad. it might be not that much better even if it were fine. the amazon threat is that acute. >> here's what tim has to do. he has to shrink the footprint of the store and make it so the front of the store is no longer

cheez-its. there's a huge cheez-its aisle. he has to make the front, all the stuff that amazon's crushing him, timing. by the way amazon has not been able to win in pharma. he has to get every pharmacist when rite aid closes -- if. he can get the fpharmacists and be open 24/7. get rid of the front of the store. that's my plan for him. >> amazon, we mentioned the $2 trillion market cap, a lot of chatter about key resistance. >> i'm furious at them. i have asked over and over again, come on. one of the reasons people like amazon -- i love amazon. anybody who has -- there's 140 million people who have amazon. one of the things that they have done when you order directly,

they don't give you a date of shipment. gassy does. that's their secret weapon. they realized we can offer low cost price and deliver the same day. >> do you think if amazon is able to hold 190, what does that say about the consumer in the second half? >> we have prime coming up. amazon is the secret weapon, not the stock market, not nvidia or microsoft. amazon hasn't figured out how to do the best chat. they will. look, they have claud, but they don't own it. i am just so impressed -- they can own sports if they wanted. they can own retail. there's no vertical. they want to own health care and pharma. their precision in how they do things is remarkable. the way they manage the finances is incredible. we used to give them credit a lot. i think the mystique of jassy

is -- he's not like bezos. jassy doesn't like the attention on him. he doesn't. i told a joke to him. unlike jensen, he laughed. i said you send my wife a package every day. how much do you like her? he laughed. jassy is funny and understated like many of the people at amazon, he's great. >> that seems to be a running theme with you, jim, names you like. you mentioned mike and jassy. >> when you see the great jensen and he hugs you and says, thank you for recommending my stock in 2015, '16, '17, you put a lot of people in. he was speaking to one of our fantastic producers earlier this morning who doesn't want me to mention her name. we can't buy it.

when you name -- jensen liked that i named my dog nvidia. it showed a level of commitment. what happened is well you're in yellow stone and someone says thank you for naming your dog nvidia, it's had an impact on people's lives. jensen is a chef. he's an architect. he's a very kind man. he uses terms like nice. i mean, remember when you use nice after your -- your mom used nice and your father says don't use that word. you look unprofessional. i would like to be as unprofessional as jensen. >> you have a new pick. >> yeah. a lot of people who joined the club said could you have a new, young, modern name. i'm tired of lily. be my guest. i'm tired of nvidia. all right. i don't want amazon anymore.

be my guest buy microsoft. we have a name people don't know at 12:00 today. >> you'll tell members at noon. >> yes, and i hope everyone listens. i love the a and p 8:00 coffee. >> sounds like you put homework into this one. >> give credit where credit's due. >> look forward to that. let's look at the premarket. we mentioned walgreens. there's levi, burke and a bunch of other names as futures remain in the red. stay with us.

coming up, back-to-back gains to the s&p. mccormick's comes in with a double beat, revenue and eps. we'll get to some of the macro as we. we got flooded with claims, revised gdps, pending homes on e thway.

we'll get cramer's mad dash and the opening bell in about ten minutes. so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot ♪ (alarm sound) ♪ amelia, turn off alarm. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

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cramer's mad dash. watching the stress test from last night. >> they were pretty much

neutral. u.s. bank and jpmorgan said they have to raise equity. i'm not sure about that. this is on credit card. we're saying that wells fargo also has a credit card problem. i don't believe that's true. i think that charlie sharp is going to buy the most stock back. this is the one that may have to do capital raise. remember, it's up nicely this year. the main point i want to make, the stress test was a yawner. some people were worried it would have major impact. it did not. >> capital markets revenue up 24. >> people have to recognize there's a lot of belief that it's going to be good. we have a couple notes talking about how there's going to be major changes. now, there's a debate tonight. there's one candidate who is so pro anything that can merge you could walk down the street and someone could merge with you.

then president biden who's ftc and justice department are so opposed to mergers that it's staggering. understand we could use banks that will merge. morgan stanley talks about the return of m&a. we're not allowed to merge banks in this country. everybody has too much except for the little guys. that changes if trump wins. >> morgan down too. >> give me a break. go ahead and sell it. make my day. you want to be lucky? you think you're lucky? >> got to add the punk. >> punk. >> we'll get the opening bell in five minutes. you can catch us any time anywhere. "squawk on the street" opening bell podcast. ♪we can secure our world.♪

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shares of levi taking a hit in the premarket. weaker than expected quarterly sales. jim, dtc up 11. the quarter's not as bad as it seems. >> i wonder whether these folks

aren't go to go the way of ralph lauren that got out of club mo monaco, the version you can get at kohl's. if you sell the stock at 19, that's foolish. if they get rid of dockers, which is the probalem -- >> take a quick listen. >> dtc business is on fire. we delivered another double digit quarter. we were up 11%. driven off of nine consecutive quarters of strong comp growth. >> gross margin of 60 is close to an all-time high. >> right. there was a lot to like here. i was surprised things were down. oh, that's -- really? i mean, again down 4. he's selling because he thinks

it's going down 5. michelle's doing a terrific job. they can get rid of dockers in a heart beat and you have a great consumer play of the most popular brand at a time when beyonce recognizes -- >> the bloomberg report on the street was they mistook the denim turnaround. >> that's broad. we're looking back saying what were people doing selling down 4. they ought to do more work and recognize that dockers isn't glued to that company. >> we'll talk about implications for nike in a bit i imagine of a we get this bell out of the way. >> nike has a bad quarter. maybe better guidance. >> let's get the opening bell here. grinder celebrating pride month.

we'll talk to ceo george harrison later. web tune celebrating an ipo today, jim. 15 million, priced at 21. >> there you go. we need them. [ bell ringing ] >> if they get the m&a, you'll understand -- m&a has been ab absent. the worst i've ever seen. the ipo is absent. the stress test, look, there are times when i felt that if there was an immediate analysis saying let's go buy, i think -- i believe in charlie sharp. i think wells fargo is doing incredibly well. it's not as bad as it used to be. >> we mentioned the test. we mentioned jeffries.

we didn't mention the nycb, one for three reversed. >> yeah. look, i know -- i don't know. i think there's a lot of opinion that you shouldn't own this group. jeffries at a high. >> yeah. >> rich handler -- i met him. he doesn't remember me -- when he was 11 when his late dad, who was amazing, was my accountant. he learned with the best. he's done the best. good friend of david. i wish david -- what do you think, dave? >> one day he'll be back i think. >> really, jim? the really always gets me. really? >> meantime, jim, we'll watch to see whether or not tech leads today. we mentioned this bernstein note on apple where they take a look at services and what it means for services over the long term.

