>> i think in the u.s. the best case we have is not a recession or stagflation, but it's not off the table, and it will be hard to avoid it, and in the u.s. it's got quite alarming tool kit to play with unlike many other parts of the world you've got a very strong labor market still, and that's likely to have some teeth in it for a while. you have the consumer in good health you have corporate balance sheets in good health, and you have the banks with strong capital and well-positioned, so you've got some tools there to help if there is more of a recessionary environment, it will help mitigate the impacts of it or certainly blunt it. >> jane fraser of citigroup. that will do it for us here on "squawk on the street. "tech check" begins right now. ♪ >> good monday morning welcome to "tech check." i'm john quint nillia. may day for madness as the tech tries to calm its longest losing

streak since the dotcom bubble in 2001. who is the next potential takeover target? vmware according to some reports. we'll break down the latest share surge on this potential deal with become more on ea's take over dreams, tech's shift into stocks and a whole lot more, stocks and targets this hour. >> yeah, carl. we'll start with that potential shake-up in the semi and software world sources telling cnbc that b broadcome is in talks on vmware. it does paint a picture of the m & a environment at this moment in 2022 after a record $5.9 trillion worth of deals last year, sinking valuations could mean some bargain basket prices for companies with the cash and the value of m & a deals in the first quarter fell by more than the first quarter. we'll talk more about ea which has been shopping itself around

for a deal john, it's interesting the moment that we're in, price is still an issue here what is the value of vmware? its current market cap today is around just less than $50 billion. it was at $70 billion last october. it was even more than that in 2019, so obviously everything looks a lot cheaper at this moment, but what michael dell who is still a major shareholder will determine were the deal gets done or not it's still a big question. what's it worth? >> i don't know exactly what it's worth what is it worth to whom is part of the question, but step back why would broadcomwant to do this here it's a company with around $27.5 billion net revenue. vm wraer ha vmware has 13 billion in revenue and when you look at the operating income, 11 billion from semiconductors, 5 billion from software. we don't always think about software when we think about

broadko broadcom, but then vmware would add 2.5 billion if they were to combine. then you end up with broad com. it's pretty balanced chips and software in sort of a cloud and multi-cloud era where they would have more, not just with the hyperscalers, carl, and i think it's that type of radical transformation of a model that we have to think about here. >> yeah. a lot of people asking about strategic rationale this morning, jon one is, is it as you say sort of a continued migration from chips to software? is it because vmware is cheap relative to peers, or is it a sign of a hot tans worry about a slowing environment days after sysco talked about potentially that >> well, let's get some perspective. joining us none is ggb's glen

solomon. glen this, would be an even more dramatic than we've seen in the past transformation of what broadcom is with a leg up in soft weigh and multi-cloud era does this make sense in the bias is always to make a case for why these things make sense, but what's the risk? >> well, look, jon, i think, you know, broadcom has been on this trend now a couple five-plus years buying software and getting into the software business i think they also see vmware, not born a cloud company has moved hard to the cloud and that's where the puck is going, and that's where they want to go i mean, the risks of their birks any time you do a large acquisition like this. integrations can be really difficult, and vmware is a company that's been around a while. you said earlier, this company has 5 billion already in soft way, so they would have to merge it into an existing business that's a risk, you know. integration is difficult >> well, you also sort of have

to have somebody running soft wear, i imagine, and then somebody dealing with this really weird environment where the hyperscalers, aws, azure, google and then some others, they have a lot of power over what the components are in their cloud. they are competing with you, and you need to work with them, and you've got to deal with enterprises that aretrying to transform. how is broadcom going to do that do they have the services and sales motion to take advantage that have if they were to combine here >> well, i think it remains to be seen how much independence they leave for vmware, but vmware itself has been doing a very good job transitioning itself to the cloud, serving their global 2000 and hyperscalers very well, and their business is strong, so i think as long as they leave it alone, they are going to be in pretty good shape, but longer term, you know, as you point out, the software business is --

it's a free for all. there's players coming in from every angle. they have want to be in this sideways so i think it will be remain competitive, and for this deal to work, vm needs to continue to innovate. >> glenn, that's exactly right players from all different areas wanting to come into this space. i'm reminded of when intel acquired mcphee, right, and they said, okay, maybe there was something there that was going to follow through for their chips and that never really panned out is this something about the ceo of broadcom that makes him more likely to suck is seed as doing something like this because he is such a deal-maker and he's done it before >> you know, i think one thing underlying this deal that i think is very, very smart for broadcom is, you know, they -- they were unfortunately unable to get the qualcomm deal done, and i think the administration at that time said, hey, we don't want a company, that you know, has too much of its roots in asia acquiring a u.s. jewel, and so i think that was a wake-up call for them.

