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good thursday morning, welcome to "squawk alley." carl and jon sbroej tboth have morning off. let's give you a quick look at the markets. you can see, not too much going on here. the nasdaq is the biggest winner up 43% this year something we focus on every day. it may be a quiet end. it's been anything but for 2020. tech has certainly been leading the way. we talk about it all the time here but now that we're at the final day of 2022, here is the performance. it's the biggest outperformance of the nasdaq since the s&p 500 and since the dot-com bubble in '99. the most reliable play this year is betting on the fastest growing tech stocks. you have the best performers,

tesla, etsy, paypal. and they led the way and, david, you've been talking about this this morning some of the risk that's brings this year. when it comes to the big tech names that are taking out more and more and leading the market higher do those sort of come home to roost? we've seen significant steps particularly over in europe and there are terms of potentially reigning in the tech companies but at the same time, david, will investors really move away? the digital acceleration has made tech and particularly the big tech names more indispensable, nor part of our every day lives. >> we talk about it so often the acceleration of trends in play vastly accelerated in terms of digitization for so many different industries and

individuals and what that meant. and you talk so often about tesla. it's up over 700% this year. in terms of value, $340 billion and they finish up paypal holdings as well when you look at paypal # and makes it every and it is amazing to see the change that's have taken place this in terms of some of the companies and the incredible appreciation of market value to them.

we didn't have the qr code, when i was living in china years ago, that was common. certainly, you use a camera to find a menu for certain restaurants and find more this year, haven't you? >> without a doubt got that down thankfully it feels natural that's why we have seen paypal and visa surge this year let's continue the conversation and bring in bob greenfield, former nasdaq chairman and ceo bob, as we just been talking about, it's been an incredible year for tech. the points that keep being brought up are valuations. are they frothy? is there a way to justify them >> happy new year. we're all very happy going into the new year with respect to valuation, and

you have to understand that the and is fundamentally different than the stocks. and that's 20 years ago. and it cost you a fair amount of money to and this policy today with the incremental so they can really have phenomenal profit. so you think about that, you say okay, those companies deserve a premium valuation. the other natural point i will make is when you have historically low rates you will have historically high valuation. those are two things

and you look at the stock market you're better off when '16 comes. if you're in the nasdaq, we're than the s&p you saw as the year progresses, you have at home or cloud computing is better yet. that is a dominant theme here. i think as you look at 2021, it's going to be a little more granular and they go within the market itself. >> what i think is great is retail investor is in the marketplace. we know that if retail investors are in the market over a long period of time, that will certainly contribute household net worth and certainly i think help with some income inequality

we see in our society. and that strategy of being in the market so you're odds are that you're going to be very well. you get in when the market is incredibly soft. but certainly going strong in 2021 and beyond. it's important and i think the from structure in the industry is prepared to do that to educate and be discerning with respect to how you allocate investment thoughts. >> yeah. but, bob, it's david you and i were both around in the late 09's. there are certain times that make me reminisce about that, remind me of them including the presence of the retail investors. some 10 million new accounts that helped the chairman, i'm sure but does it give you some concern or speculative nature in parts of the market? >> of course it does right? i think it's a greater good as the retail investors in the

market are we concerned that they're going to expect 47% return are they going to expect every year that the ipos go up as much as they have that will not be reality that is not year over year so what i think you'll see is you really need as a retail investor speaking to them directly to be as i said, discerning about what you do you have a long erm. especially if you think about the millennials now first time being in the marketplace they would have a longer time frame to think about than you or i might. so what is the market going to look like where you're going to be over the next, 20, 30 years we know over the long term, so that is a great thing they're in the marketplace. but like anything else, they can be driven by the froth of the market, you know, that will definitely present problems. i agree. but it's a concern within the context of a greater good. >> now when you were running the nasdaq, i assume you would be pretty joyous of all the potential ipos coming as well

