if they expand that list this time around. >> robert frank, thank you. after initial pop, all the major averaging you are now lower. 4289 that will do it for "squawk on the street." "techcheck" starts now ♪ good morning today global risks skirting a rebound, the latest on russia/ukraine tensions and its impact on your portfolio the tech sector may still be in growth purgatory and then later elon musk e-mails

cnbc that exclusive exchange and the rift between the white house and tesla, is coming up. jon? >> let's start with a correction stocks, down more than 0.5%. dom chu has more on the megacap meltdown we have been seen with faang names down more than 20% we thought we may catch a bit of a bounce from yesterday, however, it has brought the nasdaq trade, as represented by the qqq etf. you can see here over the course of the past year how the trading pattern has been over here, now, that qqq is now back into that area where we're roughably 18% below the record highs from early this past year. solve, again, that's so-called correction territory

within that technology overall trade, there have been certain pockets with isolated real weakness one of them is some of the internet or e-commerce names the first trust dow jones ticker, it's now down about a percent on the day so far. what is important on the down side has been due in large part to big weightings in companies like amazon.com, also alphabet, meta platforms, and some of the biggest weightings within other parts of that technology, that weakness continues. basically cloud computing, we've seen a sharp pull back in 1/2 shows names. those are now down 55% over the

last year, so some of those growth pockets continues to see weakness carl, financial technology, probably front and center for many of those growth trades that have seen a lot more to the down side if you look at that fintech trade overall, it's the big names like paypal, block inc., and then a lot buy now, pay later, so many parts of that growth trade very much out of the favor. >> that's exactly what we're going to talk about. a good lead into our next guest, who admits that tech may be in a bit of purgatory savita, what a treat for us. good to see you again. >> likewise. thanks for having me >> you saw buy high free cash

tech maybe you can explain it. >> i think this is the point where -- what we found for tech companies is that valuation is actually not necessarily a great buy or sell signal, but what you don't want to do is buy companies that are in the process of derating. these are what we would call the value traps or the growth purgatory companies that, you know, were trading as very, very lofty multiples, but now starting to see some risks eye specially some of the higher-growth names. >> what we found is that the cheapest companies tend to outperform once they're finished with the derating psych the, but still produces those are the company

that outperform. you really need to look for bottomed-out, really cheap tech. our view is screen the tech sector for free cash flow used, look for the companies that are still generating a strong and physical stream of cash flow, but not necessarily that many left us with some more boring names of the sector. >> so, for example >> for example, i mean, this is not your internet tech it's not your exciting long duration, more like your yieldy cash returns we find these names in semis, software, in i.t. services, but definitely not the sort of darling tech stocks that we have seen in this meteoric

landslides really what you're doing is paying today to get all your money way out in the future. these companies, as you would expect using bond math, are much more hurt by a move in interest rates, or a move in the discount rate look at this year. we have seen, you know, something like a 50 basis point increase in the nominal rates, so you companies getting hurt are the ones more impacted by that rising discount rate. i know you have talked about this on your program before, but i think the risk is we're not at a point where the market is adequately pricing in the moves that the fed is likely to make it's not adequately pricing in the moves in inflation in the ten-year, so we think there might be more to go for these longer duration tech companies >> i thought your comparesing to what happened to tech back in

2000 was really interesting. i wonder how you're looking for that and how that's shaping year outlook on when all of the tech sector becomes an opportunity to buy? >> yeah, it's a great question from march 20500, to september 2002, we saw it compressed by -- we've only seen 12% from peak to trough multiples, so there's probably more to go overall. that said, tech companies today in the s&p are very different from what we saw in 200. they're not the non-earners, the really speculative tech companies. here's the company, though if you looked at the ipos that took place in '99 one out of four are now they blue chip

megacap tech companies. but one of out of foryou are not great odds, so i think it's still important to be selective here is there a-second that could be the next generation of giants? >> absolutely. i'm a make rho person. i just look at this all with a broad lens, from a idiosyncratic perspective auction tech companies are not created equal. so i think that's where unfortunate to take advantage. b of a, i relieu on our

