"techcheck." we're seesawing based on the yield or ten year as they tick up we tick down. vice versa that does it for "squawk on the street." "techcheck" starts now happy wednesday welcome to "techcheck" i'm jon fortt with carl quintanilla, deirdre bosa and julia boorstin today stocks are mixed but is there hope for the bull's? netflix is surging as strong subsubscription numbers help there. and what it means for software and a look at one chip industry name bucking the trend as china curbs hit the rest of the sector asml pulls acpast the competitin this morning. netflix is the top gainer on the nasdaq and s&p as shares surge on stronger than expected results and subscriber numbers

julia boorstin with us here. >> it's great to be here. >> a lot of enthusiasm from reed hastings yesterday such a market departure from the last few quarters. >> you hear a shift after they lost so many subscribers. >> amazing how quickly they've built and are getting ready to launch the ad model but is it too soon to call victory >> too soon to call victory on the ad model here. they grew in subscriber growth so netflix added more subscribers than expected, 2 2.4 million in q3. and forecasts the addition of 4.5 million 4.5 million subscribers in q4. the co-ceo saying they're optimistic about their potential to grow even in the face of headwinds. >> we have a lot of work to do to continue to reaccelerate

revenue. we're happy with our levels of engagements, the number of hit series and films we're able to put to our members in their strained economic times and we're growing. even in those strained economic times and with the extraordinary levels of competition out there. >> going forward, netflix said it does not want to be judged based on subscriber numbers and won't give guidance going forward, they want to be judged on top line revenue as the company benefits from advertising and fees and it's driven right now by non-english programming as well as original films and innovative marketing driving what netflix says is higher engagement than any other streamer, 7.6% of tv time in the u.s. j.p. morgan saying we have increased conviction in netflix's ability to accelerate revenue growth with the help of advertising and montization of account sharing, expand

operating margins and increase free cash flow while there is a lot of attention on the ad supported service that netflix will start to roll out on november 1st, the expectation is advertising revenue will ramp very slowly. guys >> i heard some people talk about the stranger things experiences that they've had in some major cities, almost like a mini theme park experience are they counting that as marketing? are they talking about exactly what that does for them, and how much attention should investors pay to the subscriber -- the big subscriber surprise as management is saying don't pay attention to subs, pay attention to revenue. >> they know that sub growth is going to be slower going forward, but each subscriber is going to have a different value in different markets we have seen the majority of the growth come from outside north america, which is obviously a much more saturated market

but as for the "stranger things" experiences they're not only doing those but they're investing more in consumer products, i'm sure marketing those more ahead of the holiday season that really is marketing having people go and do these exexperiences and post about them on instagram is incredibly valuable marketing but down the road they see opportunity to turn them into stand alone revenue streams. how big they become, i don't think they'll be the size of a disney theme park but they could bolster in different ways. >> there is a "stranger things" experience here in san francisco. >> have you tried it >> no, i'm a little afraid of it. turning to snap as well. citi opened a positive watch ahead of thursday predicting better than expected top line numbers driven by improving environment for online ads and spotlight and snap maps.

looking for inkreezed profitability in the company it's amazing the tone we have right now at the beginning of the earning season from netflix and snap, some of the most beaten down names in consumer tech this is a 30 day positive catalyst watch are they saying that these fundamental problems or challenges still exist but maybe some upside because snap as we know evan spiegel has been transparent with investors maybe under -- >> promising. >> yes, thank you. >> he has been so transparent talking about the decline in ad revenue, the plateau, the picking up of it if we look at the snap chart, look at it over the full year, it's interesting to see that trajectory, we are hearing from snap after the bell on thursday, and the question is how are they navigating the challenges? they talked about the headwinds of a contraction in ad spending. they've talked about the challenges of apple's operating