and performance of the ones we saw in the second half of this year are things going to keep going or are we going to hit a point where we start to question the numbers coming out of the gate for the big names. >> yeah. you know, and it's going to be worth some discount. >> they're casual. there is a valuation and metric and transition and the second point, it's important. you know, when a company is successful, these business models are so powerful, right? the cost of dollar of revenue is possible to power the service. right? we have never been in a situation where we have that kind of power in business models so the ability to drive profit is very real so with some revenue growth, profit should increase it is clearly, you know, 2020

was a broad brush. i think 2021 is going to be more granular in terms of how you think about things >> you know, when you see the ipos -- >> bob >> go ahead. >> well, i'd love to just on that point get your view on ipo pricing. it's been such a big topic of debate airbnb is the biggest company surging above the listing price. do you think that, you know, bankers or the system get ahold of pricing you have the likes of coin base coming to the further thrust bitcoin enthusiasts into the stream >> certainly when you see them go off by 100% a day the pricing mechanism should be more efficient that is in some way. there has to be a more efficient

premarket, preipo pricing mechanism. stocks should not go up that high it is also a sign that bankers might have done the right thing, the institutionals did the right thing. but once it went public, there was a feeding frenzy around it there are different theories of why that might have been unique with respect to the pandemic right, it is growing, growing, growing. they're in the regular way and exploded in 2020 >> absolutely. thanks so much, bob, for being with us. and, david, can you believe it we have a segment on ipos and we didn't even get to spacs the last minute. >> in terms of issuance, you include the ipos as you should,

that's what they're going to result in. it was stunning to see just how much dollarwise was issued over this last year certainly one of the key stories in 2020. still to come right here, amazon's podcast push and what that could meafon r competitors such as spotify and apple. oh, yeah, we have a big show for you. don't go anywhere. want to sell the best burger in every zip code? add an employee. or ten... then easily and automatically pay your team and file payroll taxes. that means... world domination! or just the west side. run payroll in less than five minutes with intuit quickbooks.

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semi stocks soaring soaring

with the smh up 50% for the year josh lipton is taking a look at what 2021 might have in store for the chip names and, josh, what a year it has been i mean, you have seen lots of consolidation, decline of intel. what are we looking nfor in 202? big tech companies aren't just big chip customers anymore they are chip designers now as well for example, apple recently launching its new mac swapping in the m-1 and swapping out intel chips. then there is amazon the cloud computing division recently announced a new chip for machine learning training, too. it's a trend that is taking place for years and it's now accelerating, redefining the $420 billion semiconductor market and i'll say bringing the chip design in house can make sense lowering costs and improving

performance there are risks, too, andy aftery told cnbc >> it's not for the faint of heart. it's really expensive. there are costs that you may not get back and how successful you are in building that chip and the performance of it. >> how does the traditional chip makers respond to this trend they're making investments and bold decisions lisa su is purchasing xilinx intel is busy buying altera, hibatta and intel is the most at risk from this trend and in his opinion, it is the incumbent, he argues and the core markets all under attack from nvidia, amd, apple and amazon intel stocks down nearly 20% this year. it's on track for the worst year since 2008 and now facing new

pressure from the hedge fund third point. back to you. >> hey, josh, i know we've been talking a lot about the third point, intel saga this week. national security implications so what do you think happens next year when perhaps the economy safely reopens and is so focused on the pandemic but perhaps the bulls that chip making plays on the global stage? >> i think a step back the u.s.-china tech rivalry is red hot and chips are going to take front and senter in that battle and for very good reasons. the big chips are the big brains that is what is powering the smart phones and the next generation technology we care a lot about and you talk a lot about in "squawk alley." 5-g, facial recognition and ai only about 12% of chips, 12% are now made in the u.s. that is expected to slip over the next ten years

