know if anything else happens. >> ambitious and expensive bob pisani thank you for monitoring that. that will do it for "squawk on the street" today. "techcheck" starts right now good wednesday morning welcome to "techcheck. i'm carl can't nia with deirdre bosa and jon fortt the nasdaq down almost 1% today, erasing all of yesterday's gains and losing a quarter of its value for the year today across cnbc we're doing a deep dive and focusing on a few things we talk about a lot, amazon, microsoft, alphabet. main holdings in nearly every retirement fund and 401(k) together the stocks make up more than $7 trillion in market cap and 17% of the s&p 500 it has not been an easy start to the year take a look at the market cap lost in 2022, amazon, apple,

microsoft losing more half a trillion in value while alphabet hasn't fared that much better. we'll do the deep dive throughout the hour. first we'll turn to mike smike san tolly. >> definitely some divergence along the way. they added about 60% of market cap collectively to above 7 trillion interestingly, four of them combined, also up about 60, 65% revenue this year versus 2019. there's some harmony, but the revenue gain leans a lot on amazon's top line growth amazon has been the worst performer here its price to sale ratio has gone down apple holding up better. maybe one of the things apple has going for it among many others is the fact it's shrunk

its share count by almost 10%. the others have not. microsoft a lot less net share buyback. google keeping it flat it seems that might be one of the different things, apple also adding about $50 billion in revenue -- $50 million in net income and $100 billion in revenue. clearly it's reached a growth spurt at the right time for investors to effectively take some harbor. >> mike, those are great points. thank you. of the four mega caps we're featuring, amazon has fallen the most in terms of share price a nearly pandemic round trip yet. this company is still by far the most expensive of that group on a forward price to earnings ratio. that is because the earnings piece for amazon has only become a constant over the last few years. the company put most of its money back into the company to develop new businesses outside of e-commerce, the cloud, advertising massive logistics

network. in this market, guys, with this macro backdrop, that is a tougher proposition. andy jassy hasn't been through the dot-com bubble burst like bezos has. he's also facing the biggest labor challenge in the company hess history plus pandemic overhiring is poised to weigh on gross margins through the end of the year. so we're talking about perhaps this is the most vulnerable, or look at it another way, maybe the most opportunity >> i don't know about vulnerable it's interesting i think labor is the pivotal issue for amazon in part because amazon picked that remember the shareholders last year where jeff bezos said we want to be the earth's greatest employer or something to that degree amazon in a lot of ways is a microcosm of the broader economy. they've got the high-end employees paid mostly in stock who are certainly suffering from

this downdraft in the stock. they have hourly employees in warehouses considering orga organizing, salary and benefits being a part of that then they have the contractor workforce, carl, in delivery that sort of represents in a way the gig economy, the worker who is not an employee but trying to figure out how to make good in a tight market if amazon can figure that out, it has implications for so many other companies as well. think about target's report this morning where costs weighed down on margins walmart's yesterday. it all ties together. >> it is interesting there's been some discussion, jon, now that we have walmart and target in our pocket, maybe amazon's results are not that dramatically bad vis-a-vis the other two. it's been interesting to watch bezos get so vocal about the pernicious effect of inflation when you can still argue they have been maybe the biggest culprit of overbuilding, oversupplying in the wake of

covid of any of these major cap companies. >> target says they're caught unaware by the shift they got this big bulky lawn furniture that people don't want because they're going out to eat, not staying at home similar to amazon that built up this capacity in warehouses and workers they didn't need as much we'll have to see how they die jest that. >> when we talked to amazon, they refused to say there was anything wrong with consumer demand they said basically this over capacity set them up well for the busy holiday season. it will set them up for prime day going forward. so we haven't heard from them in a few weeks. i wonder what has changed. we know the macro backdrop is changing quickly, how they respond from what we've seen from walmart and target is a good question. jon, when we see companies start to exercise more fiscal discipline, amazon has gone all out over the last year spending so much money to double that logistics network. you have to wonder whether