>> god bless him. he's my favorite apple analyst. >> he went from your worst to first. >> yes, absolutely. let's go over -- the fact is that services is going to pass everything. it will be number two. the margins are great. it's in my eyes the secret sauce. by the way, tim cook, when you talk to him about services -- i said maybe it's a razor model. he said, we're a tech company. he said, jim, you want to go consumer product, but that's not who we are. we make the best -- i like it. >> the top dow names -- apple, amazon, salesforce. >> well, salesforce, there's a -- there's a tweet today -- >> you told him to come on the show. >> yeah. he'll be there. i don't know. that makes no -- he should come

on. i don't know why he's not coming on. that doesn't necessarily mean he's saying, listen, buy bill mcdermott now. he's not doing that. i like what mark's up to. it was interesting that elon musk retweeted that he likes what mark is up to. i mean, i hope he doesn't know i like mark. >> tesla's been in the news. we get deliveries next week. you saw the spacex valuation. >> forget how much he lost in x. he makes it up here. >> shares selling at 110. >> don't cry for me spacex. this is incredible. it's an existential threat to everybody who has a download. if you put up 25,000 satellites, everything's lightning fast. he's the guy you have to worry about if you're in media, except for disney.

now we learned -- >> two days in a row. >> today we have a rebound in parks. the problem with disney is the view that it is cruise ships and parks has been lost in the shuffle of woke. the cruises are not woke i understand. they're fun. i don't mean any -- i'm not judging woke. get rid of that rubric and talk about experiences and there will be an amazing story to tell. >> yesterday was a different note. today uvs talking about -- they're only 10% of the cruise business. >> they're going to almost double the size of their fleet. carnival is up ever since. stock is stock. a lot of people say it's the minus 7 media number for linear. linear's awful honestly. you could close linear because you have all these things that used to be great loss leaders

and you could watch your hospital chain story. if i'm going to do -- that model worked for 30 years. doesn't work anymore. i think at this point i don't care. i want to tell the truth. >> i think people think that's not a surprise from you. >> at this point in my career, if i can't tell the truth, what the hell am i doing? >> people understand the cable model was beautiful. >> it was a great model. you got to watch anything about the fire. chicago arson. why was it always in chicago? because of the funny hats? >> middle of the country, dick wolf. >> i like dick wolf. >> what do you make of this al michaels avatar? >> i was listening to william shire and he died about 40 years ago. there's a sense of what's happening with a.i. -- this is the first time you realize a.i. is commercialized. a lot of us like al michaels

voice. i idolized al. to get more al is great. what about bob costas? >> they can do that with him as well. >> what the hell. >> the olympics is big news for media and big news for nike. >> yes. oh, nike. nike does not have this quarter. there's too many variables. that piece today that they left out running, anybody who reads shoe dog recognizes their hallmark was running. the great steve fontaine, we always had stop preshirts on, pre was the pre to nike being great. disappointing to read that article. we need to see the china numbers, anybody china is bad. >> shoe dog, phil mike talks about why he chose china. the answer is always 2 billion feet.

>> that's the -- i had him on. they didn't want to come on. i had them on "mad money." i gave tim cook two segments and phil mike two secregments. i think shoe dog is -- people didn't want to know about business. >> one of the great ceo memoirs i ever read. gary freedman completing a $10 million share purchase. >> i'm begging him to come on the show. >> that's up about 5. for a ceo who has been vocal about the industry challenges. >> last quarter was one of those quarters -- i always say this in emails, please come on, my wife is your biggest client. gary was abject. he made some mistakes. the future is now. he used the pablo picasso where you have to destroy it first to

save it. people thought he was saying we're in the destruction mode. that's not true. once i realized he's buying the stock, $10 million is a real commitment. then i say to myself -- by the way, good price at 216. he's not saying we have to destroy to save. he's talking about pablo and reinvention. "the new york times" piece i l liked too. people are saying i've had it. the british operation is somewhere i can't get. he's having a party in spain so his voice is shot. have some respect. have some respect for what this man is doing and maybe think he has a vision. $10 million, 25% of the company, if it were bad, he would be doing a 1,000 share buy and saying i love it. >> it ties to what we got out of the depot upgrade yesterday talking about being on the cusp of a lower rate environment. >> right. what i really -- obviously what

you want to see is ted buying the stock. that will say things. ted is remarkable. lowe's had a good quarter. there are real weather issues. there were real weather issues that hurt them. people don't want to acknowledge that. >> checking in on micron, jim. keeping pass with the premarket losses. >> i want people to listen to sanjay tonight. you'll recognize that sanjay doesn't do what you the rest of the people do. he doesn't guide up. he doesn't get people excited because that's not his game. that's just not his game. now, look, if you want to hear the opposite of his game, then move the stock and go listen to josh weinstein. >> from carnival. >> yeah. the call was like this, everything you ever knew about

us is wrong. we're better than this. we're better than that. do you have any questions? i don't mind that. it moved the stock dramatically. sanjay is the opposite. he had someone reign me in. i say sanjay, remember the 2002 run, the 2013 run? they don't like it when you lecture them, but i don't care. >> jim, we only have a handful of earnings to look at. micron, levy, walgreens not good today. fedex isn't giving a lot back from yesterday. >> no, but that's because -- by the way, that was a conference call. holy cow. when you speak to raj, he's halfway there. europe is turning. you can get that from amazon

too. european come memerce is turnin. he's dramatically reducing costs. he thinks i'm not funny. jensen doesn't think i'm funning. >> it's all about timing. >> in reference to fred smith, what he did is win. the mode is so high. he can cut back costs. just the notion of retiring the 757s, if they have the ability to do that and the optionality of freight -- they thought the call was too emphasized. they put that in because there was a quick period they weren't talking about selling freight and now they're talking about selling freight. freight is valued at 13 out. it's one of the things that raj is doing, saying wherever i can sell something at the top, i'll do it. they feel like u.p.s. sold

