already seen. >> bd being business development. thank you. >> thanks. >> shares of pfizerdown a bit. of course, it has been a vast underperformer in the market after a strong year last year. down 15-plus percent that's going to do it for us on "squawk on the street. "techcheck" starts now good tuesday morning welcome to check teck. i'm carl quintanilla with jon fortt and deirdre bosa spotify surge. biden thinks about cutting huawei. good day for gm. that stock higher, dee. >> let's get a check on the markets. stocks look to rebound from yesterday's losses take a look root now the dow industrials up 0.25% but nasdaq up more than 1% it's the ev makers, liucid,

tesla, rivian there. the dow is up 2% the s&p on pace for its best month since 2019 and the nasdaq, listen to this, it is up 9% this month alone that would make it the best month since july, jon. >> of course it's going to stay that way today's move being driven by at love earnings. nearly every sector from fast food to machinery and energy, while the industries might be different, inflation and pricing continue to dominate the conversation our dom chu has more >> so, jon, as we talk about the reports we've seen, the market reactions have been mixed. we're off the worst levels of the session. they've all been generally good earnings reports if you take a look at mcdonald's, down 2.5%, caterpillar down 4% and exxonmobil up 2% right now, each of these companies earlier this morning reported both revenues and profits above analyst

targets. where is some of the negativity coming from? it's part of the commentary and the outlook that has some investors, perhaps, a little worried. that's part of the story let's start with one of the pieces out of the earnings calls from the big company, mcdonald's the mcdonald's ceo was saying this environment is going to continue to be challenging from a macro standpoint we have to be jushs and our franchisees have been great about the pace of pricing while keeping the customer engaged and coming into our restaurant you raise prices, but not enough to deter customers the other theme is on the heavy machinery side with caterpillar. the ceo of caterpillar says our margins in 2022 were impacted by supply chain inefficiencies, ongoing inflationary pressures within manufacturing costs and our conscious decision to continue to invest for profitable growth. caterpillar, by the way, was one of the companies that could

raise prices in a stronger demand environment for its goods. one other place is in oil and gas. exxonmobil, we saw darren woods on this morning on "squawk box," but during the earnings conference call he talked about the profit margins for refineries saying i think the driver behind the refining margins we've seen, heftier ones, as of late has been driven by the pandemic impacts of shutting down capacity and then not having that capacity available as demand has recovered jon, this is what i will point out on the exxon side of things, he goes on to say that some of those margins may become a little bit less hefty as refinery capacity gets expanded in places like middle east and asia as well refining margins, inflation, everything else for pricing for the consumer all very much in focus here for these earnings reports. >> it comes down to this interplay between supply and demand and how much it's shifting as some of that supply loosens up, gets better versus

where it was a year ago. demand is actually slowing down and, perhaps we see that playing out in the likes of amd and even juniper as we look forward to their earnings. >> this is -- we have used the word transition a lot with regard to how companies are navigating this environment. what you have is an attempt to try to figure out an equilibrium for what prices could be there that keep customers saying, hey, i will pay these higher prices but i'm not going to pay much more than that the one that was interesting, the semiconductor stocks, it was u.p.s. on the logistics and transport side they made specific mention of the fact that q4 shipping volumes were lower than people thought they would be but they helped offset that by charging more the revenue for parcel came in higher for a lot of these companies, and even mcdonald's said it, it is about trying to figure out how much pricing power do you have that makes sure that customers keep coming back for your stuff >> dom, the street was so worried about tech earnings this

quarter. they make up the biggest part of the market what's happened in the last few weeks? microsoft was disappointing, intel was disappointing, but the market seems to have taken it in stride what do you think that means for the upcoming big tech later this week >> it's maybe a preview and maybe some of the big tech traders and investors for this week when it comes to those three as coming up on thursday could very much be looking at the precedent set for microsoft earlier. the issue is going to be whether or not a lot of that move we've seen has been kind of like the buying of the dip of all the underperformers from last year and how much of it, by the way, is on the fed and the macro that we have coming up this week as well the interest rate story and whether or not we have a slowing pace of interest rate hikes could play into the valuation side of things as well so, it's going to be tough a lot of traders and investors are maybe not going full bore into this until they see the results on the fundamental side. >> so more data points to look for for sure, dom, thanks.

