>> yeah, i see what you're saying, steve, unfortunately, we are out of time. but appreciate your context. thank you so much. >> thank you well, important point, i mean, he technically, cohen was not an insider in the way we typically describe it. obviously, a very high profile investor, and three directors, not an insider that's going to do it for us here on "squawk on the street," "techcheck" starts now. good tuesday morning, welcome to "techcheck. i'm carl quintanilla, jon fortt, deirdre bosa head take or -- markets come off their worst day since june, and what's next with satori funds, dan niles, and feeling the stick of crypto winter, a lot more on you brian armstrong is handling the volatility, an exclusive you don't want to miss this hour don't think we forgot about intel. inside look at the company's new $30 billion deal with brookfield, what it signals for

intel, chip industry, and capex. >> we're going to kick off today's feed with duelling stories in software. zoom is plummeting this morning after cutting its outlook for the next quarter and the year. shares are now on pace for their worst month since april. see down, they're more than 13%, cfo warns new paying subscribers proving harder than expected to come by, zoomphone doing fine, though, in the opposite direction, palo alto networks, biggest gainer on the nasdaq this morning, up more than -- the company announcing a three for one stock split set to take effect on september 14th dee, this is sort of a sign of the times, security so important, the moves to the cloud, a wind at palo alto's back here. and bookings, you know, bookings really strong, showing that this isn't just a one quarter thing, but the intention to spend is there in place for months to

come. >> and gap profitability for the first time in four years, that was something that aurora highlighted. zoom in this brutal selloff we're seeing in the markets today, it really sort of continues what we have seen this year, carl, this bifurcation between the consumer and the enterprise before the pandemic, zoom was largely an enterprise company. that flipped on its head, and consumer went from being about a third the size of enterprise, to nearly 40% larger than enterprise, in just two quarters, that's where it's really feeling the pain. not that there isn't some slowdown in the enterprise as well in terms of deceleration and growth consumers, they don't tend to sign these multi-year contracts, and that's what's sinking the stock now. the prospect that it's not going to grow like it has, of course it's not but consumers can cancel them a lot more easily. >> yeah, it's true although bern stein defending it today. they write, should we stick a fork in the business and call it a day? not so fast. we see glimmers of sun through

the clouds as they build a product, dee, that our recent channel checks suggest remain a preferred solution, and they stick with market perform. >> that's their core product, and jon mentioned phone, zoom phone is doing okay. >> doing great. >> the promise was that it was going to be this unified communications platform. i don't know, jon, do you buy it now they're trying to build their calls on their business organically. 59 would have been a big win. >> it would have been. zoom is in a tough position, sure, but right now it's trading right around where it was after it first went public so just think about -- has the future of work and the perspective on it, and the sense of the role that video conferencing plays, has that changed dramatically since then? yeah, i mean, it really has. and, you know, how many people would have just fought all over themselves to get zoom at

sub$100 a share. here it is, the product has value. they've grown it tremendously over time. sure, there's been this huge narrative shift where there were a lot of people saying people are never going back to the office, work has changed forever. work has changed a bit people are going back to the office that doesn't change the fact that this is a high quality product in the space, and, you know, there's the chance now that, you know, because the sensement has swung the other way, you know, at first, you know, they're never going to be anything, and now they're never going to be anything again. >> well, they -- >> really, the truth is somewhere in the middle. >> you can have a high quality product, but we didn't mention the elephant in the room that is microsoft. i like what jim said earlier, carl, there's this company called microsoft when you open your pc, teams shows up that's making the proposition for companies like zoom, zoom in particular, a little tougher the next guest is shorting a range of sector names, and predicting that we will see a more traditional recession next

year, joining us now, satori fund founder, dan niles, dan, good morning, we love when you can join us. you've called the recent rally a bear market rally. we talked about zoom i want to ask you specifically about palo alto, and cisco two companies off quarter that have put out pretty decent results, and outlooks. does that make you pause at all and think that this rally could be more than a bear market one >> no, not at all. because the other side of it is, look at the pmi numbers that came out this morning. and i think that ties to what you're going to see looking forward, which is up until now, as you talked about, the consumer has seen the slowdown well, you know, two-thirds of the u.s. economy is related to services, the consumer, when that starts to slow down, then you start to see it affect enterprise demand with the lag and so that's the next phase of this slowdown, where if you remember earlier this year, the big tech companies couldn't hire

