change the world. loopnet. the most popular place to find a space. ♪ hi, everybody. welcome to "power lunch. along with tyler mathisen -- oh, wait you're tyler mathisen. >> i'm tyler mathisen and you would be kelly evans. >> i'm sorry. >> glad you could join us today on "power lunch. coming up microsoft, the big earnings reports due after the bell a lot of issues, recentoffs, the cloud business and more. the investment in ai we'll break it all down. now. >> thank you plus, a couple of big ceo interviews coming up, we'll talk did fence with the head of lockheed martin and we're waiting to hear from

the department of justice on an anti-terrorist violation the dow turning positive the s&p is up a point now. the nasdaq lagging by 10. >> let's go to dom chu to see what's moving. >> how about some of the dow components on the move right now in the earnings headline mix first of all, you've got 3m which is not helping matters much right now down about 5%. this is the company behind everything from post-2 notes to industrial filters it reports mixed results earnings missed analyst forecasts, slightly better than expected revenues. 3m cut their full-year earnings and revenue guidance as well as announcing 2,500 job cuts in the global manufacturing roles those shares down about 5% just kind of holding your session lows also, johnson & johnson with mixed result, earnings per share better than forecast and revenues a slight miss they did forecast full-year earnings with a range mid-point above estimates. j&j helped along by stronger results in consumer health thanks in part for demand for

tylenol and motrin during the cold and flu season. those shares down fractionally right now, and we'll end with a check on insurance travelers getting hit very hard last week after pre-announcing results including higher than expected catastrophe-related losses due in part to the deadly winter storms at the end of last year travelers' earnings for the record in, line with estimates with the pre-announced numbers revenue slightly better. nonetheless, an upside gain 26.5%. tyler, back over to you. >> dom, thanks very much let's turn now to microsoft. so is that big earnings report, well, that's the one we're expecting after the bell the stock flat today, basically flat for the year so far the company announcing last week it intends to cut about 10,000 jobs, so has that dampened optimism heading into the report for answers we turn to steve kovac. >> yes, we know it's going to be costly layoffs we were talking about that in

the last hour and on top of that we've seen all the headwinds to failing pc demand, that hurts the windows division, and if you look at the an loft assessment, the most recent ones, only 3% revenue growth for the quarter which will be the worst revenue growth in several years so it's a really tough environment they are going into they would love to say do more with less. i've been joking about that all day. they will have to eat their own words now and do more with fewer staff and more deliberate priorities that they are going after, cloud being one of them, gaming the other. >> are they getting any help from corporate i.t. spending, or is that -- >> that's the real thing corporate i.t. spending expected to grow this year, and that's really important for smaller and medium businesses. the big guys, the comcasts of the world, like our parent company, they are going to keep spending like gangbusters on thesism t. products from microsoft, but it's the small and medium businesses that become the concern because they are going to be the first ones as we head into a recessionary

environment. they are the first ones to start cutting spending i.t. spending not expected to grow, just not as significantly as we saw during the pandemic. >> we've got breaking news now we'll go down to the justice department and hear from attorney general merrick garland making an antitrust announcement about google >> all of us at the justice department, including the fbi and atf, will continue to support the half moon bay community in the difficult days ahead. as i said yesterday, the justice department is committed it doing everything in our power to protect our communities from the gun violence that is leaving no community in this country untouched. today, the department of justice, joined by eight states, filed a civil antitrust lawsuit in the united states district court for the eastern district of virginia against google we allege that google has used

anti-competitive, exclusionary and unlawful conduct to eliminate or severely diminish any threat to its dominance over digital advertising technologies these technologies, which are known as ad tech, automate advertising sales by website publishers to online advertisers. when an internet user opens a web page with ad space to sell, ad tech tools almost instantly match the website with an advertiser looking to promote its products and services to the website's user this. product and process typically involves the use of an automating advertising exchange. this exchange runs a high speed auction designed to identify the best match between a publisher selling internet ad space and advertisers looking to buy it. as alleged in our complaint, for 15 years google has pursued a course of anti-competitive

