expected up 2.6% versus 3% the street was anticipating the dow had been up 200 points before and that was because of very strong earnings with dow components as jeff was talking about, the restreng of the old economy. up by 322. the earnings stocks. we'll be back with you here tomorrow have a great day it's time to turn it other to "squawk on the street. we'll see you later. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david favor futures solid with another letdown in megacap tech from meta u.s. economy continues and prices soften. apple and amazon tonight our roadmap is going to begin with meta. shares tumbling to six-year urge zuckerberg urging patience as he

ramps up his bet on the meta verse. >> it is a different story for blue chips, caterpillar and honeywell. southwest shares up in the pre-market servicenow, that stock is up double digits. it topped the list of s&p 500 gainers. we'll have the ceos of both of those companies joining us. >> let's start with meta plunging in the pre-market forecasting another drop in the current quarter. on the call last night mark zuckerberg did urge investors to be patient >> there are a lot of things going on right now in the business and in the world and so it's hard to have a simple we're going to do one thing and it's going to solve the issues. there's a lot of competition there are challenges especially coming from apple and then there's some of the longer term things that we're taking on

expenses because we believe they're going to provide greater returns over time. i think we'll resolve them over different periods of time. i appreciate the patience and i think that those who are patient and invest with us will end up being rewarded. >> by expenses he means operating expenses up 19. >> cash flow last year. 9.5 billion. now less than 1 billion. >> let me say this i made a mistake i trusted this it was ill-advised you were extraordinary and i apologize. >> okay. what did you get wrong >> i was of the belief that there was a recognition that

there is an amount that you can't spend. contrast that with jim farley who took a project that was his, fargo, and closed it because it was not ready. it was not near enough this situation is almost a rogue situation. i had thought there would be an understanding that you just can't spend and spend through free cash flow, that there had to be some level and i didn't get it but, david, what did i get wrong? i trusted them, not myself that i regret. i've been in this business for 40 years i did a bad job. i'm not proud. i'm not proud. >> you're not alone. morgan stanley downgrades it for the first time ever to equal weight, targeted it 105. they called it thesis changing. >> i think that's fair when i discussed this with my wife lisa, this is all i talked

about last night and how disappointed i was, not in them but myself i think that's true. it was thesis changing i did believe that there would be some discipline i emphasized i wanted discipline i want to go back again, i made a mistake and i was wrong. i trusted this team and that was ill-advised and i own that >> it happens. >> i appreciate that. >> relationships with people that extend over long periods of time and you believe what they tell you to some extent. now that said -- >> it's horrifying altimeter was right. i chose not to overlook what altimeter said. >> that was just this week, monday >> right yeah okay you're right >> it's very easy. i come out here and i try to

help people every day and i failed to help people and i owned that was i too close to the company i did not think the company would be as ill-advised as to spend through what they had without any discipline whatsoever. >> as carl said, you're not alone in being surprised by that >> but i don't really care about them i screwed up. >> all right let's -- okay. fair enough. zuckerberg has voting control of this company he's making a decision that he wants to still be relevant five or ten years from now because he truly believes this is a -- >> maybe it's too early. maybe it's too early -- >> you have to spend the money. >> maybe it's too early to have self-driving cars. jim farley is the great contrast to mark zuckerberg and that's a family company. >> you need to explain that a little bit more for people,why >> jim farley takes a look at the universe and says i want to do electronic vehicles

okay i'm wanting instagram and reels. i have to close a division i've done a tremendous amount of work for, argo, because unmanned cars are not ready and i am not going to sit here and lose money, shareholders money, not ford's money, shareholders money. interesting enough, meta is a public company with shareholders and farleigh chose to not burn their money. >> control shareholder which farleigh is not at ford. that's a big difference. what mark zuckerberg wants -- >> it does matter what i say i am a spectator who tried to be more than a spectator and that was foolish. >> bernstein today, jim, to add

to what morgan stanley said, investors feel betrayed. the op ex figure is higher than what anyone was anticipating none were anticipating. >> bernstein. >> there's a guy that was up all night about it, too. >> you've never seen numbers like this from a company whatsoever. >> no. no it's called rogue. is he the sun god! >> billion in capital expenditures for 9 months. what we're getting for the year, 34, 37 -- >> with head count being flat. >> i suggested that they actually spend some time talking about discipline, some time. >> it is incredible in the annals of corporate history to see a company spend this much money. >> thank you thank you. >> i don't want to -- >> spend 100 billion in expenses. >> what do you do? what are you doing why are you trying to -- why are

you -- what is driving you crazy? i mentioned that it's just -- do you work there was it your fault? i said, no, i believed. >> what do you say to people, the actual metrics were pretty much in line engagement isn't falling off a sclif. >> i say -- >> i've got one. >> core eps is 12 bucks. this is panic selling like we saw on snap. >> let's say some people at the company are watching the show. maybe we ought to have some discipline then you're going to say there's a level of advisory. i used to be an auctioneer. >> you still do, right >> i still do for charity. i got 105. what do you -- do i see one 12.

i've got 98. david, it's a reverse auction. i've never seen anything like it i've never seen these numbers. only one time, one time when lem took all the money from the money tree and put it in his chimney. >> lem >> lem >> reference to a tv show. the shield. >> he took the money train money and put it in a chimney. >> spruce, i believe. >> i don't even care at this point. >> okay. >> i have morey spekt for boeing after that i have respect for -- you know, i may have respect for david for some -- for tyco. >> for tyco? >> the golden lion shower curtains >> no, i'm going to be serious again. i -- look, sometimes you look at

a situation, you think, well, obviously they must have some discipline because they're burning through free cash flow and this is entirely possible that it's just too early it's just too early. >> by the way, the market cap is going to be 270 billion at the open >> there is a lot of cash. >> you know who's setting new records in wealth destruction for himself is mark zuckerberg. >> that's true >> what's he on, 13% >> easy come, easy go. there is a level where it's worth cash flow. again, can i -- really -- >> if they turn off the meta verse spending, what happens what if they go, all right -- >> no, you see, you don't need to spend billions, you just have to figure out when and where it will work. if you look at jim sing wong who by the way had the honesty to come out and say, listen, we can't do the numbers, which would have been a nice thing here. >> yes. >> right i mean, like nice thing in the

sense that that's what you do in the history of the stock market, you come out and say, look, we're not going to make the numbers. i think that if they -- let's say mark zuckerberg said, you know what, maybe it is too early. let's slow the spending. or maybe he says, the other businesses, let's cut back on some of the fleem because we need them and then i wouldn't have to give my miranda warning to myself. you see this, here's something, the ubers is extraordinary. >> i saw it. i read your list. >> you know how mortgage at this p -- mortifeed. >> i would give you a hug. >> i'll take one. >> you work your ass off for everybody. you really do. i see it every day >> i went to sleep last night, i turned to my wife and i said, you know where i am? i'm in the goddamn meta verse. >> again, not to put too fine a

point on it. the meta verse you're in, they're going to spend between 96 and $101 billion in 2023. >> billion. >> this company. and capital expenditures as a part of that in 2023 will be 34 to $39 billion. >> do you know they actually thought that wasn't bad? they did they did you know what, they said, i'm sorry you feel that way. when i said i was upset. i'm sorry you kneel way. i said, what is that, some sort of psychiatrist snuff how about i'm sorry. >> you've got -- >> i do in. >> stock at par, 100 bucks. >> let me have -- let me at least have 11 minutes of what i regard as being what i owe the people who watch this show >> contrition?

