it is 8:00 a.m. at tesla headquarters in california, 11:00 a.eeand "squawk alley" is live ♪ ♪ are you ready

>> good tuesday morning. welcome to "squawk alley." i'm carl quintanilla with morgan brennan and jon fortt live at post 9 of the new york stock exchange >> we begin with text stocks this morning and the continued rally in the sector, another record close, apple, facebook, and alphabet at all-time highs jeff richards joins us now along with james lee guys, good morning >> good morning. >> good morning. thanks for having us >> so james, i'm looking at tech stocks up more than 30% in just the last three months. a short list apple, tesla, amd, snap, spotify, zillow. you like facebook and byedo in this market, but how much can you like some of these names given how quickly they have run up >> yeah. jon, that very good question

we think valuation right now is still very attractive. look at facebook coming to the year, a lot of investors are very concerned about regulations. i think as we get into the year, a lot of people getting more comfortable because some of the regulatory issues or policy that happened over the last few years has had very limited impact on facebook if i look at it from a valuation perspective, in terms of ebt ebitda for facebook, trading 20 times for the next two years still a lot of upside. keep in mind, facebook, unlike other companies, it has a more important monetized asset in terms of mobile messaging. you have a billion users in facebook messengers in the u.s. and a billion internationally. we see significant upside. byedo, the stock is only trading at 3 1/2 ebit to ebitda. the stock thing that is a broken

story at this time we don't think so at this point. we think this is the new discovery content of china that will continue to do very well. it's above alibaba at this point in time. this will be ramping in 2020 from that perspective. we're confident it will do well. >> okay. jeff, as a venture capitalist, you're on the lookout for the next facebook and baibu. as we look at the ipo pipeline in 2020, are investors -- ipo investors in particularly going to have to have really long, long-term view given what the market has been doing recently and the possibility that at any point, i mean, it could turn on the stocks >> we see a strong ipo pipeline. there have been hundreds of

billions of dollars poured into companies in the private sector and hundreds of companies that are valued at over a billion dollars. most of those are doing hundreds of millions of dollars in revenue as well. so as they become public, you're seeing a warm reception from large-market public investors. a couple example last year, zoom up 20%, data dog, up 46%, strong tech companies and the market have been pretty efficient. the fact we didn't get public tells you there is some disce discernment in thelandscape. that bodes well for the companies. there's a strong pipeline in the workings and we see that in our portfolio as well. >> we've seen a real drought with cross border technology the space and trade deal is supposed to be signed tomorrow does this do anything to reverse or change that especially talking about a longer term decoupling of tech between the two countries?

>> well, as you guys know, i'm a very big bull long term on the fact there are 7.3 billion people in the world. we have 300 million in the u.s the opportunities to go after, for example, fintech, a red-hot sector with visa's acquisition of plaid yesterday and paypal buying honey a month ago, you're seeing a lot of money in fintech. the biggest opportunities, for example, are with that 7 billion folks outside the u.s., particularly the 45 or 5 billion in india, africa, southeast a a asia i think in the next three to five years, u.s. and chinese companies and other players will try to figure out how to work together, collaborate, and go after that emerging demographic. we like to say they're the next billion, folks that have never had banking or financial services, are all going to come into the market in the next few years. huge upside opportunity. >> james i know you're not a portfolio strategist, but i

can't help but notice getting pretty close to your price targets in facebook and in alphabet given your expectations for some of these stocks, you're more excited about or less excited about, would it be a good time for some internet investors to take some profits, have some power for a pullback >> yeah, that's a good question. obviously, these stocks have done well recently we still think valuation is very ranable at this point in time. facebook, about 20% growth alphabet specifically only at ten times against high teens ebitda relative to ebitda, they're still very attractive in our opinion. if you're looking at secularly speaking, facebook and google or alphabet, they're going after opportunity in term ls of tv advertising. that makes up about 40% of the

media exopinions in the u.s. we see a long way for these two going forward. >> jeff, you're focused on investing with in the enterprise part of tech you mentioned fintech and all the opportunities in places like southeast asia in general, when we talk about the technologietechnologies, th applications in general, where the future is headed, especially so many different companies and different industries basically undergo this digitization right now, what do you see >> wow we could spend a lot of time on that i think what you're going to see is entire categories like retail upended. if we look at what's happening with the private players like door dash and instant card, you have amazon that's public, but look at the rise of shopify. they've gone from 15 billion in market value a few years ago to 50 billion today it's a play on the rise of small business and small business retail square is a $25 billion company.