meanwhile, china saw 15% that is expected to grow strongly lawmakers on capitol hill, they realize that's an issue. they believe it's a national security concern they expect to override trump's defense spending bill. there is a new framework to enchurnlg more domestic championship manufacturing it's a trend and important theme for investors to watch here. >> yeah. that is great chart. glad we brought that up, josh. 22% out of taiwan alone which, you know, again, that's in that region josh, thank you. let's bring in patrick morehead, president at moore insights and straty to talk about this industry overall. let's start off with the intel story if we can. fair to say that you're perhaps somewhat unimpressed by the suggestions in that third point letter the other day >> so first off, i think intel does need to do a better job reassuring its investors and customers about ten and seven

manufacturing and the new way and with that said, the third point letter and that's what it's all about and that intel hasn't looked at and is already executing on it i mean, and intel doesn't already use external and the fact is they do and they have for the last 20 years. i believe the new graphics chip uses tsmc. it's already simplifying the design inside our tech bell way, we call it a disaggregated design but what that means. that is lower risk splitting up intel into a manufacturing entity and design it doesn't really make any sense to me whatsoever

>> all right fair to say. when you do get an activist like third point, they can capitalize on the frustration of good many long term investors in the stock and actually bring that to bear in terms of some changes on the board or even in the executive chair. do you think it goes nowhere >> i think -- i agree with you third point is coming in to get their pound of flesh out of intel. investors will go away after the sum agreement or stock and they made enough there are things here to go after. amd getting xilinx, that's a move that intel already made and if you look at what nvidia is doing with arm that, is

getting nvidia big time with compute. there is a moefd sahratian there is a mode of operation. and the third point brought in the letter and the company has already done now listen, i am not saying intel hasn't had its basket of issues and it is right. and being integrated design manufacturer but actually increases margins i would love to see and that says they could achieve higher margins without having manufacturing. and as for the value of a spun off manufacturing operation -- >> patrick are you saying that they should be outsourcing manufacturing then is what that what your argument is

>> no, actually, i'm arguing that they -- they have the right strategy which is integrated and the directions specifically on this and it literally held up operations >> patrick though, who takes -- rather than, you know, putting it on this, who should take responsibility we had a guest on yesterday who said that the board is asleep at the wheel. and they argued a finance guy is not right for the job. so who takes responsibility this year >> so the decisions that and i know that sounds crazy and insane in today's tech world, but those are when some of the decisions were needed to be made this clears -- this falls clearly in the prior ceo b.k.

and -- >> i think a lot of people agree with that. but what needs to change right now in terms of management is it the board or ceo >> i think they need to get the right people inside intel who know how to execute better the challenge right now is that we don't know exactly how well ten or seven nanomeeter is doing. i believe it's an execution issue. that is the highest level of the issue. >> that talent issue finally though, i want to get to patrick. >> because it goes to the national security concerns of having more and more of our chip production here or not here. does that help or hinder intel strategy if it has to -- if it is viewed as the national champion given most of all of

that 12% >> so, third point and low had a great point. i think it's double edge sword it leads people to say it should be split up and all of intel's domestic factory should become foundries, meaning, they can manufacturing for amd or nvidia or something like a xilinx on the other hand, some people say that they have a strong body they manufacture and design because it does so many government and military contracts. >> that is something we've we're going to watch closely in 2021 patrick, thank you for taking time >> thank you.

>> daid, speaking of intel, take a look at the biggest laggers on the dow fo the year. ouch they include boeing, of course, they have dean a big rebound from the lows. walgreens, chevron, intel urfoth on that list and merck we'll be right back on "squawk alley. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. so it's like my streaming service. well except now you're binge learning. see how you can become a smarter investor with a personalized education from td ameritrade. visit tdameritrade.com/learn ♪