we'll give you 11 minutes of that. >> who's our boss? >> the people. the viewers. >> yeah. >> and i let them down i let people from the club down. i have to own that i -- look, i'm glad that the other people did similarly, but you know what, i look at it and i really -- i look at my personal best and my personal worst and i trusted this man and that was my fault. >> jim, after the break we're going to talk about where you might rotate into if you are in fact exiting facebook? another hug. very nice, guys. we'll talk to the ceo of servicenow getting an upgrade as moffitt goes overweight. stock's up 15% as you can see. they say megacap investors have a new home we'll get to some of the other winners that are doing well. ex-meta. cat, our parent, honeywell and merck when we return of the things that matter to you most. i promise to bring you advice that fits your values.

i promise our relationship will be one of trust and transparency. as a fiduciary, i promise to put your interests first, always. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com ♪♪ ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia.

servicenow shares are surging. joining us first on cnbc is bill mcdermott. bill, do you know a man by the name of eric aupere. >> sounds familiar, jim. >> he's a three-star michelin chef and i'm looking at steeper research i love it. this is a three star michelin quarter. this is an amazing quarter what you did, bill, is

incredible you said you were having trouble elongating but you were going to do everything to make it up to shareholders and i want to know how in heck could you have so many contracts close and how you're doing so much better than everyone else in silicon valley? >> well, thank you so much, jim. we owe it all to our customers they need us more than ever. i said all along the customers would deal with choppy waters and in this environment you are going to have less people but the work didn't go away. you have to automate all of your business processes you have to give people a great experience whether they're employee or your customer. we made a bold move into the helping into the erp space procurement management services, supply life management we've gone to places we've never been before because the servicenow platform can do it. it's all about the customer, net new innovation and our team is the best in the business

i'm so proud of them. >> bill, when i look at your company i think unlike so many other companies out there, you're a deflationary force. we have a lot of companies now that spend -- i don't want to offend drunken sailor so i won't use that term. you're going in and using money smart you burn out things that are burning hot and put in new can you explain to our viewers why your value proposition is so compelling >> if you think about the evolution of the tech industry, you had operating systems, you had databases, you had applications we're now in the era of plat platforms. it runs companies around which platform is going to give me the most efficient speed, execution, results and can i get it fast meaning days and weeks not several months and years so we

actually go in and reinvent the way the companies run and we do it in 90 days or less. we had one large manufacturer that said i have to rethink my supply chain to optimize it to keep pace with customer service in a really choppy environment for manufacturing. we had them up and lip in 90 days and they're talking about taking a billion in cost out it's just that simple. if you think about the federal space, which i know you have a particular affinity for, jim, defense logistics agency, federal aviation administration defense, counter intelligence and security agency, the federal government sees the power of the servicenow platform because we're the great simplifier you simplify, you get people live quickly, they derive value from the platform like no other company in the enterprise and that's why we win. >> how did you know to double down when everyone else was running? how did you understand this? because of your considerable experience is it because of the great tales

you tell in your fantastic book? you did not shy away you recognized what could happen and you decided to take advantage of it. others are fearful others are scared. i don't mean to be etherial. you didn't run, turn tail but run toward and get more business. >> thank you so much, jim. my mother and my dad. winners with dreams got them from somebody. that stays inside you for a long time i'm just trying to be the best version of myself. i've got 20,350 women and men that decided that this was a tough environment for our customers and we were going to re-orient the whole company into ready to run, turn-key business solutions. we were going to engage our ecosystem. we were going to co-create with them and we were going to get our customers live in deriving value from this platform at record speed

that's what we've done jim, great companies are hard to come by. jim, this is the only company in the entire information technology company that's operating near the rule of 60. when you take the revenue growth and the free cash flow margin and you add them up, it's near the rule of 60 they say you're world class when you're operating at the rule of 40 so i'm just so proud of our team, our board, our management team, our culture. we're so excited to get out there and help our customers win. >> that doesn't mean you're seeing the macro picture lighten up, does it? >> we're hearing from a lot of companies. mcdonald's is looking for a mild to moderate recession in the u.s. much more severe in europe >> very fair, carl you're 100% right. we had one customer in europe that is getting rid of 427 point solutions to consolidate them all on the servicenow platform

because they need to take enormous cost out of their business because they're not selling as many things and that's what the servicenow platform can do. it's the great simplifier. so from i.t. and how you service the business to the employee experience and how you inspire your people and get them to be as pro kukttive as possible to how you give your customers a complete experience, not only in how you engage them but get them back in the supply chain and at record speeds and great service. now you have 750 million net new applications being built on a local platform like servicenow in the next two years. the innovation cycle for digital transformation has just begun. we are the center of gravity for digital transformation in this economy. yes, the environment's tough and we're built for all weather conditions i've been saying that the macro crosswinds are not as strong as the digital transformation tailwinds and we've proved it.

>> you did prove it, bill. but you said that -- it's david. you said that before i remember when you did that interview with jim, we didn't think much of it on "mad money." we wake up the next morning your stock is down and the whole sector because you talked about headwinds. back to carl's question, you have a broader view beyond your own business what is your sense as to how tough it is and how big those headwinds are right now? >> well, you know, i was the guy that called it back in q2 that the dollar would be a tough thing to outrun and i did say there was elongated cycles in international markets and those things could still be true today. what we have done is we rewired the manner in which we take our product and our solutions to market and we turnkey these solutions and get them ready to run and ready to implement at record speed so the environment didn't necessarily get better but our ability to serve the environment and meet our customers where

they are got better. and that's what it's really bawl the sense of urgency so i would say the one thing you should take away from this quarter for servicenow is europe was our top performing region. we're just -- that just goes to show you it's not like europe got better but we figured out a better way to serve europe. i'm very confident in servicenow's position for sure and that's why we not only raised our guidance for q4, no one's doing that, but we also gave the capital markets confidence in '23 and beyond because we're in this to win it. i said when i came here we would be the defining enterprise software company of the 21st century. we're getting better every day i think that's what it's all about. we're really scaling the environment is what it is. you know, you have to have all weather condition team to stand up to it >> you know, bill, one last thing. you are hiring but when you hire a new salesperson it does take that person about four quarters

to get up to speed are you making a decision here that by the time we get out of this moment, which we will, you'll have the right number of salespeople versus others who will just be cut bting back at e wrong time >> 100%, jim this is a really amazing world we live in when we came out of 2021 the economy was white hot in the first quarter of 2021, remember? all the turnover, the great resignation, all that stuff? and then by the second quarter things started to tighten up inflation, supply chain dislocation, tightening monetary policy, wars getting intense and everything changed, and it changed on a dime. what we have done is we have continued to hire aggressively in coders, people that actually build the software platform that i'm so proud of, and i'm so proud of them, and go-to-market sellers and solution providers because we want to serve that

client and make sure that they're super happy with service now and we even expanded the ecosystem so we're still hiring. in fact, yesterday i announced a program called rise up with servicenow where we're going to train a million people by 2024 on servicenow's platform they can work for the customer, they can work for the partner and they can work for servicenow the main thing is that i get a million net new service now professionals into the market by 2024 jim, we're definitely hiring right now i'm at full capacity and the sales productivity is the best it's been all year because we were working so hard from q1, 2, 3. i'm in the best position from a sales productivity standpoint and we continue to keep that going from '23 and beyond. >> i think that's absolutely true i want to congratulate you, bill