coyote at the bottom. fedex is not done yet. >> jim, big week for consumer package goods. general mills yesterday for the first time now talking about volume over price. today we get this -- i think it's a nice note on coke which is close to a two-year high. >> let's figure this out. what does coke have? what does general mills have that coke doesn't have? things that get hurt by gop. no one will admit the gop has played any role. coca-cola doesn't have snacks. snacks other than yogurt which general mills has, but only 7% of their -- >> this is what you were saying the spread between coke and pepsi. >> yes. >> gop is starting to move things. by the way, who else is not affected by gop? the spice business. no weight put on by mustard, no

weight put on by spices, not by hot sauce. >> mccormick's survive. >> they're up 4. i wish they would be more vocal because mr. foley is doing a great job, but he's lacking in hyperbole. there's no gop. >> how about this hims and hers chatter, is it lack of quality in the supply chain? >> that's put out by a newspaper chain, media that takes positions. without verifying that, i don't -- i'm going to pass on that. >> shares are down obviously 7%. >> clearly down a lot. it's an point story. i can't verify. >> you've opinion on the hunt for stories that are compelling like fedex. emr gets a call buy today. >> i screwed up on emr.

i sold it too soon. i apologized to the company. they missed two quarters and i got discouraged. it was a positive note. they have accelerating growth. the illinois tool works, i think that's a dangerous cell because management is very good. i think emerson is better than illinois tool. >> elsewhere in industrials, ip, m&a cooling off. you have boeing, now the ntsb sanctioning the company for disclosing nonpublic information on the max 5. >> that's not going to stop until they stop building things. we're going to find out someone is at a position that is gary freedman like. 178, 10 million shares. i mean, i know this guy. i can't get his name. that guy does not let the stock come down. by the way, i'm not kidding.

it's hard to get worse for boeing, but it will. ip is like take the money and run guys. apparently the talks -- >> even at its best offer. >> my father used to rep their stuff. i thought it was not as insulated. >> as far as the macro, jim, today, interesting. claims down two straight weeks, but continuing claims three-year high. >> yeah. the moving average, fantastic work, the moving average showed me, wow, it's going the fed's way. it's going the fed's way. i'm not worried. >> not too much you hope? >> no. we can't have too much. we'll buy mccormick. >> we're back below 4.3 here. >> i think that people don't realize. look, here's what's going on.

i'll say this at the meeting today. we're trying to figure out the price turning goal. maybe it should be expanding because of the fed cuts sometime within the next year. stop sweating what day, what week. when the fed officials come on, i'm not saying mute it. make it lower. >> turn the volume down like a dimmer switch. >> yeah. there are a couple ads i mute. what am i going to do? they have to come on. why? for no reason whatsoever. if i was jay powell, no more hollywood squares. done with that. >> george gobal. >> the black out is extended every day of the year. go spend some time -- how about homework. do some homework. remember homework.

i do at least three or four times more homework than any one of those guys. they should see my house at 3:00 a.m. see what they're doing. they're probably sleeping. >> as we go to break, speaking of all this, watch bonds today. yields came in just a touch as we got a final q on gdp and claims. we'll get pending homes. after a good five-year yesterday, we'll get a seven-year. >> maybe people want the seven. it's not my favorite piece. >> stay with usment.

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call or go online now to request your free quote. watch crude today. you can see what's happened in the last month or so or at least month to date. close to 82. some interesting data out of eshs ia, last year u.s. production exceeded consumption by the widest margin ever going

back to data that begins in 1949. >> that's incredible. they're still putting away a lot of cash flow and returning a lot. that's amazing. the word, people. >> we will get stop trading with jim in a moment. dow is down 7.

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it'stime for jim and stop trading. >> i'm going to have to start getting to know this name dutch bros. known who knows the bros knows their coffee is unbelievable. it keeps you up three days. here's what people have to know this stock since they finished the venture, the private equity, since they finished the stock it's starting to get its mojo. christine is terrific. i've been trying to get one in new york for the life of me. they don't have them here. they're going to take their time. this is what i used to think of starbucks. >> can't really manage to get past moving averages. >> no my travel test trust unfortunately owns it, i say unfortunately because it's unfortunate. i wished we own dutch bros. i was so afraid of the inside selling, but it's finished. anyone who has gone up and gone to a kiosk and see the pleasant people, and they make a lot of money, average unit volume, it's

a remarkable chain. once we get it here i think you're going to say look out. these guys have service, they have it right. my daughter lived in oregon for a while so i was one of the -- that's where i became -- >> got in on the ground floor, so to speak. if i had an annihilator right now, carl, see you monday. >> i think you've had one. you act like you have. >> no, i had a&p coffee. their drinks are special, their people are special. the reason the stock is going up, it is pure joy to go to dutch bros. >> merota tonight. >> sanjay, i have to talk him off the ledge. just kidding. he's going to come to play. talk about the ledge, wa wahid nawabi. the drone maker, a belief things are slowing down. when you get money from the government to send drones to ukraine the government is one of the worst payers in the world

but they do pay, though, in the end. >> look forward to tonight. >> wow. >> and the meeting at noon eastern time. >> yes. new name, lot of fun. no more recommstration. >> jim, is it true you owned boeing? >> will you stop it. >> one day we'll be back together. >> thank you. >> see you tonight. "mad money" 6:00 p.m. eastern time. dow down 30. s&p trying to take out the highs of the week. stay with usday to p ut finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

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good thursday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and mike santoli, today live from post nine of the new york stock exchange. david has the morning off. take a look at stocks a little bit higher this morning although we've given back some of the early rally already. the s&p adding to gaps for the week. so far up a third of 1%.

unchanged right now. beneath the surface there is strength in communication services, energy, consumer discretionary, technology stocks are up. financials are weaker, health care, materials, consumer staples and industrials lower. the nasdaq up 0.25%. it's been outperforming this week thanks to the rally in big tech it continues. take a look at treasuries right now. we had a lot of data which we'll talk about in a moment. an auction, seven years. the 10-year note yield 4.28%. closer to the bottom end of the range than the top end of where it's been lately. but have been inching a little bit higher. there's buying today. yields slightly lower on disappointing data. 30 minutes into the trading session, three big movers we're watching. shares of micron sliding despite reporting better than expected results and meeting revenue expectations. the company failing to deliver on some analyst more optimistic forecast. much more on the street's reaction to this one.