the reason paypal and visa are looking to be more aggressive in this space is to provide technology to all these rising players. i'd point to retail as a category you have walmart and amazon duking it out at the top we're seeing a massive revolution you have small cap players like etsy, stitch fix and the real reel more and more companies are coming out despite everybody predicting the death of retail, we think there's an interesting opportunity there and more money in the hands of the consumer than we've ever seen that's one more category i'd love more innovation in the auto industry. tesla has led the way with the mod 3e8 and t and the model s there's innovation happening in china in that category as well if we all believeglobal warmin issen the issue, love to see the auto industry more in that space as well.

>> what jeff was just saying reminds me of what thomas kurian was telling us yesterday this next stage in the cloud wars will have to do with specifically superserving certain industries do you expect to see m&a that's more targeted along vertical lines this year or perhaps product development from some of the companies you cover, specifically targeting certain vertical >> yeah. certainly, you mentioned very important thing, which is cloud computing. in that universe, we see everybody is focused on a very different segment of growth at this point in time, right? i'm not quite sure that will lead to m&a specifically aws is focused on the extension to their data management service at this point in time. their infrastructure service what they wanted to do is build a database in a management service to replace oracle, for example. to really go after that $40

billion in terms of database management for gcp specifically, they want to focus on open platform for tensive flow that's the number one machine learning application globally. they want to make that available in other competitive platforms similar to what android is doing in the mobile phone space. we can see exciting m&a happen in that space as the two companies expand their respective segments. >> good insights james lee, jeff richards, thank you. >> thanks, jon >> thank you up next, an exclusive with the ceo of cigna the stock is up 34% in the last three months alone he'll join us live from the jpmorgan health care conference. ♪ ♪ ♪

♪ ♪ to take care of yourself. but nature's bounty has innovative ways to help you maintain balance and help keep you active and well-rested. because hey, tomorrow's coming up fast. nature's bounty. because you're better off healthy.

some things are too important to do yourself. nature's ♪ nty. get customized security with 24/7 monitoring from xfinity home. awarded the best professionally installed system by cnet. simple. easy. awesome. call, click or visit a store today.

welcome back apple has been unhelpful with the investigation into an air base shooting. >> we could be seeing the start of another showdown between the u.s. government and apple. attorney general william barr now sharply criticizing the company. remember, there was that fatal attack on a naval base last month in florida three service members killed the saudi national who carried out that attack had two iphones. investigators want to unlock those devices and barr now saying that apple isn't doing

enough >> it is very important for us to know with whom and about what the shooter was communicating before he died we have asked apple for their help in unlocking the shooter's phones so far apple has not given any substantive assistance >> apple punching right back saying it mass offhas offered investigators what it could, mainly information from the icloud account from the alleged killer apple says it can't access content from locked, encrypted iphones. if it created such a back door, the good guys could access the devices, so too could cyber criminal and rogue states. encryption is a hot topic in washington and the rhetoric certainly getting more heated. for example, senator tom cotton weighing in saying companies shouldn't be allowed to shield criminals and terrorists from lawful efforts to solve crimes

and protect our citizens what happens next? barr wouldn't comment on whether the government will take the company to court, but lawmakers we know have threatened to pass legislation that would compel companies to provide court-ordered access tone crypted devices unless the businesses can come up with a solution back to you. >> a lot of us having flashbacks to that prior episode on this. we'll watch it, josh josh lipton. back out to san francisco this morning and join meg terrell at the jpm health care conference with a special guest >> good morning, carl. that's david cordani thank you for being here >> good to be with you >> politics. we've got another democratic presidential debate scheduled for tonight. health care is always a main topic and target stocks can get kind of choppy with all of the talk about medicare for all you've said before you don't think medicare for all is the right way to go. but what are you expecting from the outcome of the presidential election and how consequential

it is to your business >> we think the core of our business, we're a global health services company and the most important thing we do every day is to try our 165 million customers around the world live healthier, vibrant, more productive lives that means making hash affordable we think affordability, improved predictability at the individual level and working to simplify programs will be mission critical we launched a program this past year for insulin-dependent diabetics that essentially makes it affordable, simple with a simple $25 financial obligation for an individual for a 30-day supply that's dimension of what we think happens going forward. >> what kinds of conversations are you having with investors at the conference about managing through that kind of volatility and choppiness you see in stocks i think we have a chart