conduct that has allowed it to halt the rise of rival technologies, manipulate auction mechanics to insulate itself from competition and force advertisers and publishers to use its tools. in so doing, google has engaged in exclusionary conduct that severely weakened if not destroyed competition in the ad tech industry. as detailed in our complaint, we allege that google's anti-competitive conduct extends to three elements of the digitaled a-buying process first, google controls the technology used by nearly every major website publisher to offer advertising space for sale second, google controls the leading tool used by advertisers to buy that advertising space, and, third, google controls the largest ad exchange that matches publishers and advertisers together each time that ad space is sold.

as a result of this scheme, website creators earn less and advertisers pay more that means that fewer publishers are able to offer internet users content without subscriptions, pay walls or other forms of monetization our complaint alleges that google has violated section 2 of the sherman antitrust act by monopolizing the market for the technology used by publishers to offer ads on the websites, monopolizing or attempting to monopolizing the ad exchange market and monopolizing the market for the ad network technology that advertisers use to buy digital advertising space. our complaint also alleges that google has you be lawfully tied its ad exchange and its publisher adder is have in violations of section 1 and 2 of the sherman act, and finally we allege that the united states as an advertiser has incurred damages by reason of google's

violations of the antitrust laws in addition to the declaratory relief, our complaint seeks damages and the divestiture of certain google ad tech products. it also seeks an injunction preventing google from continuing to engage in the anti-competitive practices described in the complaint and any other practices with the same purpose and effect as the challenge practices. i am grateful to assistant attorney general jonathan cantor, principal deputy assistant attorney general mecci and the staff at the antitrust division for their tireless work on this case monopolies threaten the free and fair markets upon which our economy is based they still innovation. they hurt producers and workers, and they increase costs for consumers. today's complaint is only the latest example that the department has worked to challenge antitrust violations that undermine competition and

harm the american people no matter the industry and no matter the company, the justice department will vigorously enforce our antitrust laws we will aggressively protect consumers, safe girard competition and work to ensure economic fairness and opportunity for all. i will now turn the podium over to associate attorney general gupta. >> there was attorney general merrick garland giving the details of the department of justus suit against google the shares again down about 1% today. let's get to eamon javers to wrap up more of what we've heard. there's so many issues with google, but this is specifically about monopoly on advertisers, the control of being both the buyer and seller here. what do we know? >> that's right. what the doj is saying google has monopolized both the buy and sell side of the advertising trans actions and the 153-page filing that the department of justice made today, along with

eight u.s. states, it goes bac in history as you just heard merrick garland say to 2008 when google acquired double flick for $3 billion and said essentially since this time what google has been doing is trying to build a moat around its advertising business and control every aspect of that business, even taking financial losses in the short term in order to ensure it has control over the entire trans action and that advertisers really can'tsee exactly what's going on inside the black box of its processes when you dig into this filing, there's some interesting little nuggets here, including some conversations that apparently happened inside google one of them that they cite here is a google employee who raises the question inside the company, quote, is there a deeper issue with us owning the platform, the exchange and a huge network? the amalgy would be if goldman or citi bank owned the nyse so that's the allegation that the department of justice is making here this was fundamentally anti-competitive

we'll see what google has to say about that and how long this takes in court to sort it all out. what the department of justice wants here is for google to divest itself of some of these businesses there were reports last summer that google made an offer to settle this in order to move some of these ad businesses into another unit inside alphabet those media reports. those offers cited in the media reports not enough for doj they are moving toda case. guys >> thank you very much eamon, let's bring in deirdre bosa now as well as steve kovach still with us. eamon just mentioned the magic word, divestiture. what would the justice department seem google to divest >> the doj really has a problem with alphabet being on all sides of the trans action, the buying and selling as well as the auction process, so he mention also that $3 billion acquisition a few years ago for double click. that's an area where they could force the divestiture.