let's dive deeper into spotify. shares up double digits after delivering a top line beat in the quarter. active users up 20% year on year ju julia boorstin joins us. >> i'm joined by paul vogel, ceo of spotify thank you for joining us this morning. i want to start off on the user number and subscriber numbers. you added 33 million users, more than anticipated your subscriber growth was stronger than analysts projected. are you concerned about keeping up this type of growth given the economic climate we're in? >> first of all, thanks for having me and thanks for the nice intro we did we had the exceptional quarter as you said, a record-breaking quarter in terms of q4 results and 2022 results so, 2022 was our best year ever in terms of monthly active users. we added 83 million net

additions and exited russia. if you normalize for our exit in russia, we added 88 million users. on the subscriber side, 25 million net additions for the full year. 27 million if you exclude russia we feel great about the full year of 2022 we feel great about how we ex exited q4. we feel we have a lot of momentum so we're conscious of the macro and uncertainty out there. but so far so good in terms of how our growth has persisted through it. >> in terms of the environment ahead and the subscriber demand and your ability to increase prices, tell us what your plans are. i understand you've increased prices in a number of markets the past two years going forward, where do you expect to be increasing prices how much price elasticity do you think you have >> yeah, so we have increased prices in over 40 markets over the last year or so around the world. we still think there is elasticity

we believe we provide a tremendous amount of value we've added -- we've gone from music service to music and podcasting service to music, podcasting and book service. we definitely think there's pricing opportunity. we talked about that opportunity coming up some time in 2023. there's obviously negotiations that go on with respect to how and when we raise prices we feel optimistic that's something in our future. >> you just mentioned podcasts i know you've been investing in some of these different spaces, but you also just announced you're cutting 6% of your staff and working to stream line should we anticipate any more cuts are there other areas where you feel like you need to be cutting back right now >> yeah, so for us, you know, 2023 is really about executing with speed and efficiency. if you go back to our investor day in mid of 2022 and even into when we exited 2021, we talked about 2022 being an investment year it was a significant investment year we added a lot of head count,

generated a lot of new initiatives and products and that will carry us through 2023. we feel like a lot of that setup from 2022 will help us in 2023 2023 is really about speed and efficiency we feel like we've been a company that's been able to execute on the speed side in terms of product and innovation. and now it's being more efficient both from a spending perspective. >> some of these areas you've been investing in, whether as podcasts or audio books, which is a relatively new area, at what point do you think they'll be acreetive to your bottom line rather than just an area of investment. >> great question. we talked about podcasts and it's been a drag on our gross margins, negative gross profit in this year we also said this would be the peak in terms of the negative impact that podcasts had on our business so, we expect that podcast losses to continue to improve throughout 2023. we've talked about over the next one to two years getting podcasts to break even in profitability. we actually think long term it will add to our gross margin

we believe we're on track. we said 2022 would be the peak in terms of the negative impact and we would start to see the benefit of podcasts moderating in 2023 and improving thereon. >> i can't ask about music without asking about tiktok. which is a destination not only for consuming music but advertisers in an environment where a lot of music is played what are you seeing in terms of competition from tiktok, both in terms of engagement and ad dollars? >> yeah, i would take a step back and say we've seen competition for all the existence of spotify we first came out and had to face apple and amazon and google and some of the biggest tech players out there in terms of how we've had to compete we've done really well in fact, we've talked about q1, we hope to hit 500 million users. we take all of our competitors seriously. we think we have a great ad product, great monetization potential for advertisers and

