sales, and you can see what that's meant very significant rally for, of course a group that's had a great deal of volatility much lower as those chinese lockdowns, as a result of covid, continued for quite some time. there is hope they are in the process of being lifted. that does it for us right here on "squawk on the street." "techcheck" starts now. good tuesday morning welcome to "techcheck" i'm carl quintanilla with deirdre bosa, jon fortt live from cnbc's fourth annual technology executive council summit here in new york city. today nasdaq seeing a nice pop as another inflation print comes in lighter than expected where you should put your money this hour. plus, walmart results giving hope to retailers, but what about the rest of the ecommerce and q4 holiday spend talk about that in a minute. finally, like an old man chasing a chorus girl. billionaire charlie munger's take on crypto investors his full comments on latest on

ftx later this hour. first up, turning to steve liesman from the new york fed. >> carl, thanks. total household debt according to new york fed's quarterly debt survey a record $16.5 trillion of course, new record. rose by $351 billion quarter on quarter. combination of demand. more demand for debt as well as inflation pushing up these numbers. mortgage debt up by $282 billion. biggest increase since 2006. credit card balances on the way of surge by $38 billion. largest increase in 20 years and concern of a sign of stress in here overall delinquencies remain low but early signs of increasing delinquencies. have to see if debt is getting out of control the other hand what's happened to asset side for consumers? back to you. >> thanks.

and getting into the upcoming holiday season with that consumer kickoff home depot and walmart beat be estimates, a big boost in grocery business according to data our mastercard consumers set to keep spending estimate double-digit growth for retail spending on black friday. that said, cracks in the armor when it comes to tech. discretionaries including electronics and apple, supposedly offering new and rare 10% discount for small businesses willing to buy macbooks in bulk for the holidays the consumer heading into this all-important quarter, fits into a narrative seeing the last months slowdown in discretionary goods, resilience in services walmart has a cushion. food dom, interesting about that, some of the same cushions amazon has, advertising as well saying that business grew over

30% in the quarter seeing more interest from those higher-income earners. customers that walmart -- amazon, excuse me, typically had. the question, who's better off in the holiday season? of course, inventories levels are important as well. >> yeah. i'm not trying to predict the future exactly, but i'm trying to frame these issues in the right way, de. we're getting a little more information. my questions are these as you've got a consumer that's taken on more and more debt to the point of stress, steve liesman just told us from that survey, at what point does the consumer tap out, even as we're heading into this holiday season and the consumer is having to spend more on just essentials things like grocery, perhaps don't have as much breathing room to spend on those discretionary items? like macbooks. right? which apple now appears to perhaps be discounting to get

rid of inventory, what could end up being inventory bloat if that hangs over after q4. carl, for all kinds of names in ecommerce ecosystem, in q4, the question are things going to turn out more opt mimistic end f this mastercard spending, or what adobe said earlier. look it's look this holiday shopping season is flattening versus previous ones without the same spikes and people are buying fewer things but having to spend nor get them, which could based on the fact you've had so much inventory move over here already, that some of these folks are trying to work through, and so much still to come makes it very difficult to thread the needle here. >> yeah. we should point out. i mean, walmart's inventories down two straight quarters, jon, but up year on year more than 12% and up 25% at home depot did you see empire manufacturing today. new orders in recession

territory today. we clearly have made and produced enough stuff, enough goods, and now the trick is going to be finding that level of promotion that will get it off the shelf. >> yeah. and if not, what happens to the cost line? for more on what these q3 retail vo veets mean and what to xplaun h expect in the coming holiday season, amazon executive with us good to you have is this going to be a season of discounting to deal with inventory, and how are so many retailers positioned to handle that >> yeah. jon, thanks for having me. getting into a very interesting season this time into, as we get into the q4. typically we see, jon, as we get into the month of october, pre-holiday sales start to pick up, and last time, for instance,

september to october, on amazon and other ecommerce websites, we used to see a lot of 20%, 30% bump in volumes. this year just 3%. that tells us there is a recessionary impact or potentially discushioned spending, which is coming down some of those elements are starting to play in that ecommerce may actually be soft this time compared to, say, last two years. even the last decade as relates to, because of the recession we're getting in >> uh-huh. so you end up, perhaps, with ecommerce powers versus department stores? right? so online folks versus returning physical folks in a discounting war that could turn black friday into something closer to break even or red friday right? could put pressure on profits, and then same time there's the danger that even if that doesn't happen, we end up with an