it could look even bigger than that the key, too, going forward is that's unlikely. however, when you think about what google can or cannot do right now, it would be very, very difficult to make another acquisition in this space at a time when a lot of folks are calling for consolidation. perhaps the tender for the growth of the industry for google but they say it doesn't matter because they are the predominant player this is what google would note as well, that its dominance has been declining a little bit. you've got players like amazon that were able to build an advertising business and scale it out very quickly. the fact remains that google by far is the dominant player here. that's what the doj is taking issue with and saying, again, maybe divestiture is the way of solving that. >> steve, you were nodding there. >> yeah. >> it's a question of dominance but maybe not being as dominant as it was. i would like to get your reaction to that and also to the idea here that we're not talking about search here. >> this is the ad. >> this is ads. >> this is like the nexus search kelly's favorite thing when you

search for something. >> all kind of related. >> all kind of related >> if they push the legitimate stuff down you have no choice but to pay for top placement. >> right. >> so then to have them control that market and raise the prices to such an extent. >> that's the only spot. i want to touch on what deirdre said is super important, and if google is going to show something, we're not as dominant, we're dominant but not as dominant, amazon is growing as crazy like advertising, and do not sleep -- i know i talk about apple too much do not sleep on apple as they put more and more advertising into the ios they are going to eat a bigger piece that have pie, too they can point to all these trends tiktok, of course, we know is growing like gangbusters as well i know we're just watching merrick garland do that. i couldn't help but think of joe biden because this is what the plan was from the moment he appointed jonathan cantor, to the moment he appointed doj replacement andfrom the moment he appointed lena khan at the

ftc. big tech was a big part of their platform and as soon as he nominated these people this is where we're going. ftc side, going after the microsoft activision deal. they don't want instagram to happen again don't want facebook happening again or don't want another double click and this administration is really going after these mega mergers which will put a chilling effect on it. >> they don't want campaign donations from these company, do they >> if you break them up there's multiple companies to offer campaign donations. >> i haven't thought about it that way. >> and i don't know if we have a live look in here, but jonathan cantor is speaking at the department of justice presser going on right now, so he is a key official in there. there you see him at the podium with merrick garland he's a key official in all of this this does speak to the biden administration's whole agenda here when it comes to technology and sort of corporate monopolies as they see them more broadly. the president, remember, had an

op-ed in "the wall street journal" just last week talking about his vision for what the technology industry would look like in the future and talking about a whole host of wrongs that he thinks that the technology industry is guilty of, and really looking to, in a way, to break up some that have monopoly powers from some of these big tech companies and everything from as you were just talking about search and others. so -- but on your specific point about divestiture just as a point of clarity here, the suit here is asking for google to sell off specific things they are saying they want a judge to order the divestiture of at a minimum the google ad manager suite including publisher and server, dft and google's ad exchange along with any additional structural leads and looking for any damages relevant under the law enforcement they are looking for significant changes the way google is structured and the way the ad businesses operate. >> it seems though as long as goggle itself is the dominant

search platform, that that is still where the dollars are going to be spent, you know. i'm curious kind of opening up the ad process should amealior ateame amealiorate things. >> what alphabet is arguing is if the doj goes through with that, that will actually still innovation and raise costs across the industry because it will be more broken up and maybe you wouldn't have as much data to pull. that's their argument. i would like to respond something to kovach said this is president biden's agenda this was also president trump's agenda, when the first doj lawsuit was filed and not even going to trial until later this year and that's why you see skepticism or complacency among investors who talked about this not long ago in that they don't think this is going to be done because this is bipartisan everybody wants to do something but does it happen

these companies are very powerful and spend a lot of money lobbying and let's go back to the user. we know that regulators are on this, but the people that use google tech and the cutters in trickles through to search may not as big of a problem with it. >> let me cut to the stock chase here how big of an overhang is this goesing to on the shares of alphabet and for how long because these things -- >> several years. >> these are multi-year -- i remember the case. >> as far as the stock. >> here it is in the u.s., what's it going to happen in europe >> we've been talking about these issues for six or seven years now. nothing is going to happen you won't have to blame investors for being a little cynical that there's an opportunity to do something more meaning fall can haurt the share price and profits. it's kind of adorable that