fast enough. now they're all in hiring freezings, or in amazon's case laying off people because they overhire you'll see the next phase, when consumption starts to slow down, you have less people working at these companies and then enterprise demand is the next phase of this. for us, we're actually, you know, we own some amazon we own some walmart now. defensive, longs as i like to call it. names that should pick up market share. the names we're shorting have the ones related to the enterprise that's the next phase of this. obviously it's security, there's pockets of enterprise that should be better, security should be one of them. but that's how we're thinking about this on a very big picture basis. >> dan, weren't we supposed to see some slowdown in enterprise? we saw slowing growth rates at the hyperscalers, the cloud dpaen companies, i was struck by chuck robbins' comments last week that europe was

surprisingly strong for him. what do you make of that what is the catalyst for the next shoe to drop in enterprise? >> yeah, i mean, i think, you know, if you think about this, as i said earlier, you have seen enterprise slowdown. it's not across the board, right, because -- >> but the markets are taking it in stride. >> but remember, how much is cisco down from the ties i mean, cisco, part of this, that wasn't talked about in your discussion of zoom is i didn't hear any of you bring up, how much are you paying for? that's the p/e multiple? that's the critical piece that's missing from a lot of these discussions is, yes, zoom is down from 590 to $85 it's showing the stock still go down even when it's down already 80% or so from its highs that last piece is the one that people aren't focused on if you look at the overall market, you're still paying a 20 times trailing p/e for the s&p 500 when inflation is over 3%.

the trailing p/e is 15 times and you've still got estimates going down in aggregate. we can talk about the one-offs like cisco or palo alto networks but on reporting q2 results, s&p earnings went down for 2023 for the first time in two years, after going up for two years straight off of kwquarterly results. so you're starting to see the overall numbers go down. don't forget, every big cap tech company, amazon or apple, both revenues and the eps, the eps for the september quarter went down in all of those cases, microsoft, facebook, google, all. so that's the big picture. so you don't want to get caught up in the day-to-day moves of, oh, palo alto is up today and cisco is up today, well, but zoom is down you've got to step back and look at this. this is going to be a long, punishing journey as the fed will probably remind us at jackson hole on friday, they've still got to raise rates a lot

more from the 2.5% we're at now to get it to the 3.8, which is where they have forecasts for their median projections by the end of 2023. >> how long does this take to play out, do you think, the consumer slowdown, the sort of slow evaporation of demand are the holiday numbers going to be -- well, what brings that home is january the reality check, the sobering up, post new year's and then eventually it's going to take some time for that to trickle through to enterprise if that does, indeed happen, right? >> that, jon, i think hit the nail on the head that's what we're looking at for example, we own apple right now because they've got a product launch on september 7th. the stock runs up 68% of the time in the two weeks prior. it's going to move up into it. but don't forget, apple was a big pandemic beneficiary just like zoom was. their revenue growth has slowed down what are we all spending our money on we're not spending it on peloton

bikes, netflix subscriptions, zoom, et cetera, we're going out, going on vacation, getting on flights, et cetera, that spending is shifting quite a bit. i think what you're going to see, to your point, jon, when you get to the holidays, there's going to be a lot more money spent on things like vacations this holiday season, versus last holiday season, when you may have been buying a lot of goods. it's going to be spent on services and that's when i think things come home to roost. >> finally, dan, just talking some levels, back in mid-june, i think we were at 36.75 you moved from a neutral tonette long do you think we get back there >> yes, absolutely, and i wouldn't surprise me to see it go lower because as we talked about earlier, right, valuations of that piece that no one talks about. they talk about well, zoom's gone from this to that what are you paying for? if earnings estimates are going down, during normal recessions,

s&p earnings get lower by 20%. you just started that proesz when you reported q2 you say, well, 20% reduction to estimates gets to a $2002023 target of eps on s&p, you put a 15 multiple on it, which makes sense when, you know, inflation is above 30% obviously it's at 8.5 right now. you have a pretty large downside potential if you combine that with the fed continuing to push to get unemployment up because that's the only way to take care of inflation on the services side, right, with wages and things like that that's what it's going to take so to jon's point earlier, it's going to take some time to get there. this is not a, you know, three month, six month process, this is a one year, two year process. >> right well, tan, it's always great to get your insights, the valuation piece very important indeed, and zoom currently trades at more than 22 times forward earnings

talk to you again soon, dan niles. satori fund. >> thank you. coinbase ceo brian armstrong is next, don't go away "techcheck," just getting started.