they'll scale back at some point this year. however, they are predicting for forecasting a negative operating profit. >> i think there's a difference between slowing down and scaling back target in its earnings call talked about investing in those sortation centers that will be important for last-mile delivery i doubt amazon will pull back as competitors like target are investing. we also wanted the highlight other stocks and companies impacted by similar issues for amazon, obviously labor front and center as we mentioned. we talked about walmart, target facing cost pressures. don't forget a company like starbucks facing a unionization drive by employees that will be dynamic to watch across tech and corporate america. we'll get to the next mega cap, alphabet. next to amazon, all the things we've talked about in terms of maybe that cash position, alphabet looks like more of a fortress more than $130 billion in cash

and cash equivalence, $15 billion in free cash flow. operating margin of 30%. despite macro concerns, this company has a scale and cash to keep investments and hiring plans on track this year no talk yet of scaling back. that's pretty much what cio sundar pichai made clear last week. >> i've worked through past moments like this, be it 2008 or the early days of the pandemic, and we take a long-term view obviously when you're serving across the economy, a lot of the macroeconomic factors like gdp growth end up affecting advertisers spend as well. >> in that interview he said they're facing uncertainty like everyone else and they have to stay nimble. the majority of alphabet revenue, still digital advertising, despite all the other businesses they're getting into

in a downturn or recession, carl, advertising is typically the first area the companies cut back on. youtube showed some cracks last quarter. >> we had that youtube revenue number still lingers as one of the biggest internal prints as a quarter. it's going to be interesting it's one of the things where you don't need to cancel orders like you do with hard goods, you just sort of shut that off. if you see the way consumers are changing their mix, the question will be whether corporates start changing their mix as well. >> indeed. carl, how is google positioned in the metaverse that's right nobody cares because we're back to the real world where we're concerned with the price of eggs and milk and gas because we're driving around on real streets dee, i think that where google has an advantage not only do they have google maps and the relationship with apple that gives them first-party data, here is where we'll see how much extra intelligence they can plow into commerce as commerce becomes more fraught and more difficult

in this environment. even as we're talking about the walmarts and targets being blindsided by a shift in consumer demand, it's companies like google, with the data they have, constantly getting searches that might be able to help them see around corners if they can do that, maybe the marketing spend isn't the first kurt. >> that is so important, john. i'm glad you bring that up we showed you a chart of how wall street is thinking of alphabet not a single sell rating that's not uncommon. most of wall street is overwhelmingly positive on the mega caps we're talking about. however, alphabet is in a unique position because of the data and access to first party cookies. looks how immune it was to the changes that apple made in privacy with at&t versus some of the peers in the social media space. i think that probably extends to advertising as well. that's what you're seeing, the read-through in how analysts think of the company is that it's probably less vulnerable to those macro factors than some of

the others in terms of the advertising spent. obviously a number of stocks impacted by slowdown in ad spending as i mentioned, some more than others meta and snap direct competitors to alphabet. but media companies like disney and netflix as well, any slowdown in consumer spending would affect these names also, carl, the streaming wars we can never forget those. youtube is spending a lot of money on content and creators. >> even as warner brothers discoveries holding their upfront right now talking ab what the consumer needs in the way of streaming of course, all the big forward tech names have seen massive market cap losses to date. joining us to break it down, head of internet research from ever coarse, mark mahaney. you listened to us talk about those four giants. how do yougate grade them against each other >> in this particular environment, the ones that has the most macro exposure is

amazon supply chains, input costs, debt inflation and labor costs since they've got 1.6 million employees. full macro exposed the big issue on amazon year-to-date hasn't been revenue. it's been cost you've had a dramatic shift in profit outlook, similar to walmart. even more extreme. so that's the one that's the most dislocated, because of the macro issues the call you have to have as an amazon analyst, is when will we start seeing less supply chain constraints? when that happens, amazon's stock can work nicely. google is the most insulated it has the two more defensive areas in tech arguably one is cloud spending, which probably won't slow down during a recession or just modestly the other is search advertising. it was deirdre that pointed out advertise gets cut in a recession. google has seen it in the past search gets cut last