creators they obviously are a formidable foe. they get a lot of attention. for us, it's focusing on our business and what we do well we've competed against some of the biggest guys for a long period of time and we feel good about how we've done against all of them. >> well, i know you have a big investor day, big presentation coming up on march 8th in los angeles. we look forward to seeing what you announce there paul, thanks for joining us today. >> great thanks for having me now still to come this hour on "techcheck," can amd avoid the same fate as intel while pc shipments fall nvidia, the big winner in semiconductors so far this year, up nearly 30%. plus, the biden administration tracracking down china exports and china's huawei we'll have what that means for qualcomm what to expect from meta results as advertising slowdown remains a concern. the stock is still cut in half over the past 12 months, despite a more than 20% surge this year.

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the u.s. implementing more restrictions on exports to china. according to sources, the biden administration is considering cutting off supplies from china's huawei on the grounds of national security. kayla is in washington with more this isn't the first time iwhate is in the crosshairs it has ties to the communist party. what is the latest >> the biden administration is now weighing a full ban on u.s. tech companies supplying china's huawei with key components, according to three sources briefed on the matter. it's a move seen as ramped up on activities taken by the trump administration in 2019 you may remember the commerce department outlawed suppliers from doing business with huawei unless they obtained a special license. at the time it was seen as a death nail for huawei, but license data obtained found the u.s. was actually still approving quite a few licenses to do that business.

if the u.s. bans it, it's unclear whether those prior licenses would remain intact between november 2020 and april 2021, commerce's bureau of industry and security approved 69% of licenses for huawei sales. that's about $61.4 million in business a third were returned with no action only 1.2% of licenses were rejected, according to a report from the house foreign services committee. now, that's just for a six-month period we don't have more current data. but today china's ministry of foreign affairs said it's gravely concerned and china strongly opposes the u.s.'s unup louse and unprecedented suppression of chinese companies. sources say the biden administration has not made a final decision on the ban. commerce says it consults are agencies and stakeholders but declined to comment on the company itself >> one of the questions last time around is would china

retaliate. there wasn't any sort of big retaliation against an american company, considering the significance, the symbolism of huawei what's interesting, the company was actually able to do a pivot. those export bans really hurt the smartphone business, which was a large part of its revenue. huawei has been able to pivot its focusing on government contracts. it's actually built up a significant cloud business, infrastructure business. now the fifth largest in the world. it still is the number one player in terms of telecom equipment to build 5g networks around the world there's been this soft power push out of washington to get allied countries and the west not to buy that equipment. but in the developing world, huawei continues to have success. do you think that the biden administration could put the pressure on with some of those companies that may be looking to use the network equipment? >> unless the price equation changes dramatically, it's

unlikely that will change. certainly, there is strength in numbers for the u.s. and the countries it's been able to bring on board to this strategy. dee, it's interesting. this is seen as a slight notch up in the policy that had been in place in the u.s. and it's seen more as a way for the commerce department to avoid further subpoenas from now a republican-controlled house with republican chairs of these committees that govern a lot of these issues it remains to be seen whether it will be -- despite the statement i just read from the ministry of foreign affairs, it remains to be seen howfar china would tak it in terms of retaliation or if this is just seen as a slot notch up. >> we'll hear tough rhetoric from them. i guess the implications are a little unclear with the pivot i just mentioned, huawei is leaning on less advanced chips, not the kind that are put into the smartphones that let that business flourish for so many years. kayla, thanks. >> sure. let's stick with chips amd in focus with the company

set to report after the bell today. this comes a few days after a disastrous quarter kristina partsinevelos joins us. inventory, if you have a bunch of chips and making pcs, do you still need to buy amd if you're working that down? >> yeah. amd shares have climbed 11% on the month, outperforming the s&p. competitor intel, the brutal quarter means that amd's earnings are facing even more scrutiny so, intel warned two things, the data center market would contract in the first half of this year and the fact their cpu inventory levels are still high due to pc demand weakness. even one number in q4, total pc shipments saw the largest quarrel early decline ever, 28%. lower pc sales, affect data center sales which make up a quarter of amd's revenue

