can get a golf ball a thousand yards. a lot of investments make a lot of sense when interest rates are zero. >> yeah. >> when interest rates are no longer zero, it's a different story. i think that's what investors are going to have to get accustomed to. >> maybe we are no longer on the moon jason, great to see you! [ laughter ] >> great to see you. >> thank you very much andrew, i will see you on friday i know you'll be back here tomorrow see you later! right now time for "squawk on the street." ♪ ♪ good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with david faber and jim cramer stocks look to extend to the fourth day we have the first decline in adp employment in over a year. down 300,000 and a big hour on tap. the ceos of gm, amd, and starbucks this morning >> we'll jump in, though, to alphabet jim, you've been talking about

the juggernaut business model. we have a split and mixed shelf. >> yeah. on the split, first, i want to say it's an incredibly shareholder friendly move. they were acutely aware there were a younger people that wanted to be part of the stock you can't go to robin hood saying i want $800 this is the move others say we have to get retail back. the people who do this, they know the product they love it now youtube was fantastic. google cloud losing money but it's great when you buy back $50 billion, it doesn't mean -- it's like, yeah we bought it back. it's like the stock that was issued but the most important number here, i think, besides the protein apples holding system they're using on the algorithm is youtube versus netflix. >> yeah. >> it's a good business model. and youtube is -- >> yeah. and billion in revenue.

>> yeah. youtube came in a little lighter than analysts estimated. they didn't get us any feel on the call perhaps why they missed overall you pointed it out i think talking to people this morning, jim, the stock seems to be up as much, if not more, because of the stock split than anything else. not that the numbers were bad. they weren't by the way, as you pointed out many times, it's a company that trades at a multiple that is lower than the markets you know, you're talking 21. let's call it $21 billion in operating income this quarter. just take a look at that over the course of the next year and what it will mean for google and put a multiple on it. >> yeah. >> it seems incredibly impressive. >> $8,000in january 4th in 2022 they created a system in which their calmness directly related to the top five to the stock price. >> it's very good. >> how come the expenses were up

25%. $20.5 billion. there wasn't any real operating leverage or it wasn't great in terms of an improvement. >> right. >> it did the 6500 employees during the quarter. >> they were criticized for that they said you added a lot and costs are going up what i thought was extraordinary, there was a great moment we want really good people they're worried about cranial power! >> mensa. >> they should change it to mensa. meta to mensa. >> yeah. we have more firms trying to value youtube as a stand alone that would mean some of the parts. we'll get to that. >> break it up. >> but the hour is crowded this morning. gm is among the companies beating on the bottom line stocks higher in the premarket phil will bow joining us this morning with a special guest in the house. hey, phil. >> hey, carl literally in the house let's have mary barra joining us at the new york stock exchange mary, let's talk about what you

reported yesterday we mentioned you had a better than expected profit for the fourth quarter i'm interested in your outlook for 2022 we'll start with the existing business in terms of your production of vehicles and internal combustion engine vehicles how do you expect the supply to improve this year and what is your forecast to getting more chips so you can increase the number of vehicles you're building and selling >> well, phil, first of all, it's great to be here. thank you so much for the opportunity. i do want to start by thanking the entire gmt for their hard work to deliver record earnings. as we look to 2022, we see performance that will be, again, at record or near record levels while we continue to grow the business from a semiconductor perspective, you know, we were hit pretty hard last year. especially in the third quarter. we see globally about a 25 to 30% improvement from an overall units to produce perspective so that's what we know right now. we've been working very closely with the semiconductor manufacturers and the tier ones and that's our outlook as we

move forward we've seen q 1 be stronger than q 4. we're going to, also, we believe by the second half of the year, we're going to be close to back to normal. >> let's talk about your outlook when it comes to electric vehicles you've already allocated or plan to spend $35 billion through 2025 yesterday you said, look, we're going to increase that amount and we're going accelerate it and pull forward plans for adding another dedicated pickup truck plan, electric pickup truck plan as well as make plans for a fourth battery plant how much more do you plan to spend? how quickly can you quantify that for us? >> well, we're still working on the specific details and, you know, very shortly we'll up the $35 billion number. but, you know, we're pulling ahead not only programs but, as you said, additional capacity. you know, we made a big announcement in michigan $7 billion the largest investment single investment in our history. we see more opportunity.

you know, when you look at the strength of our ev products, we already have 59,000 reservations for the hummer truck and suv we have over 110,000 reservations for both retail and fleet customers for silverado e. 25,000 reservations for the cargo van. so we see really strong demand for our products we still have very important products to come out we're less than 60 days away from launching lyric into market we'll go to orders once we get through that first edition with the response we're seeing with, with e know we need to accelerate and that's why, you know, we're saying between 22 and' 23, we plan on building 400,000 evs so a significant ramp. then it just is a steeper ramp from there. >> let's talk about one of those models that you have not officially announced but you alluded to it yesterday. the fact you believe that you will ultimately sell a more

affordable ev than the chevy equinox, which you said, look, it'll come in around $30,000 base model price can you sell a $25,000 ev? is that in the cards, let's say over the next couple of years? >> well, we plan on launching the chevrolet equinox ev next year along with the blazer. as we move forward, we are already working on one that will be even more affordable because when you look at really getting to 2030 and having, you know, 50% of our sales be electric vehicles, you've got to reach the segments where the customers are and make sure they have interest in evs. it's one of the benefits of general motors when you look at the scale of the lt and platform, we can do a broad port follow yum to get to high ev volume in the next year. so i'm excited about the plan we have coming. >> well, mary, we're excited about seeing you later this evening. first, let's talk about something we'll be talking about tonight with one of your

executives antonymous driving i think i would like to own a cadillac cruiser that can go around town with me not having to drive it. i know you're talking ces. it could be mid decade is there any way we can accelerate that? in that speech, it looked like it's ready to run! >> well, you know, we are so pleased with how the technology is progressing with the leadership team. we announced yesterday we're inviting the public to get on a wait list to take rides. i did a couple of weeks ago. it looks reasonable in the video. the experience is incredible the technology is so confident and, you know, a couple of minutes in, you forget you're in an antonymous vehicle and on a smooth ride. we're working together with cruise and we think having personal antonymous vehicles as early as mid decade is in the cards. it will change the way people move. >> all right mary, in the conference call

there was questions about the number of too many different models and you mentioned some are going to be 100,000. why would you preclude that? silverado, where are we with orders what is an exciting evening? >> yeah. so we are just a few weeks in since we announced it. we have over 110,000 orders. that continues to grow every day. so the interest is very strong and remember what we said at ces. it's the first couple of versions we have four variants. you look at the whole truck market, which is growing every year, you have to meet the customer where they're at. high value or high feature we'll have a full portfolio of trucks as well as crossovers and suvs. >> david faber here, mary. incredible ambitions for the company. increasing your product, talking about cruise and antonymous. i wonder, in addition, to the increased capital allocation, do you have enough people do you have all the plans in place to be able to fully execute the vision that you have