many -- look, they offered these remedies, clearly that up being one of them, that clearly isn't satisfying the regulators, but whether or not they have enough teeth, whether a new administration comes in and has different ideas, and to deirdre's point it is bipartisan, and there's bipartisan animosity towards big tech they come at it from different ways and have different ideas how this should be regulated. >> eamon, go ahead. >> i was going to say, kelly, the other set of stocks is web publishers because if it's resolved their favor there's a lot of money as stake. what they are saying on average google feeds 30 cents and sometimes far more than google's tech revenue business. if this is resolved in your

business, some of those 30 cents out of every dollar may be coming to you. >> in effect google or alphabet is a toll-taker in this process. >> that's right. that's right a lot of money at stake. >> thanks so much for everybody there. thank you so much ahead on "power lunch," two big ceo interviews, first lockheed martin's results out this morning, gaining slightly and an increase of defense spending of boosting the quarter, but what about the talk in washington about reining in some spending and we'll talk to the ceo of albemarle about lithium prices a key component in the electric car future we will be right back. e. so we're hard at work helping them achieve financial freedom. we're proud to serve people everywhere, in investing for the retirement they envision. from the plains to the coasts, we help americans invest for their future. and help communities thrive.

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welcome back to "power lunch. a big day for defense with rivals lockheed martin and raytheon both higher after results. will be heed stopping estimates thanks in mart to record order volume and a big beneficiary of the $27 billion in military aid committed to ukraine but it also left sales guidance for this year unchanged, can they keep up momentum after shares surged 37% last year? let's welcome in lockheed martin chairman and ceo jim taiclet and our very own morgan brennan. morgan. >> jim, great to speak with you on the heels of earnings this morning. i do want to start with that sales guidance, the fact that you're expecting flat sales this year but a resumption to growth in 2024.

what will fuel that growth as we look to next year given the fact that you do have an order backlog that has ballooned to $150 billion. >> sure, morgan, good afternoon. starting with the f-35 program that continues to ramp up, we expect to build between 147 to 153 aircraft this year, and in 2024 and then up to 156 in 2025 so we'll have production increases in 2024 and '5, and we'll also have opportunities to build up on the ch-53k that's going into full rate production we've got activity going in our space business with the next generation interceptor this can prevent ballistic missiles from hitting our homeland, and then a number of other programs, so we've got a whole set of classified and unclassified programs that we think are really going to start to catch fire in 2024 and beyond. >> yeah. of course, one of those program of records that's seeing that ramp in production is the f-16,

the block 70 aircraft. just today it looks like the first successful test flight of the first of these fighter jets that will go to bahrain. how does that speak to the fact that we're seeing this increase this demand for defense, not just here in the u.s. but among our allies as well and what that means in terms of trans haitian. >> sure, the reality is the geopolitical situation that's evolving obviously russia's invasion of ukraine. in addition to that, china has been very active strategically and i think it's well understood by our administration and by congress and both sides of the aisle that there's a heightened threat environment our allies feel the same way we have come together in europe to work together to help defend it, but there's increased demand, as you said, for the kinds of systems and products and platforms that you need to defend your country.