do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance.

pst. girl. you can do better. at least with your big-name wireless carrier. with xfinity mobile you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill over t-mobile, at&t, and verizon. wow. i can do better! yes you can! i can do better, too! now you really can do better! switch to the fastest mobile service - xfinity mobile. now with the best price on two lines of unlimited. just $30 a line.

this extended crypto winter taking its toll on bitcoin, ether and exchange stocks like coinbase, doin more than 70% since the beginning of the year. our kate rooney sat down with brian armstrong last night and joins us with that rare exclusive interview. >> sththat's right, we spoke for under an hour last night here in los angeles talking regulation, the stock pricing, going price, web 3, and a lot more. we started the conversation on this macro environment, and how coinbase is thinking in the short term amid this extended crypto winter. we never try to predict the future there's this famous saying, economists have predicted the last nine of two recessions. we're in a downcycle it's not unusual we've been through four cycles like this as a company, only 10 years old. this one happens to coincide

with the broader macro environment coming down. we all hope it will be 12, 18 months and nice recovery you have to plan for it being longer than that that's how we think about it and don't try to get too cute about predicting the future. >> does it feel different this downturn, because of the some of the macrofactors, inflation, recession risks, rising rates, crypto has been down through these turns, is it feeling different? >> no, it seals the same from our point of view. you know, when crypto goes down, everyone gets very pessimistic and there's fear they get distracted. they move on to other things when crypto is running up, and they think it's everything and there's a rational exuberance. neither one is true. we have this saying internally, i like to repeat a lot it's never as good as it seems, never as bad as it seems one of the reasons coinbase has been successful the last ten years, we try not to get focused on short-term ups and downs, we

zoom out five, ten years from now, are more people going to be using crypto probably is the internet widely distributed? probably more commerce, dij tat payments. these are all tail winds that are long-term trends if we don't get distracted and keep building great products, we'll do fine. >> your business is so tied to trading volume, is that a hard thing to not be distracted by the prices when it is so dependent on how much people are buying and selling >> yeah, so for better or worse, the majority of our revenue historically, and still today, has been from trading fees it's greatened up markets. we tend to make lots of revenue, profit, that's right great last year we booked a huge profit in downmarkets it can change dramatically crypto is not entirely unique in that regard, there's brokererages and financial services, energy traders, any new york stock exchange, everybody can't predict what's going to happen with the s&p 500 for next quarter there are other businesses that

have the lack of predictability. we're shifting revenue from trading fees to subscription services that's now grown to be 18% of our revenue in our last earnings, we shared that, that will continue to grow over time, over many years, and that's good it makes our revenue more predictable, and for the long term. >> has that uncertainty been a hard story to tell wall street you're not alone, these other brokage firms are going to be the same thing the idea you're so tied to whatever happens in crypto >> well, we are 100% focused on crypto that's an easy story to tell the revenue volatility is not entirely unique. they've seen this before with charles schwab and the new york stock exchange that part is not entirely different. the part that's unique that we're out there telling our story around with crypto, is hey, we're really passionate about economic freedom and we think crypto is this amazing way to create more of that in the world to create financial infrastructure with countries all over the world and even make

financial markets right in the u.s. or developed countries that much more efficient. by the way, it's not just about financial services, there's this whole other thing, web 3, and people are building new apps around identity and social and games, and new ways to connect scientific research. it's getting to be much bigger truly the next generation of the internet that's a much bigger picture, a story to tell, which is frankly harder to wrap one's head around i'm still wrapping my own head around it. every company has to start with one big thing that grows revenue. you have a next act, and a next act, that's the story we're out there telling. >> brian, it's been a brutal year for coinbase's stock, down 80% from the high, 70% or so from this year what should investors know, and what should give them confidence that you're going to turn the stock and the company around. >> it's important to separate what's in our control and what's not in our control the broader macroenvironment, we don't control that, we don't even control the crypto markets, we're down roughly in line with

