>> yeah, well, steve, the debate rages, thank you and of course speaking of that, we have an s&p that's down about 1.25%. nasdaq down over 2%. covid lockdowns, a two-year yielding about 3.5%. any number of different things you can key on this morning for what continues to be broader weakness in the overall market that's going to do it for us on "squawk on the street," "techcheck" starts now ♪ good thursday morning, welcome, i'm carl quintanilla with jon fortt and deirdre bosa. scattered thunderstorms across the cloud, okta, c3 ai getting crushed down to 20% plus after earnings, talking to two ceos this hour. that stock down 10%, software getting rocked zillionth wisdomtree cloud computing etf

down 6%. guys, a big part of this is encapsulating what tom siebel said, that is that customers are scrutinizing large deals, maybe more now than ever before. >> they are, sale cycles lengthening, something we also heard from bill mcdermott at service now several weeks ago. but first of all it's not all the same i want to note nutanix which had earnings, up almost 30%, almost. outperforming there. but, you know, some of these companies have individual challenges, problems, you look at okta, and, you know, integration of an acquisition, not managing the salesforce in the best way, c3 ai is switching to a consumption-based model and dealing with the sales cycles. but i think overall the macroenvironment is having more of an impact on the enterprise, at least at certain levels, than investors were hoping. so now i think part of what we're going to be talking about

today overall is this recalibration of rip tides as things change quickly. >> how big is that >> you mentioned servicenow. saying that sales cycles were lengthening. but even -- says those sales cycles are lengtening. deals that used to go through this is right -- they're going to the cfo desk. maybe they're taking longer but i think big picture, guys, is we're going to be talking to four ceos, software ceos this program. we're going to find out how they are viewing demand and that's really what investors are looking for right now. when we start off a month like september with the wisdomtree cloud etf down more than 7 #%, is this the next shoe to drop? john, you and i have talked about the hyperscalers, the crowd players, that has held up pretty well so far are they next to see deceleration

i point to sea gate, they were seeing a slowdown at u.s. cloud providers. that could be worrying the rest of the year. >> it doesn't mean the business of the hyperscalers have to slow down significantly, just if their buying slows down, if they push away from the table and say i've had enough chips, thank you very much, i'm going to wait for this to digest, that could potentially have an impact throughout different industries, carl so this is moving quickly, and that's why it's good that we get to do this every day because the way people were feeling sentiment-wise last month didn't necessarily have to do with data now we're getting that data. >> wishful thinking, maybe. >> we've spent a lot of time talking about weakness on the consumer side. and clearly, if the enterprise story heating up today as well as we get to -- speaking of sea gate, downgrades from benchmark, they go to hold. make santoli has more, not just on that, mike, but how it's going to frame the month of september which we know is

historically fraught. >> it is historically a tough one, especially when the market has been down in the first, you know, eight months of the year so no real help there just yet, maybe until the second half of the month, perhaps, if we get a little bit of a cleanse. but look at the way the movement in tech, since last november 19th, that was the peak in the nasdaq, has broken down in terms of apple and then the subsectors, semiconductors, software and social media. obviously yesterday had a pretty -- little bit of relief on the social media side with meta, and snap having bounces but that's a pretty poor trend right here this really does tell you, the numbers are going down pretty much across the board, whether by a little or a lot in terms of software and semis, and you have expensive stocks where estimates are going down it's not a good combination. we've been talking about for a while if there's unfinished business market-wide on valuations, on how much they might have to kind of reset lower, it's mostly concentrated in the very largest stock. that's what really drives the index and the index valuation, apple and microsoft, even though

they've come down, still trade at 3 p/e points above their five-year average. if they go back to the five-year average then we're talking about 12 to 15% declines in those two stocks, clearly would have an impact on the index. i think that's the overhang. it doesn't mean it has to happen but those stocks still have retained this premium and have made things look less bad believe it or not on things like the nasdaq s&p 500 than they otherwise might. >> everyone's talking about 3900, a lot of chart technicians that would involve a test and if it were to fail, then the june rows could be in play again. we're right there. >> we are. and, you know, on the way down in the last week you've sliced through a bunch of -- not so much must hold levels but maybe should hold levels i'm not sure this is the one the bond market's going to tell you whether that's going to happen or not. we're making new highs and yields on the two, out to the ten-year, that seems to be what r what matters the most, people