fundamental analysts which you likely to see more macro risk. on a broad basis, what we found is that you gently don't want to buyenes the high flyer growth stocksi think it's going to take a while as if it were really about -- if you bought cisco at the peak in 2000, you still haven't recovered, right

microsoft took a bit hit then. there's some not so boring companies that make the cut as well, like nvidia, apple, alphabet and microsoft, cisco in there, too so what about that those stocks, particularly nvidia you think that's still worst including here >> i do. what we found is the hit rate for companies in that bottom quartile of the tech sector tend to outperform. so it has been a good, where you want to bottom pick and try to find interesting ideas to your point, though, i think what was also interesting about 2000, it really took a long time

for the sector to bottom out first of all, everybody forgot about tech by 2010 i mean, nobody was even asking about it when it came to client calls. and a lot of companies consolidated capacity, so make those are some of the signs that we need to see from, like you said, the high flyers that had great runs, and it looks like they're screening as attractive, but maybe you need to see more of that consolidation in order to get really bullish on the sector tech is one of these sectors thatsh and time horizons can

really help volatility underscores opportunitiesened a longer horizon, you can ride out volatility i think these this is a time to buy some of these inexpensive tech cools maybe we'll continue to see volume tilts, but should eventually, you know, rise above the market >> right >> it's a good framework hopefully next time we can talk about some macro, and certainly the way geopolitics may or may not have changed the playbook. good to see you. >> thanks, likewise. the security company jumping this morning, beats on the tops and bottom lines.

the boost prompting an upgrade from jpmorgan to neutral from underweight, calling it well positioned to buy for the cloud security opportunity >> and rbc's brad erickson joins us to break down the future of advertising amid apple's crackdown and brian schwartz tells us what he heard from elon musk about being ignored by president biden. we are just getting started.

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let's get a gut check on rackspace, with record bookings in q4, but the guide photocurrent quarter comes up way short, both revenue and eps below consensus, shares tanking,

down by 25%, julia. >> meantime, jon, washington's big -- keeping on apple and the app store practices. the senate is working on legislation. tim cook claims the bill will hurt user privacy, but they're using privacy as a cloak to protect the app store economics. brad erickson, thanks for joining us why don't you lay out your thesis of the likelihood of regulation, or the threat of regulation forcing apple to make changes and what that could meep for the rest of the ecosystem. >> first off, let me apologize for my voice i promise is sounds worse than it is. i think what's going on right now, which is really interesting is apple as the dominant app ecosim here in the u.s., playing

a unique role where they sit on top of these large internet players, right what we have learned recently facebook relies incredibly on third-party data, and what's inter interesting, while we won't spect lace on things about advertising, what we can say is privacy is certainly serving as a nice barrier, that they can put up, that can impede or potential impair companies like facebook's ability to target users for advertising, so we're certainly not saying we have all the conclusion, but i think we're in a place where where we can start on ask some questions that pose some troubling trends for the social media companies in the future.

the year are not using their heft inappropriately so how do you think the social players such as the metas of the world will be able to navigate this >> clearly a couple trends have emerged, you know, post the facebook print, where the stock blew up. i think what we have learned is first-party data is paramount. but second i think user privacy

will be regulated in the future, and to the note you're referencing, there's other means of tracking, target, so think cloud crm providers. we think third parties are trying to leverage those data forces further on the stack. it seems like those could potential have risk down the road we're pointing out where this could go longer term it was six years ago that apple laid out its vision to essential not hold user data and be able to improve its software and a.i. without actually having to have it i mean, we a saul tim cook in

front of the congressional hearings with the back-door stuff, so it seems a lot of these social networks didn't what they want they were going to do is a long timal. it just bad strategy >> no, i wouldn't say that i think, you know the article from a day or two ago was talking about fingerprinting, that there's significant technological hurtles, that apple is yet to overscum this, of course, the tracking software was intended to eliminate conceptually, but there's other

so i think the takeaway is tech is mar more complex that we can probably appreciate, is not trivial, i guess, is the best way to say it. on shopify, how could they be winners? >> unfortunately, i can't really espouse an opinion on shopify. i don't cover the stock. we do cover amazon a key piece is amazon has the most user attention, customer attention in terms of online commerce, certainly in the united states and growing outside the united states. to the degree that they can

continue to leverage to drive more ad dollars, we think that's a winning formula longer term. edge certainly a massive amount of value in all that data. brad, thank you so much for joining us and sharing your perspective here and reply chains issues, down more than 44% this morning we're going to watch that, as we go into the second half hour the nasdaq closes in on a 1% loss more "techcheck" in a moment [copy machine printing] ♪ ♪ who would've thought printing...