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amazon buying wondery expanding the catalog and the time when spot fi and a number of others also jockeying for dominance in the podcasting market of course, i do think about spotify in particular given the amount of money and effort that they had been putting behind podcasting as they see it. and they see -- yeah, it's been already competitive field now. you have amazon coming in. is this deal reportedly worth about $300 million amazon doesn't really do a lot

of big deals like these. so you can imagine that it's going to make a significant push forward. it is owned by amazon in this too but also had some exclusive podcast. but this is kind of how amazon experiments and the acquisition. it's an offering that goes away. and they come out with even more this will be really interesting to watch if it becomes a big player it's no the necessarily a home run because it's amazon, too we should remember >> coming up, we'll talk more tesla. when are we not tainlkg tesla? will it continue the incredible run into 2021, we'll debate that next don't go away.

here's your cnbc update at this hour. ai wisconsin health care worker has been fired for destroying more than 500 doses of the moderna covid-19 vaccine it happened over the weekend it was initially reported as an accident the worker later admitted to intentionally taking the vaccine out of a refrigerator to spoil we don't know why. the fda has recalled several pet food products from sport mix that is after 28 dogs died the fda says the dog and cat foo

food may contain moldy corn and grain. head coach during a regular season game. san antonio spurs head coach gregg popovich got ejected after arguing with officials that left her in charge and in the history books. and a history making serial killer died. dan little was serving a life sentence for murdering three women when he confessed to 90 more killings making him the most prolific serial killer in u.s. history sam little was 80 years old. back to you. morgan, thank you for that the best performing stock on the s&p 500 this year is, who told you, many times, tesla. up more than 750% in 2020. but can the stock continue this incredible run into next year? let's bring in deutsche bank's he manual rosner and ross capital partners irwin tesla pushing above that $700 mark today now at $714. what does tesla need to stay at

this level or push even higher in 2021? >> so, you know, the big question i get from the buy side is what's going to pull the luster off tesla right? so where they are now, they can basically invent the milestone they're strictly in top territory. they can tell people they're going to have an event, hold the event and, you know, break out the pompoms. they have the cheerleaders on the sidelines. i do not have any negative catalysts. i upgraded the stock to neutral earlier this summer saying that we've got india and the mini car coming in 2020 now just come out in the last week that they are preparing deliveries for india in january. ind gentlem india will be just as important as china stepping back, the market cap, man, that's a big market cap for a company that is only going to produce maybe just a little over their half a million car for this year. so it's going to be interesting to see how this story evolves.

i don't see the luster coming off tesla. the and that's a big question i get from the buy side. >> it may be hard to justify that valuation $700 billion if you think tesla only as a car company. but many this year started to think of it more like a tech company. what in your mind or how could tesla lose some of the luster next year? >> we're bullish at tesla. we don't expect to lose any luster 2020 was a great year for the stock. i think 2021 is going to be a pivotal year for tesla in terms of the actual business model we're going to see gross acceleration in terms of numbers of vehicles sold more markets basically firing on all cylinders and to your point, i think that the work they're doing on the cost of batteries, trying to cut that in half again over the next couple of years or

so could unlock many, you know, larger markets stationary storage, commercial vehicles for sure. i think investors started incorporating some of that into their thinking about the stock it's no the just a dominant electric vehicle player. it is also one that can do well & he manual, with a $680 billion value as of this very moment with the stock up another 3% how much of that future that you're talking about is already discounted >> it's a great question it was just this stock with a high valuation. they're trading at similar

valuation. >> they're looking forward it is real i didn't think beginning. we're talking about a few percent of global sales. it could be closer to 100% by 2030 this is the beginning of the trend. so, yes, on once you start looking out beyond it, i think that is very reasonable for the offers >> he viewed and little asked that could potentially take some of the luster away from tesla. and that is competition. it hasn't been a real threat in the last few years but is next year the year when we start to see traditional automakers really start to compete with tesla in this space? >> absolutely. absolutely this move into the s&p 500 just recently is emblematic of the way the old guard looks at tesla.

