good monday morning. welcome with to "squawk alley. i am jon fortt morgan brennan and sara eisen live from the floor of the new york stock exchange. carl is on assignment. we begin this morning with amazon shares up 2% as evercore raises a price target on the stock, citing gross profit as a more important metric than revenue, taking it under $2,000 a share meantime, amazon's announcement of the new grocery venture sending names like kroger and walmart lower last week. this as "new york times" publishes a profile of amazon's chief executive, how jeff bezos went to hollywood and lost control.

where does the stock go from here for more on all things amazon, we're joined by elevation co-founder, early facebook investor roger mcnamee, up with a new book, zucked >> good to be here. >> a lot of ways to come at amazon with the headlines. >> new angles we're not used to relative to amazon >> the upgrade, given how big a part bezos amazon, are you surprised the stock held up this well with questions? >> i'm actually not. i think jeff bezos is arguably the smartestpers person i met a capable tactician. the company is in good hands, even with him dealing with whatever it is he's dealing with i look at the strategies, he has

a long time horizon, i look at grocery, he is not trying to win the grocery argument in six months, he is trying to do it in ten years. i'll be surprised if he doesn't radically alter that business by tying in restaurants and other consumers of fresh product but to me, the hollywood thing will pass. amazon will still be there when all of it is done. >> are all of the other ceos and founders dealing with the same stuff, people just don't know about it >> i have no idea. part of my challenge in dealing with silicon valley is the culture changed so much in the last ten years that it is no longer the same culture that i knew and loved in the era when we made products that empowered people, made the world a better place, and now it is this titanic struggle of almost greek gods trying to take over mount olympus. and i don't think that end well.

>> saying it is l.a. >> you know l.a. better than i do what i do know is there is so much nonsense part of the atmosphere now, and candidly, a lot of products that are just extracting wealth from the economy, not actually making things better. one of the things i love about amazon and bezos, what he has done in distribution is brilliant and makes the economy better we have to find ways to keep them from participating in the markets they create, but honestly, the guy is really smart. i'm sure he's going to make grocery a better business by the time he's done. >> let's dig into that more. grocery is not the highest margin business, not necessarily the fastest growing business whole foods hasn't so far necessarily been that much of a positive when you look at amazon's financials. what do you expect that to look like what do you think this vision is longer term? >> morgan, i look at this and go if you watch bezos, we're not about making money in the short run, he is about restructuring

distribution channels. my sense is that whole foods was a learning experience. it is not that big a player in the market, it plays in a niche. it was about learning to move fresh goods around without them spoiling, and i just will be very surprised if when he's done with this he hasn't found a way to make some material improvement in how the stuff gets moved around. and if he fails, then obviously that's a big issue for the stock because it means they're going to be running out of markets because they're already dominant in the places they're already in. >> when you talk about movin around, sounds like you're hinting at transportation and logistics. >> i mean, he is essentially looking at distribution in all senses, and he treats it as he said from early shareholder letter, he treats it like a computer, with inputs, outputs, applications interface applications, he managed to make computers in the real world look like the same thing and so far

it's worked. >> when i hear you talk about jeff bezos and amazon, it is glowing. it reminds me of how you speak about mark zuckerberg lately in the new book, how you have been critical of facebook and google for not protecting our privacy and election interference. why do you think amazon doesn't get heat they have a ton of our data. >> to be clear, i can respect people without respecting all the things they do in the business in fact, i'm very worried about many things that amazon is doing with data. i think we have to hold them to the same standard. give you an example. amazon has a new business where they're venturing into health insurance. now, the thing about this, they track you over long periods of time they're tracking mouse movement, they're doing all that stuff they're going to know from your mouse movements if you have a neurological problem before you do, right? if all of a sudden mouse movements are slowing down, getting more erratic, they know