shares of walgreens plunging after the drug store chain missed earnings estimates, slashed its outlook and saying it's closing more underperforming stores due to weaker consumer spending. we're keeping an eye on amazon as the market cap race goes on. the market cap topping $2 trillion for the first time. amazon only the fifth company to cross that milestone now joining microsoft, nvidia, apple, and alphabet. much more on where the stock goes from here in just a moment. let's get pending numbers out of housing with diana olick. hey, diana. >> hey, carl, good morning. pending home sales in may dropped 2.1% month-to-month and down 6.2% from may of last year. that's a miss. the street looking for a slight gain because mortgage rates dropped back a little bit in may. this pending count based on contracts signed during the month. rates had spiked in april and we saw a sharp drop in pending sales in april but fell back in may likely why the street thought there might be a gain.

home prices are still high and still gaining. inventory continues to improve but much of that is that some homes are sitting longer on the market. active listings up roughly 35% from a year ago coming off a near record low. keep that in mind. very little supply on the lower end. most of it is on the higher end of the market. sales were split month to month, higher in the northeast and west, lower in the midwest and south. sales in all regions were lower than they were in may of last year. the realtors are forecasting a busier second half to the disappointing first half of the year. they predicted mortgage rates dropping and price gains at least stabilizing. sara, i'm not so sure i agree. >> oh, you think, what, prices are -- >> i think prices are going to continue to gain. i don't know that they're going to gain much more, but i don't see them coming down very much because given the supply and demand situation there's a floor under them and as for mortgage rates, they have been very

stubborn in this kind of 6.5 to 7.5 range for a hwhile now. they could drop i don't think enough to make a difference for home buyers. >> thank you. diana on the drop in pending home sales. as far as the other data to talk about, guys, today, let's start with jobless claims. it's a thursday. we've been watching that for any softness in the labor market and there was some good news there. jobless claims the amount of americans filing for unemployment claims fell by 6,000 last week. we did have the juneteenth holiday so maybe that factored in. it's a bit of good news-bad news on every data release this morning. the bad news on the jobless claims front was the continuing claims. so those that are recurring, staying on, jobless claims week to week rose for the eighth week in a row. there's the number there. and it's actually at the highest level now since 2021. so it does speak to the cooling off in the labor market and the

fact that there's just not as much corporate demand for jobs as we have seen. it's nothing recessionary, it's nothing super stressful or alarming but it is a trend that people are watching. let's go through the gdp numbers. they pretty much came in line. it's a revision of the first quarter we know that. be ♪ the surface there was a bit of weakness in consumer spending that personal consumption number that's what drives our economy, only grew 1.5% in the first quarter. that was a revision lower from 2% which is what we initially thought. i highlight it, mike, we know the consumer environment has been weakening, softening, i'll say. i'm not sure we knew it was happening as early as the first quarter. we've been monitoring more signs that that's happening in the second quarter. so that is something to watch. and then as far as the other headline from gdp, the core pce number was revised a little bit higher to 3.7%. the main number to watch is tomorrow. that's when we get the monthly pce that's what the fed targets.

a lot of anticipation for that. but it's kind of a good news-bad news kind of morning on data, don't you think? >> it's been mixed. i do think there's a real sensitivity you can -- it's been for about two or three weeks right now that any hint s that deceleration is worsening into stalling. we don't see the evidence that suggests. bonds did rally on the 8:30 data. it was odd you weren't sure what traded or fixated. maybe it was the continuing claims number. >> lower consumer spending higher claims and one more into it, durable goods on the headline was better but at the core capex, a good -- it feeds into gdp, that was a lot lower, core durable goods sell 0.6%. the estimate for them to be up 0.1%. another weaker data point. >> exactly. it all nets out to we do have this economy that's moderating in various channels. is inflation going to be friendly enough with the reading tomorrow where at least the perception is, fed's got room to

maneuver and execute this transition towards a potential easing cycle, even if it's one or two. i don't think the market is really showing a whole lot of stress about it as you can see. we had this flatish index performance really unusual steadiness at the index level. a lot of back and forth push-pull among different groups on a given day. market breathed has suffered but that's a function of a concentrated index where the big e and fastest growing stocks are defensive and the rest of the market can rest at times and not even really respond that much to macro because it hasn't been front and center for us. >> i will say citigroup tracks a thing called the citigroup surprise index how data releases are coming in relative to expectations. . if they're worst than expectation the index moves lower. we did chart it out, and it has been moving lower lately suggesting that a lot of the data releases have been misses and weaker. what this shows is it's a double

chart, the bottom chart, the white is the citigroup economic surprises. the top the 10-year yield. >> yeah. >> basically kind of stabilizesing to lower but the surprises are weaker. that's the backdrop as far as the weaker data. the other big macro factor to watch today that i've got to highlight right up top here is the dollar/yen because there is so much drama with the dollar/yen. it surpassed 160 again, it's at -- the weakest level for the japanese yen we've seen in almost 40 years and now there's all this talk and fear of intervention. because the last time this happened the japanese spent more than $60 billion in their foreign exchange reserves to intervene. it's great for their exports. it hurts the competitiveness for u.s. manufacturing a lot. however, their import costs are sky rising as a result of this. they import oil, import food. so that's the -- that's one of the problems of why they potentially have to step in here, and it gets costly. we're watching this.

it's not a normal occurrence. last time they spent all this money, for what, ran back up to the highs again. >> it is a big influence on the u.s. dollar index which has leaked back up towards its highs of the last several months, let's say, at a time when it's not really about reprising for a mo are hawkish fed or re-acceleration in the u.s. economy, mostly about what's happening in the rest of the world, japan, to a lesser degree europe. by the way, sara, you know, in a few days when you were off we were paying attention to canadian and australian cpi at times. >> yes. i'm glad you were. >> yeah. >> that was moving the u.s. treasury market. they were a little bit hotter. i was in london i was there for the taylor swift concert and promise you inflation will be sticky in the uk this summer and i know cowen has flagged this. she did three shows in wembley in june and five in august and the swift arm yeah out in force spending and i'm sure there are -- it wasn't just me. it was like half the crowd came from, she said at one point, how

many people are from london? how many people are visiting? much louder roar from those visiting. >> lot of people p a small island. >> we get the pce tomorrow and the next time we hear from fed chair, jay powell, on tuesday. he is speaking on a panel at the ecb conference. i'm moderating that panel again. lucky enough to have that spot with the head of the ecb christine lagarde and the central bank governor of brazil, dealing with all sorts of interesting independence drama over there. they've been cutting rates. his first reaction to pce numbers and this idea of whether the economy is weakening enough to make them a little uncomfortable that would push them toward a cut while the inflation numbers are sort of stabilizing here. >> some voices on the fed have started to hint. more attention to the -- >> they don't want to wreck the

economy just to keep rates high if inflation numbers are benign. >> we had bowman and now bostic. we'll get to steve liesman. hey, steve. >> yeah. and a little bit more dovish talk from raphael boasting, the atlanta fed president, who is a voter. he says conditions will likely call for a cut in the fourth quarter. that's what he said in the past. he goes on to say inflation is, quote, moving in the right direction and recent reports push against the idea that inflation progress is stalling. he sees, quote, a few promising signals. still expects a slower progress towards 2%, the 2% inflation target this year compared to last year hitting the target in 2025 or a bit later he says. he supports reducing rates before inflation gets to the 2% target, and he supports cutting rates, quote, once i gain additional confidence. he's looking for declines in housing and service price inflation and sees good news in that service price number.