nervous about, believe or not, a strong jobs number tomorrow and that's going to be the equation here we are getting pretty oversold so arguably if you go down another couple percent, you might generate the washout signals we got in june maybe not quite as bad that's why between here and the june lows, which is only, you know, 240 points or something like that on the s&p, you might see, just a reflex type bounce, but obviously remains to be seen. >> yeah, mike santoli, thanks so much, we're going to dive further into this. the enterprise software space, the first of our four ceos on this hour, okta shares are down big, those losses accelerating down 33%, the street is skittish, four downgrades of that stock today todd mckinnon joins us in a cnbc exclusive. thank you for chatting with us today. you guys had trouble with the integration of zero, you're

reevaluating longer term targets, how much of that has to do with this integration and the challenges there and how much has to do with the deal picture, the possibly softening macrobackdrop and longer deal times? >> it's great to be here, deirdre, on a day like this, it's tough to stay focused on the long term. and the big picture. but that's what -- this is a tough group, and that's what we're doing, and so the big picture opportunity for okta is very, very positive, and very, very bright. identity management in our platform in tools and technology have the potential to be at the center of every digital interaction, every employee connecting to their tools at work, their applications, their platforms at work, every consumer connecting to every service they want to use on the internet big opportunity, the opportunities are massive. if you pull back to the short-term, not only are we long-term oriented, we're very focused on execution when we have mixed results we take corrective action to fix those to get back on track for

that long-term bright future in this case it's really about okta's transitioning from a company that sold to the chief information officer of a company, the chief security officer of a company, to a much broader platform sale that can appeal to the chief digital marketing officer, the chief technical officer. and that's a lot -- soor a year and a half ago, when we talk about the mixed results, broadening that beyer appeal is taking longer than we expected but we're working very hard to fix that and we're off to the races toward this long-term opportunity relatively quickly. >> todd, that's what i'm asking, the longer term opportunity, on the call last night your cfo said you're reevaluating the targets, what's behind that if this long-term opportunity is intact, and what are you seeing in terms of demand >> when i talked about the long-term opportunity in the fiscal 26 # targets, when we are successful getting there we're going to have to execute well reaching these new buyers.

we have to be able to sell to all these buyers, and become the strategic platform for identity and technology for every organization in the world. it's prudent to make sure we can get through near term challenges as we think about marching toward that target. >> todd, good morning, it's jon, wanted to ask you about the macro, but also what seems to me might be a macro impact on operations, specifically your sales force, the attrition that you're experiencing in the salesforce how much of that has to do with the fact that, hey, it's competitive out there still, in enterprise software, for good salespeople, and so they have options. but at the same time you've got these macrohead winds that are also causing you trouble. >> we have had higher than average attrition in the sales team that's driving some of the near term mixed results i think when you look at the quarter, though, i think there are salespeople being successful at okta. we had a record number of million dollar plus deals in the quarter. so we had great customer retention, our net retention for

customers, which is really emblematic of customer success is 120 #% plus there's a lot of success going on, but when you think about trying to reach this new -- and bringing two sales forces together in service on that appeal in the sea suite of every organization in the world that's challenging, and a little more challenging than we thought it would be we're going to work through those issues on your macro, we are seeing a little bit of macro change, a little bit of lengthening of sales cycles but i think big picture-wise, that's a very small part of our mixed results. and we have a lot of these corrective actions were taken in the short term are going to yield to a lot of positive momentum in the future. >> on the management level, the chief product officer is leaving, how long is it going to take you to get your team on the cadence that you want to perform from here?

>> well, these are all personal decisions for people and it's hard to speak broadly. but we have a great management team and we have a team that's dedicated toward achieving this long-term vision, which is to free everyone, to safely use any technology, and that's going to be some ups and downs and there's going to be some short-term changes in tactics but the long-term vision is very clear and very correct this team is fired up to go capture it. >> todd, i'm fascinated by that comment that you think the challenges are more integration than macro i guess how do you think the picture would look if, in fact, you weren't dealing with sort of this issue tea moment, is macro sort of steady >> it's a great question, and when you think -- i talk a lot in this segment on the long-term opportunity. for us to reach -- that opportunity is bold and broad. it's not about just selling identity management to the cio and the cso, the chief security officer for employees.