they have -- they have now acquired several businesses that are endemically u.s. and western-focused tech businesses. i think that this is part of the rationale for this deal. >> okay. so talk about the regulatory side of this then, vmware is the better known name than some of the other ones that they have actually acquired. it does have an important place among cloud companies, so what do you think is the likelihood of this deal being done if it is going to move forward? >> well, i think it's a brilliant move on their part, because they are a hardware business, so difficult for regulators to say, hey, this is somehow going to lead to unfair practices. i don't know what gymnastics the regulators would need to block this deal, but it seems to make a lot of sense to me. >> i do wonder overall, do you think -- is there an underlying comment about corporate demand for networking right now in this deal >> corporate networking in the hardware sense or --

>> yes, are you saying -- >> yeah, hardware. any kind of a degradation in the i.t. enterprise spending space going forward. >> okay. fair enough. look, i think we're in shopping season for acquisitions in software and certainly companies that have a presence and market share in the cloud you know, this is one of many deals that we've seen, and there's hundreds of millions of dollars on the sidelines in private equity funds and in the large -- large tech companies that have a lot of cash, and so i really don't think this is a one-off. i think that we'll see more deals like this. investors in the public market just sort of move from valuing growth, more lily to growth and profitability so vmware is the type of company you'll see on people's shopping list where maybe growth isn't what it once was but profitability is part of the picture. >> glenn, why isn't vmware the

one acquiring stuff? i'm thinking back, vmware's vision from early on has been largely correct. we're in this multi-cloud era. we need translation between different types of environment this is supposed to -- vmware is supposed to be skating to where the puck was going all along, so why is it getting acquired by this company, that company with dell, em kris, now it's getting snapped up by broadcom, why haven't they bulked up, and why aren't they leading this era >> like dolphins acquiring minnows but now whales acquiring dolphins it's a good questions jon, and, you know, i think -- i'm sure that the private equity money that's in vmware today didn't come into it thinking it was going to be a flip they were looking for, you know, an acquisition and kind of a rollup strategy, and vmware has made a lot of acquisitions over the years. nothing this big obviously, and -- and i -- look, i think that this is really a story about who is trying to bulk up who can get bigger faster, and so, again, i don't think you'll

see this as a one-off. i think you'll see more acquisitions and some will be really large. >> all right glenn, thank you >> let's broaden it out a bit and talk more about soft war investing writ large joining us this morning is global investors founder and portfolio manager eduardo costa. it's great to have you back. i don't know if you want to address broadcom specifically, but i know you're focusing on companies facing difficult comps, decelerating growth and are still in some instances dealing with elevated multiples or at least multiples that you think the market sees as too high. >> hey, carl thanks so much for having me on. great to be here it's a fascinating time because there's a lot of opportunities on both the long and short side. as it relates specifically to your question on companies facing difficult comps, there's a number of sectors right now, including the fintech and payment space where there's been

an explosion of consumer credit, proliferation over the course of the two years of the pandemic with a lot of companies emerging, you know, buy now pay later companies like an affirm and a klarna as well as new companies that have emerged like an upstart or soify, so there are going to be winners and losers in that space, but we're seeing inflation is really hitting the low-end consumer, and that's causing defaults and delinquencies to start to rise, so i think that some companies in that space are going to have challenges similarly, you're seeing across e-commerce inflation is really starting to take a bite, and it's -- it's across the spectrum all the way from pet food guys like chewie or, you know, the biggie guys like an ebay or amazon all the way down, to you know, the furniture segment like wayfair. we're seeing deceleration across e-commerce so it's a tricky time, but there are a lot of

interesting opportunities on both sides of the book. >> right when you think about key longs, is the list markedly shorter than the key shorts? >> you know, our long book is perhaps the smallest that it's been in a long time, but, you know, as you were discussing with the previous guest, there are some really interesting opportunities out there in the software space in particular one of our biggest positions is a company called smart sheet they are a collaborative work management software provider, leader in the enterprise space with brand name customers like cisco, dell, pfizer. they have a net revenue retention rate in excess of 30% which means from just from their existing customers they are growing their spending 30% and then they are adding new customers on top of that, so, you know, for a stock that's down 50% year-to-date, carl, you've got -- they are growing billions at over 40% gross margins in excess of 8 a%