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welcome back nasdaq falling about half a percent after initially rebounding from yesterday. it's down closer to a full percent now. we're going to keep an eye on that, and the latest comments

from elon musk but, first, let's get to a news update with rahel solomon. lowe's is now up about 2%. the owner of tjmaxx tumbling 7%. sales were hit by fewer customer visits they're down 20% this year tellantis has nearly triples, up more than 5% today andal polo global t--

emonth musk is speaking out in exclusive e-mails to cnbc he accused the president of ign ign ignoring the ev giant. brian, talk about this conversation how did it happen? >> yeah, we were looking into this -- we were told there was a feud between president joe biden, his administration and elon musk. you know, we shot mr. musk an e-mail, and honestly, carl, i didn't think he would respond. he did he came forward with the comments to cnbc about, you know, where he seeing this back and forth with the president he's convinced that president biden is ignoring tesla. the white house, when they spoke to us, kind of hinted that's not

really acrazz. there are white house officials in touch with tesla, but the white house did not rule out they're kind of in this battle with musk himself. this apparent fight may not necessarily have all to do with tesla. i think it's becoming a bit more personal than that with the billionaire ceo. we'll have to see how it all plays out. it was interesting he gave us these comments about this kind of developing feud he'll dispute it was a feud, but i will say it's one of the bigger feuds that joe biden is in with a ceo, at least to my knowledge. >> it's kind of blatant disrespect, i guess, i would say, on both ends. i mean, it's weird the white house won't even say tesla or speak elon musk's name. it's like he's voldemort or something. elon musk, you never know what

he's going to do when he takes the stain or he's on twitter when you talk about reputation protection, i can understand why somebody might be cautious. >> you're right. there's two sides to everything the white house seems to have this issues with musk's tweets, and he's saying he wants a seat at the table so, you know, meanwhile, in the white house there is some concern that if musk was in fact invited to any of these meeting, or one on one with the president, he could do something to embarrass his administration. we have seen his tweets, we a know what he's said, so it could be a problem if they went down the road of bringing him into the fold >> brian, i thought it was so

interesting that re wanted to reassure the administration he wouldn't do anything embarrassing, but if you look at the fundamental underpinning issues, how much do you think this is about unions and about tax credits? >> you know, i do think it's a bit of both. i think from the white house perspective, sure, they tell us they have engaged with tesla we don't know exactly who they have spoken with there they need to look at the lobbyists, but i do think it's a bit of both. the white house clearly links itself in the support of unions. then there's this issue, so i think it's evenly split on the policy size, but the white house is watching what elon musk has to say about it is president

there is no doubt about that it's an interesting back and forth. >> brian, richest man in the world, market cap dwarfs all the rivals why does he need this? why does he crave a nod from the white house? i wonder if it has anything to do with the wave of competition that will come online in the next couple years? >> you're probably right if you look back at the last relationship with donald trump, he appeared to have a better relationship he would go to the meetings, be brought to the table a different things donald trump raved about him, and now things have changed. it's not as easy to get in touch with the president of the united

states look who is going to the meetings, general motors, ford, they're creating electric vehicles musk's point is look at what we're doing here at tesla you know, big auto companies getting in with biden, and he's not. >> brian, fascinating, absolutely riveting exchange between rusk and cnbc with your help thanks for the clarity talk to you soon. >> thank you >> brian schwartz. take a look at monday.com, falling more than 22%. this latest quarterly numbers dispoint the stock is now trading below the ipo prize from last summer the ceo and cofounder joins us in just a few minutes. don't go anywhere.

