♪ and welcome to "squawk alley." i'm carl quintanilla, joining us here at post nine what a treat. roger mcnamee, co-founder of "shark tank" investor and kevin o'leary, great to have you jon fortt and kayla tausche with as, as always. an intraday high a few moments ago, not far from within a little more than half a percentage points of s&p 2000. keep our eye on that. s&p tech sector hitting its high evidence level since november of 20000. now the best performing sector in the s&p this year. of course, on a big week for tech earnings, and then tonight, facebook after the bell. some key questions.

will they beat expect aces for the ninth quarter in arow and keep taking advertising share from google? guys, this is going to be a big print, regardless whether you're long or short on the stock. your thoughts? >> i think they're going to be. the trends are there. this video service and everything about advertising is working on their platform now. big, large cap companies are using it, as a platform. the mobile story is out of the stock. nobody cares. they've obviously made that transition. stock goes north from here. >> that's what makes this quarter a little tricky for them. it's that they had 59% of ad revenue from mobile last quarter, we're expecting probably around 60% this yaur. so last year we had a big mobile ramp. this year we have to figure what maturity looks like. expectations are high. the overall trends in the ad market have been in their favor, but this time we get to see kind of how they perform under something like normalized conditions. >> yes. i totally agree with that. because the challenge for facebook now is not to sell the

ads. it's to convince wall street that these numbers are better than wall street was expecting. >> right. >> and the stock is not at a low here. it's not like expectations are down. but i think the fundamentals are absolutely there. and you know, fingers crossed. we'll see what happens. >> even so, wall street's expectations are for revenues to rise 55% for a company of this size that is no small feat. facebook said it could do it. amazing two years ago 0% from mobile. literally zero to 60 in two years. as facebook investor, roger, can they start seeing some profit, some revenue growth from the other properties that are not the core website and the core app? >> to me, the beauty of what facebook has done is to improve constantly. they make a lot of mistakes, as we've all seen, and unlike some tech companies that we know, they are quick to admit mistakes and fix them. to me, the next big thing to watch a video advertising, because video is now something that we see in our news feed

every single day. they're beginning to monetize that and that has a chance to be as big in terms of rate of change, as the whole mobile thing has been. >> that live reel approach earlier this month, gets into an interesting arena. possibilities for programmatic video advertisement is really hot. >> video has been enormously successful as an ad medium online. 15-second pre-roll, has been a gold mine for people. >> yes. >> and facebook has the eyeballs, and it has all of the demographic slices that an advertising could look for. so i would -- again, i've been a shareholder a long time and am a little of a broken record on this but i believe this company remains exceptionally well positioned. >> kevin, we always talk about dividends, crave dividends, want cash returns. if you bought a name that didn't have one works this be it? >> no. the valuation is extremely high. at some point it has to come to reality in terms of value investors like me. one thing about this company

i'll say now. this is a full weighting index for an institutional investor. if you want to have a marker in advertising, you have to go to this name. if you want a marker in social media, you own a 5% waiting in the fund. so why i'm optimistic this stock will go north is i think it will hit all metrics and it will go to full weighting. if you have 3% holding in your fund, you'll go to 5% after this quarter. i don't own it because it doesn't do matter to me. pay a dividend. vie to get paid to wait. it's fully valued. investors like roger that got in, in a share, not going to sell it. at the end of the day -- >> roger is smiling at that. >> it's true. at the -- this is a full waiting index product now. you have to own it if you're -- >> this is why markets are great. right? people have different objectives and different time horizons. when you see a stock, in the deck sector, serious value stocks to go along with the high fliers. what i like about facebook is that the fundamental underpinning is not only there,

it's really obvious. you know, the issue that many of the other emerging tech company, whether twitter, linkedin, even amazon have that delivering the goods for them, from an earning's point of view is n not -- that's just not been part of the story. those are still on the come. at least with facebook, every quarter you see some progress, when they do a new product, it winds up being material a year later and they do an acquisition. we look at instagram now. clearly one of the -- at the time for $1 billion seemed, oh, my god. what are you doing? here we are two years later, and it turns out they paid, what? six times earnings? >> which is fortunate note. we just started getting ads on instagram a couple quarters ago and haven't seen the bottom line. >> look how quickly hundreds of millions of revenue and 40%, 50% profit. a great business. >> and a real company that will pay me dividends? >> not news for you, my friend. not all companies that pay dividends are real and not all

