looking. but springback that they are not going to meet the 2021 estimates. headline crossed the wires about france, that markets have been down. we are out of time here on "closing bell. i'm melissa lee and this is "fast money. tonight, election protection as we count down to next tuesday. plus chipping away at the next competition. is it a blow with xlinx takeover and what is behind the bitcoin boon let's get straight to josh who

has the details. >> i just spoke with kirk over at isi i wanted his take. he said microsoft is firing on all cylinders, beating all three major categories, strong quarter across the commercial franchises it was better than the street was looking for. kirk said growth is translated into increasing profitability. he said are enterprises willing to spend giving this backdrop and -- in one of those segments he mentioned 12.3 billion up 11%. commercial revenue gross of 20%.

intelligent cloud 13 billion up 20%. and more personal computing, up 6% shares not doing a lot in the after hours. the forecast will be delivered on the call which starts at 5:30 a.m. >> as josh mentioned, no guidance i am sure every one wonders what they will say about enterprise spending especially with the news delivered yesterday what do you make of the quarter? >> they hit on everything. josh went through it across the board better, with the cloud services area. what we are waiting on now is what is the forecast, what do things look like going forward how is the spending going to look i don't think they are like asp.

i think that was a individual thing. i don't think it's microsoft but it made a dramatic run over the last month or two or three it makes sense maybe it is pausing and until we start getting some of the guidance, a lot of the people are focused on that i'm one of them. i want to know what the guidance looks like, but for now they hit on every single metric >> what a difference a quarter makes. guy, last quarter the stock was down 7 or 8% because of the disappointment of it >> and they came in at 48% you talk about a business with $38 billion in revenue split

even across three different business units on top of that you have operating margins of 42.7% i think the stream was at 39.5%. think about how that has been. it is a wonderful business the only knock people will make on it is valuation if you look at the numbers i look at, you are probably looking at a stock trading close to 30 times next year's numbers. i think that's okay. stopped on a dime over 200 i think you have seen the sell-off already >> or do you want to look at price in sales by your average 7.5. 23.9 for ebida where are we on the valuation of this stock, tim, in your view?

>> if the company is rerated pete has done a nice job pointing out where it wasn't expensive last year. credit for that. picture metrics is a software company. you could be leaning higher. in 2022 it's about 32 times. what can i add the public cloud gross margins of 71% are extraordinary gaining revenue which is another area we haven't talked about maybe consul goes away but plus 22% on gaming there are a lot of different stories that are what make this company -- give investors as much confidence in the text base as any you are at 48. i am not sure you are supposed

to be doing cartwheels, but how much do they steal from aws. i think people believe they are. a slower line that is the expectation for the next three or four years. i don't think where it trades now is unfair. >> and getting the boost from the coronavirus. video game, xbox gaming services up 30% usually september is a light quarter. not so this time around. people are at home, gaming, like you. >> exactly let's unpack this so the guys hit on a bunch of stuff. what does guy always say he says bad news, good price action that's very telling. today we had great news and bad price action that's very telling as well. so on the exchange when it comes to the last couple minutes of the day, you get closing balances

everything has been for sale in the tech space all of these names are for sale. all of these names have topped out in september it all came in drastically after september. they bounced back but made a lower high i think what the market is telling you, they are done with tech even if microsoft looks great, i wouldn't be investing in it right now. >> that's your position and you have taken that position for a while. guy, isn't it too early, since you are the person who says that the most, good news, bad price action, blah, blah, blah it's too early to say bad price action we haven't got epiguidance we only have half the story right now. >> i don't think steve is talking about microsoft in the after hours. i don't want to speak for steve. he is talking about since september. some of these have

underperformed if you are waiting for bad price action, maybe you are too late to do the trade. i hear what he is saying but there are a couple of tells to me, the fact that zoom video ratchets higher leads me to believe we are nowhere near the end of this covid thing. i think microsoft is one of the winners. i will wait and see what they say. i understand what steve is saying entirely, but you break down this quarter, the slowing growth seems to have abated. you talk about a company with three different business units firing on all cylinders for all three. >> i hate to say this, but it seems like a win-win situation if the pandemic goes longer or if it ends