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a smaller loss than expected, better forecast, which points to the high expectations

for some parts of the software sector joining us is monday.com's coceo aaron zinnemann. so a tough stock reaction here tell me about the velocity in the business in particular customer add s, retention and revenue are what mart over time. yeah thanks for having me we had a great quarter the company grew by more than 90%, while generating free cash flow, which i think in our is a ilis rare to see overall the company is performing very well we're happy with the rules

i think the who could tech sector is going through some rough months, about we're very focused on the long term, the fundamentals the metrics are performing very, very well. >> so how much flexibility, how prepared are you operationally with cash on hand, with the amount of money you're spending to get through this period, and keep employees, you know, your workers motivated? because that's a lot of the ball game for a company your size >> yeah, that's a great question we're in great shape in the company. we raised a lot of money with the ipo, more than $800 million in the bank. we're cash flow positive that means the company generates cash quarter over quarter. we're not burning cash, so we're

not concerned about this as a private company our valuation was much lower the company is doing well, continues to grow and generating free cash flow as we grow in such percentages >> eran, i'm curious about your product strategy you have introduced the as to stand-alone products with stand-alone pricing, and this is a different strategy from your different rivals, putting everything in one app with one price. tell us why you're going in this direction? >> yeah, so, this quarter we introduced two new products in addition to the monday.com platform over time we want to offer a beast to our customers or customers may have been --

over time we want to offer more tools so they can spend more time using monday products they will work seamlessly with one another. it will be super easy, and our customers use the platform for almost any use case. so any use case, any scenario, and now with the additional tools, we can help our customers even more with defend aspects. office time, more tools, and the product we can offer them. >> but i think it's interesting you're charging villely for all of these new products. i'm wondering, if you expect the additional fee for each of those new introductions is going to be a growth driver, or whether you just risk overwhelming your customers with additional choices of things they have to pay for. >> yay, those products, we do

charge them independently, but the point is that customers t. they want to be overwhelmed, but one tool that does everything. if you look at the larger companies, such as microsoft, and google itself, selling enterprise, a suite of products, and we want to be on the same trajectory i think that focus will bring a lot of value to customers who want to focus on different aspects of work. and moving into those is seamless, so you get more value, and if you move between them without any problems >> eran, i wonder, in terms of how the company is structured, voting control, things like that, how prepared you are for this type of eventuality it's been a lot of movement and software over the past couple decades for founders to maintain control. what's your outlook on that?

when stock prices are low, lots of people have pins about what you should do. >> yeah. my partner roy, myself, have tick lack stock in the country, and the institutionsal investor that joins through the ipo, also believe in the future of the company. i don't see any concern about that on the contrary, you know, investors are even more aggressive about the company, the future, the potential we have we have such a huge market, basically every information worker, which is 1.3 billion, just think about this, that the opportunity of growth here is unbelievable so we focus on the future and on growth, and we're just getting started. >> eran, thank you, ceo of monday.com. >> thank you we are watching bitcoin

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let's get a gut check. they call nvidia a gaming leader that can address numerous growth opportunities. >> some cpu share gains. they also expect supply to be constraint, which could drive stronger for longer sales growth those stocks both lower by 20% on the year, but obviously have been huge outperformers by long term >> and steve phelps joins us to break down the newer technology fueling nascar he joins us in just a few minutes. ♪♪

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series on netflix. joining us is nascar president steve phelps welcome. i want to start with the fan basics, you know, being mobileme ticketing and changes and upgrades you've made to the nascar app when you're planning long term on fan engagement and quality of experience, how is digital fitting in now and how are you measuring progress >> it is very important for us, jon. digital is obviously emerging everywhere and everything that people do on an everyday basis for so for us, we need to make sure we are engaging the fans and meeting them where they are and digital does that. it means a lot of things to a lot of different people and where we do that is purposeful and it's working for us. >> now, tell me how you look at strategy you've got things like a roblox thing which you've done which is fun for a certain demographic that probably isn't your core,

and then you have iracing where you have actual drivers who have these rigs who are able to compete digitally in an experience that's pretty close to the real thing. why are those things important what data are you getting from that that's informing how you plan for the future? >> for us it really is about engagement, right? fans where they are and whether you're talking about roblox or faceplan or discord, opportunities for us to get younger and more diverse is critical for us like any brand iracing is unique for us because essentially it's these crazy rigs that fans can purchase and they ultimately are just -- they're racing with each other in a virtual world, and that's fantastic for us because we want to take people and what they're doing in the virtual world and have that go back over it the physical world i racing does that specifically,