inventory overhang, carrying into '23 right? >> almost every retailer right now has a supply chain problem, and not to mention there is a huge cost of customer a acquisition that's actually skyrocketed at this point where because of the, because of the changes that apple did with at&t, push out and stopped advertisers from sharing cookies. talking about the websites same with google/chrome as well. what's happened at this point, cost of doing ecommerce suddenly year over year gone up dramatically the last two years, tripled, and with that in mind, there is a physical realm at this point in the market that comes to direct upsides versus, say, the retail ecommerce websites retailer commerce, say a non-element, walmart.coms, kroger.coms or bestbuy.comes

a premium in the market at this time we sdexpect to see retail side f the equation takes lion's share of the ecommerce growth and going to be at expense of companies like traditional companies, see that physically start to settle into the market. >> yeah. more specialty retail. you know, guru, pretty much everyone from amazon to shopify to walmart, thought would go up than did a more muted growth. as they accommodate that, amazon in particular scales back that plan weighing on gross margins how do you see that playing out over the next year or so how does an amazon, a shopify take that medicine to revert costs or will it play out over the next few quarters? >> unravel that in two areas one look at the top-line growth

and look at bottom-line pressures happening. from a top line perspective, a tale ofdemographics. starting to see a lot more of that spending go into, say, experiences, and things like that probably we think because of the welcome home culture setting in and earlier used to go to office, go to work, used to say, log jon to website do your purchases, come back home. right now you're sitting at home every hour, every single day taking that opportunity to go out, hang out with friends say take that slip out to buy groceries or buy that holiday gift that you want, and have that experience outside and take pressure there on the other hand, middle america starting to see that there is a huge pressure in terms of the recession of discretionary spending actually leading them to more, say,

gloesiergloe i glossier purchases, whatnot. what amazon depended on, starting to get out and shop less whereas one market always dependent on middle america starting to put on more high-end numbers. profitability is a whole different challenge altogether because of supply chain issues. >> yes a lot of different pressures on profitability. supply chain issues and getting consumers to spend guru, thank you. from commerce ig. >>s thcommerce i.q. and our next guest top pick is cybersecurity predicting big tech will take a back seat to spaces like ai and data management joining us today ubs senior portfolio manager jason katz great to have you. hop on to the prior

conversation conditioned to look for an all-clear to get back into consumer-facing technology you say that may not necessarily work this time >> that's right. so i have the unique perspective managing money for individual investors north of three decades and tell you there is a muscle memory to buy what's worked and buy what they're familiar with that's mega cap tech i will tell you we're seeing a paradigm shift in that thinking. consumer-facing technology is taking a back seat to back-end technology the way i phrase it is, why try to really strike gold within tech when you can really buy the companies that supply the picks and shovels to those gold mines? it's beneath the surface, pockets within technology that are very attractive. >> walk me through those areas talking robotics, right? data we mentioned cyber and health technology talk about how you have assembled this coalition of

scepters to get interested in? >> sure. ai and robotics, the smart automation that's going to power this fourth industrial revolution when it comes to big data, we have rising population growth. think about it increasing devices per capita is fueling exponential appetite for data, and health tech. population's aging it's growing you have constrained budgets by these health care providers and amazing how little technology has converged with that industry you'll see them adapt technology and as you have seen before. cyber security hands down our number one choice regardless of who's in control of government. we've seen exponential inveesnen since ukraine. name it. local governments. the prerequisite of tech spending when i speak to my clients thought and business

leaders in all facets of life, all talking about cyber spending looking at at least 10% to 15% spend growth there. >> we have seen that in recent weeks, jason why don't you think big tech are the companies to lead the way in the next generations technologies you outlined, all there, and in a softer economic backdrop have the balance sheets and cash to move forward, develop, catch up if they have to whereas start-ups are facing a tougher funding environment? >> it's undeniable these are secular growers. we're not suggesting that you abandon it but it's really not just about top-line growth any longer bottom line really does matter especially in a higher rate environment. so where do we expect the underperformance to come from in the big tech world well, if you have moderation in consumer spending, in business spending, in ad spending, you're going to see it hit top and bottom lines the dollar, yes.

