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 the worst day in several years. it's a tough year for fintech as

well sales are up 68 year on year, dee. >> carl, we'll start with alphabet, surging and what its results signals for the rest of big tech a stock split, shares shooting higher, more than 6.5%, up more than 10% at the open, so just this massive revaluing of alphabet big tech mostly survives that selling we have seen over the last few weeks, the 50% drawdowns in softwares and ipos, but it was down nearly 5% going into the print year to date. a lot of focus has been on alphabet's valuation after today's move, up more than 50% over the last year, revenue was up more than 30% year over year, free cash flow, some $140 billion in cash and cash on hand if you look at the pe ratio, alphabet and meta are the best

deals. netflix, amazon trade at 45 and 80 times forward pe. this value is here, but alphabet, of course, this growth play as i mentioned with $140 billion on its balance sheet, it can continue to collect on the core digital advertising, but can continue to pour money into things like cloud and autonomous driving. i asked last night if there would be any dividend, and she said our strategy hasn't changed even in a rising inflationary environment. they still will invest back into the core. >> that stock split, a big deal, though, particularly for retail investors. i think the point you bring up about valuation and how they compare to other big tech companies on a free cash flow basis is important here. overall, it seems like part of the message we're getting is demand for tech-driven products

and services has continued, but companies perhaps that were over-hyped during the last couple years cycle, falling back to ever. whether you're looking at your zoom or peloton or what have you. the transactions that are being advertised through google's services end up, many of them, in transactions, so it's interesting we've got this paypal/alphabet dicotkchotomy opening up, carl, and it was the core business for alphabet's google that drove these results. interesting, given the fact that youtube was -- i at least more interesting is the hiring in general, dee 6500 new workers added in the quarter. that's a new quarterly record. 50% more than we thought get this, it's two times pinterest's entire workforce, at the in one quarter. >> that puts it in perspective

i heard you talking about it earlier. they said brains, they're willing to pay up for it, and they can it goes back to the cash flow. other than, say, amazon. they're trying to get people to work in the warehouse. google, alphabet plays talent wars, the silicon valley talent wars jon, there was so much to take from this quarter. what does it say also about the rest of the season when we go back to its core digit at advertising we're looking to facebook, snap in the week ahead. >> meta tonight and the read through there, just on core add, carl, is interesting also, thinking about aws now that we have strong expectations from amazon, azure and pretty strong performance from google cloud, people will be expecting big things from aws as well. >> threat's talk about the

performance. hey, mike. from a little over a week away when microsoft reported its earnings you've had that familiar with the faangs and the apple, taking that to the foreand helping the overall s&p take up the slack of some weakness elsewhere. this is the spread in that basket, the vanguard fund, about 50% essentially, the top five nasdaq starts, that's the weighting, relative to the equal-weighted remember microsoft's numbers were not so overwhelming on the print. i think it was serving as a covert effortless -- i think they're benefiting from the fact that they're coming from the whole, all down -- take a look at the one-year version to show it's not they're reeiasserting

their leadership, but growth coming from a deeper sell-off and not mvping what the equal-weighted s&p has done on a one-year base. i don't think all of these stocks have to work at the same time, but they're all large, when you have a couple of them getting back to favor, it covers up a lot of the soft spots in the market >> just to bring it back to alphabet in a little bit, how much wall alphabet google lagging some of the other. i wonder and the overall sort of nasdaq resurgence, perhaps all bottled together >> last year they were the huge winners of this group, but if you go back, you know, four

years, it's basically neck and neck with amazon over that span of time. of course, we know amazon has been in a fallow period for a year, year and a half. i don't think people were caught flat-footed, but anytime you get these pullbacks, and the qqqs are selling off, that seems to be enough, at least to, you know, make up some of those losses. >> yeah, still alphabet indeed i want to ask about the stock split 20 to 1. you feel like it's a retail investor it also raises questions about alphabet replacing ibm in the dow. i know a few have asked. what are the chances we could see andy jassy announce a stock split? >> it's complete speculation google has done a split before

in its history it is a play for the retail investor we know a lot of investing is psychology and enthusiasm. even though stock splits have no fundamental value-based usage, it's something that retail likes. it's very conspicuous the dow does not have alphabet or amazon in it. ibm is about $100 billion, i think. the think is, i'm not sure that means much of anything salesforce has been a laggard since it entered the dow a year and a half or so ago so what do alphabet-strong earnings mean for meta tomorrow? hey, julia >> the question is, where do you want to start here it's so interesting looking at google's overall better than