you've got this one other one you haven't mentioned yet, facebook the outlier that has had very specific issues, very controversial, too i think all three of these can work these are great opportunities for long-term investors. we haven't seen this multiple on amazon in years and maybe over a decade since we've seen it that's extremely dislocated and it's high quality, too i like all three of these. probably the one with the most upside is amazon it's a huge macro call if you want to be long amazon today. >> let's talk more about amazon. tell me what you think of this framing. amazon has successfully applied data to commerce for its advantage. it's successfully supplied data to computing for its advantage now perhaps the question is can it apply data to labor for his advantage, both getting the most out of the workforce, pleasing the workforce by giving it the incentives that it needs and reducing churn so their

workforce is more efficient. is that something that investors either should watch or have a way to in the numbers? >> that's a great idea, john i don't know how the heck you can attract that, but it sounds like a great think amazon is doing -- two or three things to keep in mind i think amazon is investing 5 to $10 billion on projects we don't know about my guess is they're in delivery automation and fulfillment center automation. that's one way to over time run the business a lot more efficiently, even with the same amount of employees. the other thing is, something we pointed out earlier, amazon and other people did, too, they overhired. they had to put plans in place at the very end of 2000, beginning of 2001. you can't just snap up a distribution center. you have to plan these things out 12 to 18 months in advance i think they'll build into that capacity, but it's the first time i've ever seen amazon do

that in the last 25 years. they did that in the context of a truly exogenous shock at impact which was covid you can't really blame them, but that's the reality >> first time you've seen that also, there's a new ceo in charge in andy jassy i wonder what that says about his leadership we're looking at a nasdaq hitting session lows, down nearly 2.5%. the mega caps, amazon and apple down 5 and 3.5% respectively give us the bear case. why are people selling these mega caps now if they are so safe >> well, there's one more shoe to drop. it's almost like famous last words. the cfo of amazon on the last earnings call was asked whether they were seeing any softness in consumer he said no i.e., what's not in estimates is a recession. if there's a recession, numbers will come down again they've come down for all the inflationary factors amazon's estimates came down for

cost factors, but didn't come down for demand factors. if you think there's a probability, greater than 50% chance of recession, you probably think amazon estimates will go down and the stock can go down. we may have derisked the multiple but not the estimates yet. that's the wildcard that bears are playing for. it's a thoughtful bear argument, the number has to come down because the recessionary risk is not in. >> that is definitely what we're talking about these days we've done the p part maybe to some extent. maybe the e comes next as we're back below 4k. mark, we'll talk soon. >> thank you, carl. the selloff is broadening. nasdaq at session lows, down nearly 300 points. the dow is down 650. we're wondering if there's an upside to the downturn in the market our next guest is optimistic saying the road ahead will be hard but he's focused and

telling his portfolio companies to focus alex tao sig joining us. where are you telling your companies that there is opportunity? what do they have to do to take advantage of this moment >> thanks so much for having me. undeniably this is a really difficult time for a lot of companies. our feeling is it's probably going toget worse before it gets better. history has taught us that, if you make the right kind of decisive business decisions during a downturn, you can emerge from the crisis as a stronger business. the last several years have made capital incredibly cheap for companies. it's led to a lot of bloat, a lot of unnecessary projects, a lot of overhiring as you heard even amazon is not immune to this if ceos can see this coming, can see what's going to happen ahead of time, they can take corrective action, and they actually are able to create the

unit economic formula that produces cash flows, they can revise assumptions on talent hiring will be a lot easier in this market now, and a bunch of other activities that will be good corrective actions that will produce better business in the long term. >> alex, you talk a lot about corrective actions even in public markets, we're seeing companies that have actually seen this coming or taken the steps way ahead of time we had tony shoe from jersey shore dash as well as sarah fryer from next door they got unit economics sorted out well ahead of this moment. they're able to keep investing for the long term and keep the plan intact. could you argue this is too late for companies to be looking at some of the stuff you just laid out? >> it's not too late i think you're getting into the difference between public and private companies. we work with private companies that hopefully some day go public when you're public you're measured every day when you're private, there's overhang from 2021

record amounts of capital setting very, very high water marks. a lot of companies are actually quite flush with cash, but they don't -- they haven't yet seen the correction in their stock price. so unlike a public company where they had to get that in shape earlier, a lot of private companies are still coming around to the reality. >> alex, i wonder how you're advising others on hiring. we've seen some disparity in the ways in which hr is approaching the future uber and others, meta, for example, getting more disciplined. others like google told deirdre last week they feel comfortable where they are do some have better radars than others what is the right path right now in terms of head count >> the difference between google and uber is one company trying to get to cash flow and one that's wildly profitable look, i think the message everyone is getting right now is that you need to become default