and almost $500 million of cash on the balance sheet and free cash flow break even they control their destiny the stock is trading four times revenues we think it's an amazing stand-alone, but, you know, to the point on m & a that you guys were referring to earlier this, could easily be acquired by a number of companies including a microsoft, service now, workday, cisco to name a few. >> i think what glenn said, it's shopping season for software companies. you just brought up the idea of fintech competition. i think what you're saying is that space right for consolidation, and if so who do you think is doing the acquiring? is it going to be the big banks who might be able to do so easier from a regulatory standpoint or say a big tech company like alpha or alphabet, you know, that already have this presence but haven't gone into it in a huge way >> well, i think fintech is still going to need some time. you really are just starting to see delinquencies starting to

rise and, you know, there's not what i would call blood in the streets as of yet. did you see square which is now called block acquired after pay last year, and it was a very large deal paypal has also been fairly inquisitive, so i think it's likely that there will be some consolidation, but i think it may be too soon for that. >> yeah. i want to go back to vmware and, you know, mull pal perhaps points of interest there, and this sort of multi-cloud environment that we're in because i'm also noticing new panic shares are up about 6% perhaps in reaction to some suggestions that bain capital could be looking at it really specifically on software and software that helps manage the cloud experience for big companies that are increasingly going to need it whether we're in a recession or not, is that what we should expect to see

either go privates, m & a rumors how should investors think about how to sift through those companies and find value >> well, if you look, jon, you've got some very large private equity firms that have just raised very significant funds, companies like tomo bravo, vista extoy name a few that have been very active in acquiring businesses, and i think that that trend is only going to accelerate with valuations where they are. most stocks in this sector are down 40% 50,% year to date, and so for us where we've been focusing our time and attention is on the companies that are continuing to grow in spite of the potential for a slowdown in the economy. you know, the other name that's -- that's a big name for us in the portfolio is a company called 5nine they are the largest player in the software space, and this is

a space that's 15 million to 20 million call seats globally, 80% of which are still on legacy, sysco and afia systems and 5nine is rapidly taking share. they signed a $40 million deal with a large health care provider that they announced last quarter so, you know, they are rapidly taking share you saw that they were almost acquired by zoom last year, but that deal was vote down by shareholders and this is right for consolidation. >> well, we're going to get zoom tonight, maybe some color on what they choose in the road ahead. fascinating list, and we're clearly going to talk again soon thanks so much. >> thanks for your time, guys. >> after the break, "tech check" live from davos. do not miss what palo alto's

networks show has to say we do have a big show ahead. we're just getting started here. ♪ ♪♪ in the future we'll travel to incredible places with the help of magical technology. but what about today? i want my magical future now. ♪♪ i have places to go. ♪♪ rocks to climb. ♪♪ sights to see. and flights to catch... i can't wait for what tomorrow will bring, but in the meantime, let's enjoy the ride... ♪♪

what's it like having xfinity internet? it's beyond gig-speed fast. so gaming with your niece, has never felt more intense. hey what does this button do?

no, don't! we're talking supersonic wi-fi. three times the bandwidth and the power to connect hundreds of devices at once. that's powerful. couldn't said it better myself. you just did. unbeatable internet from xfinity. made to do anything so you can do anything. whoa. another crazy day? of course—you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want —your team, ours or a mix of both. with the nation's largest ip network. from the most innovative company. bring on today with comcast business. powering possibilities.™

let's get a check on nutanix. it's another name on m & a speculation. a possible takeover of the company by bain capital could be ahead, and with nutanix's 50% off of the highs, just the latest example of tech weakness turning into deal opportunity. looking at that a lot these days, carl. >> indeed, dee let's get back to sara eisen live in davos, switzerland, sitting down with the ceo of palo alto. stocks were up 10% on the results. >> very strong earnings. thanks for joining us. palo alto is the world's biggest cybersecurity firm for talking to us, a davos regular good to have you. >> thanks for having me, sara. >> so a lot of talk about the geopolitical risks out there you have an interesting -- >> whoa, it's very windy >> all right >> you have an interesting vantage point when it comes to zuber, and i'm curious what your