companies that fail to pay dividends are not real. >> and the s&p, last 40 years came from dividends. nots a debate. a fact. >> and facebook, highest close of the year. we'll watch. and iphone sales, week ipad, expected. josh limiten spoke to tim cook after the call and joins us from out west this morning. josh? >> carl, tim cook told me, this was the best execution of any quarter since he's been at apple. and investors, they also seemed pleased, the stock moving higher this morning. it's now up over 20% so far this year. now, i spoke with cook about two points in that release which really attracted a lot of attention from the street, and investors. first, there was that surprisingly strong margin performance. apple said, it's closely watched gross margin was 39.4%. that was above the street's estimate. that number was, in cook's words a blowout, which he attributed

to execution in cost and product quality. also, of course, a lot of talk about the ipad. ipad units clocking in at 13.3 million. that was down 9%, missing analysts expectations. cook, though, not concerned. he said, customer usage was off the charts, and that he was excited about what apple has planned in the category. cook, of course, making that bigger push with ipads, into the commercial market. recently announcing that partnership with ibm to bring business apps to its devices. now with the june quarter, it's in the history books. apple investors, they are now focused on that product pipeline, the phone, the wearable or both. cook telling me, we are set up really well for the fall. guys, back to you. >> all right, josh, thank you very much. interesting quarter. two quarters in a row now. jon, a double digit iphone growth? >> yeah. i mean, it was solid. it was solid. i think particularly what impressed me is the way they managed inventory. so that they didn't have to do any big adjustments heading into

their big launch in the fall. i think, though it was really good under the circumstances. china was back up for them. remember, that was hurting them a year ago. that's really important, too. i think there needs to be work on the ecosystem here. i think cook mentioned that, the deal with ibm being good for commercial ipad growth. i think they need to do more with software to make the devices really special, more tools for creating, not just viewing. microsoft has an opportunity there, because they're already there with productivity software. apple made its software free on mobile, but that didn't necessarily drive growth. so under the circumstances, based on what they've got there, really good quarter, but we have to see them do more. not just in hardware, also in software over the next -- >> you love devices, kevin. a dozen, a half dozen with you now. ipads down nine? say they're not worried. would you be? i. look at apple. first, i own it, and fullty closure in our funds, because it pays a dividend. carl, became a real company

recently. so i look at it this way. consumer electronics having the evening to die jest the numbers, i have one point of concern. the ipad is probably the second most important product in the company's ecosystem. it's not down 9%. to me, as long-term investor, it's down 27% year over year. that's freaking me out a little bit. i hope in the next 12 months that something will replace that. i think the problem is, as my iphone is as good as my ipad. i don't need both. i'm not going to buy the upgrade to the ipad. i'm a little worried about that. but this company generates cash, buying back share, increasing my dividends and it's got a phenomenal franchise in its -- i'm long. >> you're clear about that, kevin. you guys both have ipads. both use them for business. maybe you're not the core customer that apple is talking to when it's trying to get more commercial users. if you were trying to give them advice how to get more commercial entities to use ipads, would it be launching new apps? partnering with ibm or something

bigger to change within the ecosystem? roger? >> a great question. the ibm deal in my mind is really important. because it costs apple nothing. it costs ib b nothing and has a chance to make customers happy. great for both of them. but i think apple's big problem right now is that when you look at an ipad, an ipad is not a product you upgrade every year. i still have all three of the ipads that i bought. i still use them all. and that's a value from a consumer point of view. clearly, the phone market they break frequently. the upgrades of people who already have them come much more regularly. apple's big failing now, i think, they have an opportunity -- we talked about it before, carl -- to take their icloud service and try to do what microsoft and google's doing. which is look at it as way of building audience. not just wimg within their own ecosystem but outside of it. i think apple's magic will work in the cloud as well as it's

