to try and talk about what's been going on, what they would do originally, the cma said they would have to sell "call of duty" or block the deal. that was a nonstarter for microsoft. we will see how this continues, but right now, just on those couple of reports, you can see a activision shares up that does it for us today. join us tomorrow right now, it's time for "squawk on the street. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber, mike santoli at the new york stock exchange cramer has the morning off futures are trying to hold some gains here in the face of surging labor costs stated today, nearly double the estimate higher yields as the long end now plays catch-up, ten-year 4.08%. our road map is going to begin with this monster quarter for

salesforce, coming out swinging against activists. plus tesla's ho-hum master plan unveiling elon musk meets investors but offers few specifics in terms of new car models or even financial projections. and the retail gauge of the consumer, we got best buy, macy's, and didburlington store all reporting earnings let's begin with crm, thothough surging in the premarket the dow component posted that quarterly beat, doubling the buyback to $20 billion as those activist investors have been seeking changes at the company last night on "mad money," marc benioff told our jim cramer it is full speed ahead when it comes to accelerating profits. >> you have hit the hyperspace button, and we decided it's time to go. we weren't going to wait two years to fiscal year '26 to deliver this profitability acceleration we were going to do that right now. and that is what is happening. >> as far as the guidance goes, guys, it's that operating margin

guide of 27, street's around 22, has sort of the bulls licking their chops at the magic number of 30 we've been waiting for >> sense of urgency that was expressed in the cost-cutting campaign, fattening the margins at an accelerated way, that was the whole story. and you know, the bear case, and it was wrong for 15 or 20 years on salesforce, was, it was a roll-up, badly integrating acquisitions, but also that it was run for the employees. it was this very generous sales culture within salesforce. well, here's what's going to happen in the coming fiscal year, according to needham sales and marketing spending going from 36% down to 32% one fiscal year. it was 40%, like, thereabouts before the pandemic. stock-based compensation, percentage of revenues, 10%, it's going down to 8%. the things that they could easily just pull these levers or easily, at least, say that they're going to do them, that goes right to the margin, and so i think that's the whole story

and all of a sudden -- also, though, revenue better than expected, so it wasn't as if it was in the absence of a decent growth story, even though there's some deceleration on the top line >> i'm not sure it was the whole story. this seems to be an anomaly to a certain extent for the rest of the sector take a look at snowflake, talk to any vendors, and you get an answer that's talking about elongated sales cycles but that did not seem to be the case or at least hurt crm, as mike pointed out. the number itself came in higher than anticipated the top line is not decelerating as it is or seemingly is for so many other software as a service providers, and that's a question in terms of the quality of the quarter, i guess, but obviously you can see what investors are deciding to do here. but certainly an anomaly i'm not sure exactly what they did, other than what you're pointing out, of course. cutting costs can go a long way. the 27% margin target is certainly something that's going to be applauded, although again,

as we pointed out, beginning with jeff smith and all these different activists, there's hope they will get to 30% or 35% margin target as soon as possible that's not the number we're hearing. the buyback, though, being doubled, some talk, i guess, vaguely about succession but really the disbanding of this m&a committee. these are all things many activists had been hoping for and certainly will take credit for, whether deserved or not >> the question now is, having addressed the activist concerns, how does benioff turn back to the employee base? roth today, you know, mike mentions the revenue or the payout target. it remains to be seen whether the employee base will react well, given a history replete with seemingly endless perks and hand holding that's roth today on sort of, you know, what they call an era of overcompensation. >> true, and i guess, you know, the question is, what kind of moment are we at if you are dissatisfied where you are at salesforce, i mean, it seems as if you see general

belt-tightening in the industry to some degree i mean, not that people are sitting idle for very long if they decide to leave obviously, that's the test when i said that, by the way, that was the bear case on salesforce for 15 years or whatever, i mean, the stock went up like 3,000% over that period of time, so i don't want to pretend as if, oh, the bears got it right it's more a matter of, at this stage of maturity, where the company is, what needs to be done in terms of integrating some of the big deals and just getting margins in a place that makes sense, because billings growth is not going to be, you know, kind of in these eye-popping high levels forever, and this is kind of where they are. the pop in the stock today is pretty dramatic. people did expect some good things >> but mike, it's also because there was -- most of the analysts were bearish coming into the print all the survey work indicated it was probably going to somewhat weaken, and it wasn't. >> right >> as somebody said to me, they brought the thunder, not just with the earnings themselves, but with the guidance and the