if it ends the economic activity will likely come back and resume and be strong at least in theory, but if it continues, people continue to work from hom home is this -- >> his tenure as ceo obviously cloud has been the focus, but they didn't leave out things like surface. a lot of people would have said let's get rid of that. they made the acquisition of linked in as well. so they have positioned themselves nicely for what we are seeing to your point. and by the way, the consistency of this company is extraordinary. you have 20 of 21 quarters where you have beat on earnings and 20 of 21 quarters where you have beat on revenue as well. because of the growth -- and tim was referring to this a while

ago -- because the growth is there and so strong, we haven't even talked about cash flow. the free cash flow of this company is extraordinary the cash on their balance sheet is extraordinary this is a company sitting in a great spot because if they choose to do anything for an acquisition, they can easily do that at this point in time they can do it for whatever, whether it's buy back shares they can do whatever they want all of the good execution that we have seen in all three of these major categories, and to guy's point they are almost distributed perfectly across all three. it's amazing what they have been able to build. >> this performance by microsoft, knocking it out of

the park, is that microsoft specific or is there an extrapolation to the software? >> i think microsoft is in more of a sweet spot in terms of the public cloud i do think the s & p story is somewhat idiosyncratic i think we have to be concerned about enterprise spending. we have heard enough whispers. i mentioned it yesterday intel has their own problems we are about to talk about another problem for them but in the short-term i think it's something the market needs to be thinking about it can't go at the same pace and the competitive landscape in cloud can't go at the same pace. but microsoft, you have to feel good about the value proposition. this is $20 billion a year in

buybacks and dibs they are giving you which supports the stock. >> let's bring in jason. microsoft is among his top holdings >> thanks for having me. >> the phone call is about to begin in about 20 minutes. what question would you ask? >> part of what you already mentioned, year to year growth on their cloud business which i think is important at the end of the day we are looking at their market share. so they own 18%. solid number 2 behind amazon for us that's been the focus that's where we see opportunity. they are a vertical for them as they continue to move along their journey in the cloud base. >> this is your largest

position, jason. i wonder if at any point -- or have you -- trimmed your position out of portfolio management and also given the backdrop of uncertainty and volatility going into the elections. >> absolutely. one of the things. microsoft is a legacy name 1.6 trillion market cap. when we look at the multiple expansion we have seen particularly in technology for microsoft. i think for us it is a strong hold, not adding any more capital to the name. we are seeing about the head winds with covid-19, as well as

lack of stimulus so it is a stronghold right now. >> that's exactly where i was going to hit what would make you add to this position, and, b, are you nervous under president bide epithepn that your cap gains tax will double >> i think it does play a role what i had looked at post-election is what are the bipartisan issues and looking at the cyclicals. i think for us it is some infrastructure spending that might happen we do think the fiscal stimulus will happen as well which will turn us away from some of the industrials. that will be the reallocation of

capital. that's how we are looking at the markets from a tactical standpoint >> jason, thanks quickly, guy what question would you ask when the conference call gets under way in 15 minutes? >> is he concerned about the enterprise spending. tim addressed it at well i think everybody said it in different ways what is the virus going forward, is sap sap specific or is that negative things in the entire space. i would phrase it differently, but that would be the question >> conference call in 15 minutes. we are still awaiting guidance big deal news out of the chip space. advanced micro bought xilinx

here is the question was that another blow to intel who had struggle in the data business >> i don't think the data center business for intel is mortally wounded. i think the bigger questions are outsourcing questions. i think it's truly on the manufacturing side that i think intel is challenged. i think the core business and data center business is doing fine this deal is about amd -- yes, they talk about the synergies, the complementaries. it is also about spending $35 billion in an all cash deal for a stock that is up 65% since july this deal makes ton of sense if

you are amd. that's what i think. but intel has to fix their own problems >> grasso? >> obviously if amd's numbers are better and intel is weak, they are stealing business intel has been plagued with their line would i rush in? probably not because you know where i stand on macko base. -- macro base. amd might have had a problem getting to things. intel is not there as well either i think to add this up, if i, on a macrolevel, have a problem buying tech, but on a granular level i would rather be in amd than intel

