as tech stocks move higher >> with that we will end our show and move over to "tech check" which starts now. ♪ happy monday welcome. today tesla tears higher with shares back up $1,000 a share with talk of a potential stock split. plus, the slap felt around the world. what picture win could mean for streamers and social media's growing role finally, the risk in focus with the conflict in ukraine we will talk with the ceo of cloud player this hour

breaking news from washington president biden punveiling his budget detail for 2023 >> good morning. continue includes $23 million more in taxes for the wealthy. it would include -- there is also a new 0% minimum tax on those worth $100 million or more that covers both regular income and unrealized gain it will pay for college education, public health and combatting crime it also plans to reduce the

deficit by over $1 trillion over the next decade. but they are setting aside money for another go which would include -- >> if it would pass. it is estimated the gdp would grow 7% this year and around 4% next year. the unemployment would whoever around 3.8% in the long run. and the white house projected that inflation would end up at 4.7% and rodmoderate to 2.3% inh following years. that sounds raisy and they acknowledge that was before the russian invasion of ukraine.

overall the white house said fiscal responsibility is a key piece of the budget. >> a lot of moving pieces. tesla, shares are up 35% in just two weeks the news today the company is pro pousing a five for one split. lockdowns in china are making lockdown for at least five days. a racial discrimination lawsuit is moving forward on behalf of more than 4,000 current and former employees is that enough to keep track of? thanks for joining us. your overall point in writings is that tesla is a must-own, but you talk about dealers who you think are beginning to tamper

with the consumers' ability to keep up with price ps. how can both things be true? >> whennie elon musk went stateo state to get dealers a lot of people thought tesla is a fly that will go away. they didn't count on it being one of the biggest firm companies in the world tesla and some of the new startups can stack retail and have a more frictionless experience while the legacy folks are prevented from doing so by 70-year-old franchise laws this may have to go to the supreme court to be able to harmonize this or have some sort of way to move forward

tesla is profitable not because their cars are profitable, but they capture the downstream pricing where traditional models get leaked >> do they give up anything in convenience ordealer network >> dealers have the laws on their side they are operating in a legal way, in a way constructed. the downside for tesla where they had to make the investments, the stores, service center particularly in the early days and even now, there have been problems tesla's cars tend to have not many things that break, but when they do, you may have to wait a while to schedule your appointment. over time tesla has been able to work through that. i think we can agree they have the capital and capability to continue to address those

issues there's no going back in terms much franchise >> i wonder, adam, you said this could go all of the way to the supreme court as the legacy players look at this model in all of the benefits you laid out is this something we are going to hear more about how does it happen and when will it happen? >> it's a tricky situation i think traditional car companies are trying to experiment and look at tweaks to the existing contracts while still obeying the laws and trying to find ways to have a new contract that dealers could opt into as they roll out new models and electric cars in our opinion at morgan stanley, we think legacy companies like ford or gm make it sound too easy, like it's no problem. it is not going to be easy it will take many years. i think you are going to run

into state by state level issues some darwinian forces might have to come into play as the traditional model gets recasted. >> a fascinating discussion. i want to ask you about the master plan three and about tesla's battery business dean has seen the battery business pass a massive change in the ev industry does musk pull it off? if he does, what does that mean for tesla? is that being priced into the moment >> let me flip the question back to you can you think of any other tech firm or any firm in the world that has the capability and scale to rearchitect and industrialize the supply chain which is broken. it is not sustainable in parts of the world that are not

secure, to say the least if it's not elon, who else will do it? >> that's a good question. look at chips, they have been able to maintain production better than their rivals >> tesla stock morning, it's all over the place, up almost 8% as we speak in this market. i'm wondering, when you are valuing tesla or you are an investor trying to figure out how to get in or get in more, how do you justify $1,000 bucks a share in a rising environment where we have seen over the last few months, whether it's geopolitical concerns or fed concerns, how will it impact tesla? >> it's a frustrating conversation that will impact many of our clients. tragically, events much the past

month or so is moving the market and investor debate toward many ways where tesla has capability. traditionally, electric car company, but going forward and we think some of the master plan three, we are going to industrialize the supply chain to make it sustainable and secure sustainable security means national security, and downstream, a mobile network of grid, power energy, whatever you want to call it. so the parts of the tesla portfolio that didn't get a lot of attention will get an unbelievable amount of attention going forward. people are still solving for car, but you have ev, infrastructure, power,