we can show you the breakdown. that's the orange part on your screen morgan stanley, bank of america -- bmo, bank of montreal expect sales to weigh on the q1 outlook but the outlook could improve. that seems to be the consensus for the year because amd's pc inventory shouldnormalize in q2. it seems it's flattish for gaming nvidia is the dominant player in that category. and you have growth in servers, that's the bright spot amd continues to steal market share away from intel. and data center numbers are still up for debate in terms of, you know, are amd's numbers going to come down and what are the price points of those servers going to be? i think that's the issue between both companies right now. >> for microsoft, we sort of heard, and then from intel, it sounds like that hyperscaler

growth, right, and we're talking aws, microsoft azure, google cloud, they might be buying less equipment, which means they need fewer chips from the likes of amd and intel. but does amd's product advantage and share gains counterbalance that enough to satisfy what investors are looking for? >> the consensus on the street would say yes because it seems amd is still a stock favorite. however, the price point is a concern because that impacts gross margins. bernstein downgrade amd and said their client parts -- the price for client parts declined just within two months of the launch. that's the steepest decline within the shortest amount of time over the last few generations. and digitimes said intel is looking at dropping their cpu prices by 20%, according to their industry sources you have this price war going on, hurting margins. all at the same time amd is still trying to steal market

share away from intel. >> you have to keep those fabs running, you have to sell chips, but when customers - >> that's why the utilization on the fabs for intel a little weak. >> thanks. don't miss amd ceo lisa su tomorrow on "squawk on the street" at 9:00 a.m. up next, one of the the biggest gainsers of this year. paramount up 20% in 2023 one expert says the run could come to an end we'll talk to the analyst who says it's time to sell, in a moment hello, world. or is it goodbye? you know, it seems like hope and trust are in short supply. [clap] now, as businesses we can blame and shame. or... [whistles] we can make a change. [clap] we can make work, work for our communities. create more equal opportunities. [clap] it's time for business to show its true worth.

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welcome back to "techcheck." let's get to paramount, the stock is a big outperformer this year, as you may know, up 32%. a new note downgrading to underperform saying there are better places to look in the media space joining us this morning, the analyst behind that quaul,

macquarie. t >> it's had a good run, up 34% as of yesterday, year to date versus the s&p up, you know, mid single digits. that's a nice run. i think we've still got some recessionary impacts on the numbers yet to be seen we'll have some advertising weakness in q4 certainly on the linear side we worry that continues into q1 and q1 for all media companies paramount is perhaps most exposed amongst media peers with about 35% of revenues coming from advertising that's a near term headwind. you also have costs going up revenue down and cost up is not a good formula you have the direct-to-consumer investment cost, as far as we know, going to peak yet in 2023. and then you've got basically, you know, one of the more expensive stocks in the media

group that's trading above ten times in ebitda in our 2023 numbers. most of the peers, excluding disney, are more in the seven times range. i think it's the wrong combination of p&l drivers and valuation. >> you do -- yesterday we got the news of the showtime/paramount plus branding mashup i wonder what you think is behind that and whether or not there are further cost cuts to come as a result. >> yeah. well, this is one reason we're not necessarily long term bearish and why, as you said, it's something of a tactical call here. you know, paramount plus and showtime announced yesterday, of course, right after our note went out, there might be -- there is a combination to come of some form of the two. i don't know if it's an outright merger, but at least the concept here is reduce some operating costs on the two separate services, combine some of the content, and therefore, you can drive some more subscribers. so, you know, that could drive revenues up, reduce some costs that's one of the positives that