comparing health insurer stocks to the odds of bernie sanders, who's been rising in the polls and is focused on medicare for all. how does that affect your conversations here >> sure. i think there's two dimensions to it. first you put it in the context, for example, as a company, we've delivered in excess of 40% tsr over an environment, coming out of the financial recession, going through the aca, dealing with geopolitical environments, dealing with changes in the environments, 40% tsr on average over a long period of time the conversations are what might a legislative disruptive environment do love to business models we've built to be durable. we serve commercial clients, health plans, governmental entity, and we serve physicians and hospitals. so we have a model that is quite flexible two, we remind them we've built a very capital friendly, capital light model. a lot of our capital is fluid

and dynamic. we'll produce $6.8 billion of operating cash flow in 20 21 the flexibility we have, a proven track record over a prolonged period of time, in this time a decade with 40% tsr on average >> the focus of the current administration, part of it has been on the middlemen. you acquired xpress scripts. they were focused on changing the rebate model for drugs, those discounts paid on drugs. that didn't work they pulled it back. do you expect continued pressure from this administration on that issue? >> so we think the basic ten net back to the pressure from this administration or otherwise, they're all forces that are pushing for back to what we talked about, how can we improve affordability for the individual, for the 330 million americans every day that are looking to minimize costs, maximize quality, and importantly avoid surprises.

how do we avoid those surprise ssurprises? xpress script, coordinating care, working with pharmaceutical manufacturers and doctors. we've delivered the lowest pharmacy trend in the area right now, close to zero, close to a 0% increase. when you look at any one item, those are tools that the industry have used typically at the direction and discretion and coordination with employers, other health plans and otherwise. we agree with the macro tenet. we create better predictability for the individual that's mission critical. sometimes the aggregate moves but it doesn't show up at the individual level, that create volatility we don't want that we have a fluidity to our business model as we see right now. it's growing tremendously and our clients are staying with us and expanding relationships with

us as we sit here. >> we've talked to a lot of drug company khouwceos and we ask thm ta about the accessibility of drugs. does something in your system need to change to help fix that? is it the drug companies who need to lower their prices >> when you have this conversation, you need to rise above it and all of us need to avoid the temptation of pointing at any one party that's not constructive. this is all about people how do we help individuals, first and foremost, stay healthy, lower their health risks? there are tens of millions of individuals who are prediabetic in the united states today they will become diabetic in the next few years how do we help them avoid that in this first place? lifestyle management, diet, physical activity and supporting medications. there is no one party in a $3.5

trillion industry that is the cause of all good or all bad pointing a finger isn't constructive the most important thing is how do you work with the practicing physicians to get in this case the right service to the right patient, coordinated the right way? we're proud of the fact we lead the industry in value-based care programs with physicians hospitals and increasingly with pharmaceutical manufacturers to reward based on the clinical outcome, not the volume of continue s consumption. we need to put the individual front and center like the patient assurance program and provide them peace of mind, predictability, and coordinated care at a level they tell us is a value, not the rhetoric at this level, and then work together to create more value, because that's our job our job is the value for those consuming the services, coordinate the care with the practicing physicians. >> thank you so much for being with us.

david cordani. >> i appreciate it >> coming up in the next hour, the ceo of sorenta asking the important questions for us still to come, tesla to 4,000? it's around 500 right now.

wur european markets are set to close seema mody as the breakdown. >> so far european markets are mixed right now. u.s. bank earnings kick off, the european financials are trading lower, morningstar saying this morning that prolonged ultralow interest rates will be the key thing to watch and see how the european financials are able to reduce operating coasts further. santander down about 2% on the

day. puma among the best performing stocks on the 600, rbc upgrading the stock. analysts say the company can win back more market share in north america in 2020. that stock up nearly 3%. on the downside, uk gambling stocks under pressure after the company's gambling commission -- the country's commission said that consumers will no longer be able to use credit cards to gamble to prevent them from building up too much debt. the european countries, big france and germanytriggering a dispute mechanism after iran abandoned its enrichment limits that were agreed upon in the nuclear court, a move that could impose fresh u.n. sanctions on iran's economy that is already under pressure oil prices slightly higher on the day. back to you. it is time for a news update we turn to sue herera, who's at hq >> indeed i am, morgan