right now? what gives you the confidence you'll be able to? >> well, last year we added an additional 8,000 technical resources. so, you know, when we announced we want to be carbon neutral by 2040 and plan to have all light-duty vehicles be ev by 2035 as well as what is happening at cruz, which is changing the way people want to move people want to come to general motors we saw an increase in people submitting their applications. i'm confident we've got great talent on the field today. we'll have more and plan on doing significant hiring this year the talent is definitely here. again, we're hiring from all over the country and, frankly, the world! >> mary, phil again. you're expecting and sooutlined this yesterday a $2.5 billion increase in commodity costs. most of that in the first half of this year clearly we're seeing inflation you're dealing with inflation. how confident are you that it

moderates or at least the impact in the first half of the year and the second half of the year you might see things improve a little bit in terms of those commodity costs >>well, as you know, with the volatility that is in the supply chain and really with raw materials, it's hard to predict where it's going to be in the second half of the year. what we see in the second half is real. we think we'll have strong demand even with the challenges. we've got heads up demand for our vehicles and from an ice perspective, we have an updated both sierra and silverado coming out. it has better fuel economy so the demand that we have for gm products gives us confidence that we're going have a strong year even from a pricing perspective and be able to, you know, offset the commodity challenges that we have. >> we're running up against the end of the interview what are we looking at for the industry in terms of the annual sales this year? if we were at, i don't know, $14 billion last year, what do you expect it to be this year for the industry

>> we definitely see it increasing this year i think a lot of it depends on where everybody is at with their semiconductors we'll see an improved year as we get through the first quarter, i think we'll have a better estimate of what the full year will be for general motors, we see substantial growth. >> and i know you outlined yesterday, you guys are expecting 20 to 25% growth in north america in terms of sales as you ramp up production. mary, thank you very much! i know it's challenging day in terms of the weather here in the midwest and that's why you're in new york today mary barra, chairman and ceo of general motors back to you, guys. you see shares of general motors moving higher, in large part because of the outlook they gave for the internal kbugs engine for 2022 and the ev investments. back to you. >> phil, thank you there's so much going on in autos. jim's ward annualized sales almost one-year high ford is doubling down on ev.

>> that was interesting that announcement came prematurely. it was not from farley they broke the story farley being the ceo they're actually kind of running two track. if you want to work there, i think you want to go ev. they do have a considerable kbugs engine group so, i mean, it may be the tesla group and i.c.e. group. they have a lot of cash. they can pull it off. >> you asked about cruz. and, you know, i don't want to forget antonymous. sometimes we, rightly so, perhaps we're focussed on all electric but antonymous is still coming along al albeit more slowly than we anticipated. >> they're offering robo taxis. >> and getting $1.3 million from soft bank into cruise as a result of the vision fund. >> yes i'm glad you mentioned it. if you want to talk about something deflationary, it's

antonymous driving there was a dispute at gm to focus on robo taxis or consumer. robo taxi has a huge number of people that can work at other jobs anything delivery or door dash it costs less to be able -- >> so many scientific challenges tesla is rolling out an update to their beta today. stock concerned, right go to a stop sign. do you slow down or come to a complete stop. >> they still not -- you don't want to ride in one of those it can't detect black ice. it doesn't have the ability yet. >> neither do people. >> i know. but, yeah, if you have one injury with antonymous, it's in every single paper how many people die of car accidents. especially with drivers who are impaired. >> yeah. >> gm not the only company with the strong guidance this morning. we'll talk about amd after the break surging on the upbeat results and guidance we'll talk to the ceo lisa su.

along wi sthtarbucks and paypal and batch. don't go away!

amd shares putting on a huge show today the company beating estimates and forecasting 2022 sales growth up 31%. the ceo lisa su joining us now i have to start with a congratulations, lisa. it's a great quarter. >> thank you so much, jim. it's great to be here with you guys this morning. >> okay. so let's go over what i see to be share take and growth this data center market is insane i know you're doing fantastic in cpu. you're beginning to take a dramatic amount of share from really big name plate companies. how and why is that occurring? >> i think it was a great 2021 so we're very pleased with the results. we grew the company over 68% we grew in every business. leading with data center, i

mean, data center is a great market we've talked about that before we have made great progress in gaming, you know, with our top game console customers as well as npcs and notebooks. and the key for us has been, you know, a, you know, long-term vision, you know, building products and really working closely with our customers in great platforms. so we're very excited about the growth. >> i want to talk about the last point you mentioned. i know that you have this historically deferred talking directly about a big competitor intel. you talk about the notion of relationships. i thought a lot of people believed this was just whoever had the best chip at the moment wins from reading through your comps, particularly this month, it's whoever has the best long-term relationship with megatech or any of these pc companies. you know, this wasn't always the case, lisa it was, well, we're taking intel. what kind of relationship

building have you done it's hard once you're in, you can't get out. >> yeah. when you look at, you know, sort of the largest whether the largest hyperscalers in the world or the largest consumers companies or pc companies. i think what has been important for us is building a long-term, you know, sort of traction around execution so road maps, executing on our products, really important together to build better products it -- the whole idea of coengineering. we need more compute out there and the committee is how do we put, you know, make one plus one greater than three that's what we work on with our customers. and, you know, it has been a great market backdrop for tech no question about it but within that, i think the partnership with our customers, the execution of the products, and being able to deliver on the supply, as well, given, you know, how much demand there is out there. all of those aspects are key to

be able to, you know, grow significantly above the market. >> when i mention the stock was at 5, and your balance sheet was horrible, then i said i don't know where your company is worth talking about in the same sentence of intel. you owed so much money now it seems like cash in point. the cfo said you bought $1 billion worth of stock this quarter. now the stock didn't d trade down at $100 you're buying and you decided it was -- brilliant move but it just was ridiculous the stock was being given away at $100. >> i think yooverall, we've hada focus on business execution, product execution, and the overall balance sheet execution. we're happy that, you know, our balance sheet is very strong i think the whole idea to make sure that we have a very balanced strategy. our first priority is always invest in the business you know, invest in r & d. we're working on, you know, the road map for the next three to

five years but we're also happy we can return some capital to our shareholders and, you know, we view this as you know what you need to do to run a strong business. >> now i know you can't talk directly about what is going to happen when you finally get approved but there was heartening news you signed a deal with know kia if you can get in that side, fantastic. obviously auto mentioned something you're doing if i look at the mosaic of amd through -- three years from now, what would you want it to look like >> thank you for, you know, the overall, you know, we look at our long-term strategy first of all, we're thrilled about the progress we've made with sky links getting approval last week was an important piece believe that we will close the transaction this quarter as we finish up the last regulatory approvals. it gives us a great diverse

indication of businesses it's been our strategy at amd to take our, you know, great idea in computing both on the graphics side and the cpu side and diversify into all the markets that require high performance computing. so, you know, we love the data center market. i mean, it's so strategic. if you talk about secular growth i mean, it's the best place to be you know, we also love the pc market now we have the opportunity to really diversify into tellco, communications, across 5g as well as industrial, as well as automotive so what you're going to see for amd in a few years from now is we are the high performance computing leader that is really in all of the secular growth markets. that will give us a long-term growth trajectory as exciting as our short term trajectory in 2022. >> it's david. back to short term for a second. they were unable to fully