it's about every use case identity across the whole company, our customers' customers, every digital interaction, that's bold and that's a massive opportunity i think ultimately working through some of these short-term challenges lead to a much, much bigger long-term opportunity for okta. >> todd, i'm just going to go back to sort of what i asked you earlier, i'm wondering if you're at odds with your cfo or perhaps he misspoke. you're talking about the long-term picture being intact but he was talking about reevaluating the longer term targets, who's right here? >> we're very, very aligned. we work very closely together and we're veryaligned. when you think about the long-term opportunity and then you think about our goal, the strategic objectives of being broad and having a broad solution, and then you compare that to some of the near term challenges we have to work through these near term challenges on the way to that long term opportunity. that's what -- that's kind of what we're communicating and what we're aligned on internally. >> thank you for clearing that up todd mckinnon, thanks for being with us this morning as well talk to you again soon. >> good to be here, thank you.

another big sector move we are watching today, chip stocks are falling, meg kba caps, nvidia and amd sharply lower after the u.s. government restricted chip sales to china nvidia down more than 8%, hitting new lows for the year. that stock has been cut in half this year, nvidia and amd each generate a quarter of their total revenue in china eunice yoon is there with reaction from beijing and the impact on semiconductor stocks eunice >> reporter: well, china has accused the u.s. of abusing its export controls. today the commerce ministry said the u.s. should stop its wrongdoing, harming the rights of chinese as well as american companies by restricting the sale of these advanced artificial intelligence chips to china. so nvidia's a-100 -- -- as well

as lenovo mainly in cloud services, and the development, though, of ai is really a prime targeted sector the chinese want to dominate. with holding these types of chips really does hold back the chinese plans to upgrade so from china's perspective, this is a way that washington is trying to keep china down. so they are trying to hold back, their technological progress, as well as economic progress. so really what we'll likely see is the chinese solidifying in the chinese leadership's mind the need to wean themselves off of u.s. chips as well as other imported chips in order to make sure that their economy is not vulnerable, and instead the government here has been funneling a ton of money, as you

all know, into subsidies as well as tax breaks to try to develop their own industry, haven't really been doing a great job and, in fact, in recent weeks, they've been detaining a lot of the officials and executives because they've been misusing the funds. >> yeah, beijing has made a huge push to upgrade chinese chips from all the ceos we've talked to, hasn't happened yet, still a long way to go, eunice but last time we talked about this a few years ago when the u.s. started to ban some technology we were sending over to china. you saw huge change in the balance of power over there. it hit huawei, a national tech champion, opened up the landscape for apple to sell more iphones there. you talked about the companies affected this time around, providers like ten cent, and alibaba. do you think that that similarly opens up the field for a u.s. player i know there's political concerns, especially on this side, but what's the

opportunity? >> reporter: well, i mean, you mention huawei i think one of the big american players that's able to benefit is apple because of the restrictions on huawei's phones due to the u.s. limitations. huawei phones have not been as popular. in fact, apple's iphones have started to dominate. there's been a lot of buzz, as you guys have been talking about for the iphone 14, the day before the iphone 14 is supposed to come out, huawei is going to be releasing its own phone but it's going to be a 4g phone, not going to be as fancy and as exciting from a chinese perspective even as customers. so there is an opportunity there. for some american companies. but at the same time you will definitely see, i think, at least a great amount of effort, carl, by the chinese to create its own chips and advance chips because from leadership perspective they see this type of restriction economically

damaging to their future. >> a shot across the bough from the white house and the united states eunice yoon today from beijing. we're all over the morning software slump and what it signals about demand the k ceo of c3 ai is with us after break. this is evolving from gym to global media company. this is connecting your people and content in one place. this is the system you built to transform your business.