we've got great relationships with a number of our allies. you know, f-35s got quite a few partner nations that help build the aircraft f-16, again, you know, taking off literally again with allies that may not have the authorization to buy the f-35 or have the industrial base to support it yet, but it's kind of an entry level opportunity i flew the f-16 block 60 a couple of times recently with our test pilots, and, yeah, a block 70 is very close and an even more advanced version of that great airplane flies very responsibly, super acceleration, and the upgrades are largely around avionics, networking, better cockpit controls it's a really advanced plane if there's s&l like tens of billion prep rated by congress and dedicated to dod to put on to

contracts with companies like yours, replenishment of things like high mars and jaffe lynes and the three missiles that are part of the patriot systems getting shipped out to ukraine is the pace of contracting beginning to pick up, and if so, how quickly can you deliver on some of these supplies to replenish the some piles >> the pace of contracting is definitely speeding up there's real thought leaders in the department of defense to understand the issues and are helping to reduce those timelines. i think there's a whole approach we can take with government and congress to really advance the ball down the field on this issue. there's a number of elements it's not just the contracting process, the paperwork itself, but it's really having a number of joint initiatives between industry and government. thank your relationship that will benefit. for example, we evenly

looking to double highmar's production and the javelin production it rhett you to three years in both cases got a head start a year okay when i went back to the pentagon and volunteered to spend about $100 million to start that process before we had any contracts or any paperwork going become and for the, so it was worth doing, to demonstrate that we can get a head start, but there are four things that government and industry can do together in the future first is we need to have multiple supply sources for mic electronics, critical metals, things like that so we have more than one source for the supplier the second area is that we really would be grate for especially small and -- i know there's ways to screamline to. there's also the opportunity

really to think about investing early. we've been working on peace time production over the last two decades. what's standard deviation as we're seeing now for highmars and javelins we should be prepped and ready with reasonably small investments to ramp up if we have to. those are some areas we can improve today andthen being, other ways it give us a splifl >> that's a conversation we'll continue to have, especially as defense spending is increasing this year but is a little bit of a question mark looking at fiscal 24 in congress. we'll continue to see low tuft ceo of lockheed martin, thanks so much for joining us today.

>> thank you. >> let's goat bertha coombs now for a cnbc news update. >> hey, tyler, thanks for that here's what happening at this hour germany has decided to send its advanced lever 2 takes they will allow other countries, including poland, to do the same the move comes amid reports that the biden administration is close to approving american tanks to be shipped to ukraine. the man accuses of killing 23 piece in a racist attack on a wall stleelt he'll plead guilty in that case after federal prosecutors said they would not seek the death penalty and prosecutors are still at risk of facing capitol murder charges. and a georgia election probe by a special grand jury will remain secret for now. the report looked at possible

interference in the 2020 election by former president trump and his allies prosecutors argued against release the documents while they consider filing charges based on that report. kelly, back over to you. >> thanks very much, bertha coombs ahead on "power lunch," lithium prices continue their meteoric rise up over 800% over the last three year, a big part of making batter batteries and ablamare says business should continue to grow more on that after this quick break. gs the way you want... your team, ours or a mix of both... with the nation's largest ip converged network, from the most innovative company. bring on today with comcast business. powering possibilities™.

welcome back to "power lunch," everybody. dow has turned positive. 90 minutes left in the trading day. let's check stocks, bonds and commodities. bob pisani kicks things off for us bob, what happened -- have we figured out what happened at the open yet >> yeah, trying to figure it out. simply put the prices were not accurate we had the opening auction there was no real print for the open, and that caused a lot of dislocation. the trader talk out if you guys want to hear about that. the important thing about today, the earnings came out and frankly were very meteoric and about to go positive on the s&p 500. 3m was a disappointment, j&j fair, not great, union pacific

definitely a disappointment. verizon was okay but the 2022 consensus was below expectations travelers pre-announced. they were in the amazing the bottom line is mediocre. amd didn't have earnings, but they got a big downgrade, and there's a lot of worries about what the pc market will be looking like bernstein downgraded they. if you try to figure out china here's what the market is thinking about look at what happened with 3m. significantly slowing demand in china and swatch group came out and said we've got a big recovery in china post-covid so the market is believing the reopening story. swatch stock up a 5 has. s&p 500, on the verge of breaking that big downtrend that started in the beginning of january 2022 market cap kept moving down, and now it's slowly starting to raise, get a few more points,