mcdermott for giving us a glint of hope. >> thank you so much, guys. >> thanks, bill. let's turn to twitter this morning. obviously tomorrow is going to be eventful as the nyc is expected to suspend trading. elon trying to reassure them saying twitter cannot become a free-for-all hellscape where anything can be said with no consequences, jim, even as "the new york post" suffered an apparent hack. >> i don't need body guards and have to contact the police because of what's written? by the way, true >> it's the first sort of longer communication we've gotten from musk again, as carl said, as we've been saying, tomorrow no more twitter. >> bye-bye. >> bye-bye >> he over paid by $20 billion give or take. >> yeah. >> but you know what the reason i acquired twitter is because it's important to the

future of civilization to have a common digital town square where a wide range of believes can be there. >> is that jack dorsey speech? >> there is currently great danger that social media will splinter into eco chambers that divide our society and went on from there but obviously as carl mentioned, mr. musk also says, hey, we're going to have some -- some consequences you can't just say anything. we're going to adhere to the laws of the land and we're going to be warm and welcoming to all where you can choose your desired experiences. he was calling it the x app as i reported there's still potential equity raises going on. he's going to close but maybe he'd sell down some of his equity if others went in the x super app that he's got this idea about. obviously the company's going to start its life as a private company tomorrow with 13 billion

in additional debt and clearly significant interest payments as a result >> you were wrong. you were wrong no one's been fired yet. >> i never -- i didn't -- i didn't say that. the washington post reported it. yeah, that wasn't me. >> he's been there for almost 24 hours. >> i mean, i'm sure he will let people go. hard to imagine. things can change. he calls himself carl great. >> as we saw in that discovery, the texts between him and jack dorsey, jack regrets ever making

this a company at all. >> what will be good, they put through a very good filter at twitter. it's stepped down a lot of the more serious death threats which i think was very positive. it would be great if he actually made it so that you could, once again, communicate the way we used to. >> we'll find out. let's get you over to the big board. it is the easterly government properties merck will be one of the gainers. they raised guidance along with honeywell, carrier and bud >> 20% gain. a lot of things for carrier, they have been able to grow their business they're not residential. people are so worried lenar has

it data centers need to cool things off. that's a very, very good, solid business these are companies that i think really add to the equation of what business can do right i think they get when carrier is doing extraordinary things and spewing cash do you know his number would have been much better had it been able to get semiconductor parts. there are still dated semiconductor parts that have made it so you can have unfinished pieces of equipment that you can't sell and who knows what they could have if they had gotten those semiconductors. >> speaking of semiconductors -- >> yes. >> -- shares of n is indi-- nvi are up you'll need a lot of nvidia chips. >> the ceo of nvidia, if you want to do the things that

zuckerberg wants to do, you actually need to be able to write on nvidia chips. they are close with each other and i think that what's amazing about nvidia, to some degree it is the meta verse. you can't write without it i was interested in putting a business in the meta verse, the mall, but i think i have to wait i regard it as commercial. nvidia is commercial now it did pre-announce. they actually announced. it's something that -- there's this thing, sec. there are a lot of companies in silicon valley, they think that's an arm of their hr. but i thought that jensen wong, they're powerful, you can do

many things including having digital twins. >> it does seem to be one of the few beneficiaries of the incredible spend going on at meta >> absolutely. >> i did notice the stock being up when we talked about meta, it's almost lost 1/4 of its value down 71% well below a $300 billion market value now. you've got a founder that wants to stay relevant and believes spending large amounts of money are the way to do that may well be right. >> when he goes on the web -- >> he may well be right longer term. >> maybe there's a price for everything there's a price for everything, david. >> you know, if ten years from now we're talking about meta and it is the leader in that world, it could be a lot of market cap that it creates for that company, however, it's not happening for today. the opposite is. the other part of this story

that we didn't discuss is the rise of tiktok maybe we need to talk about it more than we do. >> the most disrupting force in technology today google, too. >> it is viewed obviously somewhat critically by many in terms of what it's doing to the youth. but it is a force owned by a chinese company, bytedance. >> it's crushing it. >> somewhere around a $300 billion. could do as much as 15 billion at least this year i believe in income at some point in the future, a lot more than that tiktok is a force spending enormous amounts of money. has been brought up by snap many times as a key competitor. reels did okay >> yeah, but they can't -- reels did okay look, again, my chief complaint among the many complaints is you could have just -- if you reined in costs, if you demonstrated

it's shareholder money, yo reined in costs, you would have seen that stock up, not down except for the fact this is so far in the future. you're right, david. you're right andy grove in only the paranoid survive, which is an excellent book, the late andy grove talked about how the quarter is still the unit of how we have to measure businesses i think andy grove was the greatest business person of my lifetime and i think that a lot of people thought that was harsh but i think he was right so we can't take a 10-year horizon. we're not putting a man on the mars even though jensen in his spare time is working on that. >> you can talk about meta the dow is once again on pace for the best month since 1987. >> why don't we get companies that have a 10-year focus and then get into companies that have an andy grove like focus. there are companies that are

doing extraordinary things that nobody is thinking about i'm not just talking about merck. take a look if you want to see something about what's going on at honeywell, it is just nothing short of amazing they -- except for the fact, you know, they had headwinds everywhere, right? big supply chain problems. you know who else did? caterpillar. headwinds everywhere bing supply -- >> operating net up 46. >> yeah. jim wants to take the astros in a bet with me against the phillies i'm not going to bet with that man. i'm not betting with him. >> the camera's -- >> that's like betting with a man named doc. >> sales up 21 even with china in the heavy excavator market. still at 2019 levels. >> look at this, the construction numbers were incredible the profit numbers the cash flow was great. the operating margin 60.2 13.4 david, this is a man that came to work every day with a company

that did not have much discipline, he instilled discipline and look at that. look at what discipline can do. >> look at that. look at that i have another one you're going to be -- >> our parent company! >> yes >> i've been jammed. >> our parent company, can't say it enough, because there's things that perhaps we don't say as a result. so you understand that as a viewer up almost 8% why? >> i thought we were dead. everyone told me we were dead? >> we're mostly dead but not all dead. >> don't say that. you can't be mostly dead >> no, we're not mostly dead we're fine we had some broadband growth >> how many? >> 14,000. 14,000 but most were looking for zero and so that helped the revenue number was a beat. the adjusted ebitda, there's adjustments all over the place here everybody uses adjusted everything now adjusted ebitda was better than had been expected.

nbc universal numbers. you had the tokyo olympics from a year ago adjusted ebitda and better than ever, carl call's still going on. sometimes you get something from management on the conference call that changes the market's perception hasn't happened though as of yet. >> yeah, adjusted ebitda up 25 peacock sub's up 70 year to date >> 15 million as jeff shell, of course, our boss or our boss's boss boss whatever told me a few weeks back. >> they could use more theme parks. theme parks are very valuable. >> theme parks is an incredibly strong part of the business. >> i'm not kidding. >> i'm not kidding either. >> i would put my chips in theme parks. >> and i remember when they did the deal, it was an afterthought then blackstone sold out, probably wish they hadn't. >> really quick. mcdonald's, jim, some of the

comps, u.s. up six >> do you know some clown search downgraded it this week. i was like, are you kidding me do you have any idea who these people are i was out in chicago this weekend and i was saying to someone, one of the great choices. boom, look at this dow this is money coming out furiously coming out of companies that choose to lose money and come out with great discipline do things, make things, pay good dividends. >> before we get to credit suisse is about mexico's comments yesterday to central bank australia. bank of canada yesterday ecb doing only 75 today. people still looking for some kind of pivot by early next june >> i think that there isn't anyone i tubing that doesn't say listen, we're about to go,

already in a horrible recession. gdp numbers say it's not true. i was signing bottles this weekend in chicago i met with a series of executives they all said the same thing we're about to have a terrible recession. we wish it could be averted. you're listening to that he's got to be hearing it from everybody. it's now louder than how much more a lamp shade costs. it's louder than that. it's louder than how much unilever's soap is increased i'm interviewing unilever. >> they had a good quarter, unilever. >> they had an excellent quarter. >> southwest is flying higher. let's get more to phil lebeau with more on that in dallas. hey, phil. >> hey, gordon ceo of southwest wow, talk about a quarter. record levels. paint a picture of what you're seeing in terms of the demand that's out there right now.