expected advertising growth. the fact that youtube did fealty short of analyst expectation, it does grow revenue 25%, but that was less than what analysts were looking for. phil schindler, google's chief business officer, talked about all being strong in all categories, so i think it bodes well for how much did advertisers pull back in the fourth quarter maybe not quite as much as some had feared, but you have to look at the fact that companies like meta, as well as pinterest and snap, they are going to be impacted by the apple idfa operating changes more so than, say, google was. >> it's interesting, too, i'm looking at meta, facebook stock this morning, it's about flat. if there's a read-through, investors don't seem to be buying it, literally, right now.

it will take me a minute to get to snap also, but that is down 4.5% as well so, perhaps an opportunity here. i don't know >> look, meta, of all the social stocks, meta is down the least since all of these company's earnings three months ago, but these are stocks that have suffered since the last round of earnings that's because there were so many warnings, not just about the overall ad market, but also about the apple operating system changes, and then these competents particularly raised by pinterest remember that pinterest lost monthly active users in the last quarter. so, you know, over the course of that quarter, so the question is, are we going to see engagement flat, growing there's always a lot of attention on those monthly and daily active users for meta here in the u.s. and canada

that is the most profitable region for the company meanwhile, julia, paypal continues to be way down, 25%, lose ago quarter of its market cap, after the guide comes in soft this is the worst day going back to the spin-off from ebay. our kate rooney is with us, after talk to go dan shul man. >> the bill miss was on numbers, especially the net new accounts. it's looking at 20 million at the high end it added close to 50 million accounts paypal also scrapped a prior goal of hitsing 750 million accounts exec sutives say thee in and out l -- they're in and out looking for quality over quantity. last quarter over more than 4 million accounts were deemed

illegitimate and didn't factor in at all. ebay is a hangover that will just not go away, after saying the transition would essentially be done, dan shulman telling me it's looking more like the back half of q3 it's still looking to be about a $600 million pressure on revenue for the year shulman telling me if you strip out ebay, growth looked better and the transition is hiding some of the strength of the business some analysts agree, as btig said this morning, they cannot recommend the stock in the meantime it's now what they call a show-me story. we talked about inflation, covid variants, hitting consumer spending, but this caught wall street off-guard, especially after visa and mastercard beat

last week, strong consumer spending and issued solid guidance guys >> kate, i understand in context sort of the legacy payment players, the guidance did not look good, but honestly, a 25% drop at the moment in the stock, maybe it wasn't that bad i know that dan doloff will make this argument later. i know that everyone is focused on the net new account numbers, but they're talking about increasing engagement and average revenue per user isn't this what we want from our fintechs, versus robinhood who can only do one thing? isn't it about cross-selling >> john ramey's point was exactly that, they're going to focus more op average revenue per user and try to home in on

that customers will stay on paypal for a while versus being attracted to $100 perk, to sign up for the accounts. that could be seen as a good long-term strategy they did grow tpv. the thing that's frustrating analysts is the goal post keeps moving in terms of ebay. venmo profitability, it showed some strength, grew 80% year over year, but it's still son of in the background here for paypal it hasn't become a huge driver of profits so i think a lot of it is it's a long-term vision people want to say, you know what we're going to hold off until they show us, versus guide to certain metrics. >> more than holding off, shares are down 26% it will be really key to see what block, now square, reports. thank you very much, kate. "techcheck" is just getting

started. amd up nearly 4%, by the way

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julia boston >> jeff zucker, he's been president of cronn, and resigning today, writing in a memo, that he failed to disclose to the company a romantic relationship with another senior executive at cnn zucker has been at the company for about nine years i just want to point out this comes at a particular time for the company, you know. he was in charge of a very important division at warner media, in the process of this merger with discovery, which is expected to happen in the second quarter. he was overseeing the launch of the digital program. so this raises questions for a number of questions.