our peers, i try to put that part aside, focus on what we actually do control. the things we can control are what products we focus on building, how are we managing our costs in this environment, making sure that we're well capitalized, any down period, you know, we were really fortunate last year to go out and raise $3 billion of debt, at a very attractive rate it's making sure that we can continue to invest not only in our core products, driving the profitability today, but using the profitability of those core products to invest in a little bit of the future, too, so we come out of this cycle even stronger. >> you guys have about $6 billion on the balance sheet, is that right >> a little over 6 billion. >> what's the plan for m&a, you guys did strategic acquisitions in the last downturn, where are you seeing opportunity and where might you look to buy other companies right now in the downturn >> i can't speak about any deals that may or may not be ongoing, suffice it to say, we're looking closely at every deal that's happening right now. i think that we haven't necessarily seen prices come

down dramatically from where they were but we're early in the cycle. it's not all about price we're taking a long-term view of this as well if there's a partner or company that we just think, if we put one plus one together, we get three or five. that's a deal that we would do in an upmarket, a downmarket so i think we're excited about some of these m&a opportunities. >> executives put a sort of cap on losses on about $500 million. what kind of guardrails are you putting up to make sure that those losses don't go deeper if this crypto winter lasts longer than you might expect. >> beginning of this year, q4 last year we communicated we were targeting negative $500 ebidta we are on track to do that despite very extreme conditions. i feel good about that we did have to react quite quickly and we did a layoff of 18% of employees earlier this year i think some of the actions like that, you can never predict the future in business but you can adapt quickly and try to make

sure you're not burying your head in the sand or refusing to look at the truth. so, you know, i think through that, in a lot of great conversations with our board, and external folks, we've been able to navigate that environment well so far. >> a lot of the costs have been around stock-based compensation, how are you managing and sort of balancing, incentivizing current employees keeping people around but not deluding shareholders. >> i'm a large shareholder i'm sensitive to any dilution that might be out there we're balancing this idea of you need great employees to build the best products in world we want to make sure we retain them in this environment, if things are coming down, every company, not just coinbase, is looking very closely at how well they're paying, is that still market or is the market changing and you have to kind of take a really close look, i think, as well, at the different levels of people coming into the organization, anything's on the table in the future. you know, i think we're not alone in that regard.

>> could there potentially be more layoffs >> you never want to say never i will say that the one layoff that we put out there, it was designed to be a one-time event, but i can't tell you what the world's going to be like a year from now so anything could happen. >> jim -- one of the notable short sellers of coinbase, his thesis being that coin onbase overearns as he put it what is your response that might say that fees are going to erode and that costs will have to come down, or fees will have to come down at some point. >> yeah. well, okay, so i think there's the short and medium term and then there's long term, right, short term, we have not seen any fee compression to date, so that's -- that's good. we're generally seeing that, especially our retail customers, they're not super price focused. they want to use the app that is -- it's trusted, it's easy to use, they're not going to lose their money, it has the products, the assets, the payment methods, you know, the additional functionality around staking and, you know, nfts,

there's so many new things happening in crypto, especially on the retail side, that it just hasn't become commoditized yet these are professional investors that are high frequency, trading bips, these marketmakers and things like that i think that could change a little bit over time again, we haven't seen anything dramatic now, okay, so let's think about medium term and longer term. i do think there's going to be margin compression eventually. it has to happen at some point everything that we're building, others eventually are going to build it and it will become more commoditized what do we do with that environment? this is why we're investing in subscription and services revenue. we're realizing trading fees is not going to be that thing -- it's still going to be a major part of our business in ten years from now, 20 years from now. i'd like to get to a place where more than 50% of our revenue is subscription and services, we've

been focused on that the last three years, it takes time to plant these seeds, see the green chutes we're seeing good subscription services revenue now, it's now 18%. two years ago it was 4% of our revenue. the trend is pretty clear. >> do you feel like it's been a disadvantage to be publicly listed at this point a lot of big competitors are privately held in different countries. do you feel like you've had to move more slowly because you're listed on the nasdaq >> some days it's certainly felt bad to be a public company, but i think honestly the same thing is happening in private companies, they're just not getting the market to market every day. but if they were public, it would probably be the same thing. i'm glad we went public. i think this is the right long-term bet. we want to be the most trusted company out there in crypto. we want to be the easiest to use. by kind of going first, we might sometimes pioneers get a few arrows or whatever that saying is that's fine. it might take two or three years, people see our track