alive in this environment, that you should be able at any point in time to pull back your sales, pull back your marketing and get to close to break even we don't know how long the capital markets are going to be inaccessible forall but the. >> reporter: best companies in the private markets. this is a question of building a margin of safety into your business the only way to do that is essentially look at your organization and say what's necessary, what's not totally necessary to the core of the value proposition and then rationalizing that appropriately. >> alex, let's try to make this investable we are in the situation where the s&p 500 is down 2.5%, nasdaq down more than that, the dow down more than 700 points today at this point. i wonder, looking at the upside of a downturn, what sort of factors do investors need to pay attention to to make sure they're not caught on the back foot like amazon, walmart and target were when it comes to hiring and inventories they're also being careful not to raise prices too much because

they're concerned about competition. so to what degree does competitive advantage play into this how should investors think about competitive advantage in this market and how companies can demonstrate that >> that's a great question so the way we think of competitive advantage, is there a core fly wheel in your business that is generating value, and how can you make the fly wheel turn faster? in some ways it's easier, if you're in a highly competitive market like a quick commerce category in the u.s., where you have tons of companies spending hundreds of millions of dollars to acquire users and incentivize them to retain, a lot of that money will go away a lot of companies retrench into the parts of the market where they have defensibility, fortifying those defenses as opposed to fighting battles on new fronts we're encouraging companies to look at a granular level to see what's worth defending, what's

worth backing away from, take your resources that are limited and reinvest in the core of your because when the growth comes back, you'll be able to reinvest it's a little bit of a game. >> both public and private companies, uber as an example, in the email that dara sent out as a company retrenching alex, we'll talk to you again soon. >> thanks for having me, appreciate it. as we mentioned, stocks sharply lower right now. session lows in the dow, s&p 500 and nasdaq dow down 710 points. s&p 500 down 2.5%. nasdaq down 2.7. still to come, an in-depth look at apple and microsoft we'll have the headwinds and catalyst for the stocks which have an influence over the entire market. ard.hcheck" is just getting stte

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stocks are sinking right now, s&p 500 down 107 points, back to 3980 looking for some ideas guggenheim revising estimates. take a look at meta. guggenheim expecting a more competitive marketplace for revenue greegt than they previously thought, projecting their eastbound ebitda margins

they cut down to 250 with a buy saying shares are attractively priced relative to the brooter market they're neutral on spotify but raised the target from 95 to 103, more bullish on paramount seeing greater potential for marginal expansion, a buy rating and a $40 target which has made a lot of news, jon, in the wake of the berkshire news. >> it has indeed we continue to watch the market. the dow is now down about 750 points, but holding up relatively well, fin tech. paypal down 1.5% square is up higher. it's been a different story for the stocks, ones going public. julia has more on how investors should be thinking about these valuations which keep coming in. >> that's right. the fin tech sector is the second most represented category in this year's disrupter 50 list

with nine companies in total fintechs are some of the highest valued on the list 6 of 9 valued at more than $10 billion. eight times disrupter stripe is worth $95 billion. checkout.com worth $40 billion this is what they last worth before stocks got pummel take a look at chime, three-time disrupter, 72% from may of last year to this year. sofi went public in april of 2021, saw market cap fall 54% in the same time period the differential is even greater for web three focus disrupter companies. blockchain.com has grown from 186% last may while coinbase has fallen by about 76%. this market shelloff is encouraging private companies to hold off on going public n. the

meantime, we're hearing a lot about this idea that the downturn could be an opportunity for startups to hone their business models and emerge stronger a lot are encouraging to make critical changes to the business and slow the pace of hiring. >> there's this problem, right, with just maintaining their existing valuation if everybody knows it's inflated, this is the currency they're using to hire. even if they're not hiring as much, even their existing employees have got to get a little antsy i have the stock, but is it worth anything do i have to go somewhere else more established where the stock has come in and i might do better >> there is a concern. companies don't want to take a down round they don't want to raise money at a lower valuation than what they last raised at. that does not look good and is not reassuring for employees i think we'll see a lot of companies hold off on raising money if it will mean raising it