this came to light when there was an investigation into the conduct of chris cuomo zeile lynx of jumping today. joining us is vivek aria i just having the underperform on intel kind of says everything about where we are right now >> thank you for having me i think amd is just getting started. they grew 60% in the last five years. and the core business of pc is still only 15%, so every year

it's on the right set of customers in cloud computing, extremely well, and they're get good support we think amf is just getting started. >> how are they -- to explain to viewers, it's one thing to execute on the design and the engineering, and the sales, but you mentioned that foundry partnerships not winding up with some of the congestion we see in the industry, how are they doing that >> i think one month thing that's perhaps been missed is there are certainly end markets that are getting some

preference. so it's important to target the right markets. what's sells important is focus. when you have a company such as who are focused on the design and letting someone like taiwan semiconductor focus on the manufacturing side when you bring the two sides together, that's why you see this group of companies produces the results, as opposed to others trying to design both the design and the -- which we think is a poor strategy for years the issue was they couldn't get into

the -- being consistent on -- now they've got this strategy that includes looking forward to what lisa su is talking about heterogenous computing how stable are the oem relationships? what should we take away from the share game they've had, given they're cracking into areas that was so hard for them to maintain a foothold in before >> absolutely. if you look back at the history of amd, back in 2003 they were at a slav position, but it was a period of they're years where they went from 5% to 26% that was on the strength of a product. at that time, if you remember, you know, there was nothing called the cloud it was all enterprise customers.

essentially nothing, and we think it has the capability to go to 30 to 35 why is that? because the cloud customers are spending at a very fast pace they said last year they were going to invest 66% more how do you do that you need a reliability partner who's backed by the right manufacturing and the right back end in terms of substrates and other capacity i think those are the stars that are aligning for amd now you're right but we saw in the last quarter that amd reported to enterprise also doubled year on year, even faster than what intel has managed to do. the last time -- for the first time we've seen amd's business is actually more profitable than

in the data center, even though amd is much smaller today. >> we'll talk about pc sales maybe the next time, vivek., as they do have some chalgs for the year ahead we'll save if for another day. good to see you. >> thank you. as we head to break, electronic arts falling off guidance, coming in light. obviously interesting with all the deals so far in 2022, what happens to ea? >>. plus after the break, why one of the street's top analysts is calling out for a high value and high-growth stock. "techcheck" bk t isacinwo - in the last two years, we quadrupled our team

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welcome back to "techcheck." taking a look at some of the laggards, no surprise that paypal is leading the way to the down side. a little weakness in netflix as well another high-growth name seeing

some losses. we'll talk more about the selling in paypal and surge in alphabet after a news update from rahel solomon. here's what's happening at this hours, shares soaring on growing demand for luxury handbags and apparel it's now up closer to 8% match group has released losses shares are up about 7%, it lowered the revenue forecast for this year, but gave encouraging details about its app. however. crude has cut those gangs slightly lower on the day. payroll sinks unexpectedly, as omicron took a bite out of working.

and spacex starlink has rolled out a new version the premium service calls $500 a month. it says it's aiming the pricier service at the customers who wand more bondwidth and connection at more locations. >> rahel, thank you very much. let's look at alphabet's earnings we talked about this earlier u. talking about among the most impressive in recent years mark mahaney, great to talk with you. we talked about it being on both ends, lower value than some of the other names, but still growth ahead of it it was interesting on the earnings call. it felt like the analysts wanted to push for the future plans he was asked about crypto, and

metaverse. unlike some of the ceos we talk to, they took a measured stance. does that kind of give you confident in that full ability to keep growing in emerging places, like emerging technologies >> deirdre, you're right they can be guarded, but that's okay the numbers speak for themselves what they're showing, though we're always focused on future businesses, driving business is still the core search business 18 years after the company was founded that they're still growing that at 32% year over year that's impressive. but a lot of the innovation is in the core business they're making searches more relevant, especially as the consumer shift toward online

retail nearly $10 billion cash pile that alphabet has, and we're in an inflationary environment. should it being doing more to return value to shareholders >> it should be. i think they are they did repurchases last year, they can probably actually increase it i think you're going to see different this is a company that we think is on track to generate $100 billion in free cash flow. within the next three years, it's probably the large-cap company, and one of the reasons i also like the stock is it -- names like microsoft and apple, even though i think google will generate more free cash flow than either of those companies in a relatively short period of time. >> hey, mark, it is jon. i wonder your thoughts on what

we can learn about cost discipline, you know, after this quarter. they hired quite a bit, but things like driverless, all these other bets that they were emphasizing before, seem to take the focus off google i mean, that doesn't seem tore the story here they might as well call it google >> i think cost discipline is the same as it's ever been they're going to spend aggressively, and as a tech investor, that's what you want them to be doing you want them to build out option value waymo was not mentioned one time i think that's the five to ten-year wonderful option you get for free as a shareholder, though it may turn out to be