>> you bet, phil thanks for coming to our network ops center this is where we run the operation with our terrific employees so well. no, it's a great quarter we've got record revenues. we've got record passengers. we tied for a record load factor if you look at our fourth quarter guide, that continues into the third quarter. >> you would add even more flights and be carrying even more passengers if you could have more planes as well as more staffing where is not the slowdown, is it staffing, getting pilots, flight attendants that you need or is it in getting more planes? >> it's really pilots/staffing in the other areas we're not perfect but we're nearly staffed. we are just, you know, short pilots to fly all of our air krampt our scclasses are full we are getting pilots. we are getting great pilots but

our training centers are full so we won't catch the aircraft until probably late in 2023. if we had all the pilots that we needed, we could probably fly 5 to 8% more asms. >> a big part of this is getting more 737 maxes you have more than 200 on order. you're the launch customer for the max-7s if it doesn't get certified do you have to modify your plans? or are you believing ultimately congress will come up with a waiver to get this aircraft certified? >> i don't want to speak for boeing they're working on this and the certification of the max 7 the main point is they are working with us. we're not going to take a max 7.

we're converting it to a max 8 i don't think where we have hit a point where that becomes a problem until '24, '25. even though we are off, we are pilot constrained. >> but you need that plane certified. >> we do, but for right now we'll be able to fly all of the capacity we had planned in q4 and all of 2023 so that won't be a problem. >> you just locked in a contract with your customer service agents you have the flight attendants and pilots out there do you think you get a contract done in the next six months? how confident are you a contract will get made? >> we want contracts our employees are the best in the industry they are paid well we want them paid better

yeah, we have an agreement with our folks, aircraft folks and i'm hoping we have a few more in the works. i'm optimistic we'll get to an agreement with our pilots and flight attendants across the near period. it's a negotiation. >> sure. with more people flying, i don't have to tell you this, the airports are packed, the planes are packed and we're increasingly hearing people complaining. complaints are up in august. that's not unusual given the fact how many more people are flying can the industry do better in terms of customer service than it did before the pandemic frankly a lot of people said, look, flying is not fun. i'm not enjoying myself. how does the industry do better? >> i can't speak for others but there's a huge focus on this our goals this year were get staffed, improve operational reliability, we've done that if you look at the summer we had

improvement in every operational staff compared to the year before how many customers got to their destination is almost 99% for the summer the other big thing causing problems is we were constantly republishing schedules because, you know, the aircraft ability to fly would come in less. we committed to not doing that after the summer september and october have been much better. september on time performance is in the low 80s i'm feeling much, much better about this. >> bob jordan, ceo of southwest airlines. >> thank you. >> great operations center >> very nice. >> with the blue lighting. very soothing. >> it is. >> david, i'll send it back to you. >> phil, thank you as always phil lebeau. want to get to a faber report. we haven't talked about credit suisse at all.

i was reporting on the company at the time many others doing the same take a look at the stock not getting much of a reprieve from what has just been endless down days essentially. but we did get the big news that we had been anticipating we were told it would come on the 27th we got the plan for the overall of the company and as many expected, it does involve splitting off the investment bank here in the united states, sending it off on its own under the first boston name with a new leader, michael clyne. man who is on the board of directors of cs. you have to ask some dwles in terms of, all right, you're a fiduciary on the board of the company and now you're taking it where is the value going who are you tlepg? how did that happen? i am told he was in those board meetings when did it shift, now i'm on

the other side of the table negotiating with you to actually be the guy who's going to run this spunoff company by the way, one of the quotes from the presentation i thought was interesting to get a sense as to what they're going to be at this company now. what did they say? it will be more global and broader than boutiques but more focused than bulge bracket players. i don't know what that means first boston is a storied name cs itself had bought, as you know, dlg, backpaid way more money for dlj, 20 years ago, than the whole company is worth now. the whole question becomes capital raise. raising money from the national bank a month ago i reported that people close to the company indicated there was no need to raise capital and clearly this morning i was wondering, as many others might have been, well,

was i missfled all right kind of feel similar to what you may have felt, but i am told that things changed over the last month a lot of deposits left this bank as a result of concerns about its financial health and that while one month ago there was a broad belief that there was not a need to raise capital that, changed because a result in loss of capitol, that's why the product is down. they are selling securitized products they have a deal apollo. how do you preserve an investment grade rating. do you need to raise more cap capital? what will first boston need in terms of -- for its new life how are you going to pay people?

a lot of questions, guys, in terms of what the future will look like. this is the restructuring they've been pointed to. they're going to immediately take a lot of costs out including a reduction in head count of as you saw as much as 9,000 by 2025. frankly, they're not being particularly aggressive targeting an roe of 6% by 2025 >> oh, man >> you know, as one person when i questioned them on that said, listen, first of all, it's about surviving, right you have to survive before you can thrive that's what somebody said. >> this is credit suisse. >> yeah, credit suisse this is the play to get the bank back to respectability again some of the people who have been involved looking at this thing the stock continues to bleed here that's a key question. nobody worries, jim, overall -- >> the swissgovernment will take it. >> the swiss government will take it. won't let it fail. >> yeah.

>> but that's where things stand with credit suisse right now capitol rates which was somewhat unexpected a month ago the storied first boston name will be returning soon under the leadership of michael klein. people might know him from having led a couple well, ail ail though lieu sid was a home run. >> take a look at picks we haven't gotten to. s shopify, hertz - >> i thought hertz was pretty good the first two are businesses and the third is pleasure. western digital couldn't have been a worse announcement and here we go the stock is up. that could be spending away from that the one i wish we mentioned was lindy. you heard about getting out of dodge. they got out of the dax. they got out of the german exchange and had a fantastic quarter. there's an overhang they're

going to blitz right through, because they were in the german index, it kept taking them down. no longer -- congratulations to lindy for having the good sense to get out well done. >> trying to think what else autonation we missed you couple that with hertz and ford, quite a bit of auto news. >> the autos are still in short supply used autos are selling at an amazing amount ford can't produce enough new cars so used cars go up in value. that's why i thought hertz should be up more than autonation there are a lot of companies, carl, that are navigating this period fantastically, but they're not faang. apple tonight. >> i'm laughing because the

pivotal upgrade from sell to buy as the shares went back over 300. >> i do expect apple to be humble, because that's their nature i expect amazon to be rough and tumble, because that's their nature. >> two big with ones after the bell tonight we lost our initial games. s&p down 10. dow was up 400 plus, now 265 bonds are important to watch ten-year did manage to stay pretty much below 4 earlier this morning, now back above to 4.01. two-year back to 4.44. back in a minute lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”.