system changes that make it harder to target ads are they finding better work arounds? and they have the augmented reality tools. how valuable are those tools to advertisers as they try to drive sales this holiday season. the question is, are they at an advantage or can they build up their advantage as they compete -- >> right and none of those have gone away. >> i'm wary. i wonder are we -- when i say "we" i'm including retail investors. there's this expectation, things move this way, that have to move that way things are going to turn on a dime because over the past few years they tended to but we remember times in the markets where the things have slumped and stayed slumped for a while. maybe volatility, even though it's significant right now isn't going to break out of this range for quite a while and so you shouldn't necessarily expect that something dramatically different is going to happen

with snap. >> i like this diagnosis of a volatility addiction, john that's a good way of putting it. what's so interesting to me about these ad platforms like snap or facebook, they make it easy to turn on and off ad spending back in the day you had tv platforms being the dominate place for advertising, it took a while to see trends play out because marketers were making commitments a year in advance. it is possible for marketers to turn on and off spending on things like tiktok or snap that's why you can see dramatic moves or speed up or slow down in a shorter period of time. maybe when it comes to these platforms, watching things move more quickly makes sense. >> it's great to have you in san francisco. >> thanks, it's great to be here. >> the talks are amazing if you haven't bought the book, go out and do so. >> thank you for your support. let's talk about netflix and

consumer tech. next guest out with a new note raising the price target, bullish on sub adds. john great of you back on netflix in general. this strategy, for so long they were the company with first strike advantage now they're coming in with second strike does it still mean it's an advantage for them >> they're bullish, carl on the tier that's being launched in early november, they cited strong initial demand for the ad inventory and said it should be a significant driver of incremental revenue and profits over time. if you remember, we did work in mid june, on the show in mid june, our initial work on the ad tier and it's kind of lining up to what we thought it would be we said $6.99. that's the price in the u.s. we said four to five minutes of ads. we think they can do $10 of ad revenue per member in the u.s.

and our survey work suggested about 4 million ad tier members in -- kind of in the first year. and then you'll probably have some folks switching from existing tiers and as you were talking about earlier, the paid sharing launches in early 2023, this ad share comes at a good time they probably should have launched it years ago but it's here now and i think it's a catalyst for top line growth in the coming years. >> it doesn't sound like from the subguidance that they're counting on it to deliver a large number of fresh subs i wonder if you think it's a liability or at what point do we figure out that was right or wrong? >> i asked that last night and it's talking with management they're being conservative they said of 4. 5, a little is from the avod tier, launching in november our data suggests, at least in the u.s., pretty good demand for

it so, you know, we're -- we actually came out a little bit above the 4.5 for 4q so we'll have to see >> everyone, by everyone i mean wall street, is so excited about them launching the ad supported model. could there be hiccups in that process when that rolls out in the next two weeks that maybe the market isn't accounting for or is complacent on? >> it's new to them. they announced this and they're taking it to market in six months for a company this size working with microsoft and giving a lot of thanks to microsoft to be able to do this. so i think they're being conservative to carl's last question about the impact early from a sub perspective and taking like from an impact perspective on the model, taking the view of it's going to be a couple years, you know, the targeting, it's going to be -- >> but john, what could go wrong

i guess is the question. not how netflix is handling it when you see the rollout for companies that don't do advertising, what could go wrong? >> i think they're in good hands with microsoft as their partner. and again, like i said, they're going to do four to five minutes of ads hulu is doing 11 minutes for the consumer it's a good proposition to start 20 to 40% below the base and a limited ad load and also doing ad frequency caps. meaning consumers watching a show isn't going to see the same ad during that programming i think they've been conservative talking to the street about it. i think it should be a fine start and we don't have the huge expectations based into numbers at this point. >> john, what about costs for netflix? they're saying pay attention to the top line, okay but they've been spend ago lot on content creation and spending it in international markets

largely that are not going to monetize along ads and also where the middle class looks to be having a difficult time and perhaps having an increasingly difficult time over the next year plus with inflation and the global economy doing what it is. so how much should we think about the costs that netflix perhaps continues to spend there and how those monetize or not? >> yeah, john. they -- they're going to spend about 17 billion in cash content in 2022, they told us it was going to be flat next year and ted on the call last night, as we're talking about their focus on revenue and revenue acceleration as revenueaccelerates they may change their investment spend on content but it's pretty much locked in, 7 billion next year, so flat. i would say you're launching an ad tier i hear what you're saying 11 markets outside the u.s., they're mostly big, mature, developed markets. but it's 20 to 40% below the