record that we're managing the business rigorously with good capital allocation, focusing on long-term profits, that's just going to help us be the most trusted, go win some of these deals with black rock, and meta. and so i'm glad that we're doing the right thing for the long term, even if this short-term market has been a little painful. >> you were the first public crypto company do you feel like that is resulting in the sec paying more attention and potentially making an example out of coinbase >> no, i think we get our fair share of attention, we're the largest in the u.s. and we do get a lot of attention from the sec. they're giving attention to everybody. so i don't think that that's unfair i guess zooming out, you know, we've been actively engaging with regulators, i think it's a good thing sometimes it's reported as a bad thing, but i actually don't -- you know, we send petitions and information to regulators, they send us inquiries, we meet with various people every week at the company, our overall goal is to drive regulatory clarity on a gl scale. every g20 country, our policy

team is meeting with most of those countries, and sort of where we're seeing, you know, no regulation, pending regulation, and clear regulation for crypto. it's compared to two years ago, it's night and day, there's basically pending legislation, or active clear legislation for crypto, in almost every g20 across the major categories now, so i think this is really good, and it's not widely known is that even here in the u.s., i think we'll see probably a comprehensive crypto bill hopefully passed next year, and what that will mean is just with that clarity emerging there will be a lot more institutional money flowing into crypto. >> again, brian arm strong and i spoke for more than a half an hour last night. there's a lot more in there. watch the full exclusive interview online later today on crypto world, only on cnbc.com, back to you guys. >> kate, great stuff in there. it seems to me that he's sort of not flying the pirate flag quite as vigorously as he used to, comparing coinbase to charles schwab and the nyfc, having some

very neutral positive things to say about regulators, not talking tough so much. he also took some controversial stances on politics at work, for example, over the past couple of years. did he talk about that >> it was interesting. he didn't take any shots at the sec, and he has made comments on twitter but did seem to be pretty balanced on the regulatory side, spent a lot of time in d.c. he talked about that then on the cultural side, he really was a standout in silicon valley, doing the opposite of what a lot of tech companies were doing about a year ago, and saying, essentially, they called it a mission first company a lot of people interpreted that as leaving politics at the door. it got a lot of pushback, and brian armstrong in particular was under the microscope for that he was saying about a year later, first of all a lot of companies have gonna similar direction. we've had shopify do something

similar. he was saying it's helped them focus and helped weed out certain employees that were not on the same page and that didn't want to be at a company like coinbase taking that strategy. he said something interesting object other ceos out there who had reached out to him saying we would have loved to do the same thing but we couldn't take the public pressure, and he said he was hearing from not only tech ceos, but a lot of other fortune 500 companies who admired the move but couldn't do the same thing. it was interesting to hear the back and forth on that and in hindsight, about a year later, that he was saying it turns out it was a good move despite the public pressure. >> kate, i like the way jon put that, not flying the pirate flag as high, perhaps, interesting, too, he compared himself to schwab higher valuation maybe going out and telling his story a little better. great interview, kate rooney, thanks for bringing that us. next hour, jim chanos will

respond on the "halftime report." coming up in a half hour don't miss that. time for a news update let's get to kristina partsinevelos. sales of newly built homes fell 12.6% in july from june levels, the slowest pace since early 2016 the slowdown affects the -- new home sales 30% below where they were a year ago. pfizer and partner biontech say their covid-19 vaccine was 73.2% effective in a study of children under the age of 5, below earlier analysis which suggested an efficacy rate of just above 80% experts have said the number could fall due to a low number of symptomatic cases in earlier studies. consumers have been cutting back on dining out, but not on their morning coffee financial services company rabo josh bank says spending fell

3.1% in june but rose 1.9% at coffee shops and bakery cafes, consumers are embracing indulgences, even as their being more careful with budgets. jon, back to you. intel striking a $30 billion partnership with brookfield asset management to finance its fab expansion plan, breaking down the news and more with intel's chief financial officer david zinzer, up next. (vo) hi. we're visible. a different kind of wireless company... ...running on a big impressive wireless network. how are we different? we exist only on your phone. so you get unlimited data for just $30/mo, taxes and fees included. plus we have a new plan with 5g ultra wideband. switch today at visible dot com.