orderly deceleration in the economy and saying the slowing is occurring in labor markets as well. carl and sara, just to your point, sara you were absolutely right to high light that durable goods report. inside that the capital spending number was negative that feeds into gdp and add that to the bigger than expected trade deficit, and what i'm hearing this morning are reductions in the second quarter gdp outlook. and you can see that yields have been falling this morning, bond price is rising as a result of this. i'm not saying july is on, but maybe it's not quite as off as some people suggest, given that you do have another couple inflation reports before that and the -- if you do see additional weakening in the economy, which we're hearing more and more fed officials note, then things could be changing in terms of certainly by the fall, but maybe possibility of july. ? is there any evidence, steve, that the weakness, the weaker

economic data that we're seeing is having an impact on inflation numbers? that was always what the fed was fighting for, right, when it comes to higher interest rates and it didn't get the weaker economy until recently. i wonder how inflation follows? >> well great question. bostic actually mentions this in his speech, sara, and points out service price inflation moves and changes more slowly than goods inflation. you're not going to change your accounting or haircut fees as quickly as you might change the fees for a computer or the scissors to cut your hair. he says what he's hearing from the contacts and staff is that price -- the ability to raise prices is eroding in the service sector. that could be one place we're in phase two here of disinflation, sara, where the first part was all supply and now slowly, it seems, we're getting some of the bite of higher rates.

carl? >> steve, appreciate that with the news out of bostic and breaking news regarding scotus today. hey, eamon. >> sweeping defeat for bur due pharma and the sackler family. the billionaire heirs. remember there was a sweeping bankruptcy settlement that was at issue before the supreme court. the supreme court now has rejected that nationwide bankruptcy settlement with the oxycontin maker purdue pharma saying that it was not fair to subset of the victims who did not agree with settlement, the so-called third-party entities in this case. a lot of victims wanted to pursue this settlement which exempted the sackler family personal billions from the reach really of the victims here. some of the victims did not want to do that. the supreme court here saying that the settlement cannot speak for all of those victims in that particular way. they say it's a narrow decision and part of the reasoning here is the flow of money from purdue

pharma to the sackler family and then whether or not that money ever goes to the victims. the supreme court outlining the events here saying fearful that litigation would eventually impact them directly. the sackler family initiated a milking program withdrawing from purdue pharma approximately $11 billion, roughly 75% of the firm's totally assets over the period of a decade ahead of litigation. they say the sacklers proposed to return approximately $4.3 billion to purdue's bankruptcy estate, and in exchange, what the sackler family wanted here was a judicial order releasing the family from all opioid related claims and enjoying sfriktsz bringing such claims against them in the future. the supreme court here, carl, is now rejecting that deal so we'll see where this saga goes from here. as you look at this ruling from the supreme court and you look at all of the legal maneuverings

you have to bear in mind the enormous human suffering in the wake of the oxycontin and opioid crisis here in the united states and the effort here to put some kind of financial number on what kind of remean rags the victims should get to that. there's some real important moral, ethical and legal questions here at stake today. the supreme court now ruling to strike down this nationwide settlement. back over to you. >> interesting. we're still on the lookout for important decisions as well made perhaps tomorrow. eamon javers in washington. our next guest did correctly call for the s&p to hit 5500 in june. fundstrat global adviser co-founder head of research tom lee joins us this morning. we've made note of that. 5500 number. it doesn't necessarily reflect how you think the year is going to end. are you going to take a look at your year-end targets now? >> >> we are carl. early december last year we thought s&p could reach 5200

this year, which at the time was almost a 20% again. we've, obviously, moved well above it, and the fund mental picture looks closer to me. i think the war on inflation has been meaningfully better in terms of progress. i know there's a lot of dispute, but i think the last two inflation reports and the fact that 55% of inflation components are back to prepandemic levels, means inflation is really going to fall like a rock. these are factors that give us comfort that multiples can expand i think 5200 is too low but i don't know how much above 5500 there is into year end. i think in the next couple weeks we'll be addressing that. >> you use a graphic of a falling rock in your chart to describe elements of inflation you think are dropping and said we're beginning to see inshurnsz break, waiting for shelter to follow suit.

some of your forecasts, tom, on new cars and used cars, do you actually think we could see that kind of deflation? >> yes. i think one thing to keep in mind there's almost 290 million cars on the road today so when, you know, used car prices fall 10%, and they're continuing to fall, that's a meaningful amount of disinflation and may be painful for people who borrowed money to buy cars, but that is also saving people who are buying cars, and so i think there's a lot of goods disinflation in the pipeline and especially with new cars. inventories have been picking up. the cd k cyber security hack might sort of disrupt it short term because there's a shortage of new cars available, but i think the trend for new cars is lower. >> tom, what happens to earnings estimates in this environment? i mean i get it's good for the market if inflation falls and the fed starts cutting rates and maybe that trumps everything.