basic level in any of those markets. so actually, in a tougher macro environment, it's a pretty good value proffer for the consumer and the middle and lower income consumer in particular. >> inally, john, we talked about this morning how they threw a little shade at the industry at large losing billions while they're working with billions in operating profit do you think what we heard last night in any way alters the trajectory of strategies at their competitors? >> i thought it was interesting, carl, in the letter they were saying that some were reining in content spend and i thought that could bode well for them while at the same time you have apple that can spend as much as they want and amazon is spending too. but i thought it was a -- yeah, they did kind of call out some unprofitable models where they are profitable it's just we're still early innings here and i think they

were just highlighting, you know, kind of some of the competitive aspects they're seeing but i think the streaming industry, overall, is in good shape and, you know, kind of good secularly for the coming decade or so >> back to the 200 day here as we said. first time, almost since the beginning of the year, john. great to see you, thanks so much >> thank you. is it time to place fresh bets on software as adobe heads higher by more than 2 1/2 present. we'll discuss next "techcheck" is just getting started.

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adobe's stock is popping after the company gave solid 2023 forecast in its analyst day yesterday considering a strong dollar is cutting into growth. i spoke with the ceo live from the adobe max conference just a few hours ahead of that analyst meeting in los angeles about how software is still going to drive growth into the future >> as it relates to digital, even if the growth is not the

kind of growth that you experienced, that shift of moving from physical to digital is not going to change and so, it may be, you know, a deceleration of the growth relative to what has happened, but it's still growth and it's still a movement that's going to happen i think you have to unpack what's happening on the overall macro economic situation where there's perhaps a little bit more pessimism versus what's happening in digital where that relentless move is only going to continue >> you also have to unpack the stock move today, up a solid 3%, even though a lot of analysts are saying that adobe's forecast was short of their expectations, but keep in mind this is a 2023 forecast ahead of an uncertain q4 with an uncertain global macro where they're still forecasting 9 to 13% growth across business units once you factor in the strong dollar, that's not bad considering nobody right now wants to overpromise. >> yeah. the currency issue, you really

can't ignore liz ann saunders thanks for the metric today costing business 34 million between april and june, so we have a lot to catch up on that front. >> absolutely. but markets have now baked that in so they're looking beyond those. to your point, strong comments yesterday seemed to address the concerns about maybe that figment deal was coming from a place of increased competition i liked the answer when you asked him is microsoft coming to eat your lunch he said microsoft is productivity, we're creativity, they have creativity sprinkled in he didn't address canva though. >> they have to thread the needle saying figma is big in

crea creativity we're still doing well with the biggest and smallest our next guest arguing that enterprise names will lead the way and benefit most as interest rates settle joining us jung mae. great to have you with us. feels like a comeback quarter, q2 in that expectations are so beaten down the sprigs of hope we're getting from netflix and others, are giving investors a reason to jump back in but we know how that ended last time. it was a bear market rally what's different this time, if anything >> it remains to be seen what's difference expectations have been lowered we are seeing positive signs out of asml, focussing on leading edge tools right now the indications out of software as well, it's not going to be a dire situation, even

though there remains the macro overhang and the clouds still remain that's the concern that lingers, but certainly expectations have been lowered enough that it helps coming into earning season to provide stability in the market for technology. >> maybe not dire for enterprise software but we still have seen this sort of pulling back, seen the sales cycles being elongated and i wonder if you think we'll see the effects on this on hyper scalers, an area of the market that investors have remained confident about? any surprises from the likes of microsoft, amazon, et cetera >> certainly we expect a little bit of softness. the question is how muchthat's already baked in i think it's probably largely baked in and the macro overhang -- the concern right now is the macro overhang is a several quarter question that's what the markets are contending with right now. we have earnings beats given the low guidance or expectations,