that who is their customer in that. are they going to call you, say we think we need to see your doctor or go to the insurance side, raise your rates or terminate your insurance i don't know i think we ought to know the answer and soon. >> you're not saying they're necessarily better stewards of our privacy and data >> i would say they have been -- that the impact of their behavior has been less dangerous to this point, not to say we can count on that going on he promises that he is only recording things after you say hey, alexa what's to stop some enterprising product manager at some point, that's what everyone else has done. >> remember the story about alexa thinking she was being alerted by a husband and wife talking and sending a message to someone else there's some issues to explore here see how it ends up shaking out roger, stay with us. lyft filing an s 1 friday, kicking off the ipo process. expect that later this month

beating rival uber to the public market >> reporter: good morning. lyft's structure catching attention. we into uber is not going public with one reminder here, dual class structure is two classes of stock, each with distinct voting rights meant to protect the founder. over the weekend, the council of institutional investors expressed deep concern over lyft plan structure calling it egregious, likening co-founders to supreme monarchs in perpetuity they reiterated call for them to curb such listings it reviefs the debates on voting rights it worked out in terms of outperforming broader markets, and snap founders control over 90% of voting rights and seen the stock plummet. important to note we don't know what lyft structure will look

like in filing, voting rights section is a place holder. it doesn't yet tell us how much control co-founders john zimmer and logan green will have. i am told from a source together they'll have slightly less than majority control and there will be a sunset provision. it remains to be seen what that looks like lyft i want to mention has an independent chair, former ceo of trulia it will stand in stark contrast to uber's which is expected to go public this year. travis kalanick stepped down, and changes like expanding the size of the board. another important difference uber has a 17 person board, lyft goes public with just ten members on the board back to you. >> thanks. roger, is this going to be a big litmus test for the founder control? logan green, john zimmer will

have 20 votes per class b share. didn't work out well for investors with snap, right >> we can only hope. this has to end. it's just really bad for corporate governance, really bad for capitalism >> what would end it >> at some point we have shareholders have to step up and say this is not okay and exchanges have to follow but it has to start with the shareholders who to date have not yet mustered any real powerful effort. >> did google start it because bezos doesn't have founder control, larry ellison at oracle doesn't. there was a time this wasn't the thing. >> media companies had it for a long, long time. >> newspaper companies >> if you think back, that's where i know it from i believe it was a thing that kleiner perkins and sequoia gave google and that got it started in the tech space. >> how much does the lyft yeipo

set for uber >> i think this is more like sirius and xm than like drop box. what i mean is this business looks like the map doesn't work unless you're a monopoly remember what happened with sirius and xm, those guys killed each other forever and then they merged and it worked out after that what bothers me is that they're both priced as though monopolist, yet neither of them is you know what the end game is. obviously you would rather be a shareholder of lyft, they're the acquired company in this case. i don't understand why uber passed on the chance to buy lyft when they had it, and they're going to eventually have to do it as a public company now, so it will be the one safety net under the lyft shareholder that doesn't exist under uber

if that's true, uber is doomed you have to take the u.s. biggest markets and get them down to a single player. >> is it an issue of geographic monopoly, domestic monopoly? >> you need to be effectively, in this business, there's a massive transfer of wealth from investors and drivers to the customers. eventually you're going to have to pay the drivers something reasonable which means that the passengers are going to have to pay more and the best way for that to happen is if there's no competition. >> i was surprised the average revenue per ride, $3.56 in 2018. is this a good investment? >> as i say -- >> you think it is a takeover target would you buy the ipo? >> me personally, no >> why >> i look at this and i go i think the business model right now is based on havingunlimite

amounts of capital and drivers who are willing to run-down their cars without getting adequate return on time. that to me, that's not a sustainable model. i believe that ridesharing is a real business, i think it is mispriced today. it will be smaller if you priced it properly, but there are so many businesses that go public where you have a transfer and then they take the air out of the balloon after it blows up, you discover something real there. that happened to oracle at one time it happened to dozens of tech companies. i think this thing is they're in a market share grab mode now when that ends, you figure out what the real business is. until then, you're playing a dangerous game stocks might work, but to me looks like tough sledding the whole way. >> so dig into that a little more then. i mean, you are seeing bookings and net revenue increase dramatically for a company like lyft, but so are losses. >> no fooling.