weakened a bit as of late but we expect it to be elevated relative to other currencies and accounts for 60% revenue of the big tech companies valuations are just not cheap. we've seen this night bounce off the bottom and still looking at 15% premium for big technology relative to the market at large. don't abandon it simply right-size position and deploy new capital look benigh the surface to the next generation of technology. >> jason, here's my concern about cyber. maybe you can address it i get that the demand for it in general, need for it, isn't slacking off, but valuations are already decently healthy because they've held up well as we're seeing hiring freezes, layoffs, so many cyber companies especially in the newer age maybe identity based things like that, are selling on a basis sometimes usage-based or per

seat-based aren't we going to see those numbers come down not because of less demand on product bus utage and head count of the customer organizations isn't growing like it did before, and might that cause a bit of a valuation reset? >> very well could be. i think earnings need to grow into some valuation of some of these companies. it's a relatively fragmented market and we think you'll see massive consolidation in the group. we focus on some perennial leaders in the group more afternonecdotals, heading management firms like mine and other, all we obsess on all day long where all of our tech budgets are going. valuations in some pockets may be rich, but one of a few areas you'll see cerearnings grow into those shoes.

>> a great framework look forward to xplonin ing iten the future meantime, we have at least one activist investor with thoughts on alphabet and david faber is back at post nine. >> heard a rumor, large regarded activist coming after a large company. tci fund management. about a $30 billion or so activist fund that many people may remember, of course. remember the tci fund management, children's fund management chris hahn runs that see what's happening to alphabet shares as result of this letter. in it he says that the fund owned shares valued at more than $6 billion reflecting what they say is a strong conviction in alphabet's future, but go on, carl, to say a number of different things that despite strong revenue growth, operating leverage minimal over the last five

years. total expenses growing 18% ye over year just in the last quarter reported and revenues only up %. of course, we've discussed this as well. they go on to make a number of different -- recommendations, i guess, what you have to say. head count they say is too high. conversations with former executives suggest the business could be operated more effectively with significantly fewer employees. they go on to say they actually agree with brad gerstner from altimeter capital, sent a letter a few weeks back to meta saying the same thing silicon valley, many companies simply have too many people and could achieve revenues with far fewer people go on to also point out they would like them to establishment an ebitda target, establish public disclose for the segment and believe target of 40% is reasonable and -- also talking about

compensation per employee being too high paying some of the highest salaries in silicon valley meeting compensation about $295,000 in 2021 so it does appear, carl, a number of different things they're going after here reduce losses and other bets share buybacks increased composition for employees too high hiring too many people and need an ebitda margin. >> and no freeze remember hired nearly 13,000 employees last quarter, and the management said they were going to hire about half of that in current quarter. still about, what? like 6,000 employees plus potentially? this letter saying, stop hiring altogether and start cutting in terms of its other bets, right? this is a unit i talk about often, because it's still losing a lot of money but it's not that all the money from the ad business is able to pay for that

that's been under scrutiny for quite a while and i think lost about a third of a billion dollars last quarter anything about waymo in the letter long thought the unit should are spun off, autonomous driving seen at leader here but still with the larger alphabet every quarter ask for a report from the cfo, any business on the cutting table? didn't say no past quarter more detail they'r i wonder if the letter, able to see yet so far, david, u know you just got it. if any of those other businesses are on the chopping block in terms what activist investors think they should do >> in fact they are. a quote from the letter. "biggest component of other bets, you pointed out, a waymo." reading from the letter. enthusiasm for self-driving cars collapsed and competitors exited the market ford and volkswagen recently decided to shut down self-driving car ventures saying looked at it every way and see

profitability a long way out tci saying waymo hasn't justified its investment and losses should be reduced dramatically so, yeah deirdre, dead on on that one pointing out other bets generated only $3 billion revenues over the last five years but incurred as $20 billion operating loss over that same period. of course, very important to point out here this is still a controlled company. right? you can be an influential activist investor, can you have a lot of -- a cohesive or comprehensive argument but it doesn't necessarily mean, deirdre, they're going to listen to you. >> yep still surveying -- >> mark zuckerberg did decide to cut 13% of meta's staff. even though, we pointed out many times he controls that company as well. >> yeah.