worked anywhere else. to me it does the matter for the stock. it's so cheap and the cash flow and the dividend, all the other value elements of it are so attractive, that essentially growth is an option on this security, and i don't worry about the product cycles the way i would in an, in a facebook or an amazon or somebody where the valuation isn't so low. >> you've been consistent on that cloud for a while? >> consistent on it until they figure it out. once they figure it out i'll sit there and go, hey, you go, girl. there you go. >> don't go away guys. stay with us through the break and into the next block. >> if you insist. >> yes. >> and appreciate it, guys. we want a check on the broader markets. right now the dow regained most of the ground it lost earlier in the session. right now it's down about 7.5 points. but even that as the s&p 500 is in record territory trading near all-time intraday highs. right now at 1888 and s&p, 2000 this morning. delta and boeing reporting

earnings boeing with a bigger beat. but the stock is down this morning. look at those shares. delta up nearly 4%. boeing down 2%. pepsi out with a beat raising forecast for the year. bucking the trend as beverage sales had slowed. pepsi says, that's not the case. that stock up nearly 3%. intraday. look at this name. the biotech, ticker pbyi. that stock up nearly 300%, just today after positive trial test results of a breast cancer treatment drug. that stock had a market cap of $1.7 billion. this morning sitting near $s 7 b billion right flou. biogen, enings beat. stock higher. programming note, an exclusive interview with the biogen ceo later on "squawk alley." carl? >> roger and kevin, going to stick around through the break. talk spotify, time wann warner

any other company google might have its eye on. and a take on amazon's firephone ahead of earnings friday, and with a big pay day from the gopro ipo, kelly slater, where action sport cameras are headed. again, all-time intraday high on the s&p. don't go away. bulldog: oooh!

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welcome back to "squawk alley." check out shares of this stock. moving higher after halted on reports that spanish energy company repsol is exploring a bid for the company.

they responded saying it has been approached, but no assurance that any transaction would be agreed upon. you see the shares just reopened for trade up about 12% on the day so far, carl. back to you. >> dom, thanks. with us again this north, elevation's roger mcnamee, "shark tank'" kevin o'leary. and a question, spotify, yes, google tried to buy the music streaming service. re/code sara swisher no way. the journal today with an unattributed comment close to time warner hinting, "it would prefer an all-cash and higher offer from a deep pocketed technology company, but no such offer exists right now." >> that's what i want, too. i want the deep-pocketed tech company to pay billions for me. >> what do you think that mean, roger? >> i don't know. other than it feels like it's just the usual talk in an m & a transaction to get the price up.

and i am not at all privy to what goes on inside the media business. i just know that there is no industry with bigger egos and more misplaced confidence than the media business in the united states. >> we'll agree with you on that. bhu but, i mean, come on a deep-pocketed company buying time warner? >> doesn't that smack of a deal with saw, aol, exact same company? >> a horror movie. >> a pre-notion google should by th buy this? why? frankly i think the clearing price, $100 a share. see it from him. this is just a dance and this company is not owned by family with voting control. this is owned by people like me a shareholder. i want as much dough as i can get and i want, if i want to stay in the stock, a synergy that murdoch can give me. his side. >> my mind goes to amazon. recalling when amazon struck the deal to offer old hbo shows on its streaming service, and hbo statement, it said we could

think of no better stewards than amazon. important word. deep-pocked company. i don't know where the google speculation came. >> from really deep pockets and have no content play at all. >> the danger on amazon is a sony-type outcome. they end up with one media property and are unable to get things done with others. >> yes. >> you're not going to it convince time warn e to take on the stock. by any measure, they'll want cash. murdoch's deal has a cash component and a vgreat synergy story. the guy's 80 years old. he'll only be around another 30. >> he'll take that as a challenge. >> just saying. >> and friday, new york city next wednesday at the cutting room. tuesday in fairfield. yeah, all around the new york area. encouraging everybody to come out and see us. >> nice to have you in town. >> always good to be here. >> kevin, you as well. >> i'm goin' to grow my hair like his and rock out too.