sustainable supply chain elon and tesla are part of that structure. that will change the tam in a way that didn't before >> what does elon musk need to do with the stock the way it is now, to make the most of this so that investors can feel all the more confident in his ability to take the value of the company up from here? >> john, tesla, we say at morgan stanley, they have had the model t moment, the model three and model y. that was a form factor that could scale to a degree. but they have not had the moving assembly line moment yet so when the model t came out in 1908, the average price of a car was $80,000 in today's dollars the model t moved that to $25,000. but it wasn't until 1913, the

assembly line got the price down to $3,000 in today's dollars i think we will see unveiling of that in the next year or so. it will be industrialized at high scale five to ten plants making 1 to 2 million cars each and incorporating the fuselage into the battery and ecosystem in a way not seen before. if you are in the battery business or ev business right now, you may be doing obsolete technology maybe the ones watching elon, maybe the second mover advantage might be on display. >> fascinating >> the wide space between your

enthusiasm for tesla and skepticism for gm/ford has been noticeable for a while but of the two, which have the better chance of closing the space? >> i admire what jim farley is doing in terms much rethinking the dealer and distribution pipeline and experimenting and trying some things, like the mache and lightning. and they are working on different iterations but what gm has done earlier trying to secure that supply chain in the united states is admirable. i can come up with scenarios where they both succeed or don't succeed. profits which will be around for many years, the cost of that capital is extremely high and being invested into technology i

think might prove to be obsolete over time. it doesn't mean they can't survive and be part of the future, but i think our message to investors is that you have to take your medicine and get that tesla vaccine in your portfolio to be able to take risks elsewhere. >> adam, we love getting your guidance just the color and entertainment factor of your notes lately has been stellar >> i don't know if that's a compliment, but thank you. >> we didn't get a chart this time, one benefit of seeing adam from his work from home studio another positive sign for the bulls. bitcoin crossing back up before 47 k

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goldman is slashing names on

several names saying they see limited upside in chip technology downgrading all from buy to neutral they maintain a buy raiding on amd. bullish on pricing power, cash flows and price returns among other factors. >> turning to markets, the nasdaq currently outperforming other indexes. our next guest says tech stocks do relatively well on the market after prices start to rise paul, good morning it's great to have you >> how are you >> i'm well. history tells us that tech stocks have been quite resilient, but we have never list through a pandemic and i am not sure we have ever seen

valuations rise this quickly in a year and a half. >> john had a good question, how can tesla be doing so well in this rising rate environment but when you look back historically, tech which is considered one of the growth sectors in the market, rising interest rates will be negative for the sector, but when you look back historically, you take the long-term treasury, when it has sharp declines like recently, and you look back at those prior periods and how the market has done and when you look at how tech is done, the market has had mixed returns, but tech has outperformed the s&p 500 during every one of those prior periods that we looked at. the most recent period was the first period where we saw tech under perform the s&p 500 as

interest rates were rising sharply. this is going back to 2002 it's 20 years of history we are looking at tech had a consistent record of outperform during that period and then going forward as well six and 12 months later, the sector was higher every time and outperformed the s&p 500 all but once and one time it just underperformed by about 200 basis points i think the whole idea that rising rates are going to be negative for tech stocks and there is no debate about it is a little bit unfounded one of the things we think about -- one of john's on the other hand comments, tech has the highest growth rate so their future cash flows are discounted by higher interest rates the sector also has one of the lowest debt levels so as rising interest rates, the

debt burden, they are less impacted by that than some of the more capital intensive sectors. >> we have the graphic ready in case any one says it on the other hand, we have seen so many companies go public over the last few years at earlier stages because of the spac phenomena. history has been quite consistent, but have we seen the quality of companies we have now, sort of this mixture in the market, such unprofitable companies at early stages? >> within tech overall there is a lot of low quality companies no debating that we are focusing on large cap space and more established companies. to your point, within the tech sector, tech traditionally trades at a higher valuation than the overall market. during this period it has a rich

evaluation relative to the market and those prior periods there is some of the weakness, rather than rising interest rates for the sector overall, and we are seeing some of that play out, but between the mid cap and small cap, the tech sector is cheaper than going into covid it's only in the large cap space where you see loftier valuations our overall strategy is rather than look at the sector overall, look at the companies where we will see stocks trading cheaper now than heading into covid. >> paul, thanks for the shout out. i wanted to ask you about what you just mentioned the small caps russell 2000 is back to the beginning of 2021. but my sense is small cap tech is doing a lot worse than that so is that where people should be looking perhaps, investors