but right now we're contending with the overhang, the economic backdrop is not going to go away in one or two quarters, probably three or four quarters that's with us where we have high interest rates, slowing growth and how that gets factored in is still a gradual process. >> that mean you think some of the upgrades on names mike micron trying to time the inventory cycle, are those calls coming in too early? >> it's tough. it remains to be seen who can hit the bottom it's tough given how much inventory is out there, we don't know how long the slow down is going to be and the drag on consumer spending and even the potential drag on corporate spending so areas that have previously been stable it remains to be seen whether those start to slow down in the coming quarters, maybe say industrial area, automotive we could see slow down there so i think it's possibly a bit

early but it remains to be seen whether or not the economy can level off here >> i wonder what you expect to happen with government spending on technology when governments are either spending on, you know, the war in ukraine, sending equipment over there, or helping citizens stomach energy prices, whether you're talking about europe -- there's so many different demands on government resources right now, at a time when the global economy is also slowing down, does technology spending from governments take some sort of a growth pause? what happens >> well, i do think governments are going to realize they're going to have to support the economies in various ways. in europe that's certainly happening. but the problem is that's offsetting other strains in the marketplace already. the government spending that is there, a lot of that is to offset difficulties that consumers are experiencing right

now. so i don't see it on that as a positive or negative, it's shifting money and trying to alleviate the strains out there. >> thanks for being with us today. >> thank you meantime, getting bullish on software names today, crowd strike, fort net and z scalers top picks. all three have underperformed s&p but baird said they're an attractive entry point we'll get more action after the break with the markets a bit break with the markets a bit split he, w u50redoisp ♪ ♪ i am peter akwaboah, chief operating officer for technology, operations and firm resilience. when you think about diversity, the employee network group is fundamental to any organization to provide a community

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this is the planning effect. ♪ ♪ designed to help you keep more of what you earn. no more waiting. no more running. [ screaming ] we finish this tonight. welcome back to "techcheck." i'm carl quintanilla with jon fortt and deirdre bosa checking in on things half past the hour, the market continues to be split with mild gains on the dow. flat for the moment. holding 3700 on the s&p. let's get to dominic chu with key gainers this morning

>> if we look at what's happening right now. the moves off the lows have not been insignificant at all. the qqq, it's been a rise off the lows over the past four or five trading days or so in an interday basis by about 7% but puts us roughly here, 33% below where we were at record highs last fall. so the qqq trust in the nasdaq 100 trying to find ways to power gains. we've seen outperformance in that key technology, specifically in cloud computing and intermnet related stocks the laggard here is semiconductors if you drill down further, the upside has been powered over the course of the last week by some notable names on the large cap, mega cap side of things. meta platforms, tesla, amazon

over the past week over those who have had bigger moves and influences over the mega cap technology trade you can see mega up 6% even though it's been down pretty big over the medium to long term other names you get a decent move higher on in terms of contributing to the upside are names on the mega cap basis, netflix in general those gains have made it the single best one week performer among megacap names. watch microsoft, amazon, apple, those names have done well but netflix certainly after a decent down side for the long term jon moving to the upside again here. >> 14.5% thanks a news update. contessa brewer has that. >> right now, housing starts fell 8.1% last month, larger drop than expected and building permits rose in line with forecast but remain near two year lows.

mortgage applications have sunk to their lowest level in 25 years as interest rates continue to rise. mortgage volumes fell 4% in the latest week and now are nearly 40% below year ago levels. refinance applications down 89% over the last year proctor and gamble shares jumping about 3% as price increases on the products helped offset higher material costs and of course the stronger dollar. p&g maintained outlook for organic sales growth but lower forecast for revenues. generac is by far the biggest loser, down 25% after the company warned quarterly results would be below estimates it blamed insufficient to install generators cutting into margins. i see you got the tan me mow coast to coast. >> i just wrote you.