and, david, where the leverage is, though that these companies pay their employees and their highest value employees disproportionately in equity if their stock drops and stays down, right? they lose talent if they lose talent they lose their life blood there is that pressure competitively for them, particularly in a time like this still have hanging what was said back in september. wants alphabet, google, to get 20% more efficient a couple ways to do that people can work harder or you can cut the number of people keep the number, amount of revenue -- it is perhaps, google already tilting in this direction just waiting to see how much they have to cut? >> yeah. i guess. i come back to you, because you guys may have a better sense in terms of their willingness to live to a shareholder like this, who, again will have a fairly strong following but also seems to say many of the things

already discuss and heard for some time. you guys are generating so much cash, for example. run rate $60 billion a year on share repurchasing, tci says, jon, simply not enough over $116 billion in cash. it's not serving shareholders or the company well reducing losses and other bets reducing compensation, and reducing head count. i mean, these are not necessarily big secrets, are they, jon? yet the company has chose ton make the decisions it has previously is it clear they might want to use this as an opportunity to change that path >> well -- >> i think so, david, to answer your question there. i think it goes back to that high-value employee issue and can you retain them to shape the future de >> you know, also you don't see here looking through the letter myself now isn't too long david, correct me if i'm wrong i don't see them calling for

cuts in the claw area. losing money in this unit, still a distant third to microsoft's azure and amazon's aws sort of sooner as an area. think where they can cut as untouchable. every quarter they say they're going to continue that pace of investments, in the cloud. we know that even at the hyperscalers, though, this is a unit, an area of business, that is seeing a deceleration, still strong i know cramer said maybe not in early innings anymore. interesting to see if there's any leverage there in cloud. what they would have to give up for that also seeing buybacks, a company doing buybacks, should be increased. $116 billion of cash on the balance sheet. >> just said so again hitting many of the things i think many alphabet shareholders may have been frustrated by, perhaps, especially last quarter significant increase in head

count. one of the leads in fact, first point carl, we'll see. seeing somewhat impact on the stock but, of course, this is a fairly strong day already for the nasdaq which is not up a very dissimilar percentage overall. a very important voice here from tci. certainly not one to be ignored. and a significant stake obviously percentagewise tiny, more than $6 billion worth. >> interesting jon, goldman's got a note as we speak, impending layoffs, unemployment rate rise by less, .03 every worker employ internet broadcasting and web search immediately laid off. >> well, might be a canary in the coal mine, though. not necessarily the issue itself, but what does it show among the most optimistic, you know, at least visibly growth drivers in the economy, that

they're pulling on this brake. just on the heels what david and deirdre talked about with google cloud, though, carl. a huge point of pride for google to even be number three. so far behind. the cloud business had not been professionalized and brought up to enterprise grade in the industry, talk is that thomas kurian has done that and strategically an important area for them i would be shocked if they pulled back significantly on that area, given how important it is. you know, on the early gains question, it might be later innings for infrastructure, but when you talk about cloud and you talk about digital transformation, got to about dev ops, profitability and applications got to think about the global opportunity. i think if you're just talking about infrastructure, you could talk about it being mid our late innings. now the conversation is moving

more towards margins and profitability and consolidation. not because the cloud is matured, but because moving into a different phase. >> yeah. end with what i hear from many people who own the stock, guys simply in their opinion alphabet is cheap and it's case at tci. trading owned 16 times there 2023 eps number base and estimates adjusted for losses in cloud. other bets and net cash against saying, carl it is very cheap. a bit less cheap given up 2.1%. >> thanks for working extra. david faber. talk about this more, later this hour. meantime is crypto just part fraud, part delusion and a little bit of fairy dust more on that story and the latest from ftx as "techcheck" is just getting started.

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their -- so forth. this is a very, very bad thing the country did not need a currency that's good for kidnappers and so on. >> what do you think happened? because there are a lot of big names a lot of people, ferns that you might not anticipate? >> what depresses me people think they just got to be on every deal that's hot, and they don't care whether it's constitution or bitcoin. if it's hot they want in on it i think that's totally crazy reputation is very helpful in financial lives, and to destroy your reputation by associating with scumballs, and scumball promotions, it's a huge mistake. >> berkshire hathaway vice chair charlie munger not mincing words on "squawk box" when it comes to crypto not that he ever have.