should be looking for opportunity in the stocks that still have decent fundamentals, but are behaving as if their story has fallen apart versus a big popular company like tesla >> you are right >> tech stocks have been hit hard in the russell 2000 versus the s&p 600 there is a bit of difference because there are less profitable companies in the russell 2000 so in the s&p 600, the valuations are much cheaper than they were heading into 2020 couldn't even find large cap space. look at a stock like paypal which at the beginning of 2020 was trading over 50 times earning and is trading less than 25 times current year earnings you have seen that stock really come in a lot. it has lost about 2/3 of its

value, become washed out i think right now you are looking at much more reasonable levels than you were, say, a year ago even in the large cap space you see stocks and individual examples of things that become cheaper. another one, there was a research piece, broadcom is a company that is cheaper now than heading into the pandemic. business has been great the last seven quarters they beat earnings, beat revenues and raised guidance their business is doing great, they are well diversified, serving cloud, peloton and mobile and had a 7% yield so a safe dividend and a record of raising the payout so that's an attractive stock as well.

>> paul, thank you talk to you soon >> thanks so much. apple is the best streamer to win best picture at the oscars yesterday

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welcome back i'm carl quintanilla the markets now. cybersecurity is taking center stage today amid the conflict in ukraine. we will talk with the ceo of cloud fair in a moment but first, frank for the first time since 2006, the yield on the five-year treasury note moved above the yield for the government's 30-year bond when investors demanded more for shorter term debt can be a

signal for recession coming. and lockdown in shanghai, china is raising concerns regarding the biggest importer of crude and walmart ends tobacco sales in some stores it's being implemented in some stores in florida, arkansas, new mexico and utah. stocks up 14% since march 14 and apple is downwards nikkei also reports apple numbers that don't pan out last night a decade after netflix got into original content, it was apple that got the first win ever for a

streamer julia was there and saw everything good morning >> it was quite a night. there was that celebrity drama, but first to speak to the apple pete, it was a momentous night it did win best picture. and "coda" got three oscars and maybe a turning point for streaming. >> that was such a moment, the acceptance speech by the actor from "coda." i didn't stay up for the whole thing. but not only was it a big thing for streaming, but a big moment for the deaf community, seeing people applauding this way what do you think about the impact of not only the streaming

aspect but the types of diversity and content being brought to the fore. what's that going to do to the market >> you are absolutely right, john it was a big moment last night there were tears in the audience's eyes. they went quiet to communicate the support through sign language for the winner. i think there has been a push by the academy for storytelling and that these are targets they have to reach by 2024 in order to be considered for the oscars. original stories can have broad resonance and reach a larger audience than just those people represented in the stories we are seeing companies focus on the authentic authorship, and i think it rang through last

night. >> apple took a bet on this movie. julia, it's hard to ignore that netflix has had a rough year and one more thing the company has to contend with. even the ceo when asked earlier was where do they go from here where do they go from here >> netflix went into the oscars with more nominations than any other streaming service and any other studio by a lot. netflix had 27 nominations going to the oscars. so that is beneficial for netflix. it draws more talent there are billboards all over los angeles promoting "the year of the dog." -- excuse me, "power of the dog. i think that is useful for them, but i think there must be a twinge of regret they didn't get

best picture, because netflix has been investing in pictures that have gotten attention of the academy. the first streamer nominated was "manchester by the sea." so there was a question which streamer will get best picture apple just announced streaming service three years ago. >> you think about why artists going to different studios, going back years, there is the paycheck, creative freedom and the promise of awards the way miramax was in the 1990s >> i think the race has been on for years and not only is apple in the race but a serious contender. artists want to be paid but want

critical acclaim and rewards attention. and if there is attention of a movie like "coda" you know there is more potential down the line. so they want to be at a studio that promote these type of awards these are useful for streamers in terms of content. they don't have to worry about people going out and seeing these movies most of these are available on streaming anyway it's mostly about attracting the talent >> julia, you were in the room we have to ask about the altercation. as everyone addresses this, will smith is supposed to star in one of the most anticipated releases by apple what do you think of the implications going forward >> it was a weird moment

there was a hush in the world. everyone had a gasp, trying to figure out what was going on there was a question whether this was staged. this did not seem to be staged you saw the publisher rush over to will and jada smith and saw will smith talk to other actors giving him advice, i assume, on what to say in his speech. there were thoughts he would win best actor, which he did not only is will smith one of the most bankable stars with appeal, but they have the reboot of a show on re-max and on nat geo and disney plus. there are a lot of companies that have not responded to my e-mails on what they do next and the question whether the academy does something