so it is so real that you can, you know, what the i racing people do is they map out these racetracks so all of the racetracks, daytona and even the l.a. coliseum where we raced a physical racetrack inside the l.a. coliseum. we knew that would work because the i racing people had actually mapped that out already for us, right? and then we had drivers that were driving on this virtual track and then lo and behold, two months later after we built the track we hosted an event and there were 60,000 people and had just a phenomenal experience in that iconic facility. >> digital twinning the other way around and you mentioned younger and more diverse give me an update on the more diverse piece. you said that nascar was going do outreach to black fans and try to grow multicultural fan base how is that going? how are you measuring it

what do you want to do beyond what you've done already >> for us, we have been trying to get younger and more diverse for a decade, right? you can say it, but to do it is another thing and our intentions that we had and we were intentional in trying to do that it really started in june of 2020 with the stance we took on social justice, the banning of the confederate flag and since that time real action and diversity equity inclusion and to your point, it's working. that led to michael jordan becoming an owner, pitbull becoming an owner. in fact, we had four african-american owners at the daytona 500, either minority or full owners. michael jordan, floyd mayweather jr., brad doherty and -- there is another one. >> that's okay three's a lot. >> and -- and, thof course, my

friend john cohen. new york racing john cohen and it's working from an ownership perspective and it's working from a fan perspective importantly, right if you think about where this sport is going, diversity is playing a huge part in it, and we're doing it with our, as i said our fan base and our ownership base and frankly with our employee base it's intentional and very, very important for the overall success of the sport >> steve, you mentioned that these new initiatives are helping the digital initiatives are helping with diversity, but i'm curious how much these digital initiatives are driving revenue in and of themselves you're dropping america fts and you have a big press owns roblox and do you see this becoming nascar revenue or is it all about driving youviewingship an the nascar rights on tv? >> to me the latter is more

important and we are driving revenue, it's not that it's not important, but for us it's really about engagement, right engaging these younger fans and engaging these diverse fans and getting them to sample nascar where they are, to meet them where they are, sample and then get them over to the -- over to the real world or the physical world, and that manifests itself with television in digital and social engagement and frankly, getting them to a racetrack. once you go to a racetrack you want to come back and the sights and sounds and the experiences that you get there are unlike any other sporting event >> nothing quite like the universe steve, thank you steve phelps, nascar president >> thanks, guys. ♪ speaking of digital initiatives, looking ahead, meta is hosting an event coming up in just a few minutes ceo mark zuckerberg is expected to deliver the opening and closing remarks focusing on the company's latest efforts with artificial intelligence and, of

course, the metaverse. "tech check" will be back after one more quick break

one more thing before we go

and that's office space. "the new york times" has a piece today exploring how big tech is spending big on offices and spending billions on spaces even as many in the workforce remain remote the pace of hiring and the tight labor market and the general sense that offices will, in fact, play a key role in the future of work according to cbre in the last three quarters of '21 the tech you under industry leased 26% more office sp space. they mentioned dash, meta, alphabet and look at zoom, it used to be 565 >> we have to be careful about this just because a tech company is leasing office space doesn't mean it will be software developers only in there sometimes it's customer service, and all kinds of things and dint salaries and the core tech worker based on silicon valley >> i also think it's really interesting to see how some of these offices are spread out around the country and they want

to make sure if there's talent to hire in atlanta or in austin and they can have offices there and still capture time in this tight labor market, carl >> a lot being done on how the tech sector is moving eastward, as we know and the dow managing to unwind losses here and let's get to sully and thehalf welcome to "the halftime report" everybody, i am brian sullivan in for scott wapner will the s&p 500 giving up gains falling further into correction territory. is there more to go? are stocks close to a bottom how will we know we will find out, plus what russia tensions mean for the red-hot energy trade from here your investment committee today and we'll call them the flying js jenny harington, jim lebenthal, joe teranova and jon najarian it's like wordle, co pf founder of market rebellion.com. before we get to the awesome