i think they have going for it into the new year. you know, maybe more into 2024 at a time when your ad market may be rebounding. we also expect there may be some cost cuts to come that the company will announce in their report in the next week's time those could be positive offsets. we think any time you're doing those kind of announcements it's because your current situation isn't where you want it to be. >> the backish memo sort of hinted at that there are some who like to play the media m&a game and argue steps like that make paramount an even more attractive acquisition target is that fair >> clearly, that's another risk we highlighted in our note, which is, you know, just sector consolidation. you already had viacom and cbs merging to form paramount a few years ago. it's had mixed results since then it's a very competitive space. it's all about streaming there are major, major, big-time

streamers out there paramount is trying to compete against. paramount now with showtime, and you have the fast channels, pluto is one of the larger on the market that paramount owns it has content and distribution but doesn't have the scale of some of the larger players this is where the industry consolidation discussion may come about. >> yeah. all ahead of the up-fronts where it's going to get more interesting in terms of where the ad market is going this year tim, interesting call. appreciate you expanding on it up next, closer to a trough than a peak. why one trader is betting on names like micron and microsoft to outperform this year. plus, we'll have more on how to play meta as they report later this week. m is the word of the day don't go away. ♪♪ i was having challenges with my old bank. lots of red flags. fees, penalties. so i broke up with bad banking and moved on with sofi checking and savings. now, i earn higher interest on all my money, and pay no account fees. sofi. get your money right.

welcome back to "techcheck." i'm bertha coombs. here's your cnbc news update poulte group shares are leading the s&p with an 8% gain. higher home prices helped drive bigger beats on the top and bottom line. strong results are outweighing slower new orders and weak guidance on deliveries for q1. employment costs rose just 1% in the final three months of last year. it is the third straight quarterly slowdown in pay and benefits for u.s. workers. and the slower growth could help reassure the federal reserve

that wage gains won't fuel higher inflation. in france, nationwide ghon stragss and strikes protesting pension reform labor unions are seeking to get more than 1 million people into the streets. they oppose government plans to raise the retirement age from 62 to 64. president macron says the change is essential and his government has refused to negotiate on that issue. jon? >> thank you. the markets poised to close out a stellar start to the year. the s&p is on track for its best january since 2019 but the focus is on tomorrow's fed meeting as well. could it kill the momentum our next guest doesn't think so. he sees an end in sight forrat hikes, says tech is still underowned for the new year. how much higher can we climb joining us, wedbush security manager, sahat good to have you i'm nervous, though, about the fed and what happens to growth

throughout the year. we've had this slowdown in pcs, even in cloud, but you say you can buy micron here despite the chip inventory issues. why? >> hey,thank you, jon. yes, i mean, we like micron. we've seen a lot of semis already print last week and this week we saw texas instruments with a good enough number. lam was fine, kla corp missed. they spoke about industry capacity spoke about weaker memory trends and then nxp last night, you know, reported their guidance was okay auto demand is strong. or resilient they talk about stronger and mobile demand somewhat softer. i think when we talk about micron and where micron is today, you know, micron already reduced deram to right size supply not too long ago. we think the deterioration in

memory conditions is well understood by the street more important to investors will be when the cyclical bottom is established. it's our view the industry is closer to a trough than a peak >> it feels like that we're kind of teetering at this moment where we're looking to see if some of these industries are going to stabilize themselves or take another fall down a flight of steps, right? the pc industry is going through this recalibration of trying to chew through this inventory and data center, hyperscalers, perhaps seem to be slowing down. you mentioned autos, those seem to be strong as we heard from gm this morning. but does some of this consumer weakness eventually bleed through? you think not. how much does the fed commentary play into whether investors agree with you this week >> yeah, jon, there's -- you know, there's a lot of moving pieces right now in the

marketplace. and this has been quite a remarkable january to start. when we think about the fed and the fed being in the latter stages of this hiking cycle, you know, it -- seemingly, there is some end in sight. so, tomorrow i think most importantly or for us, what will maybe be most interesting is what the fed says about forward guidance and really whether or not this conversation moves away from a cycle ceiling conversation and towards a cycle length or a cycle duration conversation, which could potentially be a blow or a headwind to some of the markets anticipating second half cuts of maybe some 50 basis points or so we'll see what happens, but there's a lot of moving parts. we've seen treasuries trending higher all month we've seen better inflation numbers for sure cpi, ppi last friday the cp deflator was