it is long before it was one of the ten largest companies by market cap in north america. you look at the history of the automotive company looked at the underinvesting in evs by the so-called leaders in the automotive industry. that's really open the door for a lot of innovation, a lot of entrepreneurs to go out there and find companies that we're seeing many of the come public as spacs there are more than a dozen spac ipos the best performing in the sector in 2021 people will learn there is absolutely nothing that tesla has that is not available to everybody else i categorically disagree with the commence about the battery technology i worked in the battery industry i know executives from all the largest battery companies in the world. people are actually talking to these executives

they will know that other people have things and see things and do things differently. and have different risk profiles but it doesn't mean that, you know, they can't lead. i mean, if tesla was so good at batteries, why on earth are they buying from people externally? it's just not true and there is no technology mode. you know, we've seen a half dozen spac ipos announced or completed. there will be many more autonomous projects disclosed and technologies brought into the market in 2021 we're going to see really exciting chip technology that outperforms tesla's optical processing chips by a factor of 10 so you've got to really decide in 2021 for the industry and i think tesla is great they set things up where people are really paying attention to the long term growth potential

>> thank you for being with us perhaps some needed cold water on the tesla story as we round out this incredible year >> yeah. it's maybe needed. we'll see. we'll see what 2021 brings up next though, another -- not a stock but, man, bitcoin, yh.ea up 300% for 2020 a closer look at the cryptocurrency after the break so you want to make the best burger ever? then make it!

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while bitcoin may be a beneficiary of the pandemic, it is hard to not see it overbought it is up 300% year to date what are the risks as we head into 2021? joining us is j.p. morgan's viventor lay out the risks for us as we head into 2021 >> good morning. there are three risks in my mind the first one is a strong concern. the bitcoin price will rise in 2021, $50 or $1,000. we know there is a consensus -- [ inaudible the second risk has to do with

this -- [ inaudible it exists in long retail but also institutional investors it's not similar to what we saw the end of 2017. institutional investors have positions over the past couple of months. we see that in the cme and in our calculations, the positioning there looks very frothy. >> did you say it's not that different from 2017? is that what i just picked up on >> yeah. it's not dissimilar to 2017. >> but we've been, you know, we spent a lot of time talking about the ways it does look different. you outlined one of them there is more institutional interests, more regulation so what do you think sort of makes it similar

>> yeah. as we say, institutional labels didn't exist in 2017 but at the same time, there are a similarity here with the particular -- [ inaudible so the main difference and similarity with institutional investors, i think is the wrong to assume that all the difficulties this year has been driven by institutional buying and all that institutional buying is by long term institutional investors. >> quick one, nicholas as we -- i guess for me, the piece that is really mising about this is that it's still not widely used as a form of payment. just briefly zshgs that change next year?

do you think that more people will be actually using it? more merchants are accepting it? >> i don't think so. [ inawudible ] it will be difficult here to say next year we'll see about the same i think what changed is, you know, the perception of bitcoin is difficult >> it is far from seeing months. but again, we don't need the bitcoin here to become a guarantee for the price to go up i think -- >> right as we certainly have seen this year it can be highly speculative nicholas, thank you. we have to cut it off there.

thanks for being there we hope to talk you to again soon as we head to break, take a look at the biggest gainers on the dow for the year on the dow this is apple up 80% year to date microsoft followed by nike sales force, and walt disney david is talking about this earlier. l t a turn around alonhat direct to consumer play we will be right back on "squawk alley. so stay with us. ♪ ♪ digital transformation has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ automation can solve that by taking on repetitive tasks for us.

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the exdoes -- exodus of silicon valley with cities such as miami and our next guest is the mayor. mayor, man, you got some embarrassment of riches in terms of new corporations coming to your city. i guess are you going to able to handle the influx, it would seem, of population and people in terms of housing, education, roads and all of the things you'll need. >> david, it's good to be with you. obviously the influx both stresses our systems but it's something that we need to deal with you know, you a continaustin ha doubling in population every 25 years since the 1850s.