big changes in the big apple could be ray mcguire is reportedly thinking about running for the mayor of new york city sources tell cnbc he's being encouraged to run from the business community he said he's currently dedicated to citi and has no immediate plans for a candidacy. harvey weinstein has arrived at court in new york. jury selection in his rape trial is still ongoing weinstein denies the allegations he raped one and sexually assaulted another. the u.s. court will hear appeals today in the so-called new jersey bridgegate case bill maroney and bridget kelly, two officials tied to chris christie, were convicted for their roles in creating massive traffic jams around the washington bridge in 2013. the case's outcome could have a far-reaching impact on how public corruption investigations are handled. this video has gone viral.

that plume of smoke. a couple in the philippines exchanged vows under a gigantic cloud of smoke and ash from one of the world's smallest but most active volcanos. hopefully everybody is safe over there back to 12 and change, up almost 15%. we'll watch that as we have revisited dow 29k. hey, saved you a seat.

this round's on me. hey, can you spot me? come on in. find your place today, with silversneakers. included in most medicare advantage plans. enroll today by calling the number on your screen or visit getsilversneakers.com we believe in education built for all people., - [woman] snhu was the best experience of my life. - [man] without snhu, i wouldn't be the leader i am today. - [woman] i graduated high school 19 years ago. i still finished. - [man] in the military, you feel that sense of accomplishment. that's what snhu is.

- you will march from this arena and say to the world.. i did it. - [woman] you did it. i love you. - [graduate] i love you too. dana-farber cancer institute discovered the pd-l1 pathway. pd-l1. they changed how the world fights cancer. blocking the pd-l1 protein, lets the immune system attack, attack, attack cancer. pd-l1 transformed, revolutionized, immunotherapy. pd-l1 saved my life. saved my life. saved my life. what we do here at dana-faber, changes lives everywhere. everywhere. everywhere. everywhere. everywhere.

breaking news on american airlines let's get to phil lebeau with that in atlanta. >> american airlines has announce alleged new schedule for bringing back the 737 max. the airline says it will now plan on flying the max again on june 4th that is an adjustment of nearly two months previously american said it planned to begin resumption of max flights on april 6th well, now it has joined united in saying that max will not be back on the schedule till june at the earliest. you look at southwest, american, and united, you still have southwest expecting to fly the plane sometime in early to mid-april, and then you've got early june for american and united in total, going all the way back to march of last year, there

have been more than 153,000 737 max flights that have been canceled by the u.s. carriers. guys, back to you. >> phil, we will look for something out of southwest in the coming days. phil lebeau. buy facebook and alphabet at these levels, risk ahead for amazon and expedia, expect a return to profitability for uber mark joins us this morning with some predictions ahead of earnings a lot of good stuff in this note good morning >> good morning, carl. >> you look at intraquarter price interaction as a guide to where expectations are highest and zero in on snap, baba and uber we think we'll get good result, right? >> i think that's right. we lead with fundamentals not necessarily trying to follow the stock prices you made a point earlier that's important. this is a big year for global advertising.

growth should accelerate u.s. presidential elections, the summer olympics, the eu soccer cup, football they call it over there. all those are big advertising events there are two companies i look at, facebook and google, that are clear derivative plays off that fundamentally we think they're set up for the year and for the quarter. >> areas where people are still a little skeptical, looking at trip for obvious reasons and pins would you touch the five-foot pole or ten-foot pole? >> yeah. so pinterest is for us a nice, good speculative long. there's two or three name wes ear very caution on, trip adviser and ebay would be another and probably twitter too. that's kind of a year-out perspective. they need to bring down margins and reinvest more aggressively in their business. the greatest skepticism is across these consumer internet

space is our favorite long for the year, uber the stocks recently rallied but this stock is deep in the doghouse for a variety of reasons. lots of losses, a broken ipo but if they prove they can dramatically reduce costs, this stock can rerate materially. it could almost double in a 12 to 18-month period >> we should mention the dow touching an all-time high while we're having this conversation i have to ask you about snap because you call it out both for among the highest q-4 expectations and also the least risk how can it be -- how can the bar be so high and yet so clear to you that it will clear it? >> i'm trying to do two things i look at stocks fundamentally and versus their expectations. way you make money in these if you're a patient long-term voer and can stick around with the netflix for a decade and an amazon for a decade, you can get ten-baggers out of focusing on fundamentals and avoiding