>> kevin o'leary, roger mcnamee. when we come back, the gopro shareholder and consultant is with us next. the names mover lower on the dow. boeing's off over 2% on the revenue miss and the ocf number down year over year. we're back in a minute. she inspires you. no question about that. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours.

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for your entire family. only from xfinity. a much greater portion of your portfolio, expectations so low nap they become less risky and still offering a good reward when lightning strikes. surf's up today at cnbc. some of the biggest names in surfing in new york to announce the u.s. leg of the world tour. the tour heads to california late other than this summer. joining us this morning with more, paul speaker, ceo of the association of surfing professionals and kelly, crowned world tour champion 11 times. good morning to you both. >> thanks so much. >> on your way back from where? south africa? >> south africa, yes. >> one of the biggest gatherings of surfers on the island of manhattan? >> i think so. at one time, about eight surfers and a large collection of asp staff as well. on our way back from south

africa to watch the north american tour for the asp. >> asking if you go to montauk? >> occasionally. >> not this week? >> no, i don't think so. >> definitely don't use the hudson river. usually not a good -- >> no. >> gopro, incredible story. curious, when did you get involved with these guys? s. >> for a few years now. met nick and a bunch of the guys there years ago. i will a camera for months. didn't use it. went out one day, used it for a single shot, a video shot in the water, and got incredible shot. gosh, i should have been using this thing for, the last six months. since then, got into it. met the guys and started working with them. >> a lot of people, obviously, the ip ipo, enormous success. great for you. how they monetize this? not a camera on a stick company forever? how do you explain that to people? >> well, i don't know. doing their own website. dedicated sort of like a -- i guess you would say like a youtube site. all user content from gopro,

100%. i think on youtube, up to 25% user content is gopro. such a useful camera for so many different things. yeah. you know, i guess the ipos talked about in twitter, the last couple of years, how do you monetize twitter. facebook kind of thing. it's emerging, evolving, constantly adding to it, whether software or hardware. a constantly evolving product with hard numbers. it's a tangible thing. >> a sport. really, the product was born in surfing. one of the original ideas. >> yes. >> what percentage of surfers would you say use it? >> i'd say you've got -- everybody that surfs is using some form of camera and gopro certainly has massive market share and i think what gopro has sdun creating a brand that extends past the lifestyle into competitors' surfing. we'll looking for opportunities to work with gopro and bring the

audience and fan base into the experience a little more. pov now and we're working with that on, every day in surf events. use them in drones. we're shooting with them as well. and then just a really easy camera to have around to get into confined places like a locker room and things. >> so inner connected to su surfing, because it was born there. >> a psa yesterday has a gopro on a drone. i assume that's where it's headed? recording the experience, recording the moment from multiple points of view? >> absolutely. brings a completely different perspective and it's non-invasive, like typically you get the shots, got to use a helicopter. it's loud. potentially super dangerous for anyone, if something happens with the helicopter. with the drone, sometimes they go down in the water. it's a little expense for the guy filming but not really dangerous. >> you going to sell any of your shores? have you? >> i've sold a little bit. >> probably a good price. kill, thanks for stopping by. kelly slater, paul, thanks.

simon, to you. let's check out urieurope heading towards the close. much of the session, in positive territory, but losing ground 4eding towards the close. i'm not sure why earnings were the major subject for most people going forward, or as i say, for most of the session. it's interesting, mark carney, the guy at the helm of the bank of england, more ex-clis it about the prospect of interest rate rises. we'll need to rise soon. actually not affecting sterling. flat for the session overall after, of course, making tremendous gains on the idea that this will be the first major central bank around the world to increase interest rates. a lot of sanction, or a late concern, that the portuguese banks have done so well on the session. and bcp a recapitalization on the cards. 2.5 billion euros, 26% over scribed. portugal has done well allaying

kearns, most can concentrate on earnenings as ukraine appears to take a back seat. daimler came out with great figures as the new c and e class continue to drive certainly its operating profits and a suggestion that it could hit its 10% return on sales target in the very near future. kayla, back to you. >> thanks for that, simon. keep an eye on european markets. we turn to other things in the technology sector, when we come back. walt mossberg with his take on amazon's latest device. walt will be here, up next, on "squawk alley." having the cloud allows us to rapid prototype a lot of ideas.

being able to pay as we go was crucial for a start up. having to fork out a lot of money up front was risky. you can launch a feature really quick, and if the feature doesn't work, we haven't lost anything and we can have something up and running in days. and this would not be possible without the cloud. we are now supporting over 25 million users each month. ideas can be tried and tried again on the ibm cloud.