but if the economy starts to weaken and the forecasts for the q2 are coming down, what about the earnings picture? >> well, it's, you know, first of all there's always winners and losers. there's a lot of companies in sectors that have no correlation to inflation. technology is one example. and there's many groups highly correlated to the rate of inflation like basic materials, and energy. we're not talking about overall inflation going negative. it's actually that it's going towards 2%. there's still plenty of companies getting priced, and as you know, the biggest pressure on many companies margins' has been wage pressures that's cooling a lot and gasoline is cooling an that's helping consumer wallets. i think it's complex but to us if the global economy is picking up and earnings delivered have already suggested 270 for 2025, i think we'll be closer to 280 next year. >> if markets tend to lead the

fundamentals and we've run up here to 21 times forward earnings, why would improved earnings relative to expectations now lead to multiple expansion? you know, on top of what we've already had? >> it's a fair question. it's really the composition of what contributes to the gains because if you look at s&p forward it is high. i think forward earnings multiple is like 19, but the median is 16 and the median p/e in the russell 2000 is 11 times. there are going to be many stocks that can rerate towards 20, but the p/es that are -- many stocks at 27 p/e they could increase in their multiple, but i think there will be more juice in the 16 multiple going to 20 than there is 27 going to 28. >> finally, tom, five days in a row, s&p headline index and breadth have diverged. we haven't seen that kind of streak since the late '90s.

are we going to start assembling lists of anna logses to the late '90 and is that a good thing? >> carl, the late '90s didn't end well, so i think if this is going to look like the late '90s investors have to be preparing some portfolios that are appropriate for that and, you know, that in the late '90s meant to be patient with value and then, of course, be ready to exit the high momentum. in some ways i think the skepticism that exists today, i was an analyst starting in '93 and i saw the '90s there was more ebollance back then and lot more people who didn't think stocks could ever go down. i think there's a lot of top callers today. for me this feels more mid-cycle. it sounds surprising bought there's too many top callers especially among our institutional clients. >> look forward to seeing your

updates on year end and interesting earnings numbers for next year. talk soon. tom lee fundstrat. >> a road map for the hour. shares of walgreens plunging this morning. what the company's ceo is telling cnbc about its outlook. >> the second half of the year following the fed's latest stress tests. >> the next generation of wealthy investors. millennials and gen-z looking bow understand stocks and bonds for returns. where they're investing their money. it may surprise you. big show still ahead. "squawk on the street" will be "squawk on the street" will be right bacincome suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today.

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we continue to monitor the scotus decision including one regarding sec enforcement. back to eamon javers. >> that's right. this is sec versus jarski a defeat here now from the supreme court for the security and exchange commission what supreme court is holding is that the seventh amendment entitles somebody being accused by the sec of a trial by jury, not necessarily an administrative procedure as the sec often does with some of these cases handling them sort of in house, what the supreme court is saying is no, if the sec is going to bring charges against somebody they need to do it in federal court and those people entitled to a jury of their peers. interesting note here, karl, not often you see the supreme court decisions go back to the revolutionary war, particularly on administrative and regulatory

decisions but in this case they are citing the war against the british sand i say when the british attempted to evade american juries siphoning to juriless admirty and vice admiral and chancellory courts they protested and cited as a justification for declaring independence. similarly the sec, similarly to the british, should not be removing these cases to a juriless forum. in fact, the people charged here are entitled to a jury of their peers. >> love the historical references. eamon javers on the breaking supreme court news. biggest loser walgreens, shares tumbling down more than 22% after missing earnings estimates, slashing its outlook. bertha coombs speaking with walgreens's ceo as the conference call headlines coming through and they're bearish too. we're at the point where current pharmacy model is not sustainable according to the ceo

on the call. >> exactly. sara, walgreens ceo tim wentworth told me ahead of the call he took this job seven months ago because he believes in the role of the pharmacy and the community. it's going to take a big reboot to turn things around here. walgreens posting a mixed quarter, earnings coming up short because of continued margin pressures on pharmacy reimbursement at the back of the store while in the front of the store that's really where the problem is. same-store sales down 4% year over year driven by consumers are cautious they are still in shock over the high prices. and continuing issues with theft. issues they say will persist in the second half of this year. the calendar year and into the next fiscal year. they're in talks right now to renegotiate contracts with pharmacy benefit managers in a way to try to shore up margins on generics an they're also in the front of the store cutting back on some of the big brand names and reverting to more

store brands to focus on private labels as a way to boost their margins there and they're looking to close under performing stores. tim told me last night that 75% of stores are the ones that produce the profits, so up to 25% of their footprint could close here. a lot of those are in high theft urban areas but wentworth says they want to work with community leaders to try to find a solution. >> we know that we are the last company standing in a lot of places. we are the only thing standing between those places and being pharmacy deserts. our goal is not to be the last one to leave. our goal is to find new ways to work together whether through a state medicaid programs, local law enforcement, and so forth for them to to do their jobs to do our jobs to continue to provide care in those communities. >> timing for this turnaround, the shrinking of the footprint they're saying several quarters,

not years. walgreens shares hitting the lowest levels this morning since 1997. back over to you, mike. >> i just have a question, which is, how much of this is a walgreens specific issue? is cvs dealing with the same level of theft and broken model at the front end of the store? >> they are. but here's part of the problem for walgreens, and why we saw rite aid declaring bankruptcy. they're stand alone. cvs is more vertically integrated has what's known as a pharmacy benefit management and they're the ones that do the deals with the pharmaceutical companies, with the payers, the insurers, the large employers and they kind of determine reimbursement. tim wentworth came from express scripps their ceo for a long time. this is one of the problems for a standalone pharmacy.

that said, a lot of people still rely on their pharmacists. when they leave the hospital and have a certain protocol for their drugs or their physician prescribes something that doesn't work with drugs they're already taking the pharmacist is the point person on that many times. so he says, they want to shrink to give them more time and really be able to boost those services in the stores that are open. >> yeah. cvs, obviously, has an easy time of it. the stock is down below where it was ten years ago but doesn't have that particular issue, bertha. thanks very much. the fed saying all 31 banks passed this year's stress test as investors look towards the group's next move. lpz leslie picker joins us more on set. >> the moves are hopefully, you know, if investors had their way some sort of capital return plans. that focus turns to tomorrow after the close when we're expecting to get a flurry of announcements from the individual banks about those plans post stress tests. the street is digesting what

appears to be somewhat of a disappointing result which could yield slightly smaller than expected payouts. jefferies said most banks burned worse year over year with huntington and citi better. goldman and wells fargo could see the biggest increases to their minimum capital requirement after the results among the 31 bank study, which wo would mean less capital to return to shareholders. jpmorgan saying that fed may have modestly underestimated its hypothetical stress losses as that discrepancy gets recommend died and may take longer to what jpmorgan's capital return plans are. you may not hear that tomorrow. it may take longer. even though the results were tough on a year-over-year basis with basel iii endgame still pending a lot up in the air with the potential capital return activity. vice chair michael barr said in yesterday's statement there were three risks that suggest, quote, required capital buffers should