expectations near term the expectations are key. what i find interesting about snap is i think fundamentals have improved for three or four quarters here. i think they finally fixed their apps, what works well on android device, really in an android world, not apple and they've rolled out new feature innovations. some seem cute or quirky but gender and age filters, rolling out thesefilters within the app. it's a little more speculative, not as strong as facebook or google, but if you're willing to risk it, snapchat is an interesting long >> what do you think is going to happen with ammon when they report their numbers what are the key things to watch? is this an earnings report that could actually kick this name into performing or outperforming again? >> yeah. the risk that we see here is the

street seems to be a little ahead of its ski, over its skis in terms of the operating income that the company is expect to guide to for the march quarter december was fine. but for the first quarter, we're trying to flag that issue for investors that could cause momentary, you know, fluttering down of the share price. i think the core thesis is well intact the one major overhang on amazon has to do with aws, a real big growth part of the stock in the last five years. concern is the growth of cloud is in the enterprise and hybrid cloud solutions and there's a great competitor in that space, microsoft. aws has to maintain 30% growth rates with good solid margins despite the competitive field becoming more intense in the enterprise that's what they need to prove >> even though earnings are about the banks today, mark, a week from today when we get netflix, it will definitely change toward your space

we look forward to talking to you soon >> thanks, carl. as a reminder, as we head to break, can't get enough "squawk alley" watch us live or anytime on the go on the cnbc app download it today. dow all-time high, 29,011. make fitness routine with pure protein. high protein low sugar tastes great! high protein low sugar so good! high protein low sugar mmmm, birthday cake! and try pure protein delicious protein shakes

here's what's coming up. top of the hour, today is

apple's downgrade a sign of things to come for other high-flying stocks will investment committees size up the names that could be next? and earnings season gets under way. is it time to bet or fold on the gaming stock win it's our "call of the day" at noon on the half we'll see you in a little bit. >> all right, scott. meantime dow all-time high even though the s&p and nasdaq have not been positive yet. let's get "the santelli exchange." hey, rick. >> good morning, carl. let's pick up what carl just said on the air. stock market all-time highs. now, you and i watch all the data points. i bring them out pretty much every morning they're released granted, the u.s. economy is on a solid footing, but does it really contribute to the extent that we should be at these levels with this dynamic, this momentum in stocks? think nasdaq and how far it's come, how many handles it's

covered. i think there are parts of global trade that are hard to grasp and have so many different channels, but i think on the investment side there is a huge positive effect that has been in charge of the stock market based on trade and has accelerated dramatically as we get to the signing of phase one tomorrow. we've had many experts over the last several months discussing trade, actually over the last several years that this impasse has been going on with china, putting a crimp in global trade. and many question the honesty of china in adhering to any agreement whether it's phase one or some of theish shouus issuesl trade in the past. let's be honest. many of our trading partners have blemishes that are overlooked think the middle east in years before the u.s. was more energy sufficient or self-sufficient. is that really a dynamic to look towards this deal and china in

such a negative light? the politics of the moment are hard to overcome, i understand think about the currency manipulator. i've been in markets for 40 years. it's a term that shoufsh applied more times than it has whether how it is applied to china or if it is removed, don't forget how difficult it is to get china to move at all and what leverage is needed to accomplish any change. finally, maybe the most important part i've heard, this deal will make a big difference and china can't change i disagree with that i look at the democratic field of candidates. could any of you have predicted they would be viable candidates just a few years ago in this country? and i think of what albert einstein once said the world as we have created it is a process of our thinking and it cannot be changed without changing our thinking. this administration might have done things in a rough way, but they certainly seem to have made an imprint on changing the thought process when it comes to

trade and china. jon fortt, back to you >> rick santelli a lot of things happening we might not have imagined just a few years ago. thank you. meanwhile, recent ipos on the move today do chew d dominic chu has more >> the number of last year's big ipos that started off hot and went frigid in terms of coolness look at the near-term trading action in smiledirectclub. 23 bucks a share in mid-september. opened for trading at 20.55. not even at that mark. at the lows in mid-december, smile direct had lost nearly two-thirds of its value, but since then it's up around 55%, thanks in part to news of a sales partnership with walmart and working with dentists and orthodontics then shares of pinterest, it went public last april, 19 buck, as high as $37 a share by late