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less useful than i expected and sometimes outright frustrating. a direct quote from walt mossberg on the amazon firephone. mossberg is the co-executive eder of re/code and joins us with his review. walt, you spent a week with the firephone. what did you think when all is said and done? >> well, that pretty much sums it up. kayla, i think there's room for obviously another phone competitor at particularly the premium end of the market, where a lot of the profits are made. there's also room for new, fresh thinking about interfaces. we've been tapping and swiping, which is fine. nothing wrong with it, but

there's room for a new idea, and amazon is trying to do both of those things. i just think they fell short. significantly. i think their way of letting you use the phone, which involves a lot of tilting or moving your head, turned out to be, in my case, kind of annoying and not particularly accurate. sometimes you'd have to flip it several times to get it to work. >> walt, it's jon. so is this just fundamentally a bad concept? or has amazon positioned it wrong? do they need to maybe not position it at the direct competitor, to the top phones from apple and samsung? price it cheaper? turn off that, that effect? for apps that don't take the best advantage of it? what do you think? >> what i think, jon, and i wrote actually a piece about it, which, saying this when it first came out is -- and i know you talked about it, too. i think if they were just

building a phone for shopping and getting you to buy stuff from amazon, they could have done, you know, a $79 low-end android mean just had that feature. i think they actually, they spent years and a lot of money working on these sensors that let you do that tilting effect. so maybe they have to tweak it. i suppose they could cut the price, but my assumption, i could be wrong, i obviously don't know what it costs, but my assumption, it costs a lot moor money than if they'd just done something cheap. they have to tweak it, i think, make it work better. even the shopping thing calmed firefly, which is a camera effect, which, by the way, also exists in their app on the iphone. i was amazed at how often it misidentified products. which is obviously not great, if you're selling products. so they have work to do and then lots of other feature wes don't have time to go into, which you

expect on an iphone or galaxy they don't even touch, they don't even have. so they have a lot of work to do to get this thing up to the level where somebody considering an iphone or a galaxy and really thinking about it carefully is going to pick this. >> and still all things considered, walt, as you mentioned, it's not cheap. $199 for the two-year contract. $650 stand-alone device. offered exclusively with at&t. of course, the iphone did that in '07 and it worked okay, but was criticized. how flawed a strategy is that in 2014, which there's so many choices available to consumers? >> a terrible strategy, and in my column i said this was proeblg the biggest drawback. before i even got to the features of the phone. and it's exactly what you said. when apple did it this kind of device was brand new. radical. phenomenally exciting, and could only get one carrier to let them

sell it without the carrier getting involved and screwing around with the design. that's why they did it, but amazon, you know, it's seven years later. people expect -- even if you love -- even if you think at&t is just as good as anybody else, it's not just as good in every place. some people don't like the plans. some people are loyal to sprint or verizon or t-mo or somebody, and this thing limits you to at&t. the addressable market they have is, at&t is big, but it's much less than the iphone or the samsung galaxy. and -- that's a big problem. >> so, walt, are we at the point where the -- the positions are pretty much solidified? if you're apple or samsung you've got the lion's share of market share. no matter how unique a phone you make if you're htc, nokia or amazon, you might not gain much

share here? >> jon, i'm hesitate to say we're in a lock-in point, because you and i both know, both of us have reported on big shifts that happen in the market when somebody comes along with something better, and somebody could come along with something that puts it all together in a way that just knocks these guys, who are at the top, off. you know, at one time the top two phonemakers in the world were nokia and blackberry, and look where they are now. so it's possible, but i think right now you need something really, really gripping that's really effective, which is what the iphone had, what android later had, and i think amazon's at least first effort here to do this doesn't cut it. but it doesn't mean nobody, including amazon, might not be able to cut it. >> yet it doesn't keep you from saying anything other than it's an interesting first step for amazon and the phone market,

walt. >> right. >> our thanks to you for your review today. we'll see how consumers take to it. >> okay. take care. when we come back, biogen shares up. best beat 2349 company's history, as far back as data goes. an exclusive with the ceo coming up in just a couple of minutes. customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and e-trade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. call or click to open your fidelity account today.