level of concern is right now about some of the activities that you're seeing in front of you. >> as you know, over the last two or three year, we've been going through this phase where we're seeing cyber attacks, more supply chain attacks for the most part where bad actors are hacking supply chain software, the software we all use in our companies, and that's kind of become the way that they have been able to address tens of thousands of companies i think that's not going to stock market i think that's still going to go on i have a feeling that some hacks that we saw recently are more of a dry run of nation states testing their capabilities i think there's more to come. >> what about russia specifically there was concern as this war happened in ukraine that we would see more it feels like it's been sort of quiet from russia. is that just because we're not hearing about it what's happening >> if you look at the recent activity that we've seen from the u.s. government, we are hearing from them that they want to us make our defenses more robust they want us to get zero trust in place

they want critical infrastructure or financial services to make sure that their stuff is strong, so i think that there's a sense of foreboding. i think my personal opinion, the russians have not turned their cyber guns yet on the west. >> it's coming >> but i think it depends on how this war comes to a conclusion, but i can't imagine the russian economy is going to be in a good place at that point in time. the question is what do they have at the behest to try to create chaos in the rest of the west >> with re, the u.s., prepared is our infrastructure, our companies prepared >> there's always more that you can do i think some parts of the infrastructure are more prepared than the others, but, again, you know, every company is a tech company. we saw the colonial pipeline hack it's not a tech company but somehow the hack was able to shut down the flow of oil, so every company has to be prepared not everyone is, and it's incumbent upon us to make sure that we all are. >> this is why your earnings are so strong. even in sort of a more uncertain economic environment you expect

the spending on cloud security to continue. >> look, i think the uncertain economic environment was also there at the beginning of the pandemic revenues went away and stores shut down so you had a whole bunch of customers with no revenue. so nobody stopped spending on cyber security and nobody stopped spending on technology we're like the first cousins of technology if you are going to spend more on technology, you need to spend more money on security and given where we are in readiness of security, we see a disproportionate share being expended towards security. >> what inning are we in >> security or i.t.? >> in security. >> we're very early. pick your sport. first innings of baseball, third round of cricket. >> okay. baseball i know. europe is potentially looking at recession and the u.s. economy is slowing down. >> i think -- i said this

before we're in the golden era of technology i think every company is going to spend more money on technology because we're all becoming technology companies. you want to solve a problem, you'll have resources for labor. you automate you want people to deliver food to your house, you automate. you want to buy groceries, you automate every company wants to become a tech company and every store wants to be in the meadow, so i think we'll see a lot more technology spend going forward in the short term i'm not worried about the economic conditions i think as the next three to six months transpire and we start seeing real impact of companies, we will see some marginal compression and technology spend, but overall i'm not -- >> wait on your stock at least on your earnings >> it's weighed on every stock there's been a re-reading of the market and that's been helpful because some things have run away too far look, our job is to keep our head down and keep generating cash flow for our shareholders and the market will take care of itself. >> there's a lot of competition

now with d-scaler and crowdstrike and can you all win amid this sort of rising wave of security spending? >> well, the total security market is $140 billion a year, give or take for us we were 2.5% of the market when i started and now we're getting close to 4% or 5%. there's room to grow there's no company with a reasonable share in the market we've spent time building capability in multiple categories and those categories are helping us out in terms of allows us to grow. look, this is a big market it's growing fast and there's room for more than one player. >> what about vmware i know they are not exactly a competitive. they have a cloud security business and there's reports that they are in talks to get bought broadcom. >> yes, they are in the security business look, i personally don't understand the conglomerate strategy in the technology business because in our business

security, there is a buyer and they are responsible buying a certain set of things. if i buy more things that fit that portfolio, it works if i buy adjacent things, i'm not sure how that works with the buyer, but i'm sure there are wiser minds behind that strategy. >> is that a dig like at a microsoft? >> not at all, not at all. it's not a dig you have to have things that one buyer wants. if you split your portfolio amongst multiple buyers in the company and become a technology conglomerate, many specialist companies are ready to do that. >> you do have something to say about that i thought you were going to dodge that question. >> i almost did. >> you said something. thank you for being with us. no snow, no/but a lot of wind here in davos, switzerland thank you, ceo of palo alto. >> he almost dodged but you beamed him with t. apple shares, meanwhile, on pace for their worst month since 2020, but our next guest is still bullish. find out why after the break stay with us

another crazy day? of course it is—you're a cio in 2022. so what's on the agenda? morning security briefing—make that two. share that link. send that contract. see what's trending. check the traffic on your network, in real time, with the next generation in global secure networking from comcast business.