satisfy customer needs as a result of supply chain issues. you're spending about a billion dollars or you did already in terms of long-term supply chain capacity are you going to be able to help sky links catch up >> well, david there's no question that in the last 12 to 15 months in semiconductors has been all about, you know, securing supply, building the right long-term relationships, and you know what we've been focussed on is really not just the near term i mean, obviously, we're trying to get, you know, improvements in supply each quarter, but really how do we build the trajectory from, you know, 2022 through 2025 so the discussions with our supply chain partners across all aspects of the supply chain are really targeted at, you know, very ambitious growth goals. we're excited. i think their business has done well you've seen this in some of their numbers. i think there's going to be lots of synergies as we come together in all aspects of the business including supply chain >>well, i've got to tell you,

lisa, remarkable job what i'm looking forward to is a more in-depth discussion of what you've done at amd for our investing club on friday you're our special guest it's our second meeting. thank you so much for coming on the show i can't wait to talk to you about the success you've had for shareholders and for your team on friday at 12:30 great to see you sflchlt. >> fantastic thank you so much, guys! meantime, the opening bell is few moments away. we'll be talking to starbucks kevin johnson in a little bit. some of the comps in china that have the shares on an earnings print. don't go anywhere.

all right. let's get to a mad dash as we

count you down to the opening bell about two and a half minutes from now paypal will be a feature today not for the same reason as amd and alphabet but because it's so disappointing. that -- net new years, their forecast, jim, net new active users far below what people anticipated. >> 50 going down to 15 million i want to say this, you've known me for a long time. >> yes. >> i'm thrilled about alphabet they own amd and i'm thrilled. travel trust owns paypal and i'm embarrassed, beyond belief i had an interview with dan shulman, the ceo at the end of november things sounded -- i asked the dumbest questions? i don't know i thought i did. did i see this coming? absolutely not did i know they were going to actually pivot and start reporting more about the average

revenue per user no did i think they would go from 7-50 million as a long-term goal to 600 no did i get this wrong i would say 100% is it on me or dan it doesn't matter about dan. it's on me he didn't buy it what i want to say it was surprising by dissipation nate today. some people think will report 50 the reason why it's sinking the way it is, people don't know what the multiples should be because the credibility of the company is so shot the stock has been going down and the sellers, obviously, have no level they want to sell what is going on at major investment houses is this. >> right. >> get that damn thing off my sheets i never want to hear about paypal again their credibility is done. they didn't tell us how slow things are it's a disgrace. that's happening all over right

now. i'm not going to sell it down here at these prices i think they can earn in terms of 25 multiple what matters for people is i thought -- i thought i did everything i could [ opening bell ] >> if anybody owns paypal, they'll be paying today. >> yeah. there may be a marger take away, carl. >> sorry, didn't hear that maybe they were going after a lower quality customer you know, that is not benefitting any longer from government stimulus? >> they have users gaming the system and taking van. >> they said that. i know they were offering $5 promotes to be able to see who was real but i think what matters is i think dan shulman is an honorable man. i went over the interview word

by word. i don't know about -- i don't know about 10 times. i was up very late on this i was so discouraged you have a day like we have alphabet and ups and you go home and your wife wants to know what is a matter. how about a drink? i said it's well beyond having a drink. multiple downgrades. it's a disaster. >> is it paypal specific or any larger take away >> nobody cares. >> carl mentioned visa has been strong consumer spending, you know, since october has come down. right? >> yeah. google said search is up six fold for travel. >> yeah. if dan were here we would say we had a great year in 2021 we have the best pay later we have a great wallet cramer, you're out of your mind.

i'm not. there's a chart on our screen. that chart on the screen says is dan does not realize the depth of which people who are believing in him and it felt let down there's a level of anger that people can't stand this is about anger. >> i still -- >> any sort of a slow down in the growth of e commerce. >> no. >> it could be a read through. >> there could be. i think he'll go back to 20% growth he talks about next quarter is not good it could be 15%. i don't even know if they can do that they have the separation from e bay. it has been a nightmare. >> and much more of an impact than perhaps they lead us to believe. >> or perhaps they didn't know. >> uh-huh. what i didn't like was they did not seem to have any sense in

the call that what happened in 2021 was kind of irrelevant and the forecast was not such a departure of from what we expected so it would have been, i think, better had dan said i'm sorry we let you down ceos are afraid to do that, carl he's not a regular ceo. >> you're saying they didn't soften the market up for something like this t >> no. and the lack of -- >> jim, should we take a listen to what shulman had to say take a listen from the conference call. >> supply chain issues disproportionately impacted our cross-border volumes and our small business mar chants. -- merchants inflationary measures impacted spending within certain segments of the user base. rising threats from covid variants cut travel and event bookings the elimination of stimulus had

an impact, as well e commerce improved rates during the holiday season were lower than industry expectations despite a strong two-year growth rate of almost 50% we're also lapping some of the strongest quarters of growth in our history. >> it doesn't sound so good for e commerce. >> it came to cross border american express disagreed when it came to small and medium sized business visa disagreed when you talk about travel google and alba bet disagreed when you talk about travel there's been no indication so far we're seeing any dramatic falloff in consumer spend during the period it's a company that has a lot of different, you know, many, many yea -- users. but supply chain and inflation we're going to speak to a man very shortly. >> yeah. >> who had to deal with supply chain issues kevin johnson.

duoprice -- two price increases and a third coming i've gone over every line and it just doesn't add up. >> really quick, a quick bridge to the macro adp was down 300,000 for the month. relearnings are negative stimulus is not happening this year the way it happened last year the savings rate is down people lost money in stocks. they lost money in crypto. you don't think any of that matters? >> well, look, it does matter. i saw dan on november 30rd the end of the month that was for omicron i think that -- let's say these matter and they all do matter when you think you're going from 50 million new adds to 15 new adds, that's a statement that says perhaps the people they were adding, it has to do with the rear view. says basically what we were doing may not be as good as we

said it was. and, yes, buy now and pay later is strong. and, yes, i actually do believe to not sell. i would never sell at these levels when you have someone willing to sell down $40 they're willing to sell $50 they're furious and do not believe in management. i will not abandon dan in the basis of three bad quarters. >> well, three in a row. >> i know that i said three. >> you said three. it could be three of the last nine i thought i would make the point. >> remember the questions and reports -- >> yeah. i heard what happened -- yeah never recovered, by the way. what happened to me, when i heard they weren't buying pins is when i bought it. i said, oh, there's a problem. and, see, there are words for doing work like that if i were my hedge fund -- >> i know where you're going. >> my wife would put a post-it on my head that said pypl. she would make me go out and get

her a soft pretzel and a diet coke for the world to see. >> we have an upgrade of block today at jpm as they close the afte afterpay deal. >> yeah. they paid less but brought in stock. >> yeah. >> yeah. i have a guy coming on even though the stock is down, many people would say, well, wait a second. why didn't he talk it? he's a gentleman higher costs weighing on the profits of starbucks a look at shares moving lower this morning kevin, i'll go to it omicron is in the rear view mirror your labor issues -- look, you have lots of places that are franchised labor issues is not a problem. any time you open a new store in china, it's doing well you had two bumps in costs for the consumer and there's been no resistance a third is coming. why shouldn't i buy starbucks right here knowing next quarter will be better than this one >> well, jim, i think you're