that was not a would you rather, but myself >> of course it was. pete >> i would say, quite honestly, intel has been struggling. their execution has been awful i am saying this as a guy who owns the stock it's frustrating to me we have seen some of these the data center is one of those where there is also -- amd makes a great move because it opens up -- it's also data center and you look over at a deal where invidia did a purchase my question is intel, the stock

pulled back and it pulled back further. you wonder are they doing the right thing. have they been able to react i have not seen that and meanwhile we are seeing their competition make moves that will hurt them in the future. >> pete mentioned guy. we also had analog devices maxim. if memory serves me, guy, you said a great takeover target so given -- >> that's a great question i don't know you put me on the spot and i can't answer it. i can answer this. i won't make any friends saying this it comes down to management. the gms move up in the draft to

get the players they want and others sit back. intel is sitting back and waiting and nothing is happening. and other gms are moving up in position look at intel. year after year for price, it is a disaster and in the would you rather game, even though amd has had a huge run, i would rather have amd still. and i think barkley slapped a $100 tag on it >> do i exist as a maker of the show this is infuriating on a tuesday. tim seymour who has his hand politely up. >> i raise my hand and follow orders could you ask guy who won the power stock lunch draft last year

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move your xfinity services without breaking a sweat. now that's simple, easy, awesome. xfinity makes moving easy. go online to transfer your services in about a minute. get started today. welcome back to "fast money. shares of caterpillar falling after there was a 54% drop in earnings despite the result, it was better than estimates. guy, this was your trade the other day. i only remember because you said meow people don't often make animal noises what do you make of this quarter and what it means in terms of the economic recovery? >> i think the quarter was fine. people were looking for close to that 155 level which is the top end of the range in terms of

analyst and stuff. i get it it also, in terms of stock, a victim of its own success. we were talking this is a $130 stock and caterpillar was a watch. i probably stuck around too long it had a pullback. i think the past resistance becomes support. if you look at the quarter overall it was good. i don't think the world has gotten incredibly better, but incrementally better the time to get in these is when the news goes from bad to just good i think that's where we are at caterpillar. i continue to stay with it >> i think bad to good is good the ceo said he feels better today than a quarter ago that's not great but not bad either, sort of falls into that bad to good, bad to okay right now. >> the outlook was very upbeat

about cap x in the mining center there are times in the show we can't hear ourselves because guy's dogs are barking throughout the show. i find that ironic, but love them >> when they have to play the lap track, you know they have problems >> i didn't need the lap track it was funny >> it enhances the humor of the joke, the lap track. pete has dogs and i have never heard his dogs on any broadcast pete is on >> well behaved dogs >> exactly >> but back to cat, ironically >> these dogs like to eat, mel

yes, they beat the numbers, but when you look at the numbers year over year, they are awful they are down 50% here and 30% there. i wonder if there is a little more downside. i don't disagree with you, guy, and you are better with charts than i am. but i think there is probably $10 for this stock to fall and get to 147, in that range. but as you are looking at that, lookingforward there are possibilities because if things are getting better in china and here in north america with residential, i think we have a good shot for the stock to make a bit of a move, but i think it will struggle for a while. >> i feel like i am conducting a class. yes, mr. grasso, do you have a quick comment on cat >> i think cat is a better stock chart than microsoft a boat load of sim lutimulus cog

out of china, just under $13 billion. after the election there will be a stimulus here. i would be down around the 151, 152, a shade lighter than guy. that's where it checks at multiple times in the past months >> we have much more ahead it's one of the worst performing sectors in the market this year. but our next guests say the banks could help hedge against any volatility we will dig into the charts to tell you how and later, have tech companies outgrown the mass i cive protections? we will bring you the trade when "fast money" returns

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welcome back to "fast money. the presidential election is one week away. our next guest says he has the ultimate hedge let's go off the charts. chris, what are you looking at >> i am looking at rates to start. i think if there is going to be a source of volatility it probably comes from rates up, not rates down that has been the status quo for years. i want to look at a couple of charts and talk about some ways to play this these are ten-year yields short-term, just over the last three or four months this up trend that began in

august or september, the trend line has not been violated we think you find good support in ten-year yield in this 73, 75 basis range. what is important to us, if you look at the last several days, even as equity markets come under pressure and as election and stimulus comes to the forefront, it has not deteriorated high yield spreads continue to trade near their cycle lows, their recovery lows. i think their credit here says even with rates up, the economic recovery is probably in shape. what group or sectors can we think about adding exposures to in that environment? i would point to the regional banks here and i would point to the etf.