great minds think alike. >> that's true >> wardrobe, we got it contessa, thank you. >> sure. >> we will get food delivery results in a couple weeks. but we got numbers from just eat takeaway touting adjusted ebitda profitability. while unit economics are improving across the food delivery space, there is still a lot of noise to sort through, uber, for example, lost $8.5 billion in the first half of this year due to the equity investments that have been hammered with the broader markets. door dash and just eat, less losses of 4.5 and 3.5 billion. these companies in the case of uber more than a decade on, still looking for profitability. we'll talk about the advertising push later on in the show. but that is a high margin business that the company and

investors may be positive on, but that noise that i mentioned, those losses -- net losses still just huge numbers and some of those key challenges to profitability include what we've recently discussed the regulatory pressures what the department of labor is looking at that may not lead to changes soon but is still an overhang, john. >> as i watch the space, i'm less worried about raw profitability than unit economics and does this company have the best approach to data, right, to be able to get smarter, faster? carl, more and more when you talk to door dash, tony talks about the last mile solution angle of this. it's not just about food delivery it's about delivery of things and who can do that most intelligently and get the loyalty and trust of the user to be that first stop to get that >> yeah. i would note lyft is up, i don't know, 30% or so in about a week

as we got some of the fee hikes, dee, and jb hunt, not in the same business did talk this morning about better availability of drivers maybe at elevated cost. in their view it's the equipment availability that's the problem. but that's key for the companies as well. >> absolutely. driver availability that went down during the pandemic, that's coming online. but you look to the next problem, as jon says that trust is important and what they do with the data. which is why it'll be interesting to look at and track uber's ad business taking that first party data it has to get better margins, better profitability. >> investors have to be careful not to get that whiplash from the kathy woods, long term, innovation is everything to short term, who's going to give me a dollar profit right now with technology it has to be somewhere in the middle. as we've been talking about,

netflix betting big on ads the question remains is it going to pay off we'll discuss with the stock hanging onto a 15% gain. hanging onto a 15% gain. don't go away.g has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice? i can make this work. that seems to be universal. i can make this work. i can make this work. no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial. back when i had a working circulatory system, you had to give your right arm to find great talent.

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let's turn back to netflix and the content economy. netflix still rallying, up about, let's see, let's have a look at it, i think 15%. the launch of its new ad tier

less than a month -- 14%, less than a month away. but will netflix be able to achieve a neutral impact to revenue if subscribers downgrade to the new plan. why that may not be the case, founder of mobile dev me mmo it seems to me if you have an ad business, you need the audience to grow, but does netflix want the audience to downgrade and grow into that in developed markets or not how is this going to work? >> first of all, thank you for having me here today i'm pleased to be joining you. that's the billion dollar question netflix's ad supported content tier, basic with ads is priced in the middle of the other ad supported tiers, hbo $9.99 peacock and paramount, $4.99

what netflix has to do is make that transition revenue neutral. so average revenue per user so if they switch from $9.99 to basic with ads at $6.99. the primary way you do that is command a premium cpm, which netflix is, they priced at $65, that's an ad trafficking metric but that means how much money you pay for 1000 impressions that's a premium compared to linear tv which is 10 to $15 rain and premium compared to disney plus seeking $50 if they're able to fill the inventory at $65 cpm, no doubt they'll be able to do it, this will be positive but if that cpm falls over time will it be if they get more users switching to the $6.99 tier, can they maintain in ad revenue

>> is this really just -- if we're thinking about how this model works, does basic become premium, use it as an excuse to hike the prices on the high end, saying if you don't like it, watch some ads >> my sense is that if you're anchoring the price at $9.99 and relative to the $6.99 ad supported tier, you probably have room to bump the prices of all up because they have three premium tiers now. my sense is, the problem with introducing an ad supported tier, there's an adverse selection issue. the people that switch over or new subscribers are probably going to be worth less, lower end of engagement, sort of targeting desire by advertisers simply because they're willing to pay less to have that interruption keep in mind, the ad units here, 15 and 30 second unskippable preroll and mid roll ads