in the next second, fourteen families will decide... that's it. we're getting a bigger house! finally. but we got to sell this place. before we buy the next place. and then, in the meantime. so, how long are you staying? emily no! ooh a little cramped. i am cpap man. that is not a toy! or skip the in-laws. sell and buy your house with confidence with opendoor. move when you're ready. that's it. indeed. when life's doors open, we'll handle the house.

big news out of intel this morning, the company making waves and the semiconductor space of the first of its find funding agreement, partnering with brookfield asset management to finance up to $30 billion in factory expansions here to discuss intel's new chief financial officer david zinsner. david, welcome so, first help us understand

what is different about this and how it changes the model for intel. brookfield is going to put in 49% of the capital that it takes to build this out, and then get 49% of revenue do they have any downside protections, in case, you know, the capacity isn't fully used? how is this going to work? >> good question, and thank you having me, jon, we have this notion of smart capital, which is to accelerate our capital investments. mainly to improve our process technology road map, and the capacity associated with that, but also to create a more diversified and resilient supply chain globally for the semiconductor industry so we looked at various options for helping to fund this and it was smart capital is the aggregate view of how we're approaching this one of which is this co-investment program with

brookfield brookfield as you said will put in 49% of the $30 billion to invest in arizona, get into the other 51%. we'll have complete control operationally over the fab they're more or less a financial partner in the investment. they do get a return, obviously. that return is higher than our debt, but lower than our equity. and for the risk they're taking, is an appropriate return from that vantage point they, in essence, share in the cash flows of the -- of the factories. that said, i mean, our goal, obviously, and you have to in the semiconductor industry maximize the output of the factory. so, you know, that's our expectation is how we'll approach that. and obviously they'll -- you know they'll get a return on that. >> how does this affect the foundry strategy, and the amount of risk that intel puts on in pursuing it, you know, 49%, maybe you guys have the final

say over what gets done. it sounds like they've got a seat at the table. so as far as how that foundry strategy gets pursued, how you hit benchmarks, and the degree of risk you take on as you do that, how much are these partners, and this being the first, going to have to say about that >> yeah, so we have complete control over how the fab rolls out. you know, there's obviously some requirements in terms of how much cash flow has to be generated from that factory. we'll obviously maximize the cash flow of that factory. so that -- so that it gets the appropriate level of return. they don't have a ton of say over, you know, how much we do there. but they do have an expectation around the returns they're going to get from that, and so we've, you know, we've built into the agreement the ability to manage that. >> david, i wonder, you know, how broad this could get there's so much riding on the reshoring of capacity, manufacturing production, jobs,

could this go beyond intel facilities could it go beyond chips, even, at least in the eyes of brookfield >> it's a good question. i'm sure brookfield, you know, i can't speak for them, but i'm sure they're looking at other opportunities, i think they view this as a beachhead into the semiconductor industry and there will be lots of opportunities, as you mentioned, to invest in semiconductors in the u.s., and in europe as well. for us as well, i would imagine that we are going to do this again. you know, our first facility obviously to invest in, is the one in arizona but as you know, we're investing in a fab, in ohio, we're investing in a fab in germany. and so we'll look to potentially use these vehicles in the future to help, you know, kind of manage the cash flow the great thing about this really is that, you know, so much of the cash inflow happens so much before the outflow, you know, in terms of, you know, the proceeds from the customers.

and so this enables us to kind of reshift the cash flows such that we have a better matching between our outflows to fund the fab expansion, and the inflows that come from -- from our customers. >> david, i know that you can't talk exactly about the cost of financing, but you did say it was somewhere between debt and equity i wonder, did you guys consider eliminating the dividend for even temporarily, was that on the table when you thought about financing this deal, and how you guys are going to ramp up manufacturing? >> so it was never on the table. we are committed to the dividend, we're committing to growing the dividend in the long term we have good expectations, or strong expectations that we'll generate very strong free cash flow once we get out from this investment cycle that we're in right now. you know, we really -- and by the way, we have a strong balance sheet, and we have other pools of capital but we wanted to diversify even