coming up at the top of the hour, one stock seeing huge gain, up more than 250%.

however, the najarians are waving the red flag. find out why it looks like somebody knew something before the rest of us. a huge deluge. the traders are here to break it down. and wait until you hear mouch money carl icahn lost on herbal life and how much he madiest, at least on paper. the saag da continues on the "halftime report." sales jump, and ipad sales fallen the second straight quarter. the ceo is thrilled with results. all eyes turn to the launch of the $164 billion in cash. and with us along with jon and kayla here at post nine. good to see you. thoughts on the quarter? >> a big discussion about the drop-off in ipad sales last quarter. nobody cared. jon add i talked earlier in the week, said no one would care about ipads either.

brutal. 9% drop after a 16% drop. the 5.5 inch fablet, coming out. the new ipad. people don't want them that much. people want giant phones. >> now we know twhi ibm announcement came when it did? >> absolutely. apple has to keep getting into the enterprise, fend often competition from the android tablet market, which is growing. cook said on the call he doesn't think that was partially responsible. still optimistic about air in the ipad, but it's tough to see. for a while everyone was saying the next hit product was the ipad and apping was playing that card strong and it's getting tougher to tell. >> seems the momentum, its pcs versus tablets. the momentum is in a way shifted back towards pcs. you see mac sales growing, wonder what you think? my take, it has a lot to do with software and productivity. people looking to get stuff done. maybe realize, unless i am

willing to e go through a bunch of -- i get most of my work done on ipad but need a computer to do that. can apple, through innovating and software change that equation? >> i agree. the tide is going back. the robust pc sales numbers can only be so much attributed to the xp cycle. we're seeing people that want big phones, notebook computers and the things google is doing, ingrating android, and ibm athe iphone making things better. >> i remember being addicted to imovie on the mac. it's not going to happen. some things you need a computer to work with. >> apple is coming off a low base. it's growing. the market isn't. but it's still a huge player and we'll see the push for the new software in the fall, jon said, it's all about the ecosystem and intd grating the phone, ipad and mac. i think that's part of the story, but this is going to come down to what the big product launch towards the end of the

year looks like. with the guidance for the next quarter, with sort of expecting now pushing expect aces back to the following quarter, because people aren't seeing new launches baked into the forward guidance. so apple keeps promising big quarter, big quarter, but we're building to a climax here and i think these results make that a bigger question. >> and it's that product launch doesn't involve a keyboard or mouse, some say, this isn't going to help ipad, at the very least. then the 164 billion dollars in cash. you have sue wagner, co-founder of black rock joining the board. touted her experience in m & a. i know apple has had talks about potentially buying twitter in the past. >> yep. >> is there something big that could potentially move the needle for the company at this point that would be a drop in the bucket from a cost perspective but really change the company's perception and its growth? >> that's been the question for years. netflix. go through the list. why hasn't apple bought it? i think the company is feeling

like beats was kind of that for them. biggest ever acquisition. let's see how that plays out. there's always a lot apple can do. with these results, iphones still going strong. still good. 15% growth, year over year. so i think that they could do distraction stuff on the side, but -- >> although with $164 billion, something said $500 for every person in this country. jon, does the hand wring over beats look rid ow now? >> no, i don't think it does. when you're apple's size, have that much cash, it's less of question, can you afford it? more of what should you really pay attention to? it's more a matter of time and attention than it is money. you asked the question about acquisitions. interesting. i was meeting with blackboard, the education technology company this week. i think something like that, not necessarily that, but something like that, that strengthens and ecosystem, could push product and ecosystem forward the way the ibm deal did could be