that's a big disruption to the content experience. >> and four to five minutes per content hour. >> that's right. >> i'm curious of their attempt to wean the street off the sub number and onto revenue. we have a broader range of product, any sub can have economic impacts but rivals have multiple product lines and we focus on subs. >> i think it's -- yeah, it certainly works to their benefit. they provided guidance for next quarter when it'll be introduced so an enlargement of the subbase but said they won't do it again. you want investors focused on the long term, revenue, and subs can fluctuate quarter to quarter as we've seen. and the stock drama that has araisen from that. it makes sense from their perspective. from an investor perspective, the way you drive revenue is subs or price increases. if you want to focus on the

revenue, you've got to make a compelling case for why subs will continue to increase going forward. even if there's a lot of variability within that. >> right meanwhile, there's not much hair on the print per se. certainly the street doesn't think so but they did guide margin down for the coming quarter below estimates. i guess once again it's about the spending cycle and how much got pushed into which quarter. that's something that's difficult to get away from, i imagine. >> that's always the case. they're talking about next quarter being strong because they have a stronger content plate plus the seasonality of the holidays that's fine. that's not unique to this year or next year, that's something to be expected. >> quickly as well, we'll move to another subject in a moment but on netflix is it a mistake for the company to double down on the binging model in the investor letter they showed the chart of engagement in google trends, a spike with a hit

series but it's not sustained. what do advertisers want to see? >> engagement. this is a hill i will die on i said that the bing model is superior to the drip feed model if you have enough of a content slate, you can keep that engagement elevated through binging. that's what netflix said in the shareholder letter and the call. they announced in 2019 they had about two hours on average of view time per user that's high. and they need to keep that high in order to sustain these projections on the ad supported tier i fully subscribe to that. >> i'll take the opposite side i don't like that. i like the weekly releases let's get your take on uber's push in advertising. the company announcing today that it has launched its advertising division and uber journey ads, it's the way to leverage the first party data, allowing companies to advertise on its app using what it knows

about whether passengers are going. i was inform a taxi and reminded how much i dislike taxis, it's the auto pay ads in the back is this more like uber becoming a taxi company, what it was trying to disrupt. >> i love the new york taxis because they have the games on the ipads make it's a more enjoyable ride this is what you alluded to earlier and this catchphrase i came up with in november, everything is an ad track. privacy policy disrupted the free flow of data across context which now places a premium on first party data prior to att, facebook and google captured all of the growth in digital advertising. in 2016, pwcest matesed they captured 89% of the growth in digital advertising and facebook was able to do that by agg aggregating third party data

they can't do it now that's why you see the mass proliferation of what's called retail media networks. a proprietary ad product by a company that has a lot of first party data and uber does uber delivered $140 million in ad revenue in 2021, so the ad business is not new. but what is new they're monetizing the rider location data to target ads on this basis. i think it's going to be a successful product and creates some privacy questions they need to answer. >> eric, thank you carl what dee dislikes most about new york cabs is the ads. >> the videos she's probably on, to be honest. >> i love seeing the cnbc reporters and anchors. i don't hate it all. the noise is what bothers me. >> that's essential information. >> amd and micron may have warned of a chip slow down

not stopping asml, up 7.5% on a pretty flat tape pretty flat tape we're back in a moment - oh, the stock market is doing that fun thing again. - hey news from the future, you're going to live through that about 10 more times. (laughs) they vet investments that don't ride - oh, it's no stress. i just discovered yieldstree the stock market rollercoaster. - ooh. i think some of my gray hairs just reversed. - yeah. you're welcome. - [narrator] become an investor today. yieldstreet: private market investing.

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not. better care begins with listening. humana, a more human way to healthcare. a check on asml, shares are higher despite the broader semi slow downs and the tighter u.s. chip sanctions when it comes to china. the company did predict limited

impact from those restrictions europe's largest tech company we don't talk about it a lot but we should probably talk about it more. >> i'm trying to talk about it more we had a guest who said if china doesn't buy that equipment, somebody is going to, and that's the key. it's just shifting that demand someplace else. >> and key this is european companies so as the company notes it doesn't use a lot of u.s. chip tools -- chips in its tools. so perhaps protected and maybe not a reason to get bullish on the space because we know u.s. chip companies are going to be affected by this it also says that the rules do not government equipment shipped by asml. in a unique position here, as it has been. >> they still don't want to tick off the u.s. government so that puts them in a tough position indeed. tesla hours away from reporting results. more on what to expect, perhaps how to trade it next