buyback. >> yeah. >> and everything else if you want to point to it. >> yeah. needham note, six years on the sideline is a long time in our universe, but here we are, upgrading crm to buy that's needham today premarket gain on okta is not that high. td cowen upgrades to outperform. >> snowflake is the opposite story. trading at about 17 times revenues and not hitting the number and not looking like it's got -- i mean, take a look. there it is down over 9% the question on salesforce now is what are the activists going to do, specific to elliott, of course, we reported yesterday, they nominated a slate of directors. that's not going away. the question is whether they really would go to a proxy fight. in a statement, elliott saying, we're seeing a lot of positive things here, we're happy about it, going on to sort of say they're going to continue to stand by and watch very closely, and you know, there's some of

that the announcements are consistent with what they say were their recomme recommendations. to be fair, it was really started by starboard and jeff smith, at least publicly, last fall with us on cnbc but they continue to say, hey, we're going to keep you on notice does that mean they'll go to a proxy fight? they never have. i shouldn't say that they've never gone to a vote they've never gone to a vote in the u.s. in korea, they went to a vote, they lost. it's the only proxy fight, i believe, elliott has take p to a vote interesting. but right now, they're still there. you got the universal ballot take a listen to benioff, because he did at least mention the activists, kind of, in his conversation, i think, with jim. >> in regards to the activists, jim, let me just tell you this, we can learn from everybody. i was so impressed with mason and value act and jeff too, that i put mason on the board, so salesforce has a great new board member, mason morfit, the ceo of value act.

i couldn't be more excited about him, and we also are adding sachin, the ceo of mastercard, amazing financial expertise and of course you know arnold donald very well. incredible executive who was the ceo of carnival. three amazing new board members. jim, that's five new board members in the last 16 months. >> which may be one reason, guys, why they said to elliott, no, we're not interested in your candidates, at least at this point, because again, as i had reported, they seem to be fairly close to settlement. ultimately, though, salesforce and its advisors said, no, no we're not going to just take your names so, they sat there, these independent directors, have been nominated by elliott, and we'll see. >> yeah, i mean, obviously, just front-loading a lot of the cost moves gets the stock back to where it was in the premarket last april so, that's, you know, buys you some time and some benefit of the doubt, you would think, although the activists probably weren't in there just for a

trade, like, back to that level, so you have to see, you know, exactly what else they might want to see happen at the company. by the way, 27, 28-point gain in salesforce is like 180 points on the dow. so, outside of salesforce, dow is down 100. >> can we put to bed the school that says, get them out of the dow? >> yeah, i mean, at least at this point, they're certainly no real impetus for that. i can name three or four smaller companies in the dow that we're not talking about. >> can we just get rid of the dow instead in. >> you hate it david's always hated it. but you know what the dow is >> tell me, michael, what is the dow? >> it's batting average in baseball, which is, it's not the perfect measure of what the performance is, but it's the one everyone knows in their head, and they have a historical frame to put it in context >> that's true i'm thinking o.b.s. but that's right. >> s&p 500 or the equal weight s&p is ops >> which is why you talk about that a lot more than you talk about the dow. >> no doubt about it

>> and you're also a baseball fan. tesla is down in the premarket. yesterday's investor day presentation by elon musk failed to impress a lot of innovateser. that master plan three lacked specifics about future cars and finances check out this exchange during the q&a. >> when do you think we'll get a look at it, maybe a prototype? second, are there any details that you think you can share in terms of the size, the content, the performance and then third, you think you mentioned that you would produce it in other plants in addition to mexico. should we take that to mean that you can launch it at an existing plant before you're finished constructing the new plant in mexico >> i think we'll actually have to probably decline that answer. we will have a proper sort of product event, but it would be jumping the gun if we were to answer your questions. maybe another question if there's -- yeah. yeah i don't know