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let's get to jim and stop trading. >> there's a growth industry, sweeping the country and causing companies to make a lot of money. the industry is coal the europeans were so ill-advised that the only thing you can be commissioned at a

coal plant norfolk southern is doing remarkably well. they have a fabulous business in coal like csx if you want to take advantage of the greens in germany, who i think were well-intentioned, understand the browns are winning. >> yesterday was confusing because their tax rate was 12 and people said tfts a low-quality beat >> i thought about that. i really think in the end that that's not true. intermodal is not what i would like if you think recession is going to be deep, you buy this company because the amount of coal they need over there is extraordinary. we can't even provide it look out it's going to be huge for them tonight i've got fortune brands, which is splitting up again. i have unilever and mike

sievert. that's not a good picture. >> you got sievert, huh? >> yeah. i sat next to him at kind of a short-term nirvana concert, so to speak >> nice. >> and i worked and i worked sometimes i like to really press hard matthew mcconaughey, too >> at&t's quarter was a strong one. verizon is not i'm curious to see how t-mobile does >> the best. >> the best? >> can i just say one more thing. i trust him. i was wrong. >> jim, we'll see you at 6:00. "mad money" 6:00 p.m. eastern time a lot more on meta's big miss after the break.

good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber. more rotation out of mega cap

tech, at least out of meta and the cyclical industrial names that raised guidance, including honeywell and merck and carrier. we're off the initial highs. dow still holding a 300-point gain. >> we're 30 minutes into the trading session. here are three big movers we're watching we'll start with ford, third quarter loss and supply chain problems and autonomous driving investment those shares are down 3% shares of our parent company, comcast, up big after an earnings beat. revenue falling slightly but it did manage to add broadband subscribers after a flat second quarter. those shares are up 5.5, almost 6% shares of caterpillar are surging, on pace for the best day since march 2020 recording a record profit for q3 sales, saying demand remains healthy and margin expansion is in focus for the fourth quarter. you can see those shares up 8%, carl. meta shares cratering at the

open value plunging by more than 65 billion amid falling sales and rising cost. truist cuts the target, generous compared to some other targets around the street. truist joins us to talk about the print. you said one thing you get a sense of, reading the reaction notes, is a sense of betrayal given the guide on op-ex despite all the warnings on how they needed to be more efficient. >> i think that's fair again, this is a company owned by with one person and he calls the shots. i think what's interesting is there are two sides to the numbers we saw last night. one was the ad demand. that continues, surprisingly, to do pretty well because we were actually surprised -- we were afraid that that would be falling off a cliff. it didn't. the guide didn't either. the spend on ai in the metaverse was way more than we thought

we along with other people on the street expected maybe flattish capex and opex on flattish revenues. instead they took it up by 10% or 15% we'll talk about this, five times ebitda is too cheap to be downgrading the stock here. >> do you think at this point buying the share is an option on the metaverse paying off in ten years or is this a bet on somehow reels gets monetized, you take back share from tiktok or some combination of the two >> i think you're right. i think you're absolutely right. the stock has already lost 70% of its value by my estimate, i think meta -- the meta verse has already cost meta half thrill ondollars in fair value, in market value. so, put that aside, and i think the stock could go back from 100

to mid-150, 160 just on, one, maybe gaining share back from tiktok, which interestingly enough, we spoke to that yesterday, the engagement on facebook and instagram is up, and even in the u.s. where everybody's saying they're losing share to tiktok engagement is still up users are still up that's one two, monetization on reels there's a $2 billion today in monetization discrepancy between what they sell an ad for on their regular facebook or instagram versus reels i think that needs to compress i think will compress over the next 12 months they talked about text messages. there are other elements, in my book, in my mind, that could get the numbers incrementally better, but the metaverse is still going to be a big overhang

on the stock for the next several years. >> is this a company with a stock and a leadership problem you mentioned it off the top, the fact that mark zuckerberg has control, majority control of this company they've lost sheryl sandberg this year, for example when you see -- when you see the spend being put forth that something the market is clearly rejecting, how real is that risk, even if it is a value proposition trading where it is today? >> look, there's no question, investing in meta means investing and believing in zuckerberg go back to 2012 when they were making the move to mobile. i went back this morning and it looks like capex is a percentage of revenue spiked, doubled to 24% in 2020 -- in 2012 in 2018 when they made the move to stories their capex doubled it went to 25% now we're talking about capex in

the 25% to 30% these are huge numbers i believe -- i know it i get it but zuckerberg has proven to be right at least twice in the past and so that's what you're betting on if you decide to go along with the stock today. >> how long do you have to wait for him to be right? >> well, you don't have to wait for him to be right, david, on the metaverse because that's going to take three to five years to get any insight it's the other stuff i was talking about with carl earlier that are all incremental revenues look, we think revenues trough -- i'm sorry, revenue growth trough in 2022. we do things margins -- excuse me, ebitda troughs in 2023

on that alone the stock should be trading more than five times cash that's our contention. >> looking ahead, amazon after the bell, your expectations, especially what we have gotten from the other big tech names so far. >> so, we think the e-commerce business amazon continues to hold, we think the advertising piece of amazon is going to grow well north of what these guys have been talking about. will grow at least at 20%. and expectations have been also brought down for amazon. so we're cautiously optimistic going into amazon as - >> what a morning. appreciate it very much. we'll see what amazon does tonight and maybe talk again soon >> let's turn to twitter we've gotten our first communication from the incoming ceo of twitter it may not be a name you've

heard. his name is elon musk and he will be running this company as of tomorrow. in his first sort of longer tweet about why he's acquiring twitter, he says the following the reason i acquired twitter is because it's important to the future of civilization to have a common digital town square where a wide range of beliefs can be debated in a healthy manner without resorting to violence. he goes on to say there's a great danger that social media will splinter into far right wing and far left wing echo chambers and further divide our society. and goes on saying he won't allow it to become a healthscape, and people can express themselves but still moderation saying it's essential to show twitter users advertising that is as relevant as possible to their needs. twitter obviously can't become -- i'm sorry.

which is a key saying right now they get a lot of advertising that ultimately is really not of interest and that in his belief the ads can actually become content of a sense. as i said earlier, on the part of allowing a lot of voices, he did say, obviously, it can't become a free-for-all healthscape where everything can be said with no consequences deal's going to close. in fact, this may be your last day of seeing twitter trade as a public company it will be his, 5420 is the price. it's getting closer and closer to that ultimate price there has been a significant spread, even in recent days as there continue to be some doubt as to whether he actually would close the deal he was in the offices yesterday, i believe, visiting with some employees. perhaps laying out some vision for the company. >> we have the video of course, he put it on twitter. he literally walked into twitter's san francisco headquarters carrying a kitchen

sink this commentary, this idea of not letting it become a healthscape, he's went saying this all along on twitter, for what it's worth. based on the comments and what we've seen covered in the last 12 to 24 hours, those dramatic labor -- or head count cuts that have been reported earlier in the week don't seem like they're necessarily going to happen but that's not to say there won't be cuts it will be interesting to see how he lays out the long-term plan for twitter he has a very long, long-time horizon with any of his companies. >> this will now be added to the stable private companies, including the one you cover so closely, spacex. you can see we're having a rally at least on the dow. s&p is in positive territory the nasdaq under some pressure, in part, because of shares of meta we're looking at these markets after a gdp number we got this

morning. that was 2.6 through the third quarter. on pace for the first positive quarter since the first quarter of 2021. our next guest is cutting her target joining us is rbc head of u.s. equities strategy, lori. good to have you why are you cutting your target? >> whoa did that a little bit ago, a few weeks ago what we wanted to reflect is we think markets are trying to stabilize but we think we're set up for chop into the first half of next year i do think we're focused on reporting season right now we do think that more positive tailwinds for republicans heading into the november 8 contest is something that has helped stabilize markets in here unfortunately, with reporting season, we're getting some good news we're seeing some resilience, seeing some beats, markets are