be larger. those risks comprised increases in credit card balances and higher delinquency rates, credit portfolios that have become riskier and higher expanses and lower fee income. according to fed officials losses from commercial real estate were similar to that from last year. not a key driver of the larger ma macnee -- magnitude of losses. all had enough capital to withstand the scenario the fed put together but projected hypothetical losses of $685 billion in aggregate. >> is this going to empower elizabeth warren and those saying the fed should not water down basel iii rules? >> it is something michael barr hinted to. it appears that ship has sailed with powell and bar saying that they are looking at ways to materially change the rules as they are written. however, absolute capital levels still appear to be an area of disagreement among the agencies,

the fdic, the fed and occ which need to come to agreement if analyst gothere is going to be reviszed version of basel iii. >> truist doing well today and jpmorgan, although the stress tests were more stressful for some jpmorgan stands out. erica najarian, ubs research analyst managing director for large cap bank and consumer finance joins us now with a buy rating on jpm, price target of 224. what kind of capital return programs do you expect? how big for investors out of this stress test result? >> it's going to be really -- jpmorgan sticks out because of the amount of excess capital they have relative to the potentially bigger buffer that leslie mentioned is absolutely head and shoulders above peaers so we're thinking they have excess capital after this test

of $26 billion. over the next four quarters the street has buybacks of about $16 billion. they can well afford to afford what the street expects in terms of buy babb activity. in terms of their announcement about miscalculation in their stress capital buffer even if that stress capital buffer from 30 to 20 and the language from the press release did say modest, that takes down your excess capital to $20 billion. regardless of what it is i think that jpmorgan is still head and shoulders above its peers in terms of how much it has to return back to the shareholders and so while we do not expect buyback plan announcements friday after the close, we do expect, perhaps, maybe a more exciting dividend announcement from jpmorgan, jamie did hint of a potential special dividend at a recent conference in may. >> what about for the rest of the group as far as buybacks and dividends? >> yeah. i think that's where we have to

temper expectations. so, you know, even though citi did better year over year, it just implies excess capital of $5 billion that may not be enough for them to move away from their language of saying that they're going to evaluate, given that basel iii endgame is still outstanding and the real unlocking of capital at citi will come when the ipo -- we talked about wells, wells didn't do so hot in the stress test relative to expectations, and essentially implies they have just $2 billion of excess capital. they produced about that much organically every quarter and so there could be a little bit of disappointment relative to consensus buybacks of $3.5 billion per quarter and bofa is going to be fine. as for the regionals, let's talk about the outliers, truist is doing well today because they sold their insurance company to a private equity firm.

they have lots of capital to return and the results support that. on the less positive side, we have, you know, keycorp and fifth third that have had a little bit of a surprise in terms of higher stress capital buffers which could mean impeding growth or buybacks or both. >> erica, goldman sachs down 2% today. you indicated in looking at the stress test results that might be the reaction based on the need for this greater buffer. obviously, that's been a very hot stock in the group. people excited about the idea of capital markets business coming back. where does it leave goldman at this point? >> i think this is just a blip. so i think that for goldman, keep in mind there was the article two days ago that capital increases from basel iii endgame could go from 20% increase to 5%. and the phrase "market risk"

getting softed was mention -- softened was mentioned maybe three times in that article. clearly they would be the winner there if we don't have that kind of asset therefore greater capital need. this could be just a blip in what could be a pretty decent longer term story. >> all right. erica we'll leave it there. thank you for the first reaction and some of your predictions out of the stress test. erica najarian from ubs. >> when we come back, micron down on its results with the what the street sinisayg about the latest results from here. the latest results from here. don't go anywhere. at enterprise mobility, we guide companies to unique solutions, from our team of mobility experts. because we believe the more ways we all have to move forward. the further we'll all go.

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micron shares take a look pulling back in today's trade after the company's revenue forecast failed to top estimates. our seema moody joins us to break down the quarter. jim cramer saying the quarter was good. >> that seems to be the case, sara. the stock may be down on micron's conservative guide but

the company's growing market share in the ai memory space is what's keeping the street bullish with the ceo on the earnings call last night reiterating that my kropp kron's -- micron's bandwidth generated over $100 million in revenue with total sales expected to rise several hundreds of millions of dollars and his team remains focused on continuing to ramp up production and improve yields. the memory does play a significant role inhelping generative ai programs like chatgpt process data real time time. jpmorgan analysts believe micron is positioned to capture content and raising their price target from 130 to 180 a share. citi analysts advising clients to buy micron on weakness as the upturn in memory will remain in tact and the price target 175 which comes out to a valuation of 15 times 2025 earnings. citi says micron suspects that's

above micron's historical average but below ai peers. with the raises including goldman average targets across wall street has moved to nearly $166 a share. the stock trading around 135. one key focus micron's build out of chip factories in idaho and new york as it faces competition from the likes of sk hyknicks and samsung. >> seema moody again. catch, of course, san jay tonight on "mad money" at 6:00 p.m. eastern time. interesting to hear his conversation with jim. >> for sure. turn to amazon the company crossing the $2 trillion market cap threshold that happened yesterday. it's about $40 billion above that right now. it came the fifth u.s. company to hit that level. amazon, of course, trading at an all-time high dating back to its ipo in may of 1997. tom for te joins us now. tom has a buy rating on amazon. a price target of 238.

up about 20% from current levels. good to catch up with you. i will start by saying amazon almost three years ago hit $1.9 trillion in market cap. so what happened in the intervene time post pandemic that i guess the street backed away from the name and has now in a sense rushed back in to rediscover and create the catch-up move to the other multitrillion dollar names. >> thanks, mike. what happened was you had initially investor enthusiasm that the pandemic was going to cause an acceleration in e-commerce and what we found is that when the stores opened again, consumers returned to physical stores. what's enabled the march $2 trillion is ai. so when you think about ai a lot of the story today has been chips. and i would say as far as near term benefits to profits from ai and second to chips is the hyper

scale cloud computing companies azure, amazon and google cloud. so i think amazon's ability to exploit ai after that initial and pullback in stock when we realized that e-commerce penetration wasn't going 100% is what lifted the shares to that $2 trillion mark. >> so what, i guess, at this level at this valuation setup is the bull case? aws, we can really talk about how exactly we want to capitalize that revenue and earnings stream. it's an enormous business, if it was stand alone relative to other software companies. what's the bullet points on why it goes higher from here? >> the bull case for amazon under andy jassy's leadership he's transitioned the company to focus more on higher margin service and less on first party retail sales. it's taken a thoughtful approach to adjusting its cost structure