hitting open the right points. the key positive is that consumer demand for starbucks is very strong. i mean, you look at we posted a 1919% growth in top-line revenue. same-store comp globally was up 13%. new stores were opening in china. performing at the highest auv and return on capital investing class stores from the consumer standpoint, consumer demand is strong. clearly we're navigating the cost head winds of supply chain and inflation like everyone else but, you know, certainly late in the quarter the last three weeks of december, candidly, omicron amplified the head winds so we had cost pressures and, you know, we've outlined our plan but the good news is consumer demand is strong and all the work we've done 0 every the last year to build customer relationships were on 21% to come to market with new innovative beverages that consumers love over 55% of the

beverage mixes for cbeverages. i have to tip my hat to the partners they rise to out indication and create a great experience for our customers and our stores that's what happened this last holiday. >> it seems like every single wave of covid that happens after that wave subsides your sales go up rather dramatically how is that possible >> well, you know, we've tracked that and, you know, when you look at the data, you know, clearly when there's a wave or spread of covid, you know, it is a little bit of demand. there's latent demand. the fact is starbucks is a community gathering place. we're entering the third year of the pandemic, and what do people want to do gather again they want to socialize they want to build part of the community. so, you know, we've optimized around creating safe, familiar, convenient experiences for our customers. they come to our stores! they order on the mobile app and, you know, we want to be

there to serve customers. >> you had the best description when we talk about supply chain problems people's eyes glazed over. can you talk about the idea of delivery to your stores and how supply chain does impact the bottom line? >>, you know, a lot of cost pressures we've been facing is related to the cost of distribution and transportation. it's getting shipping containers into the ports, truck drivers to deliver to the distribution centers. this quarter, when omicron hit, you had a large number of people, whether it's starbucks partners or drivers in our third-party delivery organizations who make those daily store deliveries, when they're out sick or exposed and isolating, you know, in transportation, we had to buy a significant higher level of store deliveries on the spot market versus the normal delivery there weren't enough drivers

sort of as omicron spread. typically we might have 10% of our store deliveries on the spot market but adds as omicron hit it went up to 30% and higher the spot market is typically two to three times more expensive to get that delivery to the store but we prioritize that that was the right expense to make at the time because we wanted to keep creating the great experience for our customers because we know omicron, as we see, is now residing it's, you know, coming to an end. our business is recovering and after every wave of covid, we come out strong. we wanted to have a great customer experience and so we ensured those store deliveries got made, as best as we could, and we navigated through it. >> okay. kevin, one of the things that we talk about here and people don't realize is that china is basically shut you have huge stores in the airports i don't think people realize what zero covid means. you can tell us. >> yeah. you know, clearly every market

around the world, you know, governments and figuring out how they want to navigate the pandemic in china they have a zero-covid policy if they have number of citizens in the city that test positive, they shut down the city for a period and test everyone so they can identify who has covid and can quarantine those people and reopen the city. so there's constant waves of store closures and, you know, constraints created by that. but when you look at our stores in china, you know, clearly international travel is really, really low now our stores in airports in the international travel terminals are closed and so that's weighing on costs. stores in office districts are slower than they used to be. when you look at stores in residential or commercial zones, they are performing very well. they're comping positive and more importantly, when we open a new store in china, it is performing at some of the

highest until return on invest to capital to any of the prior classes of stores we've built. we're leaning in and building roughly 700 net new stores a year in china. they're performing extremely well at some point as the pandemic subsides and go back to a nor normal pace of living, we'll be well positioned in china there's a long runway of growth opportunity ahead for starbucks in that market. >> you know nobody -- that certainly sounds right but i do wonder, kevin, it's david. how about visibility you say at some point they seem to have this zero covid policy they can keep it in place for a long time. it's not clear that covid is truly going away how do you get any visibility of what you're talking about? >> well, i tell you, the indicator for me is how these net -- these new stores are performing we're building stores in cities that starbucks hasn't been before and they're performing extremely

well so this is navigating, you know, the global pandemic. and i think we're playing the long game. we believe that's in the best interest of all stakeholders relative to starbucks in china. >> a lot of downgrades or this morning pivots around the operating margin guidance. approaching 17 versus a price 17 how does it fit with an improving omicron picture? if you think, as you said you do well when these things recede, why shouldn't the margin guidance be better maybe you don't think it's necessarily that material to something that would drive a downgrade >>well, you look at sort of the factors that reduce the growth on earnings per share the last quarter, you know, we still grow eps 18%. but we have some of the industry's best benefits when it comes to covid health care for our parter ins we prioritize the safety and well being of our partners

our covid isolation pay of partner tests positive, or if they're exposed to cocoa vid, we pay them to self-isolate that pay covid isolation pay just skyrocketed in the last couple of three weeks of december it's now subsiding as omicron spread, you know, ends it will take a toll in this quarter but the back half of the year, we'll see positive things. in addition, we announced last quarter a billion dollar investment in wage and hours for our partners so a lot of this is we're leaning in, investing in our partners, taking care of our partners we know when we do that, they serve customers. we grow share of customer equations. as we come out of the pandemic, we're going to be on the front foot taking market share and accelerating growth. and so we think these are the right investments to make. >> kevin, it's david again you know, when you talk about the partners there's a small

group but some of them who i guess don't think it's quite enough but two dozen of your almost 9,000 stores but they are at least filing for individual union elections. >> yeah. you know, we have two stores in buffalo that have voted and been certified by the nlrb. we're in a bargaining dialogue with the two stores. it's not new territory for us. david, in fact, there are roughly 3,000 starbucks store embedded in grocery, airports, and hotels that have union agreements so, you know, we have examples of starbucks that are run in a union model. and through our license partners, you know, we're up to speed on how to do that. i think approaching 50 stores or so that e -- petitioned.

we'll continue to prioritize our partners we'll listen to them in a union store or not and work to do the right thing. we know when we do the right thing for our partners, they, in turn, do the right thing for our customers and our business thrives. >> one last question if it weren't for omicron and the labor shortage and weren't for unions, we wouldn't be discussing what is happening at the stores there is a desire for cold brew that has changed the complete complexion of when you do business, what hours you do business, and it happened overnight. i don't think they have realized what percentage of people go to starbucks for cold brew. >> it's incredible, jim. we commented in the united states roughly 20%, 25% of our beverage mix was cold beverage 75% was hot. and i tell you, this younger generation, they embrace cold brew they're embracing nitro cold

brew iced espresso beverages. so those cold beverages now make up more than 55% of the beverage mix in the united states that is giving us a competitive advantage in the fact we can personalize and customize those beverages with different cold foams and different sweet creams has made those popular beverages. and i, you know, i've always said that three things we do to really drive and elevate the brand is, you know, continued to extend the in-store experience to digital customer relationships. that number is up deliver innovative beverages for our customers. we have done it and saw in in in holiday. it drove so much traffic in stores third is invest in the partners. it's our partners that elevate the customer experience and keep the customers coming back. if we do those three things, we'll continue to gain market share. we'll continue to grow we'll continue to create value for all stakeholders that, i believe, to be true.