it has crept back up above its moving average what is most important for us is relative to the s&p, they have started to outperform. if you look at the regionals versus the money centers, they started to outperform. regionals have underperformed the money centers for the last couple years that seems to be changing. two names that stand out, ticker itb, and sivb. it has broken out of a big base. improved relative to the s&p with bond yield we think higher. credit spread contained. look for some of these opportunities as an election

hedge. >> if the rates go higher, is there an assumption that biden will win >> i think the assumption is there is a week to go and we want to look at different outcomes rates have been quietly grinding higher without much attention. we think the bond market is telling us that the economic recovery is in pretty good shape irrespective who wins. >> thanks. guy, do you like any of chris's charts >> chris can speak to this i think tlt bottomed out the same day that kre topped out at 46 if you think rates are going higher, that tlt is going to

test that higher level, then kre is the place to be you are talking a multiyear low through that march low of $22. it is probably trying to tell you something probably wells fargo specific then you throw in some other banks, citi, for example if you think rates are going higher, kre. >> and wells fargo and citi have regulatory issues. interesting to think about these banks as election hedge. when talking about rates and bonds, the assumption is that a democratic win would lead to more spending. but we are saying this is a hedge for the election regardless of the outcome. >> i am with you i am a fan of chris's work, but

if you overlay the ten year, they are in lock stat. i like his silicon valley pick it is up 15% year-to-date. that's an anomaly. but if biden wins the election, rates will go higher and banks will work. but i think as of late, there are a lot of different polls on the inside you are not hearing about. i do think the biggest upset will be like 2016 if trump wins a re-election bid. then ink you will see people buying back into tech and trading these cyclicals. biden would be your pick if you want banks to run. >> twitter shares flying to their highest level in five

years. what is behind this move and ater, earnings from ups. will they deliver?

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welcome back to "fast money. the ceos of big tech set to go before tomorrow. >> they will make the case why the liability shield is important not only for their own business but the internet as we know it. here is jack dorsey -- and mark zuckerberg -- and pichai said -- but republicans in particular are angry as what they see as the platform's abuse of those protections

and roger wicker has said it's time for that free path to end >> thank you in washington. tim, what should we expect we have seen it time and again maybe it's no coincidence that today these tech stocks did quite well in the session where these stocks shirk off news of any congressional testimony required or any impending changes to 230 but this time around there is common ground when it comes to republicans and democrats when it comes to the read of 230. >> there is, but i don't think they will use that as a next us point to come together at all. going forward there may be, even in a blue wave, there could be more pressure on the companies i point to the ad revenue and get back to where we thought the

center of the storm was going to be in may and june, and when we started to hear from facebook pointing out the ad revenues were resilient i think twitter has come back. they were underperforming. i think the expectation when they report is that year over year their ad revenue is down. but we got word their ad revenue is up 15%. i think at some point people recognize there is a lot more momentum behind this >> the expectations i am sure will be high given snap and its ad revenues in the quarter >> i think across the board, facebook, snap, twitter, all three of those and all three that i own stock in. i think there is more upside

i know facebook had somebody with a price target over $300. i think they continue to roll to the upside they continue to grow. the political nature of the season now, but as we go forward, the eyeballs are there. that's something everybody wants. you want to get to as many eyeballs as possible facebook has multibillions, but you have others that continue to grow and certain segments. snap is different than twitter and twitter is different from facebook they are different from each other, but i think they are able to go after a lot more ad spend. coming up, bitcoin, what has investors so hot plus ups earnings. we're excited to do business with you

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♪ ♪ welcome back we have a bitcoin alert. the crypto coin surging to its highest point. let's bring in mike. great to speak with you. >> thanks for having me.