"techcheck" back in two.nn. - oh, the stock market is doing that fun thing again. - hey news from the future, you're going to live through that about 10 more times. (laughs) - oh, it's no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - ooh. i think some of my gray hairs just reversed. - yeah. you're welcome. - [narrator] become an investor today. yieldstreet: private market investing.

tesla just hours away from reporting results as analysts look for new record profits.

phil lebeau joins us now with the latest phil, shares have been hammered going into this report, down 20% on the quarter so far. >> and i think part of that people are unsure what to make of tesla is at this moment of time there's no doubt it leads the ev industry not only here in the u.s. but worldwide does that impact the profitability, because frankly when you look at the fourth quarter and the things to look at it comes down to a cup of metrics within the numbers one of them automotive gross margins. analysts expect it to be 28.5% what's happening at it factories in texas and berlin and for that matter what's happening in the delivery growth in the fourth quarter. they need to deliver i think 440,000, 450,000 in order to hit the consensus for all of 2022

which is 1.35 vehicles do we get any guidance in terms of what they're expecting in terms of delivery and demand as you look at shares of tesla keep in mind the average share price, the price being paid for a tesla vehicle right now $57,000, so they clearly -- and that's moving higher i think it was $5,501 last quarter or the second quarter. the question becomes how much are they able to convert that into profits and we'll get those numbers after the break and the conference call with elon musk hopefully this afternoon >> we talked about the credit space after ally financial and carmax and the ford prix announce you think tesla begins to talk about this, too? >> i'm not sure they will. they might allude to it to a

certain extent but i'm not sure it's going to get a whole lot of attention. i think most of the questions from analysts there may be some about the consumer and if the consumer slows down how that might impact demand. but most of the questions i believe are going to be centered around production and what's happening as they work on this next generation battery and battery cells and how the ramp up in the production of those cells are going. >> competition always a concern but is it really here? how quickly is it ramping up they recalled of course nearly every vehicle they produced, and does that hilith the challenges not just they but other traditional auto maker is going to have in terms of rolling out their evs? >> well, the competition is coming and you can see that in tesla's market share when we talk about motor intelligence which tracks all sales here in the u.s. it's down about 66, 67%. it was about 71% so they're losing some every quarter. that's only natural because more

evs are coming out is the competition to the point it's going to threaten model 3 and model x sales. you might start to see more entry level products coming out that could potentially cut into the sales dominance in evs, strictly evs for the model 3 and the model y. >> phil lebeau, i know you'll be watching thank you. >> we will >> everybody, get your phones out now. i've got a qr code coming up just get ready first, still to come it's not just tesla ibm reporting tonight. we'll have more on that in a moment, and with just a little over 24 hours away -- there it is there's the qr code. from this year's deep dive 50 summit you can scan that qr code at the

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the nasdaq is fractionally

lower this morning, but here are the biggest gainers on the index. you can see netflix there at the top, intuitive surgical, asml which we mentioned, adobe, and applied materials. a couple of chip names >> one thing before we go. investors are going to be keeping a close eye on enterprise spending and any potential head winds due to the strong dollar. the stock has been outperforming the broad market this year as the broader tech play gets a bid but of course underperforming over the last decade or so guys, it could be messy of course because that kin drl spin out was completed. how much can we glean from its cloud performance from some of the other players since it's such a smaller product >> i'm less curious about that perhaps surprisingly than about some of those core things like

government because it's not so much about growth as predictability and how much do they get affected by their core business in macro. >> yep, macro is not going to go away now t two-year let's get to the half. carl, thanks so much welcome do the "half time" report much better than feared. that is the word as earnings kick into high gear and several big names beat expectations. we also have some trades to discuss, which we will joining me for the hour today. let's check the markets. carl was talking about yields, and they really are keeping a lid on things today. 410 on