interesting for them. on a software note, i do all video editing on my iphone. >> on your iphone? >> iphone. actually really good software, they could stand to push it further. >> also, rather than dots the beats deal a smarter acquisition, do something in cloud productivity. roger was on before. i won't say drop box because i always do. what about evernote? all the good uses of cash, for workforce producttivety, betser than a vaporware with ibm. >> talk about iphones up 12.7. bric sales for the iphone, 55% up. the company is getting a lot more global, probably faster than people expected. >> yes. china, really strong. despite the low cost android. a very good sign. >> worried that samsung starts cutting prices and we have to worry about margins again? jon? >> they tend to rise and fall together in general. more strength apple had in asia han samsung in the prior quarter, but, no.

people are buying more smartphones they both rise. people buying more tablet, they both rise. >> important headline, chinese central authority essentially told carriers you've been discounting phones too much. that hurt samsung dispro pogs knitly because they use xoe many marketing dollars and carriers to use so many marketing dollars to discount phones. that strengthens apple. >> apple was cutting price. having a turn in program, turn in your and i phone, get a new phone, this past quarter, and tim cook hinted how successful that was. a put to a lower cost iphone. >> does this mean the formula doesn't need to be changed for apple retail at this point? >> i think retail is strong. i'm interested in her impact on the marketing side for the company as a whole. i here she'll have more say in that, and i think that will be interesting to watch. retail is strong. opening store is like gang

buster, but i think she'll have a bigger impact than just that well-oiled machine that's apple retail. >> one thing, it normally fuels the day after earnings. not always. 340e69 of the time. today is the best action for apple since april. according to this quote. thank you so much. >> good to see you. when we come back, biogen, another big mover up almost 11%. an exclusive with the ceo in just a minute. thank ythank you for defendiyour sacrifice.

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biogen trouncing expect abss for the second quarter. seams of the biotech blockbuster's drug drove global revenue up more than 40% in a major earnings beat. joining us wit ceo and a cnbc exclusive. >> hey, carl. here at biogen's new headquarters in cambridge, massachusetts joined by the ceo. thank you so much for joining us. >> thanks for having me. >> a bit of a heavy news day for you. got an approval in or drug, and launching a lot of drugs. a great quarter. what drove the record results? >> had a great quarter. revenues up 40% and eps up 52% versus q2 of last year and driven by really the base ms business. our new oral drug continued to perform well in the u.s.

launched in europe now. revenues, sales are going very well in germany and it looks like the, europe will have the same trajectory as the u.s. a very good quarter as well, yore drug, and avinex is gaining share. all are doing well. >> and moving into a new space for hemophilia, two new drugs launching there. >> exactly. launched one a while ago. often a good trajectory. pleased with that. and the other, it's a little early to make any calls about how that's going. but we're very bullish on both of those and i think they can both take a meaningful share of that market and really do provide a benefit for patients with hemophilia. >> how do you continue this momentum with such a good quarter? drug launches coming, phase two pipeline, some call it risky. is that the right way to characterize it? how does the momentum continue? >> i think the commercial

trajectory, we expect that to continue. the pipeline, even characterize it as risky? we characterize it as going after diseases where there's a big unmet need and try and match that with diseases where we have some insight into the science. so we have projects going forward for alzheimer's disease, as you know lingo is a different way to approach m.s. we have projects for sma, spinal muscular atatrophy, where theres a low standard of therapy or no therapy at all. we believe will are opportunities there. >> have to ask you about business development. tax inversions. companies buying other companies outside the u.s. to lower corporate tax rate. how do you look at that? are you looking at one of those yourself? >> yeah, well, personally for biogen idec, we believe that doesn't make sense if there's not a benefit to the do it. taxes is nor enough for us to go do that. we've thought about it, of

course. all companies have to think about it. american companies are really at a disadvantage compared to foreign companies in this issue. $1 of sales is worth less to an american company than a foreign company, and that results in an unfair competitive situation. if you look at the companies here in massachusetts, we just did a little study on this. there have been about 28 acquisitions of biotech companies in massachusetts in the past few years. 17 were made by foreign companies and the largest ones were made by foreign companies. look at the dollars involved, it's more disproportionate. there's a reason for that in that foreign companies can afford to pay more than american companies can, for an equivalent set of assets. that disadvantages american companies. the way to stop the inversions is to reform the tax code. that means we need a corporate tax rate that's competitive with the rest of the developed world. our corporate tax rate is 35%. highest in the world and we need a territorial tax system.