lunch? -sure. you've got time. onboard 37 new people, with 74 new devices. does anybody have any questions? and just as many questions. shut down a storm of ddos attacks. protect headquarters and the cloud. with all your data on the nation's largest ip network. whoa, that is big. ok. coffee time. double shot. deal with a potential breach. deal with your calendar. deal with your fantasy lineup. and then... that's it? we feeling good? looks like we're feeling good. bring on today with comcast business. powering possibilities™. your record label is taking off. 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

welcome back to "tech check. i'm john quint nil ark checking in here half past the hour doug, a 2% gain, up 639 as energy and financials help out, but the nasdaq is underperforming the other indices this morning top lag yards are software names like zscale and octa and data dog. let get an update with our own frank holland. >> hey, here's what's happening. after 15 years in russia starbucks is leaving that country in the wake of putin's invasion in ukraine. the coffee company is closing all of its 130 licensed location russian workers will be paid for six month and get help looking for new jobs pfizer says three small doses of its covid vaccine provide strong protection to younger than 5 the fda said its advisers will

meet in mid-june to consider pfizer's data and also look at moderna's plan to vaccinate very young children and conan o'brien has a brand-new friend, sirius x the company signed a five-year deal for him to continue hosting his podcast. he's buying team coco, his digital media company. "the wall street journal" values that deal at around $150 million. in a news release when o'brien started in television his ultimate goal was to work his way up to radio. that's the latest. back over for you. >> sounds like something conan would say, frank more m & a could be coming in gaming ea at some multi-month highs potentially seeking out a buyer at our julia boorstin explains hey, julia. >> reporter: well, carl, take the acquisition of zynga and microsoft's acquisition of blizzard electronic arts now is the

biggest video game-maker left. they held talks with comcast along with diss anything, apple and amazon sending that stock up about 2% since friday morning. now we've gotten a no comment from all of those companies, but sources close to the situation tell me ea did indeed have preliminary talks with all four of those companies and that nothing advanced and nothing is imminent one source tells me that ea approached disney but that the conversations did not advance. another source saying that comcast ended the conversation because they couldn't see a path forward on any key terms for a deal such as price, time structure or management team sources tell me nothing is imminent burks those talks do speak to growing focus on the value in video games, and ea is certainly the most valuable. it's the largest independent player level now the video game sector and ea in particular have the advantage of a young engaged demographic ea says it has more than 500

million players around the world. it also has a strong like riff games focused on sports with the madden and nba franchises. those would, of course, be particularly valuable to the media and tech companies that own some of those sports rights. plus, they have a large catalog of other titles. ea has hit apex legends, and then there's growing interest in e-sports, competitive video game playing. ea tells us it does not comment on rumors and speculation and that they are proud to be operating from a position of strength and growth with a portfolio of amazing games, but, guys, you just have to wonder which of these giants would be most interested in those ea assets. >> julia, give me your take, your analysis here though looking forward in the business models is this mostly about content library, the fact that ea has this high engagement in its, you know, games of reputation, or is this partly about putting

together gaming capability, the content capability with some organization that owns ip. you think about nbc universal. you think about diss any they got plenty of ip. often if you're a gaming company you've got to get access to that to provide momentum to your gape wouldn't it be nice if you could put the two things together. >> well, look, i think ip is a key part of it you're right, jon, it works both ways think about the different titles at the media giants that could translate into games or video games that could be turned into movies, but i also think that it's more than that. i think it's about the direct relationship between the media and tech companies and consumers, and the fact that we're seeing the shift to stream and the fact that they want to own that one-to-one relationship with consumers, whether it's comcast with peacock or disney with disney plus have you amazon with the prime video relationship and apple tv plus, and the idea that games could be a key part of that, the people who play video games ren cybilly engaged, and you have to