a little better as well as last friday, university of michigan inflation expectations lower and then this morning i think somebody mentionedright before i got on, the employment cost index, eci came down a little bit. so, the pace of wage growth subsiding, we've seen ism prices paid come in lower these should be decent signs for the fed, but again, we'll see if this conversation moves away from a cycle ceiling conversation and towards duration of this cycle length. >> if you see the fed as approaching the end of its hiking cycle, what do you do with unprofitable tech here? we talk about how the nasdaq has had a good start to the year, but you take a look at, for example, cathie wood'sark etf, one of the best starts to the year ever. the fundamentals haven't change much if the fed is nearing the end of its hiking cycle, does that make the case even more for them?

>> that's a great question, ded deirdre, and an important one. the excessive negative investor sentiment was responsible for much of the sector rotation and push higher in equities we've seen play out this year. last year all of these no-profit, expensive tech, these things all got crushed the unwind's been brutal one can take a look at the ark, the various ark etfs, which you just mentioned we think a lot of the damage is done and there is areas where -- within some of these software names that we start to like, mongo dbb being one of them. we like some cyber and security plays. we think a lot of the pain is, we think, in the rearview. and we think some of these can be bought. palo alto, another one we like, and we think that can be bought here the no-profit tech and expensive tech, these things just got crushed last year.

they've been on the forefront this year in this very nasty unwind of sorts. and so - >> so what -- what should an investor make of the strong move higher in risk assets overall? bitcoin, tesla, ark, some of these -- are we to believe, then, this is justified because of the end of the hiking cycle, or has some of that been overdone >> jon, i think some of it's overdone a lot is justified i think the justified portion of this move has been the extreme negative sentiment from investors in the street coming out of last year when we saw rates move as aggressively as they did as we now come to grips with the latter stages of the fed and its moves, people start to look through the rubble some of these things just got kicked in the teeth so hard,

deserved being bought. others will probably continue to slide. it will be just a very tough and choppy year going forward with stock selection on the forefront for investors to try to pick out names that just got hit too hard to our point, are closer to trough levels as opposed to peak levels and there's just a lot of pain within the group but we think there's some decent buys out there >> all right thank you. >> thank you and after the break, lifted by lithium, gm surging on the heels of results we'll tell you how that company is trying to improve its own supp cinhe"thccklyha wn eche" returns. e's “dreaming”] [music playing] ♪ imagine something of your very own. ♪ ♪ something you can have and hold. ♪

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welcome back general bhoerts a beat on the top and bottom lines they announced investment in a lithium company as the ev price war ramps up our phil lebeau has a closer look at that. >> when you look at shares of gm, up 8%. two numbers stand out. they beat in the fourth quarter. and then their guidance for 2023 well above what analysts were expecting. they expect to earn $6 to $7 a share. the street is at $5.67 con ten success. in regard to the ev and ev outlook. they said a few things today -- within one, no price cuts in

response to tesla. they're ramping battery plants, one is already in operation in northeast ohio and the 9.9% stake they have taken in lithium americas take a look at shares of lithiums americas. keep in mind, they'll be developing a deposit, extracting lithium from this deposit in nevada but that's not going to happen until 2026, though gm believes it ultimately will supply enough lithium for 1 million evs annually you have the tax credits that are going to be going into effect with regard to battery packs that gm will need and also it needs to secure the lithium if it's going to be able to catch up in terms of production and lowering costs with tesla. that ultimately is where gm needs to go when it comes to ev production it needs to get its costs as low as tesla that's why this lithium americas deal is a big deal if they can ramp this up in terms of production, carl, a lot of people are saying, look, it has a lot of potential here. a lot of things have to happen