cheering those, punishing the misses, but i think we'll not be able to rip off the earnings band-aid until we get into the early part of next year. let's enjoy it while it lasts but i think we're set up for chop over the next few quarters. >> what is ripping off the earnings band-aid mean for early next year? what do you mean by that >> i mean getting to the point where we finally right size 2023 expectations and that's something we've been hearing a lot of since the summer where the buy side says, we don't need to pay super cheap multiples for stock. we're fine paying 15 times, 16 times. just getting the sense we derisk 2023 expectations enough i think that we've got a little more wood to chop there. i don't think we're going to get that entirely in this reporting season >> just to dig into it a little more, what is right size altima thely going to look like we keep hearing about the question marks for 2023 and the uncertainties from a macro

standpoint, geopolitics, recession, on and on down the list what is right size, do we know what that's going to look like >> i think that's a great question i think there's a high uncertainty of what 2023 will ultimately look like our best guess is whatever economic hits we get, you can call it a recession, a sharp softening, whatever you want to call it, we think most will be hitting in the fourth quarter this year and the first quarter of next year when we bake that into our earnings model we come up with a 208 number for next year the consensus has been tracking around 237 as far as bottom-up aggravation. that number is in flux this week there's still a decent amount of reduction we need to see for those 2023 numbers to be in align with something that comes pretty darn close to a recession but may not quite end up being one. >> you've made some contrarian calls around big tech. those calls have is been largely

right. what do you think of big tech right now, the so-called tech racket and all the selling we've been seeing? >> i think i want to be very careful when you're digging into that tech landscape. if you think about the broader tint space it's in three different sectors. we like the classic technology where you have semiconductors, software, i.t. services companies, earning revisions have been beaten up. on the software side you have more resilient business models and we're hearing about that this week from some of these companies. not all but some i think you want to be more careful when you look at communication services space, which we're neutral on or the consumer discretionary sector, which has the internet retailers on, i don't think that consumer discretionary sector has gotten cheap enough yet. you have seen some beaten up earnings revisions trends there. we're keeping an eye on it i like the tech space itself the best because we have the highest quality there and ultimately what we know is over time,

higher quality names outperform lower quality names. i think you have to take the longer term view and you have to stick with quality and the more resilient business models. >> thank you appreciate you taking some time. >> thanks for having me. good to see you guys >> as we head to break, here is our road map for the rest of the hour, including a deep dive on defense stocks we'll have the highlights from conversation with northrup gru grumman's ceo. we'll hear what the company's ceo told cnbc about righting the ship. shopify's president is with us help us get a picture of what consumer demand is looking like right now. stock up double digits the dow up 475

welcome back want to turn to credit suisse, shares of the swiss bank are plummeting after it posted results. more importantly, something we've been waiting many weeks for. this big announcement of a restructuring that included a very large third quarter loss. let's bring in leslie picker, who can take us through a lot of what's going on here leslie >> david, yeah, not a great market reaction to all of the news announced this morning. you have the $4 billion loss on the quarter. that's about seven times the size that analysts were

expecting plus $3 billion restructuring cost and a diluted capital raise with saudi national bank serving as anchor investor for that. in other words, this turn-around will not come cheaply for the firm investors are losing patience after years of turnover in the c-suite. a series of multibillion mishaps including greensill and macro headwinds facing the financial services industry broadly. backers of the plan say the structuring will lead to a smaller and more focused firm. as a result, this includes a retrenchment in investment banking, and credit suisse also agreed to sell a majority stake in securitized products group to apollo and pimco the firm said both layoffs and attrition will also result in about 9,000 fewer jobs in three years' time. nearly a third of the head count reduction will take place during this quarter it's also putting the firm's

capital markets and investment banking business under the cs first boston brand, a nod to the u.s. bank credit suisse acquired decades ago. they already have half a billion dollar commitment from a third-party investor also hailing from the middle east to invest in that business. credit suisse says the plan will lead to a return on tangible equity of about 6% for 2025. a figure kbw analyst describe as relatively low the bank says it's expected to deliver sustainable and attractive returns from 2025 onward guys >> leslie, i referenced that 6% roe in 2025 earlier. one of the people involved in restructuring say, first it's about survivingand then it wil be about thriving. thoug they lost a lot of deposits over the last month as well i was assured even a month ago

there wasn't a need to raise capital. things may have changed. tell us a bit more about what did happen did they really lose a lot of deposits because people got concerned? >> they did lose a lot of deposits they saw a lot of outflows people were concerned by all of the media attention, the credit default swap spreads we talked about that quite a bit ago. those have come down quite significantly. that perpetuated over the course of the last month did lead to significant outflows for the firm as a result, they did, in fact, engage in this capital raise and were able to get that anchor investor from the saudis now, they went about -- this was something discussed on the media call, is the reputational risk of bringing in the saudis to invest so significantly in the firm, just given all the radio geopolitical risks they're in. then they have another potential

investor in their cs first boston spinoff they're looking to do. and so the question remains why tap those sources of capital, why tap them now i think that's also creating more fear, especially since the market really digested this idea that they didn't need to go out and do a dilutive raise >> leslie picker, thank you. >> it's nothing but down. >> wow. take a look at the spdr dow etf, up 1.5% up more than 12% in october. the dow is on pace for its best month since 1997 hanging onto gains here today, as i just mentioned. but why? earnings from a number of blue chips that reported this morning. mcdonald's beat, customer demand remains strong despite higher prices honeywell reported a beat. the company citing strong growth and advanced materials commercial air space, building

products, those business upped its guidance shares are up 4.5% and caterpillar sales and revenues increased 21% in q3, senting cat up seema mody just spoke with the ceo and joins us now >> just kindly correct you, morgan he spoke on the conference call. here's what he said the. the urgent need for natural gas in europe is prompting u.s. energy players to buy more energy and transportation equipment from caterpillar ceo saying the company plays a meaningful role across the value chain from drilling, fracing to gas compressors. sales rising 22% year over year. he does not see this business slowing down on supply chain he said there are pockets of improvement this is the first time we've really heard jim talk about an improvement in supply chain. but he did refrain from providing a 2023 update given the flurry of macro related events as to what to expect in the

fourth quarter, he said q4 is typically the highest from a revenue perspective. the reaction from wall street so far, pretty strong it's the best quarter for caterpillar in ten years barclay's says it's the cleanest set of numbers they've seen since the pandemic stock up over 9% back to you. >> what's the read-through, whether it's caterpillar or honeywell today, whether it's ge, some other industrial names we have gotten reports from. it does seem like commercial aerospace, aviation is an area of strength, and even commodity focused seems to be an area of strength so far i guess just looking across the broader sector, what's the takeaway? >> first of all, to your point, i think government spending on infrastructure that is fueling investment in caterpillar's equipment devices helping the defense names you follow the second one is commodities. it's not only helping the big countries that are oil producers

but the companies that specialize in the equipment, the excavators, the drillers, the fraccers,ing all of this equipment is in higher demand when you have a nation like europe in such urgent need in lng. the u.s. is exports and, again, fueling demand for companies like caterpillar honeywell comes back to the i.t. spend you're seeing across business services. >> yeah, this industry of industrial software, digit tieization of everything seema mody, thank you. >> who needs a virtual world, right? you've got a real economy here. >> yes. after the break, much more on how to value, speaking of, meta those shares are down 21% right now. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi.