>> so what would it actually take to see profitability? merger >> i'm just saying, i think you have to get rid of the competition and be able to increase prices. you can't increase prices until you get rid of the competition i think silicon valley is on this thing about creating monopolies right? we have forgotten what competition is these things are predicated on winding up as a monopoly in this case, opportunity was missed to create that early. these guys will pay for that until it is done same as sirius and xm did until they got together. >> meantime, early investors will make money. always good to get your perspective. the new book is available now. still to come on "squawk alley," analyst behind that amazon note we talked about joins us in a few minutes. and later, what a historic docking at the international space station means for spacex and elon musk.

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it has been a decade since stocks hit historic lows at the end of the financial crisis in march, 2009. despite the s&p 500 now more than quadrupling in value, market tenured performance seems to echo bull markets of the past what does that tell us how much room there is left for stocks to run? it is the subject of mike santoli's latest column.

he joins us at post 9 for more this is a garden variety -- >> not in details, not in news flow, not in how it started, in terms of performance of stocks since the low which was march 9th, 2009, actually march 6th, this wednesday is the anniversary, was the inter day low, 666 on the s&p, has been basically similar to post crash decades that we've seen before so 17.8 percentage annualized return, total return for s&p 500 since that point that's almost exactly what you saw in the ten years after the 1987 crash, 17.2% annualized, and after the 1982 bottom, mega all-time bottom that started the '80s bull market now, there were many dirchfferee in terms of economic pace and what central banks were doing, the condition of stocks in terms of valuation and dividend yields in the beginning

somehow the market has metabolized these into something similar. to me, the lesson, one big take away, if you invest in stocks when it seems so desperate and they're down so much and people are legitimately questioning whether equities as an asset class are worth betting on, the market in the next decade gives you 1.5 times the historical seems to be the way it has gone. 1974 was another real low, about 15% annualized from there. the other thing is it doesn't mean it is the end when you get to the ten year return mark. it is not early, it gets volatile, but you tend to have a couple years left in this cycle, you have positive returns, lower returns than we had, but positive ones. >> crazy question, might be putting you on the spot, compared to previous bull markets how has retail investor participation been >> i would say on balance retail has not fully been excited about it, not fully participated as much i think there's a demographic

story. seems like a cop out, but the '80s and '90s were prime time for baby boomers getting into the highest earning and investing years. that might be one reason also the prelude '87 was a quick crash, it was violent and colored the market but we got over it faster. '82 was a slower motion pickup seems like news flow reflected better news, economy was growing faster, killed inflation and all that >> so from the troughs, they look similar what about from the peaks i wonder, we're looking back, saying -- if you're not doing that, equal danger on the down side from the peak >> we're still paying the price for the year 2000 peak returns from that point on, pretty much has been 19 years since the peak, march 20th or march 10th of 2000 that the market peaked.

been very much sub par returns, half the long term average there's bad times to do it you tend not to get hurt too bad in terms of absolute losses over ten years, but that was a bad time to bet big on stocks. >> how does it end in a crash >> variety of different ways there was a recession that was in '99 and 2000, market got too expensive. crash in big parts of the market, slow motion two year crash. it wasn't at once that pulled off the bandaid. >> great look at the numbers as we head to break, look at the best performing stocks in the dow in today's session united tech, caterpillar, dow dupont among them. more "squawk alley" ahead. rebekkah: opioids has taken everything and everyone i've ever loved away from me. everything. i blew my ankle out and i got prescribed pain pills by my doctor. if making my detox public is gonna help somebody

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welcome back to "squawk alley. it is the start of a new generation of space flights, according to nasa administer jim bridenstine, after elon musk's other company successfully

launched to the international space station over the weekend the unmanned launch for nasa which took place early saturday morning amid mostly clear skies, lots of cheering, marking the first time a spacecraft designed to carry humans traveled to orbit. at the pre-dawn press conference, i was there, an emotionally exhausted musk said liftoff occurred from the same launch pad which americans used to travel to the space station before, and before that, the moon >> i would never believe this would ever happen. yeah, i just think, you know, landing on the moon, that was maybe the greatest thing ever. maybe the greatest thing ever. so i can't believe we're launching from that pad.