august from there, it lost over half its value from mid-december. now it's up 20% from there amid growing investor optimism over market share they passed snapchat as america's third biggest platform last year. how about fake meat, beyond meat public at 25 bucks a share in early may, going as high as nearly $240 in late july, went down to $71 and change by early december since then, it's up 6% 8% as th buzz heats up once again then uber, the ride-sharing giant possibly the story of ipos in 2019 went public at 45 bucks in mid-may, 47 by late june and lost about 45% of its value from there to early november. since then, it's up around 35% and riding a nine-day winning streak at this point a big theme, jon, guys, in the

coming months could be whether you continue to see the shifting momentum in some of these beaten-up names in 2019 ipos does it have staying power jon, back to you >> that stock has been on quite a ride dom chu, thank you up next, the original tesla investor it's at 532. will it get to 4,000 we'll find out next. stay with us h to take care of yourself. but nature's bounty has innovative ways to help you maintain balance and help keep you active and well-rested. because hey, tomorrow's coming up fast. nature's bounty. because you're better off healthy. - [spokesman] if you've tried colleg(group cheering)shed, snhu lets you transfer up to 90 credits toward you bachelor's degree. - [woman] it doesn't matter how old you are, you can do it, you can finish. - [spokesman] finish your degree at snhu.edu

some things are too important to do yourself. ♪ get customized security with 24/7 monitoring from xfinity home. awarded the best professionally installed system by cnet. simple. easy. awesome. call, click or visit a store today.

welcome back to "squawk alley. no stopping tesla, above 530 now, up about 1.5% jeffreys and deutsche bank raising price targets to $600 and $ 455 respectively our next guest thinks it can go to $4,000. kathy wood joins us at post 9. great to have you back >> happy to be here. >> $4,000 by when? >> we are in print, actually we don't even talk about this number it's a five-year time horizon. but when we did our next run at the model, we came out with $6,000 we've just completed another run. stay tuned it will be on get hub within a few weeks. >> wow, okay it does beg the question, this is a company that's only a handful of quarters has been profitable how do you apply that value and

get to those numbers >> so we are focused on the electric vehicle market fauirsto all and how quickly it will go we think from 2 million units last year we'll be at 37 million units. that's about a third of the total auto market in five years, 2024 originally, we thought in our bull case that tesla would lose a third of its market share, so its market share was 17% last year, so we thought it would go down to 11%. it has not been losing market share. as we're looking at other auto companies, seeing how far behind tesla they are, we're beginning to believe they may not lose market share, which is a huge change in our assumptions. that's even before autonomous. we're not even talking about anything autonomous right now. >> at $6,000 a share, they have a trillion-dollar market cap if i'm calculating that correctly. >> yes >> the two companies that have that are apple and microsoft they're nicely profitable.

do you expect that tesla will have to be very, very nicely profitable within five years to hit that market cap? >> we believe it will be very nicely profitable. it's not going to be profitable just because of electric vehicles we think the margins on electric vehicles will be much higher than most vehicles are going to be higher than most analysts anticipate. but it is going to be because of their autonomous taxi network. they are building that out it is on the crawing board those margins are service-like margins in the 80% range instead the 30% gross margin range so yes, because auto analysts are auto analysts, they can't see this because it is a services model it is nothing traditionally auto analysts are used to analyzing >> although once you start talking about autonomy then you run into regulatory friction right? what gives you the confidence that even if tesla were to

execute flawlessly that cities and states and the government would be there to help this technology get integrated. >> we have been very, very gratified in listening to the regulators who annized tesla's accidents and actually come to the conclusion that people who own tesla cars are 40% less lickly lick ly -- likely to get into an accident 90% of all accidents, including fatales, are caused by human error. regulators are very focused on the data the data that tesla is delivering is, in their view, quite remarkable. >> you don't think it is going to take an elongated period of time for them to work through the politics and the optics of all that, that data management >> elon thinks that if regulators allow, he will establish his autonomous network. >> i want to know what you think, not what elon thinks?