wonder also with the likes of a comcast, obviously video games use a lot of -- if you're streaming a game, if you're doing e-sports, that's all about broadband. you wouldn't a high-quality broadband and that could be apoling there as well and with the fact that e-sports is this incredibly popular new kind of activity, people are going to e-sports conventions and are watching e-sports competitions that's the kind of thing, hey, maybe that would work at a theme park venue such as those owned by disney or by comcast, so there are all sorts of different things in play here, but i think it's really about that direct-to-consumer relationship. >> that's right. i wonder, julia, did the move itself surprise you? i mean, i feel like they were just talking, ea's ceo was just talking about them being more inquisitive going out, and they have acquired what, $5 billion worth in terms of studios, and to that ip point, right, what jon was asking you about, this is coming as ea is going to be

losing some of those exclusive licenses like "star wars," right, and then we were just talking about how it's re-branding fifa because it's losing that license. >> you're right. there has been a ton of consolidation in this space. i believe that ea has done four deals in the past 18 months, but i think this is about consolidation in general the fact that activision, blizzard, zinga, those deals are done it's just a question of what comes next. >> julia, thank you. take a look at shares of apple. the stock is on pace for its worst month since 2020 our next guest is still bullish. joining us is a bank of analyst analyst. i wanting to to the m & a conversation first because we've been talking about it all show or at least the potential of t.apple, of course, has aering amount of cash some might argue too much. it's never been particularly inquisitive in terms of the larger deals do you think that changes in this environment when valuations have come down so much

what would it take for apple to look at like, for example, an ea >> yeah, hey, good morning, deer draft. thanks for having me i think it's been apple's focus to make sure that they keep their innovation engine runningance a and they have been doing that largely from an internal perspective they have done a phenomenal job of that. now that said, at some point when you look at sort of what the benefit of the capital return is versus m & a, do you have to weigh those two things, and on the last conference call we asked a management team whether it made sense to look at more m & a assets, particularly in light of the fact, that you know, some of these tech valuations have come down significantly, so from that perspective, i think there are adjacent areas where apple can go and look at certain deals health and fitness areas, lot of assets that are interesting and apple clearly has a priority in health from a gaming perspective they have been very insular, focused very much on internal

development along with the app store models so far. there's a lower probability on the gaming side. i think it has to be something larger, more synergistic at the same time it's easy to absorb so they don't have a lot of integration company and the company culture matches so there's a lot of different things but i think it will be more so in the health and fitness area. >> you said you've been asking do you sense that anything has changed in the tone even around the edges from the team at apple that would make you think that they might becoming more amenable to m aim a? >> i who is going to say, deirdre, i think they are a very inquisitive company. it's just that they do a lot of stuff that's more small. that's more private in nature, and they have been doing that for a very long period of time in fact, they have acquired 50, 60 companies in not many years, so they will continue to do so i think on the margin i would say that i was a little surprised that -- with their

answer i thought that they were a little bit more willing, you know, when pressed on the issue, but that remains to be seen. >> wamsi, hard to talk apple today and not discuss this "journal" story about them expressing a private interest in diversifying the manufacturing base away from china we've been talking about this for years, but are we in a different chapter here, and what country could possibly absorb their demand >> yeah, carl, look, i mean, i think that we actually have in the past talked about this about something that we said gama, get america manufacturing again, and really the crux of this is for the apple supply chain to move meaningfully outside of china two things need to happen. one, they need to find an area where you can actually get labor force participation at the right rates, at the right capability, with the right understanding and the ability to actually do this but also be able to flex that

labor force up and down and so southeast athat, they have had some of their suppliers move to areas like vietnam, thailand, like mal sharks like india, so there have been a lot of areas where they have already decided to diversify their manufacturing on certain products. when you think about iphone itself that's a much larger scale operation and much harder to dislocate from a labor standpoint into other areas, but what we think it will take to really move that production is automation, so what you have to do is do a lot more system check type of integration, be able to do a lot more with robotics and be able to do a lot of assembly work and shift it more to a manual with an automated loin and we think if something hike that were to happen, we want to see them diversifying a lot more out of china i don't think that's going to be something that happens for the iphone they are going to make some attempts with some of their

manufacturing ems partners to moveinto india, for instance, for certain models and on a whole scale basis to really be able to work that out is extremely difficult. >> wamsi, you said apple does do quite a bit of a&m and it's on the smaller side we estarting to get more information coming out about a vr, ar, really more ar headset what are the opportunities there? perhaps even among smaller cap public companies which would be more in apple's, you know, traditional range? what are the opportunities either in terms of companies themselves, small gaming studios where they don't tend to be public or even component suppliers that would be key to apple supporting and growing this sort of product >> yeah, look, where we are i think is extremely key to some of the new product road map aspirations that apple has, particularly on the ar side. i think from a vertical