zero i don't think we'll see a major change in that maybe it slightly goes up. they want to run the business and any excess profits will fall back -- i think that's good for tech shareholders. >> mark, i wonder, you know, we've been talking in recent months about worries at snaps, pins, pay pals, some including twitter in there, are you sensing more distance? >> that's kind of hard to not come up with that conclusion it does seem like they're reaching a point of scale where the amount they're vetting in, just swamps some of the -- i think snap is one of those companies that's extremely good at product innovation. one of the problems we've had with twitter for quite some time, they haven't been great at product innovation they need to fix that. yes, we're seeing a continued

separation, because, to their credit, these large-tech companies, whether it's amazon i look at, amazon, facebook or google, they are aggressively -- that's also responsible shareholders activity, but they have enough cash they can return it to us at the same time. it's a good combo. because it also has access to first-party data i think facebook solves that problem. that's one of the reasons i like the stock. i like both stocks, but with amazon, i do want to be careful. i think the street is way too high

foreign exchange is a major risen, so that also could oy do worry about it >> mark, thank you very much beal talk soon coming up, jack dorsey weighs in on the impact of bitcoin. d fometa wasted a lot of time anefrt stay with us we're back in two.

jax dorsey taking aims at meta the block ceo criticized the company for failing to develop its own crypto project. >> i think there's a lot of wasted effort and times when those two years, three years, could have been spent making bitcoin more successful.

i don't think we would be as dependent on an advertising business model a fascinating reflection from the man who literally wrote the first tweet. a new bill in congress would give congress power to go after bad actor, ylan mui has more. >> they're already scoring a couple wins. take it as the america competes act. tucked inside the give is a big that give treasury the power to

go after bad actors like those who use crypto it also eliminated a public notice the industry immediately sounded the alarm. we need to make sure we don't fail to strike the balance so i appreciated the feedback. the industry called their conversations with lawmakers reasonable and productive, guys, this is proof the best way to win is not to have one. >> ylan, thank you "techcheck" is back in a moment.

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meta is in the red fracturally. it marks the first time the company will break out the reality labs segment our next guest argues, though, companies like meta and alphabet have abused user data. they need to be kept in check. tom chavez, also the founder of the organization, ethical tech welcome. your approaching though, to the problems that these digit at giants have created, is a

capitalist approach, even more than calling for regulation. you are calling for both explain. >> exactly right a lot of us are concerned about the consequences or the negative effects of the government stepping in and overreaching and setting new regulations that undercut the value of the internet and possibilities that the businesses enjoy to leverage data to grow their top lines we also recognize, though, that companies like meta, have trampled on our privacy, and the drums of beating it's a potential extinction-level event we think there's a middle path to allow consumers to enjoy greater privacy and trust of their data, yet allow companies to responsibly grow their business. >> alphabet is doing very well,

led by the core search and advertising business in a way, is your approach not bullish on these names effectively arguing their problems being growth markets in and of themselves? >> that's exactly right. look, i don't know if meta will miss, meet or exceed expectations i know their profits will be gigantic, further evidence of the unbreakable market pow they have assembled we can disagree on the perils of concentration of power like this the more fundamental problem is the cost that we have all incurred as companies like facebook continue to assemble this kind of market power. it comes at the expense of trust and security and privacy what animates a lot of the concern and excitement around crypto is, as mentioned before the break, this idea of trust and security have played a

similar concern, animates what a lot of us are doing in the realm of privacy >> i wonder, of course, the consumer him will have is not standing still they are getting less trusting in big media, and technology, more sophisticated i wonder, as we move in, say, to the metaverse and away from the classic news feed are you optimistic that maybe the audience is a little more -- i don't want to say jaded, but grounded on what they're seeing and hearing? >> well, i think certainly as more consumers move to the metaverse the problems that we're seeing today will only accentuate and we'll see these troubles and not less of them. i think that as more people spend more of their time in the metaverse they'll become increasingly concerned many consumers today would rather trade off convenience for privacy. facebook and other companies have enjoyed the benefits of that tradeoff, but i think you're right as more people move to the