>> we have it delayed by a year. we adjust for elon musk time we think by the end of 2021 you will be seeing autonomous networks throughout the united states and through china. >> when you talk about software as a service, the robotaxi fleets, are these assets are the cars themselves owned by tesla? what does the business model look like. >> they can be owned by tesla. they may start off the taxi new york by owning them. but we believe that fleets -- that we will have business operators of fleets on top of tesla's network. and they will get a platform fee. originally we thought it would be uber-like like the 20 to 30% take rate. we actually think it will be higher certainly in the early days because tesla is so far ahead. >> i still don't get the profit margin calculation because i mean look at uber. it is the biggest company in ride sharing or ride hailing right now. it is not commanding anything near those margins if you look at rental car

companies or anything else if tesla either owns or doesn't own these cars that are in the autonomous market, how do you get to that 80%, and billions of dollars worth of profit? >> well, first of all, let's take uber. uber is nowhere in autonomous. we were not -- these are night and day companies. one of the reasons is uber, which could have been collecting data on u.s. roads all of these years, didn't. it didn't outfit or cover cars with sensors because they weren't their cars, right? tesla has roughly 700,000 cars out there collecting data, which is going to be -- which is going to power the autonomous network. no one is close. google just announced a couple of weeks ago they have 20 million miles worth of data. the winner in autonomous platforms in any artificial intelligence project is that

company with the most data and the highest quality data that company is tesla. this is a software as a service. transportation is a temperatuse model. it is hard for analysts to conceive of it because it doesn't exist yet. this is how we think it is going to work. >> when you talk about rivals who are behind who has fallen behind. porsche has had decent numbers for the last year and we know they are entering the field. >> porsche's entrance into the field doesn't hold a candle to tesla's in terms of range and battery efficiency. >> do they stand the best chance of everybody >> we don't think so we agree with tesla that the winners here are going to have to be vertically integrated. because it is an artificial intelligence project the first in china is volkswagen they are building their own battery plant. we are interested in watching

volkswag volkswagen. >> kathy, always fascinating to get your take on tesla. we are above 29k dow y'all time high. up 1 2 the s&p trying to bust out of the hered re at 3287 back in a moment just as soon as my audit's over, this gets my undivided attention. you take a lot of trips to the islands, phil? pretty great, right? oh phil's legally dead. fell off a boat. going by denis now. celery. long story. what do we got here. oh. not going to want to see this. i don't think this is going to work. just ok is not ok. at&t has america's best network, now with our best plans, at our best prices, starting at $35 a line for 4 lines. new from at&t. apps except work.rywhere... why is that? is it because people love filling out forms? maybe they like checking with their supervisor to see how much vacation time they have.

or sending corporate their expense reports. i'll let you in on a little secret. they don't. by empowering employees to manage their own tasks, paycom frees you to focus on the business of business. to learn more, visit paycom.com

in case you missed it, 2019 was a record year for space investment according to space angels an investment firm focused on the sector funding for the space economy jumped 73% reaching $5.8 billion. the largest year on record that brings the total to $2577 billion invested in five different space companies since 2009 international investing doubles. in general 148 new venture firms put money into space last year bringing the number of bcs invested to 769 with bonds capit capital, tusk ventures and early bird among some of those new to the sector spacex and one web each raising over $1 billion.

plus jeff bezos self capitalize of blue origin chad anderson space angel's ceo says the category seems poised for exits next year. we could see the first bc based ipos this year spacex expects for start ups two other areas to watch, mega constellations thinks spacex, one web, amazon, which could displace some of the big public incumbents, but also satellite based cyber security, which could give defense contractors for example, an important edge, according to space angels. there you have it, guys. you have been hearing me talk about it, the fact that the commercial space economy is finally starting to emerge now you are starting to see more of the investment dollars flowing into the area.

lots of trends to watch. >> even as you are talking, the vice president swearing in some space force officials which we will keep an eye on. s&p record high, out of the red. 3288 an all-time high for the s&p. joining the dow today. earnings -- industrials coming out in a couple of days. let's get to the judge. i'm scott wapner the biggest baddest most important stock in the market cut to a cell. is the apple downgrade a sign for the rally and your money it is 12:00 noon, and this is the "halftime" report. >> the street taking a bite out of apple other hot stocks that are in danger of a downgrade. hits and misses. what the big banks are signaling for earnings ahead netflix, amazon, tesla, and microsoft all getting price hikes. our traders take their positions.