>> total man of his word, kevin johnson. comes on tough days and good days the next time, i bet it'll be much, much better. they're taking share and taking names. great to see you thank you. >> thank you, jim. thanks, guys before we go to break, let's take a look at the treasuries and bond markets on this morning as we've been getting a flurry of fed officials, at least in the last couple of days. walking us back, perhaps, from a 50 basis point hike. for now, though, yields haven't moved around a lot we'll be right back. municipal bonds don't usually get the media coverage the stock market does. in fact, most people don't find them all that exciting.

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. bitcoin for corporations, that's what micro strategy ceo jack dorsey and mike saylor

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\. good wednesday morning welcome to another hour of "squawk on the street. i'm carl quintanilla best four day rally for the s&p nasdaq in over a year. november 2020 some of the enthusiasm over google, alphabet and amd outweighing concerns about fundamentals as adp goes wild >> we're 30 minutes into the training session here are three big earnings movers we're watching. we're going to start with paypal on pace for missing bottom line forecasts. weaker than expected current quarter outlook. shares are down 26%. plus, general motors beating

street estimates issuing an up beat 2022 forecast and saying it would move to accelerate efforts to produce and market evs. those shares just dipping into negative territory down a half a percent. we will end with amdshares which are surging topping earnings expectations on continued strong demand for data center chips lisa suh joined the show last hour to discuss the quarter. >> we are very pleased with the results. we grew the company over 68% and we really grew in every business leading with the data center data center's a great market you and i have talked about that before yeah, we have made great progress in gaming, with our top game console customers as well as in pcs and notebooks and, you know, the key for us has been really a, you know, long-term vision on building products and really working closically with our customers and great platforms. we're very excited about the

growth. >> of course, getting some of those comments, guys, after what has been strong earnings for many of the other chip makers as well, whether it's nxp semi. you saw it with sirius logic we saw qualcomm. shares of amd are up 8.5%. it speaks in general which is the strength across all of those businesses. >> xylinks shares are up they had a i refile in theu.s. that is coming so she talked about long-term and shorter term there are still supply chain issues of course, morgan they seem to be dealing with them very well at amd. she did say they will help xylinx. >> m&a moving forward even as it's not moving forward with other chip makers like nvidia,

carl. >> pretty fascinating picture she paints about expanding meantime, speaking of which, alphabet beats on the top and bottom line. better than expected q4 results. a 20 for 1 split that will go into effect on july 1. joining us to discuss is wells fargo's brian fitzgerald there's so many elements to this print. the search business which is the star the capitol returns. the split itself what's most important today? >> yeah, thanks, carl, for having us. look, we saw broad strength in both advertiser spend and consumer engagement. it was across verticals, retails, finance, media, travel is even strong so some of it is broad based across products again to your point. search, youtube network. you know, what i think is really important is cloud it showed particular strength, 45% growth to 6 billion. the backlog increased 70% to 51

billion. these are big numbers. these are starting to get in the realms of azure and aws. so moving on to bigger and better and more complex enterprise workloads the more sophisticated sales force, too 3x bigger than it was in '19 across geographies, products, industries a lot of strength at google's cloud business >> i wonder what you make of the turmoil at various platforms like pins, like snap, like paypal today we're all wondering what meta is going to tell us tonight is this a dynamic where big guys, the champions are simply getting stronger at the expense of smaller rivals? >> it's a great question i think what's important specifically for big versus small, maybe go back to google's mission statement, right to organize the world's information, make it universally accessible and useful. and they're doing that and

that's even more important in today's society and world maybe. they continue to be able to lever ai, machine learning and automation and doing it at scale is important that's big versus small. doing it across utilities, search, maps, youtube. creating new ways for you and i and businesses to use images and words together they're doing it across cloud. they've introduced 2,000 new products last year for the cloud. so you need big scale to be able to do these kind of innovative things as the pace of innovation just accelerates. >> hard to take issue with much of anything in terms of the quarter at alphabet, but some at least point to the continued increases in expense growth. i think it was up 35%. so your operating leverage can't really get any better. is that a concern at all what was op ex, 25 billion for

the quarter? >> that's right. up 35% 19% growth last quarter. look, there's a couple things we're watching fx is going to be a headwind for sure investments are ramping. with great growth comes, you know, great head count 6500 in the quarter and we expect strong hiring to continue in '22 it's okay because you're investing for growth they're hiring the best and the brightest. also impacting there, capex. increased servers for both the core services and for growing out gcp. what else do they do they just bought their london headquarters for a billion they just completed purchasing a new york office building for 2 billion. so, yeah, the spend is there david, to your point, especially in cloud, but we point out that the cloud operating loss and operating margin did improve throughout the year. they're focused on path to

profitability. again, they're continuing to invest aggressively given the opportunity as businesses do this transformation to the cloud and then to digital. and when you look at it, the work loads, 75% of work loads still have to do this digital migration to the cloud. >> the fact that alphabet announced a 20 for 1 stock split and the implication there being that you could potentially see this company enter the dow at some point as well, how meaningful would that be for shares what would it do to i guess the investor base? and also just the way it's being valued and approached and where it could go from here. >> yeah. it's a great question, morgan. they said this on a call last night, the stock split just makes the stock more accessible, especially for retail investors. it just makes sense. i think is the phrase sheused. of course, it doesn't really change the valuation

you can buy a fractional share on platforms like my classmate from west point, sofi. you can buy google fractional shares there and to your point, the five, you know, megacap tech stocks, only apple and microsoft are in the dow right now. amazon, alphabet and facebook are not. so, you know, this would -- just opens up accessibility and could be in addition to the dow. >> timely, brian, some of your peers on the street once again are arguing that if youtube were to be spun, could be worth 305 billion according to needham, reduce regulatory risk, make them a little bit smaller, less of a target. how likely do you think it's a good idea? >> yeah. i don't think it's likely. i don't think it's needed right now. we think the regulatory risk is

manageable the debate here would be brought up in a call last night, you k know, if there's any reg ulator overlay that is impacting the key products, that users like you and i, that businesses are getting so much utility out of and growth out of, especially small and medium businesses, you know, i think that's going to be the debate around what to do with regulation going forward. >> well, regardless, best upside gap on earnings in the best seven years according to the spoke today helping to lead the s&p. pretty amazing thanks good to see you. >> thanks for having us. still to come, michael saylor, microstrategy ceo. a day after holding a virtual bitcoin event. speaking to some big names at that event including jack dorsey. >> what kind of advice would you

have for a corporation thinking about plugging bitcoin into their business and what kind of opportunities do you see >> i would just look critically at your business and what can you learn from bitcoin, number one, that would make your business better? i think there's a ton. and are there any practical applications in either purchasing it or building it into your products or utilizing it or providing services for it?