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only from xfinity. nah. unbeatable internet. made to do anything so you can do anything. shares of western big slipping this morning. target of 34 they argue softness could lead data centers to cut 2023 # spending plans we've talked about micron and nvidia lowering outlooks for fiscal 23 #. semis on pace for five negative sessions in a row, jon, and of course those licensing headlines didn't help. >> yeah, indeed. and now let's get back to the slump in software. we've talked to okta we've talked about mongodb

20% missing on revenue lower than expected guidance the rest of the year that's become a theme this morning. joining us now is ceo and co-founder tom siebel. tom, good to see you so growth revenue growth around 25%. what's happening with these deals, with customer hesitancy, and this shift to a consumption based model? >> well, good morning, jon and first of all, as it relates to kind of what's going on in the marketplace, there's no question last quarter we saw a lengthening of decision cycles and additional processes put into the approval process. we saw any number -- we saw 66 transactions move out of the quarter that were forecast we saw any number of transactions that under normal market conditions i would be quite confident they would close and they just did not close.

so we are seeing our customers in the gas industry, the wood products industry, pharmaceutical industries, these guys are gearing up for a recession. they are in recession planning, and they are really rethinking their business processes so there's no question, particularly in july, we saw lengthening of sales cycles. >> so how does a consumption-based model, which is having an impact on your guide, how does that address what you're hearing from customers and these economic conditions >> it addresses it in a big way. so for the last decade, jon, as you know, we've been selling transactions, a million, 5 million, 25 million, $50 million at a time. and so we've learned something of an anomaly in the software market, what's become the standard in the software market is consumption-based pricing like we see in snowflake, data

dog, aws, google so, you know, if you price our products at 55 cents per cpu hour, it actually is revenue neutral, without having it over say ten quarters, it's revenue neutral, without having to negotiate five, ten, $20 million deals. importantly in the quarter we expanded our strategic partnership with our partners at google cloud, where google cloud will now -- they have 4,000 people selling our applications worldwide. they've committed to jointly fund pilot projects at 134 tier one customers, and so in order to really take advantage of that, we need to bring our pricing in line with their pricing, and they sell on a consumption-based model. so we will be closing, you know, certainly in order of magnitude, i think more customer relationships in very short

order. however, for a short period of time our revenue goes flat and then as you get into calendar year '23, the revenue hits a hockey stick and our growth rates seem to be very substantial. so this was -- we're in this for the long term, and this was a decision that we made that will result in more customers, better partners, more revenue, more revenue growth, more profitability, and we will emerge from this recession a stronger, more prosperous company with greater marketship. >> interesting to hear you use the "r" word there, tom, i am curious, the shift in sentiment among customers, has it been abrupt or has it been in the oven for a while i wonder if you can compare it to maybe some prior downturns we've had the last 20 years. >> well, i would say the head winds in july were pretty

bracing, carl, i didn't see it coming we did see -- it's very clear that there's been recession talk out there, but, you know, i was really pretty surprised by what we saw in july, something fundamentally changed and then i went and visitedsome of our customers in houston, and atlanta, out in virginia, next week, and it's very clear that, you know, at the most senior levels these companies are, you know, they're in the bunkers planning for a global recession. and so procurement processes are changing, and this new pricing model, we have consumption-based pricing is going to make it possible for these customers to continue to acquire our technology, at a rapid pace, even in a recessionary economy, short-term impact on revenue is that revenue goes flat for a little while medium term impact on revenue is, you know, substantial growth in calendar years 23 and beyond. >> tom, good morning, you as

well as many ceos are looking' cost reductions. on the call last night you said that layoffs are not a part of that for your company. i wonder if you could give us more color around hiring and your workforce you said you had thousands of candidates for open positions. were you able to hire them and have you relaxed at all your position on remote work. previously you said you would not hire anyone who wanted to work from home. >> well, if you visit our headquarters here, i encourage you to stop by for a cup of coffee, i have the only full parking lot in silicon valley. we are working from the office, and we have been for some time in redwood city, in chicago, in new york in london, paris, rome and copenhagen it is a very high energy work from the office environment. >> and you're on your way in, right? >> last quarter we had 11,000 applicants i think we hired 350 people. for the sales organization --

for the new sales organization we had a thousand applicants we're consistently rated as one of the best places to work in the world. our attrition rates are more than acceptable. and so we're -- we have a lot of -- this is a place where people like to work and want to work. >> and tom, you're in five days a week >> pardon me, i am in five days a week. >> you're on your way in today, right? >> after this call, i'm on my way to the office. >> before 9:00 # on the west coast, how quickly we forget tom, going more into that google deal, and the partnerships, even as it works through the consumption model, practically how long is that going to work, and what kind of sales capacity do you need to make sure that you take full advantage of that? >> well, with google alone, i have 4,000 sales professionals selling for us around the world.