i think there's something in the water here we're real excited to see companies like oracle bruing their headquarters here. it does stress the system, it does stress the housing supply so there's a lot of work to be doi doing. >> high-class problems, i would assume some would say. i assume your tax revenues will go up and a lot of spending and things of that nature. what are your expectations to have the wherewithal to keep one that growth and keep services where they need to be. >> i think it's important to have the growth pay for itself we're trying to do that so new development actually pays for the associated burden on the community. all the same while really emphasizing the equity focus to make sure that we're taking the strength and the power and the resources that come from having

this growth but investing it back into middle skill jobs, taking people out of poverty, making sure that we have housing that's affordable at all income levels >> so important, mayor, as i've been living in san francisco and traveled up to seattle frequently and seen some of the unintended consequences like the homelessness problems in both cities i want to ask you more about the tech influx and what it could mean on how you do policy going forward. your counterpart in miami, mayor francis suarez, he's embraced the influx there, saying he would even consider buying bitcoin for the city's treasury reserve? would you consider something similar, any other tech forward projects or policy measures? >> so much of of what we do is tech forward in this city. it's kind of in our dna. i think they're the most important thing we bring to the

table here is a culture that is really risk tolerant it's okay to be different than the city and think outside the box. it's okay to fail. you don't get punished the same way you do in so many other places that really creates an environment that is supportive of innovation. but we're trying really hard in the community not to skew things, but to maintain a really high quality of life in our city a lot of these companies come to austin because the people they want to have work for them, want to live in a city like austin. so having a city that have warm and welcoming and progressive and entrepreneurial, i think those are the things that are most important for this city to maintain >> how often are you talking to some of the entrepreneurs and executives at companies that are moving to austin, there's this debate that's been going on for years really but has certainly taken up some space this year

about sort of the death of sill i c -- silicon valley, are you hearing complaints about what it can offer and not offer? >> i'm in constant contact with the innovators and creators that are in our city and i've been reading the same blog traffic that you reference and it is a concern. i mean, as cities grow, as affordability issues grow, there are -- there are challenges. and i think the important thing is to address those challenges as early as you can while the scale of the challenge is still small enough that you're able to actually do something about it we're in a different place than many of the cities in california and other cities where some of these challenges have been left to get really, really large. they are here in austin. but we're trying to be pro

active and aprddress them early enough they're still on a skill we can be successful >> we've had you on talking about the pandemic in the past and i do want to come to that now. we're all trying to figure out vaccine distribution, where the bottle necks may be given the goal of 20 million vaccinated by the end of the year is not going to be met. what are you hearing from austin, the state and fbs ederal government in terms of getting your population vaccinated >> it's pretty much dictated by the feds and by the state. we don't really know where the vaccine is going to go until it virtually arrives. but as soon as the vaccine is getting to our city, it being put in people's arms we're being really successful right now and focusing on the 1a people, the front line health care workers, folks in our nursing homes. i understand from my governors' tweets and what i'm saying in

the newspaper that in some other parts of texas, the vaccine may not be being implemented as rapidly, and that's something that has to happen we have to get the vaccine out to people. part of it is a distribution issue where the decisions are not made locally with respect to distribution and being made at the state or federal level so in a city like austin, that doesn't have pharmacies or grocery stores in some parts of our city reflecting the kind of historical institutional racism issues in a city, the rollout is not as fair and just as it needs to be. >> we'll be watching it closely, the continued growth of your city mayor adler, thank you for joining us appreciate it. >> thank you >> and i want to wish of course a happy new year to all of our viewers as we wrap up here on "squawk alley" and most

importantly a healthy 2021 and let me take a moment as well to thank our staff here, our team for "squawk on the street" and "squawk alley" which i've been able to host this last week or so, our producers, who have managed to show up day in, day out or at their computers at home and our technical staff here in the studio and back there in the control room. thanks to you all for your incredible work during this challenging time and a happy new year to you and to you, morgan brennan, as you take over the half >> thank you, david. i couldn't have said it better welcome to "the halftime report." i'm morgan brennan in for skcott wapner the last trading year of a remarkable market. joining me are joe teranova an