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>> are we in the midst of a turn here what's going on? >> look, think, start at the macro level. the macro winds of remain strong long term. global e-commerce sits at 5 trillion today and 27 trillion by 2025. shopify is one of those dominant player in that space and dom nant player for retail consumers' favorite brands are almost entirely on shopify in terms of the quarter and the results, i think during the third quarter of choosing for solutions than ever before the role we're playing in these merchant businesses is very different than most typical software providers attach rate is 2.14% more merchants are taking more of our solutions, payment, capital, fulfillments, more services like audiences. i think we had a good quarter in terms of revenue revenue was 1.4 billion.

awe quaully important, right now especially is this operational discipline adjusted gross profit was $681 million. that's up nearly 11% a we're also decelerating year-on-year operating expense growth and we have $5 billion cash on the balance sheet. >> i was going to ask you about that the sequential decline in opex op ex is a huge topic of discussion this morning. how disciplined can you be before you start cutting into muscle >> shopify has been thoughtful managing expenses. nearly all of our growth predeliver acquisition has been organic and funded by redeploying gross profits into the business the cash we raised externally has been used strategically to

accelerate the product road map. we can continue to invest in building buyer relationships, the logistics piece of it. we think we can do both. we think we can be good stewards of capital and grow this business shopify is 10% of total e-commerce in the u.s. we have small businesses growing really large that's the figs and albert story. we have large companies like spanx and mattel who are coming to shopify to run the entirety of their enterprise commerce area we have different path ways into shopify. the more exciting story is merchant resolutions we can make it easier to sell. >> a macro question, given you are working with so many different businesses of different sizes across the country. we are carol tome from u.p.s. on earlier this week, and one thing she talked about is the idea of it's a little return to

pre-pandemic norms in terms of things like consumer behavior and how they're shopping but it's also the fact we are seeing this economic slowdown what are you seeing through your different business segments and how do you expect that to translate in terms of economic activity into next year? >> look, carol is a friend and u.p.s. is a great partner. year over year consumer spending was up 8.2%. month-to-month, that spending remains fairly steady. i think the key is in the same way merchants during the pandemic had to reset how they did business and where they sold, the same thing goes now. if one channel isn't working well, shift to a different channel. we announced a new integration with google on audiences our integration with tiktok and spotify and snap is we want to make it easy former chants to find more customers regardless of the client. i think we'll see a good holiday

season it remains to be seen how strong it's going to be our merchants, we have millions of them, are getting ready to sell >> harley, the stock is having a very good day. we're looking at it right there, up 18% you still lost three-quarters of your market value over the last year how is that impacting morale among your employee base to what extent, if any, is it impacting your ability to compensate them with stock >> it's a really important question one of the reason we introduced our new comp form is some people don't need to buy houses, others are looking to buy a place for their family the more agency, lending aside between cash and equities and rsus, we think we can help mitigate some of that uncertainty. that being said, you're absolutely right, david. the stock, obviously we were this great pandemic story. i think what's being missed is shopify is also a reopening story. it was up 35% year-on-year

we're taking a lot of market share away from the traditional point of sale physical retail e-commerce, commerce platforms and coming to us as well i think our job now is to explain to the world, to investors, to everyone that shopify is the future of commerce wherever that happens >> hardly, good to see you again. appreciate it very much. shopify hanging on to near 18% gain let's get to frank holland with a news update >> good morning, carl. here's your cnbc news update at this hour. a texas man has been charged with trying to smuggle dozens of people across the u.s. border. texas authorities released a video of a truck packed with 84 migrants officials say he tried to bypass a border control checkpoint. kremlin authorities have left the kherson region, joining the 70,000 people evacuated from kherson as ukrainian forces set up to retake that city. poland has torn down four monuments to the soviet union army it's called a condemnation of

russia's invasion of ukraine and remove russian symbols since world war ii. a transgender woman has bought the rights to the miss universe pageant in thailand >> thanks very much. get a check on where the major averages stand this morning about an hour into trading. s&p back in the green. 3855, maybe 30 points shy of yesterday's intraday high. dow is up 500. putin giving a speech right now saying at some point russia and the west are going to have some talks -- or need to have talks about their common future. we'll see what that means. aomhetrt"s ckee iba in ment.

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>> carl, mark zuckerberg asking for patience as the company said it will lose even more money next year on its metaverse bets, warning its reality labs operating losses in 2023 will grow significantly year over year the company announcing full year 2023 total expenses will be in the range of $96 billion to $101 billion. and that's all despite keeping head count flat through the end of next year mark zuckerberg defending his strategy to make these long-term bets amid shrinking ad revenue saying, quote, those who are patience and invest with us will end up being rewarded. multiple analysts are downgrading the stock today to equal weight, largely concerned about growing costs. morgan stanley downgrading from overweight to equal weight saying, we think meta's forward

capex guidance are thesis changing and likely to weigh in on the same period needham saying, deafening silences about meta's historical ad business was our number one takeaway and though mark zuckerberg was bullish on the opportunity to make money from reels, saying they made progress there and gaining share on tiktok. those concerns about meta's big meta verse bet are overshadowing that other progress. >> we got some downgrades from analysts on wall street, julia, but overall throughout the year, the analyst community continuing to stick by this company it's down 70% year-to-date how much longer, and this goes back to something we talked about earlier in the show, how much longer do investors need to stick with meta to see this major transformation with all of this major spending actually come to fruition >> i'm looking at the stock down now 28.5% today. i think so much of that companies down to the fact that

mark zuckerberg talked about the fact he was doing cost-cutting and i think there was some expectation among analysts that he would be moderating his investment in the metaverse, after brad gershner said they would like to see meta half their investment in the metaverse every year and he says, no, we'll be investing more and losing more next year zuckerberg said the metaverse vision won't be fully realized until 2030 i think right now people are worried about what's going to go on in 2023 >> one last question i this is why the guide on expenses is so high given they see head count flat at the end of next year from reqq3 of this year? if not head count, what are they going to be spending money on? >> look, i think there are some costs associated with investing in this technology they're talking about

consolidating their physical spaces, which also does have some cost. but this is a tech company if they're investing in headsets and devices and all of this high-tech infrastructure for what they see as the platform of the future, which is the metaverse, mark zuckerberg says this is great, we won't be reliant on apple anymore but those are meaningful, meaningful costs. >> julia, thank you. julia with that stock down 22% if you're an owner, perhaps you can take solace on the fact that you're not just losing money, so is mark zuckerberg let's get to robert frank with what we're talking about here. >> not a lot of sympathy for zuckerberg, but the wealth destruction across the board here remarkable. now, leading into that earnings call yesterday, zuckerberg was already down $76 billion for the year at the current stock price trading down 22%, he is down $85

billion for the year he has lost a steve schwartzman, a ken griffin and carl icahn combined and lost mother than sergei brinz's entire net worth. down $95 billion he used to be the third richest person in the world. after today he could fall to 26 or 27. get this, behind michael dell. how's that for an irony? he has taken money off the table over the past decade zuckerberg has sold $17 billion in stock much of that for his philanthropic llc. he's not alone among the losers. the top ten tech billionaires down about $400 billion so far this year. musk is down 60. bezos down 54. on a percentage basis, there are some even bigger losers. evan spiegel seeing his net worth falling from $14 to $1.5

billion. guys >> we're all getting out our very tiny violins. he's lost a full sergey brin that's amazing he has voting control, robert. we talk about, perhaps not enough that's the reason that meta is doing what it's doing because he wants it to. it's different than bezos, to a certain extent different than musk even, to some extent as well. but many of the other names you discussed also do have voting control over their companies >> look, you know, the argument to that, when people bought into meta, it's like, look, his fortune is tied to meta just like our fortune it's not comparable given he's taken $17 billion off the table. investors weren't that lucky i think that there's a whole misconception that, okay, it's a concentrated owner position. he has voting control, but just

like us, he's his financial fortune is tied to this company. it's just not equivalent >> pretty amazing, robert, thank you. just one more angle of the meta story today. markets hanging onto some green. s&p is up almost ten points. the vix close to 27. ten-year, 394 is going to take you back a couple. stay with us ♪ ♪ mercedes-benz is turning electric... completely on its head. bringing legendary design... and state-of-the-art technology... to a fully-electric suv.