the pools of capital that we were tapping into, to make the investments necessary to drive this transformation. and, you know, this -- you know, we kind of worked with brookfield over the course of the last seven or eight months to kind of flesh out, what is a fairly common structure outside of semiconductors, but it is absolutely new and innovative within the semiconductor industry. >> finally, david, give me, if you will, an update on inflation's impact on these capital expansion plans, it's been more than a year since pat gel singer first started talking about this inflation has been running rampant. sure, labor costs but then all sorts of equipment costs that go into, you know, construction costs, that go into that, how much has that grown the cost that you expect these things, these facilities to have, over time, and how does that influence your smart capital strategy >> yeah, so, you know, we

originally, as we were thinking about arizona, expected the investment to be something in the neighborhood of $20 billion. and some of that was just, you know, planning at the low end, and now that we have that plan fully fleshed out, the number, you know, is higher. but it also includes inflation you certainly have seen the cost of these factories rising in terms of the level of investment, i mean, $30 billion is just a very significant amount of money, even for intel to invest, and it's why smart capital is so important. we need government incentives. we need pre-paids from customers, and we need, you know, instruments like this, to help manage some of that, some of that significant amount of capital we have to deploy to make this transformation possible and bring semiconductor manufacturing to the u.s. >> all right david, thank you david zinsner. >> thank you very much. >> the cfo of intel. pretty fascinating a former twitter exec is blowing

the whistle on the company what that means for musk's $44 billion deal after the break as twitter is down 5% now bubbles bubbles bubbles there are bubbles everywhere! as an expedia member you earn points on top of your airline miles. so you can go see even more of all the world's bubbles. ♪ ♪ ♪ ♪ ♪ ♪ okay season 6! aw... this'll take forev—or not. do i just focus on when things don't work, and not appreciate when they do?

i love it when work actually works! i just booked this parking spot... this desk... and this conference room! i am filing status reports on an app that i made! i'm not even a coder! and it works!... i like your bag! when your digital solutions work, the world works. that's why the world works with servicenow. ♪♪ age before beauty? why not both? visibly diminish wrinkled skin in just two days. new crepe corrector lotion only from gold bond. champion your skin.

twitter is being accused of deceiving regulators, and it's own board of directors by new whistle-blower kpant made public this morning, julia boorstin joins us with that story, julia? >> deirdre, whistle-blower is

accusing twitter of among other things violating its settlement with the federal trade commission by falsely it had appropriate security for user data, coming from a hacker who was head of twitter's security, reported this morning, he alleges he warned twitter that half of the company's servers were running out of date, and vulnerable to software, and that exec executives withheld information about the lack of protection for user data. the company prioritized user growth over reducing spam. that's a point that elon musk's camp is seizing upon to support its case that twitter underreported fake or spam accounts musk's attorney alex spiro saying we've already issued a subpoena for mr. zatko and we found his exit and dha of other key employees curious in light of what we have been finding but twitter responding and discrediting these allegations saying, quote, mr. zatko was fired from his senior executive

role at twitter in january of 2022 for ineffective leadership and poor performance what we've seen so far is a false narrative about twitter and our privacy and data security practices that is riddled with inconsistencies and inaccuracies use of -- trueists analysts saying if we thought initially that mr. musk had very little chance of winning in court these revelations improve somewhat but our view of the situation remains unchanged, and our rating on twitter remains at hold this all comes on the heels of elon musk's legal team subpoenaing twitter co-founder jack dorsey. of course he's also the former ceo. he did support musk's bid, and now musk and his legal team is hoping he'll provide some details about those spam accounts that are very much in focus. guys >> julia, zatko, better known as

mudge in the community, somewhat a celebrity. this is a big deal, mudge plus musk twitter is saying they fired him for poor press conference. given how twitter has done over the past five years, ten years even, there are a lot of people they could have fired for poor press conference they have to substantiate that at this point, this guy, he knows what he's talking about. >> i mean, yes, i mean, this is really interesting here, jon, you make such a good point that mudge as he's called is an icon in the hacker community. he was hired as hackers sometimes are to oversee security but also there are all sorts of questions if you're overseeing security what your additional responsibilities are there in terms of managing people, et cetera i'm sure we'll get more information from twitter, but, you know, the question that's being raised here, you know, twitter is indicating it's a sour grapes situation, where mudge didn't like the way he was pushed out of the company. but so many he said/she saids