and enables amazon to invest in the future and generate significant market in cash flow and that's important. now, things early stage initiatives like health care could contribute to the move to $3 trillion from $2 trillion, but bread and butter right now, cloud computing, advertising, as well as continued growth in the mature e-commerce asset could enable amazon to hit $3 trillion without any contribution from health care. higher revenue hts high margin services that i think will drive the stock higher from today. >> how many trillions of market cap do these companies need to get to before antitrust concerns really do come to the floor and represent a meaningful threat to their businesses? >> first and foremost $1 trillion the new $100 billion for the mega caps and what we're seeinged with nvidia, microsoft, apple, amazon, investors are flocking to the mega caps and concentrating their portfolios

and that's also contributing to amazon's performance here. on the antitrust regulatory concerns, it's still a huge concern. they're being sued by the ftc for antitrust. what is unique to amazon versus apple and others you could make an argument if it was three stocks, first party retail stock, third party retail stock, cloud computing stock it could be worth more than $2 trillion. i think amazon's unique among the antitrust plays there where if it resulted in a separation, three individual stocks could collectively be worth more than one stock. >> yeah. it seems like that's how the street might view it at the outset. a trillion the new $100 billion. 40 the new 4 years old which in this market makes sense. thanks very much. >> thank you, mike. >> more like 40 is the new 30. >> really? >> i don't know. i like to think so. still to come why a growing number of younger investors are opting out of stocks and bonds

and putting eir neinhathmoy wt they see as more lucrative long-term investments. we have the details when we come back. >> university of maryland global campus is a school for real life, one that values the successes you've already achieved. earn up to 90 undergraduate credits for relevant experience and get the support you need from your first day to graduation day and beyond. what will your next success be?

check out shares of the health care platform hims & hers. it's tanking today on reports that hunter brook capital shorting the stock claiming they're exploiting a loophole that lets it sell knockoff gdp gdp weight loss drugs and claims it's only glp-1 provider, drug provider, has past ties to fraud and bankruptcy. stock getting hurt. it had been one of these big winners from selling ozempic and the like. >> meantime a vast generational divide between wealthy young investors and wealthy older investors. robert frank is here to explain this. we've been paying lot of attention to behavioral economics depending on the age cohort lately. >> a huge difference. nearly three quarters of millennial investors and

gen-zers surveyed said they won't get above average returns with traditional stocks and bonds according to a new study of bank of america private bank. most investors over 44 still have a lot of faith in their stock and bond portfolio so there's a big difference there. when asked about the best opportunities for growth, this one is interesting, domestic stocks topped the list with real estate and emerging market stocks right behind that. young investors have nearly three times more alternatives in their portfolio compared to xers and older investors and they have about half the share of stock. young investors, only about 25% in stocks. another big difference is collectibles. the young wealthy are nearly twice as likely to collect watches, classic cars and wine. i know sara knows this, nearly a third of them are collecting sneakers. very few of the older investors are. older investors say they collect because they enjoy it and they

rarely sell. the younger investors see collectibles as part of their investing strategy and muchmore likely to trade in and out of their collectibles. you can read about how the wealthy are investing and this great wealth transfer that will make these young investors more important to the stock market. you can read all about that in my inside wealth newsletter at cnbc.com/insidewealth or click on the code with your phone. >> is it your guess this is sort of standard youth risk toll lance, or does this generation, having lived through covid and existential questions about climate, think about the world differently? >> it's absolutely about the formation of their life experience when they became investors. and there's interesting -- josh brown talked about, even within gen z versus millenials. they started investing before the financial crisis, and they are skeptical. gen zers are skeptical because they have so many more choices

to invest than we did or parents did, where it was just 60/40. and collectibles can you buy a share of a painting or wine fund. it's a vastly different landscape for older investors than younger investors. >> gen z has not been through any major correction through this collectible, crypto, any of it. >> there you have almost an overconfidence of markets, where you've seen in the meme stocks, you've seen it showing up in other exuberant parts of the market. because they have a much wider choice and distrust of traditional institutions and traditional investing, they want to go far afield to crypto and collectibles and alternatives, private equity, real estate. >> the irony is that one of the big long-term bull cases for stocks is millenials will turn 50. when the boomers turn 50 it was the '90s tech bubble. it was the demographic, you had to own assets. we'll see if there's the irony in all of this. >> even smaller shares in

stocks, because $80 trillion is going to pass to younger generations in the next 20 years, there will be a ton of money with young investors. that's why this matters. >> they also just know how to do it. they know how to wait in line and get sneakers that are really valuable. thank you, robert. >> thank you, guys. coming up next hour on "money movers," an exclusive with commerce secretary gina roman dough, hosting the first ever national child care innovation summit in washington. that's coming up at 11:30 m.a. eastern. we'll be right back with the dow we'll be right back with the dow up 93 pointsressed) ay i like i! who wants to come see the future?! get your business online in minutes with godaddy airo

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check out shares of nike, slightly higher today. set to report after the bell. this is a big and important one to watch, because nike has been an underperformer this year. it's the third worst dow performer. it's down more than 13% on the year. if you look at a chart of nike versus adidas, which everybody always compares the two biggies, adidas has far outperformed. that's because there's an innovation lull that nike has been explicit about. john donahue has talked about it here with us on cnbc. that's key for the investors tonight, the revenue growth. that's what's been lacking.

clearly, nike has levers to pull when it comes to margin expansion, profitability. they've been cutting costs, more efficient. it's the growth which speaks to the brand heat and speaks to their innovation. that's what investors want to see and that's what they want to see in the guidance, more importantly. nike has warned it's going to have to clear out some of the older styles to bring in the new styles. they're going into olympics. and so the investors really want to see evidence that some of the new styles and innovation is working. >> big story in the journal today about how nike lost its way in running and allowed -- >> hoka, on. that's been tough. meantime, 25 points shy of an all-time high. "money movers" begins after the break.

good thursday morning. welcome to "money movers." i'm sara eisen with carl quintanilla live from the new york stock exchange. coming up this hour, "time" magazine called her america's point woman on a.i. u.s. commerce secretary gina raimondo with us. double line's deputy chief investment officer, jeffrey sherman on where the market