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we have to share our signal with the entire neighborhood. yeah, now we do some weird things to get our speeds. well... i'm up. -c'mon kids. this sucks. well if you just switch maybe you don't have to be vampires. whoa... -okay, yikes. oh sorry, i wasn't thinking. we, uh, don't really use the v word. that's kind of insensitive. we prefer pro-lunar. yes, much better. welcome back to "squawk on the street." another up this grumman missing on the top and bottom line market volatility is impacting workforce retirement plans northrup's q3 sales growing 3% and cfo noting that the 2024 forecast, now poised to come in at the lower end of previous guidance, actually implies faster growth in the current quarter. book to bill outlook, key for defense contractors, increasing in 2022 as well.

unlike lockheed martin or raytheon when sees sales growth delayed into 2024, northrop expecting an increase next year. ceo not projecting supply chain improvement but also doesn't expect it to get worse basically stabilizing. a key factor, labor improving. noting increase in head count, robust hiring practices and also a labor market that's slightly starting to ease seeing, quote, growing demand signals across the portfolio, including internationally for missiles, missile defense, and that will take time to translate to sales space emission systems remain critical areas of growth nuclear triad, including the b-21 bomber which will get unveiled by the air force on december 2nd continues to be well funded.

lastly, in a weaker than expected quarter, the big bright spot, space. again. two big program wins the ground base strategic deterrent, which is the system that defends the homeland, they've taken that contract over from boeing. and a low earth orbit constellation to track hypersonic missiles but also telling me space strength is broadbased, including work for nasa, which is contributing to q3's 18% growth there as well. stocks have been moving between losses and gains this morning. it's definitely the underperformer within the aerospace and defense subsector right now. worth noting, northrop started this year trading around 400 bucks a share. coming off all-time highs at 530 even with a little weaker right now. keeping with space, i just mentioned nasa it's out with a new economic impact report. it's first since 2020. indicating that the space agency generated a total economic

output of 71.2 billion, an increase of almost 11% from 2019 joining us now on set in a cnbc exclusive, nasa administrator bill nelson. administrator nelson, so great to have you here. >> thank you so to have you here >> thank you so much you said it, space is the place. >> so, space is the place. i get asked this question a lot, i'm going to ask you, gimp the fact that the we have all the geopolitical strife. given the fact that we've been having a market that's selling off this year. questions about economic growth, on down the list why does space matter? >> well, the numbers that you just quoted are just the tip of the iceberg. it's quantitatively so much more, the effect that nasa and our space programs has an our economy. let me give you an example we are the ones that create the

instruments that determine climate change how much is us understanding what climate change is doing to us worth to us so it's another economic calculation. we can tell a farmer that he has this much water content in his soil, so that he can help improve his crop production. how much is that worth so, the calculations of how the space investment ripples through the economy is incalculable. >> and talking about space investment, we've seen this emergence in recent years of commercial space buyers. some of them have even gone public we've seen them not immune to the downdraft in markets this year given the fact that there are so many more companies out there for nasa to potentially partner with, how are you viewing that landscape? do you expect we'll see some consolidation in terms of who you'll be contracting with >> the commercial partnership that we have say very, very important one.

and a central thrust of nasa when this rocket that will launch in two weeks, november the 14th -- >> is it going to launch on november 14th? >> the largest rocket ever, going back to the moon a test flight. then we put humans on it in a couple of years. in three years when it lands it will be a private spacecraft when they won the competition. that's just one example. look how we are planning for the international space station for the next eight years until 2030. and then we're going to turn it over to the commercial sector for commercial space stations and nasa will become then a tenant, with our landlord. in low earth orbit, so nasa can concentrate out there. as we explore the cosmos >> you just mentioned artemis 1

which we've seen the date pushed back and pushed back boeing is the prime contractor for that super mega powerful sls space long systems rocket. is it actually going to launch on november 14th >> it will launch when it's safe >> okay. >> we don't do that, particularly, when you're messing around and putting humans on the top. so, we had a hydrogen leak we tried again they didn't fix it then we were ready to go in the last part of last month, and lo and behold, here comes the hurricane. >> i do want -- >> -- so we had to roll it back. >> yeah. i do want to get your take on boeing, we saw that company reporting yesterday. it took a big charge air force got a lot in terms of that charge. commercial continues to be a drag for boeing. how are you working with that company and bouncing it against spacex for the first crew flight

for boeing now pushing back until next year? >> they'll come through. they are assuring me that they will launch with the astronauts. two astronauts, a test mission, in february. but whether it's february or a couple months later, it will be safe and then we will have the additional crew capability to get to and from the international space station, as we have now, with spacex and as we rely and integrate crews with the russian soyuz. >> okay. finally, i can't have you here and not ask you about ufos or i guess you would say unidentify phenomena. nasa has set up a team to study what we would call ufos. this comes on the heels of the dod classifying some research

around this, too walk me through what you expect to find here >> well, just like asteroids, people are fascinated with things like ufos and so people think that it's being clamped up, kept out of public view by the department of defense. what we decided to do was to put this blue ribbon panel of scientists together. and look at it from the scientific standpoint. and what sensors do we have that might tell us about that phenomenon and that's the approach we're taking a scientific approach now, it's caught people's attention because naturally, they're wondering are they aliens is it anniversary, but we're going to take it from a scientific point of view >> so is there extraterrestrial

life, real quickly >> the universe is so big 13.8 billion years ago that it started, is there a possibility that there's another sun in another galaxy with a planet that has a similar habitual atmosphere i would say the mathematical probability is pretty good >> bill nelson of nasa, thanks for joining us today >> thank you coming up on "tech check," we won't get to that, we'll talk meta and service now and shop apply and the earnings report. then to twitter and musk here's a live picture of twitter hq shares 5397. we'll keep an eye on elon throughout the morning stay with us

i want to focus on shares of our parent company comcast because it is having a rare up day, a significant one, similar to adding to overall to the sector as well, charter, mull tease. cable margins all-time high. added broadband subs, when there would be no additions. wireless, more additions than

ever we talked before, both charter spectrum and comcast, they are becoming serious competitors to a certain extent to the other wireless carriers. and overall on adjusted measures for ebitda and other revenue numbers, a rare good day there overall for the markets slightly up on the s&p. that will do it for us on "squawk on the street," "tech check" starts now. good thursday morning, i'm carl quintanilla with julia boorstin today, another volatile week for nasdaq and microsoft, google and meta plunging after results this morning. mark zuckerberg bets billions. investors won't if it will continue with amazon and apple julia, talking a bit about the operating expense guide and the silver line something argue with that is that