between now and 2026 the potential is there >> phil, adam, morgan stanley writes about the early innings of ev deflation. how does that square with gm's ro refusal to go along with the price cuts, and i would mention volkswagen, too, today. >> both gm and volkswagen do they have a direct competitor to either the model 3 or model y? those are the two main vehicles they impact tesla. the 3 and the y are the main areas. the most direct competitor to the y, you could argue the only competitor in north america, is the mustang mach-e that's the only model ford cut prices on. so, that's where the price cut is taking place. could we see other models ultimately have to cut -- other evs have price cuts as well? yes, that's definitely out there. i don't think anybodyexpects e prices to rise or stay where

they are now but the question is what happens in the $35,000 to $40,000 price rang that's where the battle will take place. >> that's a great way to frame how we're all thinking about price changes in the industry. there's a lot of different tiers. phil, thanks so much phil lebeau. coming up after the break, key metrics to watch when meta reports later this week. ad spend remains in focus. we're also watching snap, releasing results after market close today. those numbers could provide insights about what to expect from meta. back in two. ♪ icy hot pro starts working instantly. with two max-strength pain relievers. ♪ so you can rise from pain like a pro. icy hot pro.

all eyes on meta when the tech giant reports earnings tomorrow the stock is up 20% at the start of the year after a lackluster 2020 but facing countless headwinds, including ad business, competition from tiktok and the ability to cut costs as it ramps up the metaverse. our next guest remains bullish saying the company has successfully navigated transformations in the past and the company is resilient also former product leader at facebook, thank you for coming into the studio. >> thank you for having me. >> you were there during the mobile transition. you saw the stock fall to under 20 bucks how is it different this time? do you see green shoots, facebook transforming? >> like i said, facebook is a

resilient organization they've gone through that transformation 15 years ago. i see them going through the same transformation right now. now, what's happening is that there are two forces at play one is the competition from tiktok, and facebook's typical reaction is to buy their to buy competitors. they bought instagram. they bought whatsapp and should buy tiktok regulators in china and the u.s. may not allow that it might be getting in their way. then the other challenges they have, they're making a bet on the metaverse, which i'm very bullish on, but in order for these massive platform plays to be successful what you need is a device and app and there is none on the metaverse the holiday season may prove that things will change. we may have apple and sony releasing amazing devices, but that remains to be seen. >> you're a product person and you worked at facebook and don't

think the okculus is a killer app? >> it's a completely different culture, a completely different process. i think the killer app will come from one of the major hardware players. >> and not meta? >> not meta. it will come with an ocular device but not app >> for its legacy business, for its transition to reels for the advertising, is that right you're not bullish on the future on its metaverse ambitions >> i'm bullish on the future of facebook as a great app software company not hardware >> i knew jon would want to come in here. >> sc, have you seen a company do what meta is doing, spend tens of billions of dollars on something where there's no killer device or killer app? >> i have not. that's why it remains to be seen on the other hand, a lot of these hardware players, whether it's apple, sony, nintendo, are all working on killer devices so

the holiday season in 2023, i think, will be telling >> will meta benefit from that if it's not them making the device or the killer app >> i think so. i think they need each other a killer device will need a killer app and facebook and the metaverse is potentially one of the killer apps. >> maybe not the promise of the metaverse but facebook is working on artificial intelligence which plays into it and there's been some evidence reported by "the journal" their investment in ai is getting more people interested in facebook again, particularly reels. do you think that facebook is a leader in the space as we talk about things like chatgbt and the algorithm? >> ai has a ton of promises and moved forward with leaps and bounds whether facebook is one of the leaders in ai, i'm not sure. i don't see them be like a dominant player in ai. i think they will be a great player but i don't think they will be a leading player. >> you're bullish on facebook, meta you don't think they have a