he and partner warren buffett critics of crypto. once call add psych caulk grandpa from omaha skepticism for warranted as we saw in the last week always more. doing such a great job. >> thanks. new details overnight from new paperwork filed. ftx saying roughly 1 million creditors when the company filed initial paperwork friday ftx said more than 100,000 creditors and expect to get a list of 50 biggest by friday. ftx saying in the past few days in contact with dozens of global regulators including u.s. attorneys oft, fcc, and ftx faced a severe liquidity crisis necessitating filing of these cases on what they call an emergency basis. last week lawyers point to the complexity of this case with over 100 ftx entities involving

non-traditional assets, such as cryptocurrencies and mentions ftx's governance did not have a board or cfo. john wray the new restructuring officer and ceo. the same john wray worked to restructure enron now working with external legal team and cybersecurity as well as forensic investigators to secure customer money ftx has new independent directors of each of those individual ftx companies to ensure proper governance, and added independent board members. former ftx ceo sam bankman-fried, cryptic tweets in the past 24 hours saying this morning he's going to talk about what happened, but haven't gotten that full explanation yet. all of this, guys, factoring crypto markets ala alameda, firm sounded by bankman-fried one of the biggest and ftx second biggest exchange, clients important for liquidity, and calling this the alameda gap. past week marked largest drop in

liquidity and markets tend to me more volatility. affecting the depth of bitcoin on this chart here although bitcoin is getting a slight boost this week back to you. >> what a story the last couple of weeks thank you. kate rooney on ftx. meantime, could tebe with c tessa brewer, headlines. >> fourth straight monthly drop, of course, over the past year. prices at wholesale level have risen 8% walmart shares popping 7% hitting a six-month high retail giant reported strong quarterly results and tighter inventories saying consumers are sperndsing more on food and less on general merchandise walmart also raised guidance, added $20 billion to its stock buyback plan and agreed to pays 3ds.1 billion to settle opioid

lawsuits from 43 states. home depot posted smaller gains. up 2% and strong results, but left guidance for rest of the year unchanged implying weaker sales growth for the holiday season keep our eye on that and head of warner brothers discoveries offering a bleak view of the after thing market ceo zaslav says declined and worse than at any point during the pandemic certainly not good news for media in general, carl >> contessa, thanks. contessa brewer. meantime, today is the deadline for funds to disclose holdings as of the third quarter and a big trend. some big beds on media names like paramount and disney. julia boorstin has the breakdown. >> right, carl media stakes revealed in 13f filings, disclosed 40% increase in ownership of disney shares to 1.4 million. comes after disney struck a deal

with loeb including adding carolyn eberson to his board in september. disney shares up 2% on this news berkshire hathaway increased its stake in paramount by 16% to 91 million. shares up over 9% today. though still down over 30% year to date. and then take a look at warner brothers discovery shares. they are up today as well. they're currently up 4% after ceo david zaslav spoke and contessa mentioned, the ad market worse than during lows of the pandemic and warned if ad market doesn't improve next year it will be hard to hit the company's $12 billion earnings forecast for 2023. he did say, though, discovery would stay disciplined when the nba rights renewal discussions accelerate and confident the company's strategy pointing to another media stock on the move. netflix. those shares hitting seven-month

high today currently up about 4%. jessica reid cohen assuming coverage giving a buy rating, $370 price target believing in expansion of the advertising supported offering and also password sharing initiatives may drive potential operating and financial upside of course, demand for ad-supported streamers very much in focus especially ahead of the launch of disney's ad-supported service coming up in a few weeks guys >> we know you'll be watching. julia, thanks. taking a close look at strength of the consumer today how are discretionary consumer stocks holding up? joining us, barclays, including names like airbnb, spotify and r r roblox resilient this year, heard from brian chesky, no slowdown in demand what do you think?

is this destined to slow down next quarters or stay strong >> yeah. just a lot right within travel airbnb look at fourth quarter guidance, implies from q3 to q4 remain relatively stable seeing a slight slowdown regarding pace of recovery and in terms of next year and into '23, too early to tell whether that pace recovery picks back up. that's across the board with airbnb booking and expedia. >> so discretionary consumer tech as a whole. too risk toy hold here, mario? what do you think? >> yeah. i think for our coverage and in terms of travel stocks, also we cover video games. both of these two sectors. there is that turbulence for travel, from covid, people stopped traveling in 2020.