integration standpoint, look, we've been very clear about where they can do vertical integration. it's really been much more so on the silicon side, and that's where i think they will continue to do more and more vertical integration, as they have shown with the likes of the m1 and what they have done obviously on the iphone for a long time and when they are going to continue to do on that side i think on more of the software side, they are going to do much more inhouse this is going to be hard to integrate like various different software assets on display, for instance i think, again, they are going stay in an outsource model they have companies like corning that are doing a lot of things jointly with them and they are part of like the investment that apple makes on a, you know, five-year basis in terms of some of the capital that they are giving to some of the partners to be able to innovate, so i think there's a lot of opportunity for apple to do a lot of this innovation inhouse i think semiconductors is where

most of the focus is going to be yeah, i mean, on the fringes they can look at certain smaller assets, but i don't think that it's really going to be a lift and shift. apple takes ten years to develop a product like this, right >> yeah. >> i'm sure this has been in the works now for a very long period of time. >> wamsi, thanks for your insights today. >> thanks for having me. >> let's check in on a mega cap tech name, amazon reports that the company is looking to shed some 10 million square feet of warehouse space. we will continue to watch that story. meanwhile, the dow way up, more than 2% right now translating into nearly 700 points financials surging jpmorgan, goldman, visa, amec, all trading sharply higher we're back in two. cal: our confident forever plan is possible with a cfp® professional. a cfp® professional can help you build a complete financial plan.

visit letsmakeaplan.org to find your cfp® professional. ♪♪

facebook's products harm children, vstoke division and.org to fweaken our democracy.ional. teens blame instagram for increases in the rate of anxiety and depression. it's not great when your customers are voting with their feet and deciding to kind of walk away. facebook's parent company meta dropping more than 26% last week... that is more than $230 billion in market share value. when will there be accountability? how many more people need to be harmed before mark zuckerberg listens? when you need help

it's great to be in sync with customer service. a team of reps who can anticipate the next step genesys technology is changing the way customer service teams anticipate what customers need. because happy customers are music to our ears. genesys, we're behind every customer smile. dow up almost 700. tech coming off another week in the red though the longest losing streak for the nasdaq in 20 years though we're trying to bounce hard. mike santoli is here with a look at how stocks are digesting with some more signals of consumer weakness. >> yeah, carl, it's all how you slice the sectors. we were talking about this earlier. take a look at amazon and tesla, both consumer discretionary stocks in fact, together, they make up 40% of the regular regular cap-weighted consumer discretionary sector

same move down 40% over the last six month. this is the equal weighted version of the consumer discretionary sector and it evens out the overweight better by almost 12 percentage points you have to know what you're get when you're talking about the signals. today in general it's non-tech and banks that are the impetus for the upside here, carl, but have you to see exactly what signals you're drawing from the different sector moves >> all right mike santoli, thank you. coming up, how crypto omryange fts is shifting away fr cpt ore we'll have that in just a minute don't go away. to design solutions to help you manage payroll, benefits, and hr today, so you can have more success tomorrow. ♪ one thing leads to another, yeah, yeah ♪ - super excited to open up my diploma so yofrom southern newuccess hampshire university.

- i'm nervous, i'm excited. - [man] okay, let's see it. let's see it. - oh my gosh. - as soon as she saw this, i did it and it's here. - [man shouting] yeah! (upbeat music) - [narrator] next term starts soon. visit snhu.edu - hiring is step one when it comes to our growth. we can't open a new shop or a new location without the right people in place. i couldn't keep up until i found ziprecruiter. ziprecruiter helps us get out there quickly and get us qualified candidates quickly. they sent us applicants that matched what i was looking for. i've hired for every role, entry-level technicians, service advisors, store managers. ziprecruiter helps me find all the right people, even the most difficult jobs to fill. - [announcer] ziprecruiter, rated the number one hiring site. try it for free at ziprecruiter.com