45, to 45 range. that's it. now back to you. >> and here's rick santelli tracking the bond market action. hi, rick. >> reporter: hi, tyler a, we're not trading below yesterday's low yields remember that for a minute and right around 1:00 eastern you saw yields drop a very good two-year note auction and when investors are flocking to buy two-year notes, most sensitive to the fed, that gives you information in and of itself now let's go to a two-day of tens we're trading below yesterday's lows in 10s and at 10:00 eastern it spiked. that was global services pmi, better than expected, a few look at the three months, and last wednesday at minus 139 was the closest one ever if you look at the long-term chart other this this episode, minus 98 was the most exclusive record keeping number and the dow on pace for its lowest close

in seven months. that means it's 10.5% below its september highs at 114 plus. kelly, back to you. >> rick, back to you, our rick santelli let's turn our attention now to oil prices as we close for the day. pippa stevens with the numbers. >> reporter: hovering right around on wti. nat gas once again is the big movement and freeport applied yesterday to regulators asking to restart their texas facility which has been offline in juppe. that's about 2% of u.s. demand so that's a big catalyst here, and while we're not seeing that much of a response in henry hub prices over in europe, prices are down 10% and freeport is looking pretty good. >> what about gas prices are they going higher? >> they are going higher and definitely something to watch. pain at the pump. >> yeah, it's coming not a great time

speaking of rising prices, if you think gasoline is bad, will be at lithium. prices are on a record run and the big players are representing the benefits, like albamare telling investors things are looking good all the way through 2027 the ceo is here now, ken masters with an interview with our pippa stevens. how can you have clarity through 2027 what about a recession >> we have volume growth, even with a recession the volume driven braine-le-comte vehicle growth and then we're not really forecasting that pricing the assumption is that it remains relatively flat. people are will being for something teasent and stable and prices have come up for quite some time and now people are seeing that play out did the ev market get too big during the pandemic boom is it going to downside, or will the gains continue >> no, i think the market is growing.

i think that transition is happening, and it's going see growth consistently. it's at different levels in different part of the. >> in terms of as you look to benefit from the ruch in targets. at the many high end you -- we've seen so many projects with things of this nature including around permitting, how confident that you can reach the high-end projects >> we have multiple projects across it. it's a portfolio not one project we're betting on there's a portfolio and we may have challenges in one and can deliver on another we think we get to the middle of the range and maybe to the end of the range because we're been doing that >> where is all the lithium

going it come from to be powered by over the next several years and can an industry like yours produce that lithium at a price that retains the economic viability of those electric vehicles >> yeah. well, the big locations where the resource itself is coming from, australia, south america, but we're starting to see resources coming into north america. we have a facility in kings mountain where we hope to open a mine there in a couple of years, we actually produced we have product from the u.s. and we possibility that to grow. north america is coming into its own. >> i'm looking at the prices from january 2020 to january of 2023 and the prices if i thetd -- you can not downthat

kynadi -- that would seem to me that would have something to do with the demand for electric vehicles. >> that's right. when you go back to the numbers were you looking nat 2020, that was the very part of the cycle and our forecast, as we said, is that misses remain relatively from the in. >> we've seen a shift where oem is starting to contract directly with the upstream players versus the cathode or battery mix and are there more concerns around a supply shortage that continue to see the new types of contract structures >> i think that there is secure the -- you're starting to see -- traditionally they israel the --

you're starting to see the oems and you'll see a mix of that as different people have different views of supply going forward. >> thank you both for being with us today >> thank you >> all righty. bitcoin up 36% over the past month. short positions wiped out and crypto benefiting from the same macro factors that are boosting big tech, but is this turnaround only temporary we will explore that when we return ever wonder why they call it the american dream... and not the american goal? announcer: derek jeter ...or plan? maybe... it's because in dreams, you can do anything. in dreams... you can hold your entire world in the palm of your hand. and turn time inside out...