metaverse, we're going to see more of these kinds of heightened awareness and how big tech are using it. >> tom, what makes you think that users are going to, you know, sacrifice convenience for that privacy is there an indication i mean, when we look at sales of oculus over the christmas period or the holiday period we saw that the downloads were, you know, it was at the top of the app store, so what indication do you have that this will actually hinder meta's ambitions there? >> the first, most important thing to take note of is the mounting away of regulations that have taken root in europe. >> but that's from lawmakers, not users, right there's always been this disconnect >> you're absolutely right i think there is this kind of disparity between what the governments are trying to do now to protect citizens and

consumers and more consumers are preferring that convenience to security look, certainly the majority of consumers will prefer to make that kind of tradeoff. it's the 5 to 10 to 20%, right who are making their voices heard and are saying i'm not going to work with this kind of approach anymore those are the people who are taking action, and i think we need to be,a at the present timive to their concerns and that's what my colleagues and i are taking seriously i run a data company and we're seeing customers come tous and say look, i want to demonstrate that i'm a great steward of my consumer's data. can you help me get this right can i deploy new standards and new tools to responsibly collect consumer data because i'm betting in the long arc of things that will be an enduring source of power for my company

and in a sense, apple becoming effectively the super regulator in this space doing more across the entire space than governments have to realign things tom from super set, thank you. >> thank you if you missed part of the show don't forget to follow and subscribe to our podcast listen any time, anywhere wherever you download podcasts "tech check" is back in just a moment

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the dow is down 10 points. you might think that it is a quiet day, but that is missing some huge moves under the surface. shares of paypal, lucent, netflix, okta, zoom all sharply lower. tom is a paypal bull and says investors are missing the fundamental story here dan, we talked about this earlier and the takeaway increasing and engagement good and it goes back to the question, how do we value paypal should it be valued as a traditional payment player >> always great to be on the show it's a sad day for paypal, but overall this is just an expectation management kind of a disaster

the stock itself or the fundamentals as you said are getting better and i've never seen it getting better in the last two years i've never seen the volumes accelerate over the last two years since covid. everything that we wanted to see is happening and the stock's coming down because of that expectations management issue. i would look at it as a tech company and a destructor for the networks for visa and mastercard i think that they were talking venmo gaining share at checkout and that's a very important thing that people are not given credit for and it's gaining checkout and over time it should become ubiquitous. people are not given any credit for that and i value them as a tech company and not as a legacy company. >> dan, i hate to get too much into the macro, but we are keeping an eye out on the balance sheet and being disrupted by inflation and lack of stimulus and the rest

i know i didn't hear it from a lot of other financials this quarter so far, but how strong of a line are you drawing between that comment on the call and the broader macro environment? >> it's a fascinating comment because i think what you're seeing now and this is the first time you basically get not like a canary in the coal mine, but you are getting an early-bird view and this ecosystem didn't exist. this is not paypal, if there was an issue with the low-income consumer, this is not if there is one this is not a paypal issue and this is a broader macro issue which kind of makes sense, right? we're lacking stimulus and inflation. nothing here caught me by surprise, but the first time we get that is an early indicator because this system didn't exist in '08 and didn't exist in the apps we flagged it right away in delinquencies, too >> dan, what if, as disappointing as this is for

paypal investors, this is rational and a return to reality and this is visa versus paypal over the last two years. with this drop in paypal they're performing the same, right >> right >> visa's doing well and maybe it was doing worse than it should have stockwise and paypal is doing better. >> paypal is growing -- should be growing revenue in the 20s once they lap the ebay, right? from a visa perspective, there are more issues than opportunities over the medium term it's a great company, but i think that the future for paypal definitely looks brighter in my view just of the future for visa and the ecosystem and the opportunity to increase share of checkout i would buy paypal over visa at this point >> dan, appreciate it very much and an awful print today and we'll see how it rebounds in the days and quarters to come. thank you very much. in terms of market action

relatively flattish and i haven't moved around a whole lot and vix continues to be anchored very close to 22 we didn't talk a whole lot about energy and net gasis having another barn burner of a day and we'll watch that spot and meta, just two of the highlights for now, though, let's get to the half and melissa lee welcome to "the halftime report." i'm melissa lee if for scott wapner a stock split put a floor in the beaten up techtrade and we'll get ready for the big mega-cap names. plus, investment committee making a number of moves in this market we'll tell you all about them. joining us today brenda vin gel on, sarat seti, and the major averages trying for a fourth straight day of gains. so far we have the dow and the nasdaq in the red. although you can call that unchanged effectively and s&p 500 up a