welcome back to "squawk on the street." jack dorsey made his first public appearance since stepping down as ceo of twitter joining us now for our first on cnbc interview, michael saylor microstrategy founder. great to have you on the show. >> thanks for havingme. >> let's talk about some of the headlines that came out of this conference specifically the conversation with jack dorsey a lot of thought provoking conversation bitcoin is slower moving than other types of crypto assets which is why both of you prefer it over some of those other crypto assets. big picture around bitcoin and what it means for businesses like square based on what dorsey said yesterday and also for microstrategy. >> yeah. well, i think that the world's plagued with an inflation

problem. the headlines last night were that lebanese consumers lost 93% of their wealth because of the currency devaluation the same has happened in argentina. turkey's on the brink. you know, the banks are going to freeze their assets and they're going to hold them for many, many years there's no solution there. and so the internet's also plagued by scammers, spammers, surveillance problems and cy ops there were 398 michael saylor twitter bots spun up yesterday big tech needs a solution. big finance need a solution. jack's a man on a mission and his observation is we need digital property, which is open, permissionless, fair, ethical and we can build on that base, especially if we use lightning to move that value at the speed of light everywhere in the

world. >> yeah. i think he used the words very close to the first native internet language and how different business models might look, for example, social media companies if something like bitcoin had existed sooner this idea of emerging and overlapping payment systems at a company like square using bitcoin, how do those worlds emerge at microstrategy? >> our view is we're going to run our enterprise software business we had the best year in many, many years our revenues are up 6% year over year our cloud business is growing 39% year over year we dropped 18% of our revenues as free cash flow that we were able to use for debt service and acquiring more bitcoin the core business is healthy the bitcoin strategy is to, of course, reinvest our proceeds into bitcoin and we kind of view our self as we're combining the efficiency of a zero fee spot

etf with the yield and the cheap leverage of an operating company would the a competitive risk to the bitcoin miner. that's a compelling offering if you're a public market investor and you're looking for bitcoin exposure. >> it sounds like you're very much on board at least from wall street and investor standpoint of the stock being seen as a bet on bitcoin >> we definitely believe in bitcoin and we believe that bitcoin's the most disruptive force of the decade. and so certainly our intention is to continue to inquire and hold bitcoin by any means that's a creative. >> let's talk about you reported earnings last night. stocks under pressure. net loss of $90 million or 843 per share. street was looking for a profit of 89 cents. this loss was tied to the inclusion of losses on bitcoin that more than the core software business walk us through the implications of that as you continue to build

out that core business and also as you said on the call last night look to acquire more bitcoin. >> i think the most important numbers to focus on are the revenue growth 6% up year over year the 18% free cash flow margin. we are generating a lot of cash. we are growing our core business and we've got 125,000 bitcoin. and i think our investors, they understand those numbers the indefinite and intangible accounting that we have on our gap statements and the inclusion of the non-cash charges on our pro formas make it a little bit opaque if you're using those conventional measures. >> we've seen the price of bitcoin fall, fall pretty dramatically in the past couple of weeks we have a fed tightening if we see a prolonged down draft, how much would that hinder the micro strategy strategy >> you know, we're very flexible here we're generating free cash flow.

the soonest we have any debt coming due is december of 2025 and it's at $398 a share so we don't really have any near-term debt obligations we're very patient i think bitcoin is going to have a good decade. the big elephant in the room here is there are billions of people in the world that need digital property the big news of the past couple of days is fidelity coming out saying bitcoin is the primary digital property and there is no second best. david marcus who head the dm initiative said bitcoin is the solution you heard jack dorsey say. there is one solution to the problem. billions of people have the problem. it will take a little bit of time for the world to sort itself out. >> michael, you've been pretty up front as you say about communicating the bitcoin strategy but the stock -- the

correlation to bitcoin approaching 1, it's double the s&p software index does it need to be reclassified or do ratings agencies need to be classified that this adjustment to corporate strategy is changing the character of the company? >> you know, i think that we're the first bitcoin-based operating company out there. we're the largest public holder ofbitcoin so that makes us a bit of a unique creature we're really just 18 months into this transformation. last year we added $2.5 billion of capital to our balance sheet and of course we acquired a huge amount of bitcoin. i think 53,922 bitcoin the character of the company is evolving i think that industry watchers are going to -- are going to catch up with us in time we just have to be patient. >> michael, it's david

always listening to you with great interest i'd love you to give a sense to our viewers as the evolution you see for bitcoin at this point and what might be something they can focus on as a seminal event, whether it be in the next year, two years that you feel really will start to fully fill in the vision you have. >> the most important point is the big tech and big finance an billions of people around the world need a digital philosophy solution we have a technically sound, morally sound platform and that's bitcoin people start to realize that now. if you are looking for catalyst for more institutional adoption, i think an approval of the spot etf would be a catalyst. i think if fasbe converts the accounting treatment to fair value accounting, that will be a catalyst i think that additional regulatory clarity from the administration is going to benefit bitcoin and accelerate

institutional adoption of an asset, that's a catalyst. >> what would that clarity be from the sec, for example, that you think would be beneficial? >> i think the deaf anything, clear, bright line definitions of digital property versus digital security versus a digital currency and the operating rules of the digital exchange i think that people understand broadly speaking that bitcoin is common property, it's not a security i think we're waiting for the operating rules of the road for securities, for digital art, for digital exchanges, for digital exchanges. there's a bit of ambiguity there. >> michael, will you raise more debtor more digital equity to buy bitcoin? >> i think we're going to use cash flows if we see creative debt financings we'll consider them i think we'll consider other

equity-linked financing if we believe they're accretive. as you know, the markets fluctuate and sometimes they are, sometimes they aren't we're open to other partnerships that might generate yield. we don't have any specific plans right now, but it's very important that our shareholders know we have 110,000 bitcoin that's unpledged as collateral that's a big asset base and as an operating company we have the opportunity to use that asset base if we think it's in the best interests of the shareholders. >> to go back to something you just said, how much of a disincentive is it currently given the regulatory and accounting rules around something like bitcoin from more companies adopting it and putting it on their balance sheets >> i think that the publicly traded companies that rely heavily on gap accounting, it's probably the single legitimate pushback you would hear from a cfo. they're not concerned about the

volatility of the bitcoin as much as they're concerned about the accounting volatility on their p&l and the degree of opacity it brings to their financial statement. i do believe that if in time the accounting is converted to fair value accounting then that would be a catalyst for adoption. >> finally, the price of bitcoin. do you think it has sold off as aggressively as it has and given the fact you are a long-term holder, where do you think the price ultimately goes? >> there's a lot of uncertainty about defi, crypto exchanges, about the future of digital securities there's 20x leverage trading, cross collateralized against crypto assets and bitcoin off shore. there is no trading rules. traders can sell a billion of it and buy it back an hour later and harvest a tax loss they couldn't do that with apple stocks and the s&p index

there are a lot of asset class reasons to trade it and i think it encourages volatility as regulators provide more clarity and it's more normalized, i think the volatility is dampened and i think that the stability of the asset is going to encourage institutions to come into it in larger volumes. >> michael saylor, always great to get your thoughts always great to get your thoughts >> thank you for having me. we're going to talk supply chain with one of the world's largest logistics companies, c.h. robinson. down 10% during february we are celebrating black history and featuring some of our cnbc contributors here's david henderson with his personal story experiencing discrimination >> my wife and i had our house

appraised twice. the second time it appraised almost $50,000 higher than it did the first time what changed the first time we were home. the second time we made sure that we weren't. we took down all the pictures of ourselves and our family one of the most important things you can do to improve the financial future north black cumulomumulommunity is recogniz u n'fiwh y w yocat x atouon't acknowledge. but all my employees need something different. oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee. yeah i should've just led with that. with at&t business. you can pick the best plan for each employee and get the best deals on every smart phone. i think you're going to like it here. umm, why is everyone... throwing things at me?