if we did those two things, there's no reason to invert and all of the companies now in foreign hands would still be american company, and be paying american taxes. >> until something happens on that front, there's not a lot of optimism things will change, at least in the near-term. are you getting pressure from shareholders to try to do something about your tax rate? >> of course investors would like the tax rate to be as low as it can, but we're not getting pressure to invert. i think we are focused, it's not really on how do we minimize our taxes? that is, of course, of concern, but how do we maximize our business? how do we bring our therapies to as many patients as we can, and how do we bring new therapies forward for patientie patients who need them? that's really the core of our thinking. >> as you're pursuing all of these risky areas, like alzheimer's, lou gehrig's disease, what do you see as the most important technology that will really change biotech right now? >> that's a tough question. right? this is an amazing period that we're in right now. and in that the science and the

medicine are advancing so quickly. look, good drugs come from understanding of biology. it's really an understanding of the disease mechanisms that's important for us. so if you look at alzheimer's disease, for example, there are actually, we understand that the causes of alzheimer's disease much better than we did a couple of years ago. and that allows targeting of therapies that have a higher chance of success. so as we look at our pipeline, we're trying to match the unmet need with the advancements in the science, and take our shots where we think we have good scientific insight. i would say it's the combination of the power of genomics, of biochemistry, of advances in physical biochemical techniques and computer power, information, algorithms, ability to handle big data, all of those come together to put us at the beginning of what i think is going to be incredibly

productive for the sdrinchts than industry. >> thanks for joining us. we come back, one unusual netflix barometer and check out some of the big tech movers. s&p hovering all all-time intraday highs and tech reclaims the top stop for top sector of the year. ...for the year. hi. sorry. just want to say, i bundled home and auto with state farm, saved 760 bucks.

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not just the dozens of emmy, another sign of netflix success, "orange is the new black" sparked its own style trend. a michigan county prison decided to retire their signature orange jumpsuit because it's become too popular among civilians, thanks to the netflix series. according to the local michigan news outlet. saginaw county sheriff says kids are wearing neon orange jumpsuits to the mall. she replacing the orange with the traditional black and white stripes. so sblblack is now the new oran.

a lot how netflix is driving popular culture, i'm not sure if i saw someone walking around in an orange jumpsuit at the mall i'd think they must be a fan of the show. >> how fashion-forward? >> question their fashion sense, i suppose. i guess baggy jeans, just stuff goes around. >> yes, yes. take a look. facebook, the big print tonight. the high close of the year. 7157. we're a little more than a dollar away from that. now trading almost a 50 multiple or forward earnings and valuation is going to be -- they're going to have to meet expectations, have are high, jon. >> they will. mobile will be a big part of that. speaking of mobile. qualcomm also tonight, incredibly important across the ecosystem. great numbers from apple on phones last night. good numbers. tim cook would call them great. a lot of people, investors today, agree. we'll see about qualcomm. >> and thinking to leon cooperman at alpha about

qualcomm. a big pick, did great. a little more passive on qualcomm. hasn't sold any but not necessarily buying more. >> with such huge run-ups in a lot of the stocks last year, a lot of people from alpha were winners across sectors. >> yes. >> qualcomm, interesting to see what the earnings show. >> all coming up after the bell. meantime, judge wapner has "the half." >> welcome to the "half time show." our game plan, friends or foe? as facebook gets set to report earnings in four hours, can zuckerberg deliver for your money? taking often with a flurry of airline earnings on the runway. which carrier should you place in first class or bump to coach? and the puma question. who knew what and when about the massive surge on tuesday? jon najarian uncovers the unusual activity there, and how about this business news? were we get to all that, an important programming alert. exclusive interview with president obama. our steve liesman sitting down with the president