killer app device or transformative ai at the moment? >> that's correct. >> okay. we'll see how it shapes up sc, thanks very much for being with us today. carl if you missed part of the show, don't forget to follow or subscribe to our podcast you can listenanytime anywhere check out apple today. citi naming the stock a top china reopening pick, something morgan stanley said a few days ago. you can read more about that call on cnbc.com/pro to adapt in a fast changing world, you could hire a professional pit crew. go, go, go. sorry. nope. okay. fresh donuts - hot coffee! they deliver real time data and business forecasts when you need it. i think it was fine how it was. (air tool sound) to help you stay ahead of the curve... or you could use workday. the finance, hr and planning system that helps cfos make better decisions faster. on the other hand, we had a great fourth quarter. for a accelerate your decision-making world. workday. for a changing world.

welcome back to "tech check. new this morning former google ceo eric schmidt making a change in the way he approaches washington eamon javers is here with the exclusive details. eamon? >> reporter: he is joining a new outside commission here in washington, d.c. this is a role he's played in the past this time congress announcing at the end of december that it's forming a biotech commission and staffing that with eric schmidt and 11 other experts from outside the government and including members of congress who will advise congress on how to spend money, how to steer the industry going forward it's a crucial high-powered role here in terms of biotech

we discovered, though, eric schmidt holds investments in three biotech companies through a venture capital firm called first spark ventures when we contacted people close to eric schmidt about this, they came back to us with an explanation schmidt will donate the profits in first spark ventures to charity. we don't know which charity he will donate those to he's said to be making up his mind on where to send that money. in an effort to show an adviser says that he joins these boards for the right reasons, schmidt will donate profits from those biotech investments and others to charity in order to avoid any potential conflicts of interest. we talked to experts who say the way these outside commissions are set up particularly when they're overseen by congress allows for enormous amount of potential conflict of interest given that you have people from industry with active roles in industry advising the government on how to shepherd that industry it's a question, john, for washington of how do you get outside expert opinion and input

on these commissions without raising the specter of conflicts of interest? and here we know eric schmidt is now taking steps to avoid that, jon. >> this isn't the first time in your great reporting this issue has come up of eric schmidt giving the government advice that there's the possibility he's able to profit from behind the scenes now are there required disclosures? does he have to substantiate the idea he's donating these profits? is it all of the profits or just some of them >> well, we don't know he's not going to have to substantiate he donated these profits. what we know is a person close to schmidt tells me he's going to donate 100% of the profits from first spark ventures, the venture capital firm where he was a co-founder that has biotech investments and will donate them to charity he will decide at the time there are any profits what charity that will be we'll see where the money ends up, presumably an organization will benefit from that

we reported back in october that eric schmidt was on the board of the artificial intelligence commission here in washington, d.c. and during the course of his tenure on that commission, he made as many as 50 investments through personal money and entities he controls and is part of in artificial intelligence companies. that also raised the question of conflict of interest and ethics experts in washington said they didn't think that was the right thing to do at the time. this time schmidt will approach this one differently, jon. >> all right, disclosure issues around business ties and information in washington yet again. this time not directly involving congress eamon, thank you >> reporter: you bet guys, meantime s.n.a.p. is set to report after the bell, shares down over 60% in the last 12 months. investors are hoping snap can maintain its strong user growth from last quarter looking to add 12 million daily active revenue growth, however, expected to grow significantly to just 0.5%

for the quarter. there will be a sharp focus on ad revenue as the broader pullback in spending from advertisers may signal what'st come for other names reporting this week, and those would include meta and alphabet. it will be key, guys, as we know sometimes on the heels of these snap print there tends to be a little volatility. to the judge and "the half." welcome, everybody, i'm scott wapner front and center this hour, earnings, the fed decision, and how both will impact your money in the weeks ahead we discuss and we debate that with the investment committee. joining me for the hour stephanie link, josh brown is here and so is our senior economics reporter, steve liesman. let's check the markets and show you what we're doing just past 12:00, noon, in the east s&p on track for its best january since 2019 day one of the fed meeting got a lot of data out today. and we're going to get to all of that however, our top story i