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life is for living. let's partner for all of it. i'm so glad we did this. edward jones welcome back, everybody. bekin making a big comeback, up more than 30% in the past month, but wall street is skeptical about the turnaround kate rooney joins us now kate, can it last? if so why, and if not, why not >> hey, tyler. the bulls certainly hope it can last, and it has been a good year so far for bitcoin. in terms of reasons why it may not last, there's a litany of reasons that wall street has talked about this week the first one is that some of the buying has really been fueled by existing crypto

investors, so you can track money moving into bitcoin, and for the large part it's been moving from what they call stable coins or the equivalent of cash, the dollar-based crypto currencies, you've seep that money move into bitcoin and seen as a recycled crypto what you really want to see for any sort of breakout in prices would be new investor interest which really has not returned to these markets. bernstein put out a note this week describing it as a mean reversion rally, as they put it, technically meaning that it's just returning to the historical averages for prices. they say they are cautious to bearish at this point. katie stockton earlier this morning, a technical analyst, said she was pretty skeptical that this was sustainable. yes, bitcoin broke through its 200-day moving average it's happened before, often proves to be a false signal and others pointed to last year's performance, down 22% in 2022 and some of the investors are

rooking to have more investors. >> what happened in bitcoin happened in other currencies >> it tends to be the biggest. you tend to see outside moves in a smaller token. when bitcoin is up 10%, you see some of the smaller tokens up even more, though they tend to be much riskier so it's often a signal of risk appetite when you see tech stocks rally. you might see some of these what used to be called meme coins, things like doge coin really tend to be a barometer for some of the risk returning to the market so it tends to follow bitcoin but the moves are often outsized and exacerbated from what you see in the world's largest cryptocurrency in the first one. >> maybe tracking a little bit with the ftx developments as weful how they might try to make that exchange work again kate, i wonder do we have a sense of where people are?

remember when we used to say if it falls below 22k, people will be in the red. are people back in the black again? >> they are. so interesting that you prout that up. there's no data this week that the cost basis, sort of the average price that investors got in is now around $19,700 the glass need a of one of the firms out there does nom weekly updates on it. that's the cost basis. people will say technically i'm in the black even if they haven't sold and we are above that level which also tends to be in terms of crypto technical levels a very important one to watch. >> very interesting. our kate rooney with the latest for now. a great. still ahead, microsoft reporting results after the bell just a couple of hours away. we'll talk about the company's tsg investment in ai and chat bo and what it could mean for their future bottom line don't go anywhere. refund of up to $26,000 per employee.

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well, let's get back to the big earnings report that is due out after the bell today let's bring in gil luria welcome. what are you a looking for from microsoft today? >> there's going to be two lines today. one line is going to be about

where the business is at, where spending is going to be over the next couple of years mr. nadella's already given us preview that he does not expect spending to be very strong for the next couple years. the second line is going to be about the investment in generative a.i there's been a lot of news breaking on that, some announcements from the company, and i expect there to be a lot of excitement communicated by the company about what those investments mean for microsoft, both in the short and longer term >> you're talking specifically here about the owner of chat gpt, correct and how much money is microsoft saying they want to put into that particular company? >> well, the report -- they've said several billions. the reports are that it's about $10 billion. but let's keep in mind that's really mostly azure compute that they're contributing to open a.i., so in the short and medium term, they're actually going to get volumes into azure based on

this investment in open a.i., and i think that's going to be one of the positives that could come out of this conversation. even if in december those volumes weren't meaningful, mr. nadella, last week, says he expects up to 10% of all data and compute to be generative a.i. by 2025 if azure gets even its fair share of that, that's 7, 8, $9 billion of revenue and possibly as much as 50 cents of earnings, so it's very meaningful contribution to their most important business that could come from this investment. >> that's super clever, and i missed that wrinkle. hey, we'll investment in you and you can use our computers for your massive data requirements are we turning slightly, gil, to the subject of google, are they going to end up fighting the last battle? is the battle already moving to a.i. how does that implicate search it's ad markets and all the rest of it. >> i think today was the second shoe