>> so far, the mission is going smoothly early sunday morning, spacex capsule autonomously latched onto the space station, traveling 20 times speed of sound. this is a docking procedure that never happened before. astronauts greeted it and cargo, including ripley, the sensor filled mannequin that got attention last week. up next, dragon returns to earth for an ocean landing, scheduled to happen friday more tests and assessments follow that, and if all goes right, nasa astronauts could once again be traveling from u.s. soil into orbit as soon as july this is a big win for spacex which is competing with boeing under national's commercial program to be the first to do that both are developing these capsules guys, in case you wonder how are the astronauts feeling about the goings on of the weekend, the two astronauts that are going up on the first mission with spacex

for nasa were at the press conference they said they were confident about the way things were unfolding with the launch and they were headed straight back to california to hawthorne to watch the docking process and they're moving forward doug hurley specifically was one of the astronauts that piloted the last space shuttle mission that ended in 2011 this would be full circle for him. but new way of doing it. >> as far as launches go, this was a big deal >> it was a big deal, a major milestone, not just for nasa and the u.s. government but also for commercial space flight. i think we truly are ushering this new era in, and it is the startups like spacex, blue origin, some more traditional contractors like boeing bringing us there >> very interesting. it is time for the european close. seema mody joins us with today's action overseas. good morning >> major averages are closing mostly higher, well off best levels of the session. this comes amid more weak economic data out of the uk.

in february, britain's construction industry posted the worst monthly performance in a year, amid brexit uncertainty. look at the equity performance, reports of a u.s. china dealing moving closer, boosting shares of miners. major european oil firms moving to the up side on the back of a bullish report from lukoil they saw profits jump nearly 50% in 2018, bolstered by higher oil prices and weaker ruble. so the currency a major factor in play. finally, switch to shares of ted baker, the british retailer ceo ray calvin resigning amid allegations of inappropriate conduct with employees he reportedly maintained a hug zone in the office near his desk allegations first surfaced in december shares higher by 5% on today's announcement, up 3.5%.

jon, back to you >> all right thanks i think i see sue herera hibehid you. >> indeed you do right across the room from her here's what's happening. oxycontin maker purdue pharma exploring brumankruptcy m thousands of opioid lawsuits according to reuters purdue and wealthy owners denying the allegations. eli lilly offering a half price version of top selling insulin, humalog it will sell for $137.50 per vile, or 265.20 for a five pack of quick pence humalog brought in $3 billion worldwide. troops had to open fire

killing two palestinians in a car and injured a third. pope francis announcing he has decided to open up the vatican archives on world war ii era pope pius xii. they long criticized pius not doing anything to save jewish lives during the war. you're up to date. that's the news update this hour guys, back downtown to you sara >> sue, thank you. kara swisher joins us after the break with more on lyft's upcoming ipo what investors need to know. back in a moment cnbc trend tracker live data board, brought to you by the cme group. cal: we saved our money and now, we get to spend it - our way. ♪ valerie: but we worry if we have enough to last. ♪

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welcome back lyft on the road to going public, filing the s1 friday, in anticipation of ipo date in march, beating uber to the public markets recode co-founder kara swisher is with us now kara, against the backdrop of several major tech unicorns, considering ipos this year, you spoke with social capital over the weekend. he called startups a ponzi scheme, saying if you thought the financial crisis was a big deal around mortgages, wait until you see the amount of debt