it's starting to pick back up. still this element of pent-up demand left. we believe in 2023 similarly for video games. you know, seeing softness as of late, but look at the council makers, still pent-up demand for next gen's consols and see "cal of duty" still pockets of strength among travel and video games. >> mario, that's an interesting segment of consumer spend. that's thought exposed as much to physical goods, and the inventory story we're talking about. also a valuation and expectations for this consumer that appears to, perhaps, be getting tapped out with a level of debt that the consumer is taking on which steve liesman told us about top of the hour. so to what degree are you exposed to a potential slowdown in that tap-out in consumer spending ability, if you're long

some of these stocks here? >> right a great point. that kind of points to our thesis within the nvidia sector in particular. we are overweight in activation under way roblox our main thesis on roblox is if you look at the average per user today around $50 for this year up from the piece of covid, which was 60, but well above pre-covid levels in 2019 so we do think that metric trends back tos 40d $40 over tin our thesis being short. >> mario, thanks for being with us. >> thank you and last night in las vegas, i was onstage at the first cnbc spark event with a group of health tech leaders discussing how innovations in the space are addressing health equity and

pulling in new investments despite the broader economic downturn chief medical officer neil shawn and dina shatner among those at last night's event discussed maven's recent funding round announced yesterday and how that innovation remain as priority especially for employers take a listen. >> covid has opened up an entirely in way of thinking about our bodies, our economy, our health as individuals and as populations. there is a renewed interest among individuals, among investors like myself and my colleague, who co-led maven's latest round to see there is a real opportunity for value creation to also help improve lives and advance entity always there but now undoubtable and i think just the beginning. >> economics work have to work irrespective of weather patterns i don't think any business is

immune to them necessarily to be honest the same time to dina's point, living in a world with greater recognition of long-standing problems one of the things covid-19 did take every equity in our society and throw into a pressure cooker. >> the way to decrease costs is make people healthier, and i don't really see uninstalling these benefits among the most important particularly from a dei perspective. >> co-founder of bioformula joining us co-consolidation in the health tech sector, bio forma is hoping to participate in. >> yeah. talking about health tech not long ago good stuff busy later. news out from the fcc. agency filed 760 total enforcement actions in fisk's '22. up 9% from the prior year and

recovered a record $6.4 billion on behalf of investors, those from a recent annual report covering a wide variety of situations from late filing of documents to civil actions s.e.c. gave out a total of 229 million in whistle-blower awards that is a record high. de >> meanwhile, carl, nasdaq strong session up 2.5% saying chinese names lead the chart once again we're back in two.

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datacenters part of the life blood poirg meta an google and face rising risks in climate change we have a deep dive on that story. diana olick. ♪ >> reporter: datacenters store and transfer all the digital information we use which is a lot, and growing so they run very, very hot the cheapest and most common way to cool them is water. a lot of it. >> water tends to be cheaper than power so it's a pure financial decision for many players. >> reporter: in just one day the average data center could use 300,000 gallons of water to cool itself the same water consumption as 100,000 homes, according to research, at virginia tech, who also estimated that one in five datacenters draws water from stressed baert shed mostly in

the west there is, without a doubt, risk if you're dependent on water these datacenters are set up to operate 20 years so what is it going to look like in 2040 here >> reporter: when cyrus one purchased this year by investment firms kkr and global infrastructure partners moved into the drought-stricken phoenix area using a different albeit more expensive methods of cooling. >> sort of our uh-huh moment make a decision. changed our design to go to zero consumption water so we didn't have that sort of risk. >> reporter: realizing the risk in new mexico meta ran a pilot program on its lohse lunas center it's since implemented in all centers. meta centers rising steadily one-fifth of that water last year coming from areas deemed to have water stress. it does actively restore water

and set a goal last year to restore more water than it consumes by 2030, starting in the west but while companies with their own datacenters can do that, datacenters that lease to multiple clients are increasingly being bought by private equity firms in search of high-growth real estate >> a lot of new players that may not be as sophisticated, may be looking at a short-term time horizon and aren't worried what the watershed look it's like in 10 20shgs years. probably not going to be around. >> today cop 20 u.n. climate summit, looking at ways to make populations, businesses and economies more resistant against drought and i spoke with microsoft president brad smith from that summit saying the company is investing in new technologies to repsych the wa recycle water and goal being water positive by 2030. >> a huge deal for the industry.