when we heard reports about google going to code red, inviting sergei and larry page back to the fold, we knew that open a.i.'s threat, chat gpt's clet in combination with bing goes after that google search business, what we're now learning is that there's a concern now about the other part of the business. so, google is now under attack on both fronts, and it's going to have to move quickly to adapt since these developments around generative a.i., around chat gpt, are happening at a breakneck pace and google has the technology it just has to move faster >> how much of a, quote, cloud is hanging over google right now? or alphabet? >> i think it's been building. this cloud has been building, as you pointed out earlier in the show but now this is a very real threat but you also pointed out that 25 years ago, microsoft was dealing

with the same thing. they made it through they adapted and under mr. nadella, they have become far less of a monopoly and much more involved in the developer community. i expect google to maybe soften up in its development of its motes, which is a way of saying, protecting its monopoly going forward, but it doesn't necessarily threaten its business in the short-term >> gil, we have to leave it there, unfortunately thank you very much for being with us today, gil luria still to come, a new cnbc survey says the s&p 500's gains could be done for the year we'll explain next [music - cover of blondie's “dreaming”] [music playing] ♪ imagine something of your very own. ♪ ♪ something you can have and hold. ♪ ♪ i'd build a road in gold just to have some dreaming, ♪

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all right, the s&p 500 higher right now, according to a recent rally, adding to a recent rally, excuse me, after a rough '22, so what are strategists saying about the outlook for this year? dom chu puts the results of a survey under the microscope. >> we're looking at the cnbc strategist to market strategy and we're looking at the median surveys, the highs and lows, but what it comes down to is after a nice start here, as you can see here, to get the year going, we have had a pretty solid move higher, and where does that put us in terms of where we are overall versus analysts,strategists and their forecasted results according to our cnbc strategist survey of wall street

strategists, here's the number that you want to focus on. it's 4,100 as the median, the middle observation, so what that means is if you take that middle point of all of the analysts and strategists that we polled, 4,100 is where they currently think the s&p 500 will end this full year. now, i just showed you, currently, the s&p 500 is right around 4,020, right? so, you kind of look at that, say, 4,020 versus 4,100, that's about 2% upside to where the year-end target is, about 3% to the average or mean target so, if you take a look at the overall picture, does it get any better for stocks overall? one of the things that we want to look at here is who's the most bearish we got barclay's at 3,725. we know mike wilson at morgan stanley has been that bear, was right last year, 3,900 but if you take a look at some of those bearish guys versus the ones who are the moist bullish, right now, that distinction goes to sam stovall at cfra, a 4,575

target for the s&p 500 as we talk about what happens now with these vatstrategist surveys, this is very early in the year, early observations there's a lot of stuff that can change between now and then. the fed, what they do with rates, whether we go into a recession or not, all afof that comes into play, but you could say, sell in january and go away for the rest of the year >> yeah. yeah it's hard to say i mean, these things are moving targets, and they -- and the prognosticators themselves may change their views >> not may, they will. we'll see them update throughout the course of the quarter, at the end of the year, at the half-year and everything else. as we look at the way things are shaping up, this is the baseline right now. we'll make the adjustments along the way, and by the way, if you're looking for the other full results of that survey, you should check it out. i will tweet out a link later but it's on the website.

>> i think we got to get sam stovall on i'm curious how he gets to 4,500. what is the multiple the concern i understand, but that one, i would like to unpack a little bit >> dom, thank you very much. >> you got it, guys. and thank you for watching "power lunch." >> and closing bell starts right now. ♪ the dow right now sitting at session highs, erasing a 319-point deficit as big-name earnings take center stage this is the make-or-break hour for your money welcome to "closing bell." i'm sara eisen there's the dow, up 141 points or so. it is in the lead right now as i mentioned. the biggest contributor to the dow gains, travelers, caterpillar, united health care. s&p 500 is unchanged, tale of various sector performances here industrials, utilities, and real estate going strong. but the tech sector, energy, communication services, they're all getting hit today. th