at a lower amount. >> you have employees holding this inflated equity well, we'll see. eventually the market is going to correct back up or somebody is going to have to take their medicine. >> or a little bit of both. >> little bit of both. julia, thanks. we also want to get a check on shares of target as we head to break. we mentioned it yesterday, with walmart you had higher inventory costs, pressures hurting the stock. it is down about 25% today, target is, post earnings also interesting to point out, online sales increased, down from 52% last year, last year being an exception after the break, more on apple and the supply chain challenges that have an impact on the whole economy. stay with us

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at ice, we connect people to opportunity. see him? he's not checkin' the stats. he's finding some investment ideas with merrill. eyes on the ball baby. digital tools so impressive, you just can't stop. what would you like the power to do? welcome back to "techcheck." i'm carl quintanilla with jon

fortt and deirdre bosa first, let's get a news update with christina >> hi, carl, thank you treasury secretary janet yellen says it is, in her own words, reasonably likely that the u.s. will block russia from making national debt payments, allowing the payments to expire next week speaking to reporters in germany she added a technical default probably will not have a significant effect on russia's economy. an conference board survey of chief executive officers finds that more than half of them think the federal reserve's move to race interest rates will lead to a short mild recession that the fed offsets another 11% are expecting a challenging recession. as gasoline prices rise, u.s. households are now spending around $5,000 a year at the

pump that's up from $2,800 just a year ago i'm glad i ride a bicycle in the city carl >> christina, thank you very much as we said, the flas dak down more than 3%. apple down almost 4. the stock once considered the safe haven for investors has lost over half a billion in market cap this year the street still remains mostly bullish despite the supply chain challenges our steve kovac joins us with what to expect next even as we get some headlines, steve, about china. >> carl, just saw that that's dragging apple shares down even lower. down 18% so far this year. that's half a trillion in market value gone, like you just said there are a lot of theories about what's causing the drop, but there's also uncertainty in china. apple ceo tim cook warning covid lockdowns in the country will cost the company up to $8

billion this quarter still, almost every analyst has a buy rating on the stock. an average of 189 bucks. it's not too expensive looking at the forward pe ratio, bottom line with microsoft and alphabet, amazon very expensive there. new iphone models and new macs maybe the reveal of the aug augmented rmt headset. on the surfaces side, this is where the project margins come apple working on an iphone hardware subscription plan, pay one fee, get a new phone every year and bundle in digital services there's an app store business that saw a lift after the company implemented its privacy changes to ios causing pain for digital advertiserslike facebook guys >> steve, against this backdrop, we can't underestimate how investors are looking at cash. when itches looking at alphabet

i wanted to call it king of the cash pile. that would actually be apple in terms of cash, catch equivalents, free cash flow. it allows us to do the really ambitious things like the m 1 chip, the vertical integration this seems like the bull case will remain intact doesn't seem like anything is going to throw that off. >> and also the cash is really good for them buying back shares and raising the dividend, too. that's something shareholders like as well you can expect that to continue. >> steve kovach, thank you as we keep mentioning, the d down is down about 700 points, s&p 500 down about 2.7%. the nasdaq off 3%. let's stick with apple, which is such an important piece of all of those tim cook's handling of his supply chain is going to be a key issue for chip players and suppliers like qualcomm, intel, not much of a supplier to apple

as it used to be, micron also having to deal with these issues, as are equipment makers like lam research. let's bring in bernstein analyst tony sack nagy tony, welcome. i look at supply chain for apple as an advantage because of its vertical integration, its scale, the way it buys priority with suppliers like corning, but that doesn't necessarily mean it should be trading at the multiple that it is now. how much of a benefit do you give apple for its supply chain strength >> good morning, john. apple has, as you mentioned, always had very strong supply chain management and sourcing. they are pretty good about dual sourcing most of their products. they have a relatively strong