>> it is up 25% this year alone. what do you think is the primary driver of this rise? especially because we are just about a week away from the election does that have something to do with this? >> i think bitcoin is ready to solidify as digital gold investors are telling us that bitcoin has a place in their portfolios it is not just in vesters telling us this. we are seeing reports of research coming out from major banks like chase morgan. bitcoin gets challenged and each time it does it comes out stronger 2020 has been no exception to that rule. this year we saw where bitcoin drew down almost 50% in a single day and now it has returned to almost 90% year-to-date. it has outperformed a lot of market classes

investors can't ignore it. >> how excited were you when you were on squawk box and they were talking bitcoin? were you high five sng. >> there has been a lot of bitcoin wins talking about micro strategy it is adding it it is more than double its investments. we are seeing growth on all front. >> so -- it's steve grasso when you describe the volatility in bitcoin, that's what makes me want to stay away from it. when do you feel you will have a more substantive, sturdy market with a retail audience and an institutional base i have seen the headlines from papal, from square, from

fidelity where do you think that volatility, if i bought it today, i don't have to worry about losing 50% >> i think we are seeing quite a bit of that. over the last year or so, there has been the development of the two-sided market, borrowing and lending. it has helped decrease a lot of volatility in bitcoin. but lots of the investors are really looking at their allocations over a medium to longer term time horizon and when we have like that 50% drawdown day, we have investors looking to add to their position rather than running scared >> michael, always great to get your thoughts. >> thank you >> how are you feeling about

bitcoin as a place in your portfolio today versus two years ago? >> i think people have gotten more comfortable with it than two years ago. every year that goes by, people find a little more comfort the jamie dimons who weren't involved are getting involved. i am getting a little more into it myself. my brother john has been into it multiple years i think we are all adapting to it slowly, but we are adapting some of us have probably gotten there too slowly i am in that camp. this is a category that's been on fire. i know it's volatile but a category that has gone parabolic versus the markets >> i think the next thing is to go to the broader currency

market i just think you have to be careful. the legitimacy is there, no question about it. people just have to do their work coming up, shares of ups what can be expected when they report earnings tomorrow one day we'll look back and remember the moment that things, for one strange time in our lives, got very quiet. we worried over loved ones, over money, over our planet,

and over takeout. let's remember this time when so many struggled to feel secure, and build a future where everyone can. because when the world seems like it's standing still... that's the perfect time for us to change it.

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welcome back to "fast money. ups trucking higher today. it says an expansion could continue throughout 2021 and that's not the only thing driving it up today. investors are counting on an increase in. >> it is about 7.5% of the stock price, more than long-term average move, but less than the last week where we have seen 8%. today there was weekly call option those were trading for just under 4.50 and just under 5,000

traded by the end of the day the stock would be at new highs exceeding the 52-week high we saw last week after earnings >> guy, i asked you about being subjected to that ups video with you in the coastume. >> first of all, halloween is this week. i did work at the united parcel service. i was one of their greatest employees ever because they sent me an e-mail suggesting so and the stock has gone higher ever since. what scares guys is back in july it went from 116 to 118 in a straight line. if it is another on the upside,

you have a parabolic stock that shouldn't move that way. yes, i did wear the shorts, and, yes, i looked great in them. >> well, we will let the world be the judge of that, guy. >> put up some "fast money" poll >> be sure to tune in to the poll show friday at 5:30 up next, final trades. ♪ ♪ ♪ ♪ ♪

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can't miss interview coming your way tomorrow at 9:00 a.m. speaking exclusively with dave calhoun after earnings time for final trades. tim seymour. >> good discussion earlier in the show morgan stanley is the one to trade ahead of others. >> pete? >> i am going to give you twitter. i have seen nothing but option activity that says it's going higher since the stock is $44, i think it's going higher. >> steve grasso?

>> i have chewie for my final trade. >> guy >> love the pet themed show, but i am going to give you fire eye. good quarter and stocks should be higher than it is, in m my mission is simple to make you money. there is always a bull market some where and i promise to help you find it. "mad money" starts now hey, i am cramer, welcome to "mad money," welcome to cramer america. my job is not just to entertain you but to teach you call me at 1800-743-cnbc or tweet me maybe we spend so much time focusing on covid-19 or th