companies have this as lyft posts a nearly billion loss for last year in the s1 this interview is one of the wildest. you have to check it off i have interviewed him i know him can't even begin to talk about that >> we can. >> we can, but oh my goodness. but lyft >> yeah, lyft. >> you're critical of the structure, the amount of voting control the founders are going to have. >> yes. >> talking a bit about that with roger. i'm going to ask you the same question i asked him do you think how lyft turns out could tip whether or not this becomes the default going forward? since google for popular companies, it has been the default, but hasn't always worked out. >> it worked out with google, they haven't run into the scholes, haven't had what happens going on at facebook or anything else. you can't do anything at facebook because mark controls everything which may be good in the end, but other companies

didn't need this to run companies well i know the excuses for it and why you want to do it and of course you want complete control, but the idea that these people once they go public, they run it like a public company and can't keep it private. the thing about silicon valley that i keep saying is they want everything, they want all of the benefit, none of the responsibility if they want to be -- they can do this, maybe investors will agree to it, but i think it is ridiculous. >> the way it links into the interview is that to me it was amazing that despite all of the big promises he made about changing investing, he was unable to say i'm sorry about any of the things that he didn't deliver that perhaps people expected it was like saying you're welcome. >> he did. he said it with you're welcome i think what he was saying he didn't want to do this any more, then he had people he made a lot of money for, he returned

capital too and had enough he compared himself to michael jordan, didn't want to play basketball or baseball i think a lot of people in silicon valley are on the treadmill, bigger houses, better vacations, better planes i think he was hitting at a smart idea in the middle of it and then he didn't want to do it he made certain promises and then decided he didn't want to do those, but he did return capital and make a lot of people wealthy. he was sort of irritated that people were angry at him for making them wealthy and didn't want to keep making them wealthy i guess. >> i want to go to the idea of startups operating as ponzi schemes. you do have all of the major ipos expected this year, lyft being the first in the pipeline. a lot of retail investors are probably saying i want to get in, how do i get in. what do they need to know? >> i think with a ponzi scheme in the case of smaller startups,

you keep putting money in and all goes to facebook or google, for example, or in the case of lyft, aws. that's a lot of money that goes to aws for massive computing needs there at lyft and uber and the rest of them so you're sort of playing, it is all going to amazon and those and they buy things and it is sort of a circle i think he was trying to get the idea that reminds you of aol that used to invest in startups, they advertise on aol and do this the question is, are they viable businesses in and of themselves that can continue forward without massive losses some companies like amazon manage to jump the shark i guess because they were showing massive losses a long time, then found businesses that are sustainable. is that possible for a lot of companies? in some cases, they're enormous losses on the other hand, enormous markets. the question is which one will dominate, can two of them

dominate are rides being subsidized by venture capitalists, the answer is yes. >> every generation has one. used to say that about sun servers in the late '90s >> yes, there's many. >> when it came to networking equipment, same thing. well, this company is propping up that company by spending too much on all of this, and eventually it is going to go down the toilet. is it a ponzi scheme or just how silicon valley works >> you know, google sells advertising to lots of people, sure, and it was pretty much always profitable from the beginning, quite a good business from the beginning and sold it to businesses not just in silicon valley, it sold all over, microsoft sells software all over the world, so does uber, lyft and these companies. the question is can they sustain the low prices, can everybody sustain low prices that are kind of subsidized. that's the whole point that he was making, they're either subsidized or it is cooked a little bit then everybody is in it to do

the growth thing and there's a point both can't continue. i think it is a point when there's direct to consumer companies, mattress companies, whatever it is, this is some of them aren't going to make it he was making that salient point in that epic interview i think >> it does feel like the flood gates are opening with ipos. you have lyft, pinterest. >> airbnb. >> uber. what's driving the mood? is it that the market is doing well >> part of me feels like the get while the getting is good. part of me feels it is that and it is time i guess, and these endless rounds of funding aren't going to continue, so let's bring it to public markets, let them pay for it. a lot of them are great businesses, a lot of regard for what airbnb is doing, at the same time, it runs into head winds from hotel companies people are surprised by recent other facebook thing with a phone number is these are