track record of being able to manufacture even in times of turmoil. that's largely expected by the company. i think the issue that you raised is, we are in an unusual time covid lockdowns are prevalent in china. they were particularly prevalent in april apple is anticipating they will be impacted in terms of their ability to manufacture pro dmukt the quarter. i also think more broadly, investors are getting worried about consumer demand, that we may be entering into a period of slower economic growth, that european demand is being impacted by the war in ukraine, and that as a result they don't feel quite as confident in the earnings outlook for apple as they did 90 days ago. >> i guess the counter to that would be looking at, for example, walmart versus home

depot earlier this week. we saw walmart doing more grocery business which is lower margins as people look for deals. on the higher end, the home depot customer was buying less but paying more for what they really wanted to buy isn't that apple's sweet spot with the m1 max, with the iphones? people are still going to need phones they're going to need laptops and computers if they're willing to pay a premium price performancewise, does that play into apple's successful vertical integration up to this point >> apple has always been a previous -- priced, premium experience company whether it be products or service. they do have very strong premiums to other products in the marketplace. that said, apple really benefited, i think, in hindsight from consumers' wallets during the pandemic people were not traveling. people were not going out to

dinner maybe we're getting government subsidies, and as a result they had money to spend on electronics, on tablets, on macs and to some degree, higher-priced iphone i think one concern is not only are we having a slower economic environment from which apple is not immune, but i think the other thing is we may have ultimately had excess demand for apple products above trend because the consumer was relatively flush the converse is now true where the wallet size may be the same or even smaller for people getting subsidies, and yet they're traveling. they're going out to dinner and they're having more experiences. w when we look at apple in the preceding five years to last year, fiscal '21, the company grew in its ebit by about 5% a year

last year it grew 66%. why did that happen? in part because consumers were flush. apple had a great product line up, but consumers were flush the concern is we have both a potentially slowing economy and a slowing consumer spend, but we also have the risk that apple consumers may have effectively forward bought last year. >> toni, you're talking abou that shift from products to more services going forward this year apple is quite strong on services as well it has a strong payments platform the services business is only growing. can't it benefit there if not necessarily in the headsets? i know the makeup is different, but that could provide some growth, right? >> sure. look, i think apple's multiple has gone up considerably over the last two years because the services business has become a bigger portion of apple. investors provide services with a higher multiple.

higher margin, more recurring, and that's something that warrants a higher margin so absolutely i think there is a bit more stickiness to services. now, that said, it's important to note that, again, last year, the app store did really well because people were not going out to dinner, were not having experiences. so they stayed at home and they played games that benefited apple's app store. the other big driver of services is advertising there's some economics technicality to advertising as well pound for pound services is definitely more recurring and stickier, but services themselves, particularly around both the app store and advertising could also be impacted >> all right toni sack nagy, with apple down 3.6% so far. after the break, the company

formerly known as square holding, investor day. fin tech continues to sell off in the session the nasdaq is still down about 3% we will be right back. don't go away. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire (all): all hail, caesar! pssst julius! you should really check in with your team on ringcentral. oh hi caesar. we were just talking about you. yeah, you should probably get out of here. ♪ ringcentral ♪

i'm dan o'dowd and i approved this message. yetesla's full self-bably driving technology. the washington post reported on "owners of teslas fighting for control..." "i'm trying..." watch this tesla "slam into a bike lane bollard..." "oh [bleeped f***]" this one "fails to stop for a pedestrian in a crosswalk."

"experts see deep flaws." "that was the worst thing i've ever seen in my life." to stop tesla's full self-driving software... vote dan o'dowd for u.s. senate. stocks remain sharply lower today off the worst levels for a moment hitting the low intraday level of the week one name outperforming, and that's block, formerly square,

hosting its first investor day in five years, making the case it's not just a payments company. our kate rooney has that for us. hey, kate. >> hey, carl block executives want wall street to value this company as a lot more than payments pure play ceo jack dorsey keynote is coming up here i saw a copy of that and what he plans to say here. he's going to talk about the scope of the business and says a lot has changed since the last investor day in 2017 saying according to the embargoed and early look at the keynote we got for cnbc, he said we're no longer a payments company. block is now made up of different ecosystems he's got square in there, cash app, title his big focus is the bitcoin business cfo told me this week calling square a payments company is like calling amazon a book