look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system for a changing world. ♪

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all right. time now for our etf spotlight taking a look at the consumer discretionary group ticker xly up 12% top holdings, amazon, tesla and mcdonald's keep an eye on starbucks their shares under a bit of pressure off of lows the company cited higher cost for commodities and labor. ceo kevin johnson joined us last hour to discuss the impacts of the omicron variant particularly

the impacts in china. >> we wanted to keep creating great experiences for our customers because we know omicron is now coming to an end. our business is recovering and after every wave of covid we come out strong. >> shares are down about 15% or so year to date. carl, they keep opening new restaurants or new starbucks in china, he said every time they do so it does well, but you do have to wonder about the long-term impact of the no covid policy there. >> in the states we talked about supply chain and things that could ostensibly get cured he talked about the stickier pressures they have. wages, turnover, rehire, retraining that are not going to go away because suddenly the supply chain looks a little bit better. >> yeah. yeah they are paying people to stay

home if they do get covid, which also has been an added cost. that's one that he does expect will hopefully go away soon. >> you have some of the unionization efforts taking places like a starbucks as well as what you have right now the pricing. they had riaised prices preparig to raise prices again and feel it's a stickier enough consumer base i have to think as coffee prices continue to rise in a commodity sense that at some point you're going to hit a wall. maybe not. people love their starbucks. >> yeah. we have not gotten demand destruction broadly. >> yeah. >> coffee prices have basically doubled in a year. pretty amazing. meanwhile, despite the down turn on the dow, still looking at the best four-day rally for the s&p nasdaq in over a year

since november of 2020 you have a bit of a mixed bag on sectors. the alphabet effect. the vix near 22 is notable we were near 30. let's get a news update with rahel solomon. >> hi, carl. president biden is moving 3,000 u.s. troops into eastern europe. 2,000 of them are going to poland and germany from the u.s. the remaining 1,000 are now in europe and will be moving to row maybe yeah a senior official said the redeployments are not permanent and not going to fight in ukraine. back here at home washington's nfl team has a new name with a military theme on nbc's "today" show, jason wright and others unveiled the washington commanders. it has been 18 months since the team dropped the previous name which had been widely criticized for years as offensive to many

americans. enormous storm moving through the country. 90 million people under winter weather alerts almost 1500 u.s. flights have already been canceled so far today. there may be more to come because on this ground hog day punxsutawney phil has seen his shadow so according to the legend there will not be an early spring. you can tell here in new york city also, no sign of bill murray don't go anywhere. more "squawk on the street" will be right back. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

c.h. robinson among the morning's biggest decliner it misses on the bottom line joining in a cnbc exclusive. bob, welcome great to have you. the stock reaction i assume is just a function of good volumes but you've got to invest a lot to keep up with the environment

we're in >> yeah, good morning. great to be with you today you know, we had a record year in 2021 at c.h. robinson and a great fourth quarter i think it's a testament to our people and the investments we've made and our ability to serve over 100,000 customers through the supply chain disruption over the past year. to your point, in order to prepare for future growth, we need to continue to invest we did that in fourth quarter. we invested in additional people, continuing to invest in our technology so we can create the true digital marketplace for our customers and carriers to participate in. >> when do you think either the investing cycle begins to diminish a bit or the comps year on year get so much easier that you get some relief in a year-on-year basis >> we had strong adjusted profits growth and eps our comparisons as we go into 2022 are certainly -- there's

not an easy comp in sight as we look at next year. we're very confident in terms of the trajectory of our business, the expectation of deliveryof value from the investments we've made close in technology, in our people we do see growth in our future at an enterprise level. >> bob, i am curious about the technology piece of the puzzle especially as we talk about labor shortages. today you have union pacific talking about a partnership for two simple for autonomous trucking your company is working on navisphere how does the landscape change, shift and evolve and what does it mean for c.h. robinson? >> i think everybody's experienced the disruption that's occurred, whether that's on the side of shipping and trucking or here domestically. there are headwinds we face whether it's labor, availability and capacity we believe the future of supply chain is truly much more digital and it will take investment into

that digital strategy to have better planning decisions on behalf of our customers so we can capture and unlock capacity unlocked today there was conversation with one of your guests earlier about the inefficiencies of trucking in the stock market the reality is 20,000 miles driven by truckers are empty through better technology, better mapping and algorithmic technology, we have better mapping through the suite of drivers out there. >> given how tight the freight market has been, pricing has been resilient it's been strong how long does that continue? and i guess just as importantly as we talk about some of these technological investments, at what point does that begin to put downward pressure on pricing? >> yeah. in 2021 we saw the rate of change of price increases in trucking continue to moderate throughout the course of the year albeit even in the fourth quarter we finished with pricing

increasing over 18%. as we look forward into 2022 we expect that to further moderate. we expect price increases in domestic trucking, more in the low to mid single digit range. we don't see necessarily a rapid decline in costs but certainly a moderation which will allow all of us to plan a little bit more effectively for our businesses. >> we're going to get a jobs number on friday where we're going to pay attention to labor supply and there's been a lot done on american workers who left the labor force through retirement or other means because of omicron, delta or any variant. are you seeing deep in the pipeline of labor people wanting to go into trucking and logistics? does that look remotely optimistic at this point >> labor is one of the biggest things that we need to solve for in the supply chain. a lot of talk is made about the ports. we've made good progress in decon guesting the ports beyond the port of entry, we have labor challenges starting

with trucking and today there are fewer truck drivers in the marketplace than there were prepandemic. we estimate we've lost 25 to 50,000 drivers that's having an impact. it was also an industry that has extremely high turnover. many carriers will report 80 to 100% turnover in the workforces. because of the turnover and increase in demand, we need to hire an additional million truck drivers in the next several years. this is a job today that oftentimes isn't somebody's first career because of the fact that you need to be 21 years old until this point to be an interstate truck driver. they're doing great things to attract younger workers into being interstate truckers through programs that can be a relief valve we need to make it more attractive to attract the labor we need. >> bob, can't help but come back to the stock price this morning. it's the second biggest loser.