>> we will add pressure. we hope you hear back from them, julia. we hope you hear back. and shares of coinbase are rallying on news, more than 7% wl ntueo tcthe story.

as cybersecurity firms are under attack, floud cloudflare and companies like that are on high alert i would like to talk about the state of ama you bought security about a month ago. about $162 million i believe what can you tell us about the mna environment right now, company's willingness to sell and perhaps take stock as part of the mehmet -- payment >> i think at cloudflare we have always believed in internal

development. with area one we found a team that we respected, a vendor we were using ourselves, a vendor we knew could help close one of the key holes in any organization's security portfolio. we are excited to have them on board. i think our outlook for m & a continues to be extremely high we will be selective about what we use, but when we find nice tuck-ins to our customer base, it's a great way to expand >> what about the cyber attacks and in what way is that shifting the ask from clients about what they are concerned about or what you are messaging about how they need to be protected >> the lapsuss attacks, shows

how individuals, a group in a nation state, or in this case a series of teenagers, how they can do enormous amounts of harm to organizations they were paying insiders within an organization in order to take over client information and other things what that highlights is how important is to have defense in depth in any security. once upon a time we built ships without bulk held, and the problem with that was ships could sink a modern company should have the modern security which could prevent any one vendor or security vulnerability from taking down your entire organization last week we did see law enforcement disclose some earlier investigations about potential attempts to at least move into the energy grid.

does that act as a deterrent when law enforcement says we know who you are and what you were trying to do. >> any time we can identify hackers who are trying to attack parts of our infrastructure is part of an overall strategy, but we have to make sure those energy companies, those companies in the water space, hospitals, make sure they are as secure as possible, which is why we, along with cloudstrike and team identity want the infrastructure critical defense project. we are providing our services and best marine technology to make sure they have all of the security that's there. i applaud law enforcement going after attackers. obviously times they are overseas and out of reach of law enforcement. but going after them is good for

us as a society and everything organization out there >> so there is to be more cooperation between public and private sectors. but i wonder why we haven't seen a concerted attack from russian hackers? have their abilities been overstated or what is the reason behind that? >> that's not a bad question all of us are asking ourselves one of the biggest surprises of the last month has been that while our shields are up, and i think it's appropriate for us to be at a heightened level of security, the massive attacks haven't come so far. we don't know if that's the quiet before the storm or if, for whatever reason, cyber attacks aren't part of it. we know that russian hackers are very talented, are good at launching cyber attacks.

this is a heightened level of security our team is working around the clock with our clients to make sure they are secure we are watching for anything going on, watching what is going on inside ukraine, belarus, russia, making sure we can stop attacks coming out of any of those regions or target regions around the world that's the million dollar question, why haven't there been more cyber attacks i don't think that means we are out of the woods >> thank you matthew prince of cloudflare

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welcome back let's get a gut check on hpinc, acquiring poly this is a bet on tech work sticking around. they make headphones the stock is up 50% but it pa peaked back in 2018 and hasn't come close to those levels since. you can take a look at some hardware stocks. logitech is about even

sonos up about 13%, perhaps in sympathy perhaps some sense of what might happen i think of poly being a corporate purchase play. it's interesting to think what might happen in that space given logitech is coming at it from the consumer side and poly from the corporate side >> it was interesting to talk to enrique about that speaking of remote work, zoom up 20% since mid march with the rebound of growth names. it is off the 52-week high, a long way to go to the pandemic highs. wl bk aomt.weilbeacin men visit letsmakeaplan.org to find your cfp® professional. ♪♪ do you have a life insurance

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the volatility in the market and tech in particular has led to a change in investing behavior cnbc contributor of "the wall street journal" reporting that market swings have triggered a stampede into tech-heavy exotic products as the riskiest, costliest way to invest is the most popular she joins us now to discuss that trend and its implications good morning to you. one of the most actively traded products between the tqqq. it's designed to triple the daily rally of the nasdaq 100. so how are retail investors using it