store. bitcoin businesses only make about 5% of profit for block a big portion, according to the keynote we saw earlier, we saw an extraordinary trend toward an open trend for money transition. that becoming a reality allows our entire business to move faster globally for sellers, individuals and artists. he says given expertise with developer platforms and hardware, we decided to further fill some of the gaps in the market he said it's going to be a massive part of the business in the future and a smart way to add resilience to our company. block ceo focusing a lot more today on discipline and profitability. the long-term plan she says is to be aspirational yet disciplined. i talked to her on the phone this week. she said when you compare block to some of the other fintechs and look at performance, it's outgrowing and outperforming today they're sharing numbers to back that up including adjusted profit margins for square, 34%, 12% for cash app

cash app monthly active users 46 million, total users 86 million. back to you. >> kate, appreciate that that's our kate rooney baird did name block a fresh pick they note it's not a long-term play thinking the stock may settle in the 90 to 110 range for a while. dow down 727, the ten-year back to 292 up next, a lot more on microsoft. stay wh itus

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nasdaq down more than 3% let's turn to component microsoft down 3 1/4 so far. one of the few tech stocks still above its year ago level what's next for enterprise software demand and by the way, these issues are going to affect a lot more than microsoft, oracle, servicenow, adobe, salesforce, atlassian. steve kovac is back with us. steve, how does it look? >> yeah, that cloud growth for

microsoft is still flat but growing in double digits percentages, mid-40s, while there were concerns growth is going to stall or fall, really bullish on this and during the earnings call, there were concerns that enterprise spending is just going to go down and combated that and said, look, budgets might be being cut, businesses elsewhere but he doesn't know of a single company cutting their i.t. budgets and that's good for microsoft as they head into the summer and exercise pricing power on office and will be raising prices soon, jon. >> it's one thing not to cut that doesn't mean they'll grow it investors want to see this stuff growing year over year you know, when we look at companies reporting charging more for things and selling less of them, i wonder if that becomes a factor in enterprise software as well. >> it can but office is pretty much sat righted right now, 365, i don't think they have much more room to obtain more

customers. pretty much all their current customers transferred over so that's why you see them increasing prices. the growth is outstanding in the cloud business plenty of room and that's why nadella sounds so optimistic. >> steve, thank you so much. although that earnings call feels like ages ago and to that point we continue to watch the sell-off today the dow is down now more than 800 points, the nasdaq has slipped below 11600. lows at session, biggest laggards, dollar tree, costco, lulu and data dog. "techcheck" is back in just a moment

sell-offs really broadened when nikkei ran a headline suggesting china phone makers were scaling back production often taken with a grain of salt but didn't help today. overall, i mean it's a broad sense of risk aversion in the wake of target's numbers, oil back to 110. ten-year back to 292 broad based selling today. >> the costs associated with inflation sure seem to be an important part of this market. we've been talking about four

big tech names, i have to mention, two of those with the biggest exposure to inflation from labor and physical goods costs, amazon and apple have the biggest workforces and they're actually moving stuff around down the most right now, apple down 4 1/4 amazon down more than 5 1/2. >> and they are underperforming so interesting to see what is holding up relatively well you mentioned fintech but the arc innovation etf, carl, down by less than 2% so kind of that idea of first in, first out and looks like the megacaps have more room to fall here >> interesting, yeah, you do have macro desks as well looking at recession risk. yellen headlines talking about food insecurity later in the year you got the g7 finance ministry, jon, meeting over the next few days talking about how the long-term effects of the russian invasion of ukraine are going to affect not just markets here in the united states but clearly all around the world and then

you got some geopolitical instability as turkey looks to stem this attempt by finland and sweden to enter nato geopolitics layered on consumer concerns, layered on inflation risk not helping matters at all today. certainly it was a good day to take a look at the megacap tech. an afternoon ensues. let's get to the judge >> carl, thanks so much. welcome to "the halftime report." i'm scott wapner the bear bouncing, just crushed the rally in its tracks. we'll discuss that, of course. with the investment committee and joining me for the hour, britain talking ton, steve weiss and joe terranova. i'll show you what the markets are doing, pretty much at session lows dow down 800 s&p 500 near 3%. nasdaq is worse than that. 3 1/3% that's a 400-point loss. russell under big pressure, bond yields on the rise, ten-year quote yield,