are you disappointed with what you're looking at on the screen right now? >> we've got a very firm conviction that we're doing the right things within our strategy to create incredible shareholder value over time. of course we're disappointed but we're keeping our thoughts long term how we engage. the value we create for them we believe the investments we're taking will deliver commensurate with the returns of our shareholders we have a unique position in the market where we're playing domestic and global side we think that's a differentiator it's generated half of our revenues we'll continue to stay the course on that strategy and look for better days in the market in the future. >> you guys are definitely at a real pivot point in the american and global economy a lot of people watching to see how you perform on this. bob, thanks as always. good to see you. >> great to see you. thank you. still to come, we'll talk with tech billionaire palmer

luckey buying underwater drone company dive technologies. first, check out the biggest gainers on the s&p constellation energy, match group is actually higher right now after earnings last night. alphabet also earnings amd earnings and xilinx. a lot of tech names and growth names in the mix today we'll be right back.

shares of paypal getting absolutely shah lacked we talked about it the first hour of the program. losing about 1/4 of its value after its guidance was far less than many investors had hoped for. in particular the focus is on what they call net new active users seeing a loss of 15 to 20348. they were looking for 49 million in fiscal year '21

that's well, well below ex expec expectations ceo dan shulman on the call. changes in consumer behavior, inflation. morgan, not enough to satisf many investors who are wondering about the growth potential of this company given all the companies they may have that have yet to be fully answered. perhaps some of it having to do with those who have paypal accounts and not being the highest quality. people who perhaps were benefitting from certain government outlays that no longer are but they're changing their approach in a very significant way in terms of their user base and the growth of them. >> certainly a lot of questions about the company specifically, david, and the impact of omicron, inflationary pressures, lack of stimulus all of that having that impact on spending and on paypal's business as they talked about on the call last night. however, you do have to wonder could this potentially be a

canary in the coal mine. they're coming across best gdp growth in four years really strong consumer this year you're seeing some wobbling in the consumer confidence data. as of late we have inflation a fed that's getting ready to tighten and of course the removal of that fiscal stimulus. just how strong does the consumer remain this year. what does that mean for spending what does it mean for economic growth and thus in the midst of a fed tightening cycle, what does it mean for markets here. maybe that's too much of a macro story for this company specifically but it does raise those questions, carl. >> i don't think it's limited to the paypal tory. b of a this morning has a piece on low income consumer weakness. it's continued into q1 that's largely a paypal story. david, it's not that this isn't warning for the quarter, this is

5 year eps cagr. big compression in long-term guidance. >> yes big significance for paypal. you're trying to figure out the new approach here if you're an investor, if you choose to remain one to the point we've all raised as we wait for amazon, does this mean anything for ecommerce growth we've talked about master card, visa, a.m. mex all pretty stron. morgan, the consumer not quite as strong from the october highs we saw, carl something we'll be keeping a close eye on. meantime, tech earnings. one of the bright spots, we'll check in with evercore's mark mahaney. there is amd, paypal and the s&p is hanging on to forty-five seventy. you need to hire. i need indeed. indeed you do.

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do you think enough has been done to promote minority representation at that level when you look at the sideline and the coaches, it doesn't seem necessarily reflective of the league as a whole. >> i agree with that no, i don't think enough has been done.

70% of the league is made up of black players. it's ridiculous there's only one black head coach and we had a couple that were fired in the cycle unfairly in my opinion in brian flores and david culley. i think the league has got to do more to promote it and, you know, they're to pronot it they're creating incensive the for draft picks, but until we have a fair representation in the nfl, there's going to be a very unfair disparity. nfl agent drew rosenhaus talking to us earlier in the week as brian flores announced he is suing the league, broncos, and giants, for discrimination. >> humiliation disbelieve. anger.

i have worked so hard to get to where i am 18 years in this league, and to go on what felt like was a sham interview, i was hurt. nfl has responded, calling the suit without merit the suit does go way into what he calls the sham interview at the giants, accusing miami owner steven ross of offering to pay to lose for a better draft pick, totally overshadowing both the brady retirement and washington commanders today >> yes, the new name of the team for washington it is no secret, as i talked to rosenhaus about. you look at the players in the field, the representation in the sidelines, there's a mismatch there. you could say the same about the nba, too, but perhaps less so. the rooney rule requires you

black candidates, but it doesn't abto be actually improving or increasing the number of coaches. even as a jets fan todd bowlsy was 9-7. how could we even fire that guy. he's had -- he should be a coach, without a doubt the enemy should be a coach. i could go on and on >> of course, morgan, this is the league's star moment with the super bowl a week and a half away they would rather be talking about something else but maybe it's the. >> the timing is crucial, and it is overshadows some of the big headlines in what's already a busy week it would seem that the league is dismisses some of

these allegations on the flip side, you do have calls to see an independent investigation take place aswell. we have these conversations where corporate america is concerned, the push, and esg investing, everything else perhaps it would be good to see this happening within the sports world as well, where of course it isn't just an entertainment story, but a money story as well we'll take a break the markets are losing a bit of steam. the dow hanging to the flat line here thalr utck in a couple mines wi pmelucky.

up next, this is the maker of autonomous underwater vehicles or robotic submarines the terms of the deal is not closed, but an expansion into the market for andrel. this morning i spoke with the company's founder, palmer lucky, to discussing this underwater opportunity. >> there are more and more threats on top of the water and under the water that can only be

addressed by robotic systems that can hide from enemy surveillance, can hide from what you see in the air, and can do things that are only possible to under water. >> after a recent billion contract award from anduril, has focused on counter-drone capabilities when it comes to national security and war fighting, autonomy is the future. >> we built a system where you could have one or two people managing an enormous footprint, a huge forcefield that's able to take out all the enemy drones, identify where the operators are, and make sure we keep our people safe. >> of course, all of this hinges on fundings. that's front of with congress operating on a continues resolution that's currently set to expire later this month. >> the real people who get screwed is the smaller defense companies, the startups, the people coming unwith innovative

thanks that are relying that that money customers are saying we need your technology, we want to give you money, we can't. >> of course, that cr has been one of the keep topics around defense earnings in recent days as well. while national security is lucky's key focus, i asked about meta, it's rebranding itself, investing so heavily, which is luckey's oculus, which was sold a while ago -- >> facebook is something they hope will happen in the future i think it will be more than one company. it will be a lot of companies building an interoperable digital world that exists parallel to our own. >> just that piece of the conversation this morning, very interesting to hear palmer luckey talk about the fact when

he developed the oculus technology, the met 'verse was always the goal in the long-term vision to see that become reality, i think is really making him happy right now. [ laughter ] >> i'm sure there's a lot of things making him happy, though when he talks about drone wars, robot wars, autonomous, you know, it's still a little scary. taking out the drone operators, the way he throws that around, but that's what's coming. >> honestly that's what's here when you think about the rising tensions in ukraine and russia right now, you literally are seeing commercial affordable, inexpensive drones -- this is taking place in the middle east, too -- because of off the shelves, equip with old missiles, and used to attack very costly systems. we've been seeing this a number of years this is a growing threat, and

something that companies like anduril is the working on. the company e formerly known as facebook, wall street, spotify, and you can see t-mobile, qualcomm as well that does it for us for now. let's send it over to "techcheck," which starts now. ♪ ♪ good wednesday morning i'm carl quintanilla with deirdre bosa and jon fortt today. alphabet surging, with a plan 20 for 1 split. meantime investors splitting up with paypal, shares on the pace for th