in order to take advantage of that i needed to bring our pricing in line with their pricing. these guys are used to these people, these men and women, are used to selling on a consumption-based pricing model. we had to align with them to take advantage of it google has committed, okay, to co-sell and jointly fund over a hundred chair one customers with us so take advantage of this, and the selling we do with aws, and the selling we do with microsoft, it was critical that we bring our pricing in line with their consumption-based pricing model. that effect will be a much greater number of customers. net effect, once we get into calendar year 23 and calendar year 2424, much greater revenue much greater revenue growth, much greater market sharing, greater profitability. in answer to your other question deirdre, we are hiring, there is

no layoff. we have put into place very rigorous cost controls to make sure that by the end of next fiscal year, that we'll run cash positive, non-gaap profitable business. >> tom siebel, ceo of c3 ai, thank you. pouring cold quarter on disney's prime copycat up next azs "techcheck" is back in three minutes

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. >> welcome back, i'm kristina partsinevelos. the chairman of russia's second biggest oil company died today,

the latest in a sudden deaths. two sources are saying maganov died after falling from a hospital window in moscow. the company said he died following a serious illness. soon russia's negotiations to end the fighting. the u.s. labor department reports today that newclaims for unemployment insurance fell to their lowest levels since late june. that would be 232,000. the government will release its august jobs numbers tomorrow morning. and twitter is testing a new feature many typo prone users have been waiting for, some paying customers will be able to edit a tweet within 30 minutes of posting it. it will be labeled, and readers will be able to see past versions to, in the company's words, protect the integrity of the conversation carl, back to you. >> kristina, thank you very much. dow was down 300, now 100.

watch disney, reportedly working on its own prime-like subscription service julia boorstin has more details on that offering hey, julia. >> well, carl, disney is working on a membership program, but sources tell me it's not like amazon prime, which is all about e-commerce and free shipping this membership would be about customizing and connecting the experience for fans across the parks and disney plus, and disney's others businesses a source close to the situation tells me it is still very much early days and details on pricing for membership and what exactly would be included have not yet been determined. but my source says the company is looking at potentially offering exclusive merchandise, exclusive content or experiences, along with discounts and deals. now, there is no doubt that having more data, connecting people's online and offline behavior, could be massively valuable for disney for marketing, and could drive attendance' parks or even movie theaters, plus could drive more purchases both online and

offline. disney is saying technology is giving us new ways to customize the consumer experience, so we are delivering entertainment experiences in products most relevant to each of our fwess. disney is more than a brand to our consumers, it's a lifestyle, and we are exploring how to better serve them across our many touch points. disney is separately working to include qr codes on disney plus to make it easier to shop from the streaming service, but that is really more about cross platform sbe kbrags, and is separate from the membership service in the works one thing it's worth noting is this is all part of a broader trend of media companies -- separate out from the bundle disney has a real advantage in that regard because of the physical touch point of the parks. guys >> yeah, an earlier version of it years ago, saying disney should do exactly this let's see if they execute that

plan. well, if you look at the dow, down less than 100 points you're miss you go the larger story. sharks lose, the wcld cloud index down more than 7%. mongodb, okta, among those down. rngsara on the chin today post eain, it is down about 18, 19%. we have an exclusive interview with the ceo, next more care for your cashmere. more power for your workout gear. this is smarter sensing and dispensing. fully optimized cleaning, no more guessing. getting the best out of everything that goes in. ♪♪ this is smarter cleaning. this is ge profile. this is doubling production without doubling headcount. this is connecting all your team with a shared point of view. this is the system you built moving from concept to customer.

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. it is a rough morning for software, especially growth software i was mentioning samsara it is down about 19% this morning, despite a beat across the board in q2, reporting strong demand, raising the top line guide for the year ahead, with all of this turbulence going on joining us to break it all down is cnbc exclusive, samsara ceo sanjit biswas. good to see you. your growth in the quarter is 52% top line, but you're guiding to mid-30s going forward, even as you're raising the full year. what's happening in the larger environment, whether it's the overall macro or what, that's causing what some would point to as a growth deceleration >> jon, thanks for having me on. i want to start with context so we can talk about the guidance we serve the world of physical