businesses like everybody else, and they will do things in their best interest. they're not here to change the world, that's a nice bit of twaddle they like to pedal some are good businesses, some aren't eventually price comes due we'll see. some are great businesses. if they can get it right, great for them. >> and they just want to be happy in the end. >> oh, come on they want to be rich, that's the problem. >> kara, great to have you. >> thanks. just want to show you the markets. we flipped into negative territory. stocks are selling off after a rally at the open. dow is down 151 points, s&p 500 down four-tenths, and nasdaq up an hour ago is down by four-tenths. names like unh, mcdonald's, home depot weighing on the dow. all groups have gone negative in the s&p 500. health care is the biggest

loser. technology, utilities, materials also getting slammed the initial burst of optimism over reports over the weekend that u.s. and china were inching closer to a trade deal even got details released, has faded. >> looks like we took another leg lower around the european close as well. coming up, semantic, one of the biggest gainers, up 20%. it is lower now. the ceo sits down with us after the break. stay with us what do you see? we see breakthrough medicines getting to patients in record time. we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.

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i am scott walker. here's what's coming up. how much of a china deal is already priced into the markets? is today's lackluster action a clue we debate where the rally goes can amazon climb another $300 a share. call of the day says yes that's why we are teeing up debate on that jon najarian joins us as well. see you in 15 minutes. >> see you then. thank you. more and more companies and consumers shift to cloud for storage needs, cyber criminals are making a move as well. in 2018, more than 70 million records were stolen or leaked from poorly secured cloud storage buckets. that's one finding from symantec's security threat report with more on the report and the cyber security space as a whole, let's bring in the ceo, greg clark. welcome to the show. nice to see you. >> nice of you to have me on the

show, thank you very much. >> the security conference is about to kickoff, it feels like efr year when it happens, it comes amid a new wave of malicious threats on security and growing security budgets what's different this year >> i think another great show in san francisco. we have the whole industry, tens of thousands of people here. cyber crisis continues we definitely have a new set of threats showing up i think it is a testament to the fact that it is ever changing. and the partners you pick to help you defend it are important. >> the other big theme that wall street is watching is consolidation in the industry, which we have seen a lot of. cisco made that acquisition last year, are we going to see more of that, and what's driving that >> you know i think cyber defense is a continuously moving target there's a bunch of things should be there for the long haul at symantec we put those together, deliver them

integrated what's important is problems that emerge that are not solved, takes a vibrant startup community and investment community around that to address those, so it is the sum of big cyber investments like we have at symantec and vibrant startup community, the combination of those things integrated, what we call integrated cyber defense i think is important for customers and partners in addressing a bunch of the crisis. that is it moves all the time, there's all kinds of different things that need to happen the big transition at the moment took cloud to mobile, new ways of beating people, stealing information. it is definitely a vibrant time for cyber defense. >> it occurs to me we were just in barcelona last week for mobile world congress, lots of talk on 5g, internet of things in the pc era, there was security software installed on the pc, and we could feel like we could trust that. in the smart phone era, app stores were supposed to be

restricted, security applied that layer we felt like we could trust that in the iot era, there are cameras everywhere, microphone in the home. sensors in the car where do we go to know whether all of this stuff is secure? >> yes so i think the injection of consumer iot and enterprise through the home is important. what we found in the last couple years at symantec where we are putting things like norton core product in the home, the number of platforms there is substantial. there's an ever present threat in the iot we're addressing that threat what people have to also realize, it is not just anti-virus or pc or mobile phone end point, there's a threat in the network. many have seen an e-mail from somebody who has their mail password extortion is rampant in consumers, and account takeover

in things like uber is rampant important to protect yourself and the network. make sure if you're roaming around on other infrastructure, you have a vpn engaged these are serious items. we're seeing a lot of threats coming into the space, not just on the end point, also on the network, in the iot and in the home a different set of solutions are required than ten years ago. >> greg, where are the biggest threats coming from, cyber criminals or countries like north korea or china or russia that you hear reports of hacking. >> i think we're always going to see from now on cyber espionage will continue, has been going on hundreds of years, now in cyberspace, it will continue in cyberspace probably forever. big corporations, governments, heavy lifting needs to be done we're very invested in that. then on the consumer side, people at home, smaller