>> that's right. there has been justan exodus into these types of products they are some of the most risky products in the entire marketed and they offer leverage or inverse exposure to specific sectors of the market, major indexes as as you mentioned one of the most actively traded products is this one that's designed to triple the daily return of the nasdaq 100 index it's one of the most popular products, especially among individual investors who are saying i want to go all in on tech i'm not looking to take my chips off the table. i want triple the exposure to this tech-heavy index. and of course this can lead to some explosive one-day gains and also some big losses for investors. >> and they're not really meant to be held for a longer term sometimes they're only meant to be held for a day or less. what does that mean for the market's foundation and the rally over the last few weeks. do you think that it should be

less trusted because it's built on this riskier foundation >> you know, investors that i spoke with, data that i looked at for this article, whether it was fund flows or retail investor activity showed that many investors are still bullish on tech. i think we have seen this sell-off this year, but investors i spoke to, particularly individual investors, they were saying i don't think this decade-long rally in tech is over quite yet, though it has been tested recently and that's why they are looking to these products to triple their exposure to tech basically. >> okay. so what's the risk -- what are people telling you overall if this bet is wrong? to what degree is this risky behavior by some retail investors going to affect the overall market structure >> you know, over the past decade we have seen times where

investors have pointed to etf activity or options activity as a source of exacerbating volatility i think in this case one of the biggest risks is for investors themselves i spoke to a 25-year-old individual investor who's worked at chick-fil-a, who's worked at starbucks and he reported $15,000 into tqqq on the nasdaq 100 index. you know, the risk for investors like these is that holding the etf for long periods of time doesn't work out the way that they think they will investors are turning to these as kind of lottery ticket-like bets on the nasdaq and tech stocks you may not win the lottery. >> putting it lightly. thank you so much for being with us today talk to you soon. >> thank you we are just two days away from cnbc's healthy returns summit this wednesday where some of the sharpest minds in health care will discuss the post-pandemic reality. you can find out more by

scanning the qr code on the screen or go to c nbcevents.com. tech check is back in just a moment eed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

we had held pretty steady here around 4550 for most of the morning. then we get a two-year note auction that wasn't all that hot. we got some squeeze on some yields and as a result took a leg lower here, now down 290 on the dow and back to 4522 as we are looking at the highest period of bond volatility going back to 2009, the last few weeks. >> yeah. and one more thing that is a potentially large tax will ahead for some of tech's biggest names. robert frank joins us with a breakdown of the expected proposal robert >> good morning, jon well, the top ten tech ceos would owe over $200 billion in taxes when this takes effect it calls for a 20% tax on income and unrealize capital gains. most of the revenue would come from billionaires and most of that from the tech founders, from elon musk he would owe $50 billion

jeff bezos would owe $35 billion. they would have ten years to pay it all off but each annual change in the stock price would also be taxed or credited. mark zuckerberg would owe a tax of $25 billion but he's down $40 million this year so in the end he gets an $8 billion credit leaving him with an irs balance of $17 billion so it gets very complicated. founders of private tech companies may get a break, liquid assets won't have to be valued and taxed every year. if you look at stroipe co founder, he would owe $2 billion the first year but each increase wouldn't be taxed until and if it ever goes public. guys. >> this one, the whole credit thing, you know, when the stock goes down, so many ways that this could go south from being able to predict what tax revenues are going to be. >> and that's one of the main criticisms is how complicated it

gets i've been looking at shares of tesla, speaking of another billionaire that may be paying more in taxes. that stock is up 15% over the last month it's sort of quietly been outperforming some of the other tech giants over the last month at least, but still on an annual basis over the last twelve months, it's still the underperformer but it has been picking back up over the last month. >> yeah, and green for the year once again as of today basically going green for the first time since january interesting, and by the way, guys, we haven't really touched on bitcoin a whole lot today but speaking of going green for the year as we got back above 48k, jon, we did see some beneficiaries from the likes of coin on that front. >> yeah. great piece by robert frank, also has me thinking is that going to aploply to crypto too? i don't know if you're holding it -- the whole tax implications, carl,

potentially fraught. >> indeed. as we said late last week, guys, we're going to work our way and have to chip away through a boatload of data throughout the week as we get through ism and auto sales and income and spending leading up to the jobs number on friday we're going to see where that and cpi in a couple of days. after that leaves the fed. lets get to "the half. carl, thanks so much welcome to "the halftime report." i'm scott wapner fro front and center, stocks continue to hang in there pretty well is that reason to be more bullish? we ask the investment committee. we have jenny hairington, steve weiss, joe terranova and jon najarian let's check stocks which are going for a third straight week of gains we do come on the air at noon in the east at the lows of the day. the dow is down a little more than 300 s&p 500 off by one-half of 1%. yields, watching those closely, 2.45, the yield on