operation. samsara is helping digitize the -- powering economies, local governments, connecting them to the cloud and helping them be safer, more efficient, more sustainable in their operations. the need for that technology is persistent across whatever is going on with interest rates in the macro economy. we all need this infrastructure to function, and they're digi digitizing rapidly that's why remain in investment mode as we continue to build this company for the long term we had a great q2. we reported 52% year over year growth we raised our guide as you mepgsed but we are being cautious so i think it makes sense for us to take a look at what's going on in the macro economy, make sure we're being conservative in our planning and guidance. we see the opportunity for growth, and that's what we focus on. >> yet, your growth overall strong, hey, mid-30s growth given the environment that we're in, pretty significant, but i wonder what the follow-on effects are of what you described as lengthening sales

cycles, customers taking extra time to dot the i's and cross the t's and make sure they're getting that roi, having to go through more approvals how much are you being conservative either in your hiring increasingly so, or in what you're investing in go to market, given everything else that's happening >> so we are continuing to invest that's the important thing to highlight here is as we're growing, we're at scale, and there's a natural sort of deceleration that occurs as the numbers get larger and larger. we reported over $660 million, so we're getting to the scale where 30% growth is a very large number, and we're making sure to invest in that so we're hiring across the board. we have about 300 open recs, but we're keeping an eye on roi and our path to profitability. we're making sure that every incremental hire we make has an impact on the growing business and doing it in a sustainable way. that's how we think about it is that balance between growth and

profitability. >> an y colors you can provide o what you've seen in the current quarters so far, has the cycle lengthened at all. seeing the difference between the different sectors you serve? >> we serve a broad variety of industries, i mentioned a few of them but it's everyone from the supply chain company to the energy utilities to others, we see across the board, there is more scrutiny on the deals themselves in terms of making sure there's clear roi, we're seeing the free trial conversion rates to continue to remain at a high rate. the need for the software, the need for the technology is really fundamental so i think cfos are naturally being cautious, as they think is about is every dollar going to growth in their own businesses but we're not seeing a fundamental shift in the need for technology that's something that's persistent across all industries the need is very much there. >> when you think about operating margin targets, given the headwinds, but also the cost discipline, direction ally it's

going in the right direction how good can they get closer to getting flat >> well, that's our goal is to continue that profitability. we showed a 17 percentage point improvement in our operating margin, our non-gaap operating margin in the last quarter, and that's going to concerted effort across the company, we want to make sure we're building a strong business for the long term you'll see us get there, and this is something we're going to move towards regardless of the macro economy. >> strong growth despite everything going on. sanjit biswas, thanks for joining us. >> thanks for having me. coming up next week, it's going to be busier "techcheck" will be live in l.a., we'll hear from tim cook, and many more. you do not want to miss that one. "techcheck" is back in two

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shares of pure storage pulling back after a 5% premarket pop, down about 4.5. the data storage company reporting upbeat earnings and mixed results from industry rivals charles juan car low joins us. you're getting lumped in with some of the peer group today it doesn't sound like your customer base is nearly as negative on their i.t. budgets. >> no, certainly true. we raised -- we had a great

quarter in q2. we raised for next quarter and the year as a whole. we're seeing strong demand in an increasing pipeline, curious as to the market response today, but i think you're right, it's just tied into the larger macro. >> carve out some part o the consideration to focus on europe there you say the challenges are a bit more acute. >> well, not from a demand standpoint we're seeing very good demand in europe in fact, we have probably the most environmentally sensitive product in the world we use far less energy, far less power, far less space that anybody else and that's at a premium in europe right now. we're actually expecting to see, you know, coming out of some of the energy sensitivity over there, some really good demand >> good morning, charlie what are you seeing in demand from the hyperscalers? they're so much a part of the

buying picture right now, if they were to just, as i was saying earlier, push away from the table and say they're full, it could have a big impact. >> hyperscalers are not a big part of our demand it's relatively small. we do sell a lot into the cloud, saas, non-cloud service providers but not the top three. we're continuing to see actually good demand out of the saas space. >> charlie, those are the hyperscalers, but what about some of the smaller players, and you know, i think it's a good question because earlier this week seagate said their weakness went beyond the legacy segment into some u.s. cloud customers they didn't say which, though. >> it's interesting. magnetic disk demand and most of that market is, in fact, in the hyperscalers a lot has come out of consumer and a lot has come out of enterprise our market is -- that is the flash market, is really about replacing magnetic disks