businesses, there's an extortion, ransom crisis going on i think the u.s. government has been addressing that with some great support for us around consequences by saying third world countries where a lot of these guys are resident, if you don't have cyber lawson the books in a few years, you may face sanctions we're starting to bring consequences into that which is helpful but it is in two spaces. organized criminal stealing from people and companies and then a bunchof nation state activity, i think they're with us for the long haul. >> greg clark, thank you for joining us >> thank you >> to discuss it from san francisco. ceo of symantec. more on the market selloff we're seeing as major averages turn lower, all of them, s&p, nasdaq, dow do mwnore than a half percent back in a moment so with xfinity mobile

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earlier in the session that the u.s. and china were inching closer to strtrade deal that optimism fading here in the session for the u.s. >> i would point out kind of surprisingly to me, facebook, apple and amazon all still higher >> so are some of the big industrial names like caterpillar, dupont, yunited tech they are hanging in. >> dow is still down more than 250 points at this moment. we'll have much more sllti ahead. squawk alley will be right back.

welcome back the dow is down but shares of amazon are still hanging onto gains but just barely. gross and gross profit will out pace a revenue increase. estimating the stock will go to 1965 just hair below $2,000 a slhare joining us is the analyst behind that call. anthony, it's great to speak to

you today. break down there argument for us especially given the fact you do a deep dive into some of the parts for amazon >> yeah, what we're saying is the headlines really are dominated by revenue growth for amazon for us, because a lot of the growth that amazon is coming from, newer business, businesses like advertising, like the subscription services business that we will look at in terms of gross profit gross profit will be growing much faster than revenue over the next three years why not value the company on gross profits. we're valuing it in those five amazon is half the value when you buy it the third party marketplace is a real lynch pin to our analysis advertising. over 150 bucks a share the first party business and subscription services fees from prime over 100 there adollar a e

it's really more detailed way to get into the mor profitabe profe parts of amazon. we find when stocks under perform there's real valuation support here when you look at it on some of the basis i think it's a good entry point for the stock. i know the fourth quarter there were some deceleration in a couple of those lines. advertising and third party are two to point out i think those will reverse in the first half hopefully kind of revert back to the third party marketplace. the multiples are really reasonableable >> you say aws represents 50% of amazon's value here. the company is a conglomerate. it's got so many different businesses what we have seen happen is that investors have believed there's

more value to be had when parts are broken off in portfolios is therefully reason to think that could be the case for amazon or are they stronger with all these businesses together? >> that's a key question that investors ask us i think they're stronger together one example would be for amazon web sfervices its biggest customer is amazon.com itself. we have done the work. we have the research we look at it this way but if you're asking whether jeff bezos will split the company up, i don't see that as very likely. amazon web sfrss market leader, we'll give that 20 times multiple and glowing revenue at 45 to 50%. >> the big ets risk then is that amazon goes into another heavy investment cycle and one of many areas where they could grocery,

logistic, international, that would damage the thesis here >> i think coming out of last quarter on investments, people got worried they would be incremental to expectation i really don't think that growth unlike some of the others will be mump higher than we're already expecting in 19. further more, john, you want them to invest let's face it, this company is a juggernaut it has the ability because of its size, scale and access to data, it has the ability to disrupt other markets. groceries are a big one you mentioned. if they weren't investing, that would be more of a red flag. amazon is not seeing further vectors of growth. >> i think they are and i think they will. >> we'll leave it there. anthony, thanks. the dow now down more than 300

points the s&p and nasdaq also down just about 1% at this hour that will do it for us here on squawk alley thanks for being with us >> closing bell. let's toss it over to the half all right. thanks trade deal with china already priced into the plarkt a deal so close as report sugges suggests >> s&p 500 crossing a key level. the desk will debate where stocks can go from here. a china trade deal could be approaching a resolution with a face-to-face meeting between the two leaders as soon as this month. the call of the day. amazon getting a price target booth boost by one wall street firm. the halftime repor