gut check on didi, its life as a public company nothing short of disastrous comes to an end soon days after the company went public on the new york stock exchange in 2021 that was in june, beijing launched a cybersecurity review kicking didi's apps off app stores in china, revenue plunged: losses widened. that has contributed to shares falling nearly 90% over that time now the company hopes to get its services back onto chinese app stores not clear, however, that a delisting will be enough for regulators what it will do, though, is move didi to the otc market, the over the counter trading where it will no longer need to file financial reports with the

s.e.c. from $14 ipo price to about $1.50 today, it has been a wild ride for this company. more "tech check" after this stayitus wh

the m&a news continues, crypto platform ftx is apparently shopping around for an acquisition target that would help it expand into stock trading. our cay rooney broke that news first. >> that's right, crypto exchange

ftx has been quietly shopping for stock trading startups and looking at potential deals i'm told by sources the crypto firm has approached at least three privately held brokerage companies about an acquisition the list includes apex clearing and public.com this is according to sources familiar with those talks who asked not to be named because the discussions were confidential, these talks were very early stages, no term sheets were signed i'm told, and no comment from those companies or ftx on this it does speak to ftx's ambitions in the space, and a broader effort by the whole industry to really bring stocks and crypto trading under one roof just last week ftx announced its official move to offer stocks. it's already made a couple of investments in the space, in april it took a stake in iex, a stock exchange operator and notably robinhood. that one was through ftx's ceo sam bankman freed, the 7.6% stake was disclosed in an s.e.c. filing that's fueled a lot of questions about potential deals in this

space and about robinhood's future as an m&a target as well as its share price drops more than 80% from that high last summer that s.e.c. filing i mentioned, no plans to push changes at robinhood and he sees it as an attractive investment. bottom line, expect a lot more m&a and consolidation in this space as prices come down, carl. >> that space is evolving quickly, thank you kate rooney. inflation pain, tune in tonight for another cnbc special on the state of the consumer inflation and your stocks kicking off tonight 6:00 p.m. eastern time one thing that has not been inflated, yeah, the price of twitter shares down again today. elon musk still has a signed legal agreement to buy at 54.20. investors not as confident that deal will go through this istl a s ildollar above last week's low. back in a moment s—you're a cio in 2022. so what's on the agenda? morning security briefing—make that two.

share that link. send that contract. see what's trending. check the traffic on your network, in real time, with the next generation in global secure networking from comcast business. lunch? -sure. you've got time. onboard 37 new people, with 74 new devices. does anybody have any questions? and just as many questions. shut down a storm of ddos attacks. protect headquarters and the cloud. with all your data on the nation's largest ip network. whoa, that is big. ok. coffee time. double shot. deal with a potential breach. deal with your calendar. deal with your fantasy lineup. and then... that's it? we feeling good? looks like we're feeling good. bring on today with comcast business. powering possibilities™.

welcome back, win more thing before we go this weekend i had the great honor of delivering the commencement address to the graduating class of 2022 at my alma mater depaul university in green castle, indiana. the year was 1998, google was founded, apple unveiled the imac

and a few months before that i graduated from dupaul. yesterday i shared what i learned on the campus, and lessons of love, truth, and impact. >> i have a weekly segment i created on cnbc called on the other hand i argue one side of a contentious business issue, and then i say on the other hand and argue the complete opposite just as passionately. what i enjoy most about "on the other hand" is what it teaches me as i'm researching and writing it every week i start out pretty sure i know what i think about a given issue, and every week by the time i'm finished writing i'm less sure. sometimes i've changed my mind completely because i'm trying to have an honest debate with myself in search of truth. >> the -- ♪ >> people often ask what i really believe in these on the other hand segments. sometimes i really don't know, i just made the arguments. >> because they're so good, jon,

you argue both like you said so passionately i change my mind watching them as well, right when i think you've convinced me, i've gone the other way. carl, i'm sure sometimes you felt the same. >> yeah, i'm thinking of that billy joel lyric, john, shades of gray are all that i know. the more i find out the less that i know, which is certainly what that segment has taught all of us. congratulations on that, that's fantastic. >> zoom tonight, let's get to the half. thanks so much welcome to "the halftime report" front and center this hour, the question on everyone's mind right now, is a short-term rally possible have some stocks just gotten too cheap to ignore? our committee selectively buying today. we'll tell you where, joining me, bryn talkington, joe terranova and with me on set is jim lebenthal. dow has been down for eight strakt weeks we're having a nice bounce today. 1.75% to the upside today, it's a nice gain across the board you do have some talking