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welcome back i'm here live at the fourth annual cnbc technology executive counsel summit, a gathering of tech executives and thought leaders. the labor market a big topic of conversation here. it will be when we've got a hiring slow down, recent spates of layoffs just this hour we got news a large hedge fund is calling on alphabet to cut costs and cut employees. joining us now is an nyu professor of entrepreneur and technology speaking here today how to build the most effective and diverse teams. good to have you here. >> delighted to be joining >> building teams is one thing, but recently we saw twitter making cuts and cutting so quickly it appears they cut some people who they needed, they had to hire back traditionally people of color, marginalized groups are the ones who get cut first, right

does that change -- should that change in this cycle >> i think it absolutely should. i mean there's plenty of academic evidence that suggests having diverse teams isn't just about hiring ideology, it actually makes good business sense. diverse teams to have more divergent thinking they draw from different life experiences, bring in information from different networks they end up with more creative solutions. the tradeoff they make is sometimes they can't converge fast on a solution, so they give up some speed. but with tech teams, with rnd teams, anything with a high level of innovation in it, the diversity benefits always outweigh >> isn't there this challenge where companies are looking to continue hiring and maintain the employee count in strategically important areas while also

cutting back on areas that aren't growing, and that's the primary thing they be to do to survive. sometimes they're not able to maintain certain demographic numbers or it's difficult to as they do that, right? >> yeah, i think it's always a challenge in tech. i think, you know, the recent slow down in the tech labor market, the layoffs at meta, twitter's a different story, but meta, amazon google is now under pressure to cut its labor force. stripe strike, sales force it makes the labor market a little less competitive in tech. instead of just chasing off any talent that you can get and sort of not putting your diversity objectives front and center, companies that are hiring in tech can sort of kick back a little -- you know, take a measured view on how much they want to hit those objectives and we may actually see some positive effects here. >> i've got a theory i want to

run past you because you're an expert that we're about to see an unprecedented amount of pressure on controlled companies because of stock price declines and not because the activists themselves had influence but employees predominantly paid in equity have influence. you need those high value employees to stick around in order to build a future. is that what we need to see? >> absolutely. i think that's a great theory. i think there's definitely going to be investor pressure, but, you know, there was a ton of hiring in the two years that followed the covid lockdowns at these tech companies the labor market is intensely competitive. there's extremely large restricted stock units given and so there is definitely going to be pressure for employees

the thing that's going to counter it is greater sense of insecurity in the tech job market, which i haven't really seen in the last seven or eight years and so it remains to be seen whether that will silence employees who are worried about keeping their jobs >> we'll see professor, thank you here from the technology executive council summit, which is getting ready to kick off >> john, thank you i have fomo, too i love those councils and the summits. more on what to expect from nvidia and cisco when they report tomorrow. nasdaq up 2.5% still we'll be back in a moment. space. the boundary of human achievement. the new frontier. ♪♪ eh. ♪♪

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get a check on the markets on this tuesday morning following that cool ppi number we opened hire and pretty much held the sum degradation in the indices since the open on the dow, but the nasdaq holding onto the nearly 2.5% gain as the sox is up 20% in the last week

>> more earnings to go tomorrow afternoon cisco anticipating a small revenue boost for their fiscal q1 rising in line with their recent s&p turn around. nvidia anticipates a year on year decrease in revenue shares have risen, though, alongside the rest of the semi space after, you know, declining for much of the year guys, data center business is going to be a big one, john. some questions around that accounted for nearly 60% of nvidia's business last quarter questions around the china export restrictions as the stock has come down-to-earth this year >> i want to hear from cisco, if they say anything about mna. rumors out there they're kicking the tires on a number of potential acquisitions, smaller companies that have become more affordable in this market. and if that happens, that could be interesting for some of the smaller and mid-cap software names. >> yeah, we tend to get pretty good color out of cisco. the tradition goes all the way

back to john chambers, but we do look for their commentary on the enterprise meantime retail sales as we'll get a better sense of the consumer along with target and lowes. and don't miss ibm's chair exclusively on tech check. welcome to the half time report i'm scott wapner front and center rising stock after another inflation read comes in cooler an expectations. the investment committee debating what it all means for the state of this rally. joining me for this hour let's go to the wall and check the markets. it's just past 12:00 noon in the east there you go, dow's good for about 250, three quarters of about 1% s&p 1.5% there's the nasdaq, though