here, and of course this all is in the leadup to the trial which is set for october. >> that's where the rubber will definitely meet the road, julia, fascinating development today, that's our julia boorstin. speaking of social media, imitation may be the sincerest form of flattery, not when it comes to instagram, the company prototyping a candid challenges feature that the verge is calling a murder clone of genz social media app bereal where users are prompted to share a candid photo at a random time each day it's a general prototype but given history of copying but given history of copying features first seen on snap ands when you need it. i think it was fine of the curve... help yd

or you could use workday. the finance, hr and planning system that helps cfos make better decisions faster. on the other hand, we had a great fourth quarter. for a accelerate your decision-making world. workday. for a changing world.

gut check on apple stock up nearly 10% over the last month lou venture's managing partner g. munster thinks there is still more upside ahead and things could go as high as 250 in the next few years you can read the full writup at cnbc.com/pro apple has gone from 130 to 175 in just two months more "techcheck" coming up after this policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. if you have $100,000 or more of life

insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance. your projects done right . with angi, you can connect with and see ratings and reviews. and when you book and pay throug you're covered by our happiness check out angi.com today. angi... and done. with xfinity internet, you get advanced security that helps protect you and wat home and on the go.hroug you're covered by our happiness you feel so safe, it's as if... i don't know... evander holyfield has your back. i wouldn't click on that. hey, thanks! we got a muffin for ed! all right! you don't need those calories.

can we at least split it? nope. advanced security that helps protect your devices in and out of the home. i mean, can i have a bite? only from xfinity. nah. unbeatable internet. made to do anything so you can do anything.

another read on software demand and small medium business demandcoming after the bell today with intuit reporting results. the street is expecting a strong quarter projecting sales of more than $2 billion into what has beaten estimates two of the last three quarters and we'll break it down tomorrow here on "techcheck." credit karma a big part of the story one way or the other and we'll see what the consumer has to do with it. >> a good read on small and medium sized businesses as well. this name has really rallied over the last three months up some 20% so we'll see if it prices at perfection when it

reports. >> especially as complexity has definitely entered the work places specially for small and medium size. you can follow and subscribe to our podcast and listen anytime anywhere wherever you down load podcasts another busy 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 converged network. from the most innovative company. bring on today with comcast business. powering possibilities.

one more thing before we go. that is insta cart out with a report showing revenue grew by 39% year over year last quarter. this is a positive sign. consumers are sticking with online grocery delivery despite rising prices. this is also one of the few silicon valley names, big ones headed for public listing as ipo activity plummets, traditional ipos raising a little more than $5 billion this year last year at this time we had already crossed more than $100 billion at this point what a difference a year makes we know that for sure. sometimes it takes one high profile company to come out of the gates and ipo to open the door for others. in the case of instacart the market has been so down on gig economy companies. it will be interesting because we know it has a big ad

business, enterprise business. we don't know the size of it though i think that is a question many investors are wondering >> i want to see does instacart come to market with a mullet, with a crew cut? how big is the hair cut on valuation? >> didn't they take a hair cut already? >> but it is unclear exactly what the hair cut is is this a $15 billion company, 20, less than 15 >> is the value like an uber or door dash? these are good questions it will have public comps in a way uber and lyft didn't when they came to market a few years ago. >> going from a hundred to five at this point of the year is pretty dramatic especially given all the swirling cross currents in e-commerce and delivery in general. got to say kate's interview with brian armstrong this hour very eye-opening, john, as you pointed out his comments about regulators and the industry's relationship with regulators we'll see what channos says in

response >> talking to one of these old school news organizations that a few months ago he sounded like he didn't mean we all go through changes. >> it will be interesting to see what he says about the subscription revenue because it flies in the face of his short. >> yeah. of course this afternoon we'll get into it as we said urban toll and advance auto parts as we work our way through the week let's get to the judge >> all right, guys thanks so much welcome everybody to "the halftime report. i'm scott wapner the uncertain road ahead for your money and whether the summer sizzle for stocks is ending as the fed chair readies the most important speech of his tenure we discuss and debate all of that and what is at stake with the investment committee liz young, michael farr here with me on set, josh brown and stephanie link at 12:00 noon in the east a mixed picture. do 299 is the yield on the ten-year note we're coming off