and we're starting to see that as flash continues to decline in price relative to magnetic disks. we're replacing more and more of it so, actually, i think, you know, it's a tale of two different cities entirely. the reduction of magnetic is generally good for us. we see great demand coming from the midtier of the magnetic market. >> what are you seeing heading into q4, which typically sees a spike in consumption is that trending as it normally does, just the sense you're getting in data center demand? >> it actually is. we're seeing, you know, an increase in our pipeline we're -- as i said, we're seeing very good demand through the rest of the year while cycles have lengthened a little bit, but on the flip side there's been no demand destruction and the demand is actually increasing, from what we're seeing by the way, i should say, we're a share taker in a very large

market and so i think we're a little bit less sensitive to, you know, to the macro >> yeah, i was going to ask you if we're in a period where we are starting to see some shifts in share also, my last question was about capex r&d. is there a need to get more stingy on that front or not? >> no, we're not -- you know, we're not big capex spenders obviously, you know, by producing product, we do spend capex, but it's not a large part 95% of our team is software, so, you know, very much more aligned with this -- the spend on software we are continuing to hire. it's an important part for us. we're seeing, you know, we'll grow well above 20% this year. and our expectation is that we have to continue to build our team as we go forward. >> certainly a fascinating day to report, charlie appreciate you coming on good to see you. >> you bet thank you for having me. as we head to break, check out shares of ark innovation

etf. new data showing $803 million rushed out of the ark innovation etf in august. the biggest outflow since september after investors stuck with her funds for so long ark flagship is down 4%, nearly 5% over the last week, down nearly 20%. we'll be back after one more quick break. (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.

what a morning it has been for software the wcld remains down about 7.3% one name we haven't mentioned so far this morning is sentinel one down double digits on what were pretty solid results we'll talk to the ceo tomorrow here on "techcheck," but certainly a lot of negative halos going around the sector today. >> you have to give it to the ceos in the face of their sinking stocks, they're coming on, talking to us, being extremely candid we heard from four of them these are all data points investors are collecting to see if enterprise is the next leg in the selloff here and we've got a big september coming up. i mean, we're at code next week. there's a nobody of conferences

where we'll hear from other ceo has are going to help us figure out where to go here. >> just a huge, entire four months remaining in the year and what a way to start that period just a few days ago, people were feeling like, oh, boy, so sorry i missed that june low on the software stock well, here it is again it's coming around do you have the conviction to take advantage meanwhile, let's get to one last gut check. if you're looking for stocks that might weather a downturn, citi thinks it's found a couple in the back office, initiating intuit and box, saying both are mission critical companies with recession-proof demand intuit is on sale, down 3.5% and box holding up like a champ. >> can you say it's on discount? we used to talk about this in relation to dropbox. dropbox more of a consumer name but moving into enterprise they have diverged over the last

year the 12-month performance, box under aaron levy, it is up marginally, but dropbox is down 32%. that has brought box's forward multiple to nearly twice of that of dropbox carl, i still remember not that long ago he was fighting off activist investors >> yeah. we're definitely in that period where we're watching it closely, guys i keep getting fascinated by the fact that 3900 has held here, jon. we're back at 39.12. paramount, match, pvh, verizon, salesforce and intel and nvidia on that news that did not help the chip sector on a week where citi already said they were basically throwing in the towel. >> what a setup for the jobs number tomorrow, especially considering that 1,000-point drop on the dow last friday, right? you got a week away from that. you got a jobs number, is good

news bad news? is good news good news i don't know, carl, but it's going to be an important number and a lot to do, perhaps, with what the market does tomorrow. >> definitely seeing moves that would suggest strength we'll find out in a little less than 24 hours. that does it for "techcheck. busy hour. let's get to "the half." >> carl, thanks. welcome. i'm scott wapner front and center, stocks sliding again as september trading gets under way. why this could be in an especially treacherous month for your money, even more than usual. we'll debate the road ahead with the investment committee and see where there might be opportunities in these markets joining me, jason, carrie fire stone, steve weiss we've been down for four straight days. we're going for five unfortunately, we are succeeding at the moment. nasdaq is where i'm looking right now, down 2% that's a loss of near 250. 325 is where the yield on the ten-year is. and therein lies a problem, st