anyone >> all right, so, no new models, no new prototypes, no data on the cyber truck. bloomberg today says that car which was presented basically as an icon is like a scooby-doo costume and haunted the whole event. adam jonas said it was more about the drivers of cost reduction as some of their vertical integration efforts are going to come into play soon >> placing on display the long-term ambition, the manufacturing sort of prowess, the efficiency, the pushes by the way, jonas says there could be a practical and marketing-based reason you don't immediately unveil the cheaper car. he says, what if you just put in an order for a $50,000 vehicle and you're about to come out and say, hey, really soon, we'll have one half the price that has enhanced features. maybe that's true. maybe not. maybe this was all just about restating the mission and claiming we're going to get there. 20 million, you know, cars sold in 2030. who knows, right

but to me, this was a good test of, will the public that, you know, really does follow every utterance of musk about tesla and really wants to believe and wants to have a new reason to reup their enthusiasm about it, are they going to take just this initially, no. i mean, i could look at the chart over two years and say, well, this thing was going to have a hard time getting above $215 no matter what happened it needed something really special to happen, and now it's going to backslide a little bit. so, we could talk about how much money and capital it's going to take to get to that 2030 number. 20 million vehicles is like a 16% global market share of all vehicles if you believe what the current projections are for total sales in 2030. now, presumably, they're all going to be -- a lot of them are going to be evs, the vast majority sold in 2030. it's still a lot of cars, but i think jonas's point about, they're so far ahead in terms of vertical integration and it's bearish for the auto parts

ecosystem. >> right we've watched some of the silicon vendors today lower, if they use less silicon in the power train. but jonas has long said that tesla is the rabbit. everyone else is trying to catch it >> i think that's fair the question is, has the market kind of given them the credit for being it already >> although, i mean, you know, they did come into the meeting sort of saying, we're not going to share a lot of long-term foa goals or information, and they did lay out how they're going to get costs down, and they did indicate how they have the, you know, the infrastructure to do it that could be seen as a positive it's clearly not being taken as one today. >> yeah. no, exactly. and you know, the other point that some of the sell side is making is it was very much other executives taking a front row role and describing things and putting management depth on

display to some degree as well >> which is important. >> yes >> i mean, i have heard a couple of people remark on the fact that in -- at tesla now, maybe musk is more of an ellison role than a, you know, and obviously, he's not the ceo of oracle any longer, is ellison but -- than a ceo role because they have so many talented executives now >> you know who you want to hear on this is phil lebeau what was your take >> exactly what mike was talking about. there's no doubt that tesla has the hammer, if you will, in terms of production costs, the ability to drive them down adam jonas is spot on in what he's saying in terms of, they are the rabbit they lead, and this was their vision for how they can drive down costs even further. now, let's be clear. i've been to a number of these with a number of automakers over the years. they almost never, every come close to hitting the projections that they will put out there in terms of, oh, we're going to cut

costs by 25 or 30% that doesn't mean that tesla doesn't have that goal it just means that you have to take it with a bit of a grain of salt, but they clearly have an advantage over every other auto maker in terms of ev production and the supply chain look, they talked about the corpus christi lithium refinery. it's going to be operational in 12 months. that's the vertical integration and how quickly they're bringing it together. with regard to the next generation vehicle, you're not going to see that before the end of 2025. because it takes at least a year and a half, even if you started right now, a year and a half, and that's if you're scrambling quickly to get it together it's not going to happen and they plan on building it at that giga factory in mexico. that's probably going to come online, maybe '25, somewhere in that time range. >> i wonder if there's a sense out there that the current model

line-up that tesla has out there, you know, has been pretty much same-ish for a while, and you have all the other contenders trying to come out with fresh new stuff does it start to seem a little stale? >> it does start to seem a little stale look, i already hear that from that's from my friends who have a tesla, which is, i see everybody else driving the same vehicle as it goes down the road we are, for a hundred years, a society that has gravitated to new designs. at some point, every vehicle goes through a stage where people are, like, that's great, that's great, tired of seeing it, and that is the -- that is the challenge for musk and his team as they redesign, refresh the model y, the model 3, and whatever new models kocome out you really do run against the whole culture in this country and around the world that we want new vehicle designs every five, six, seven years, something like that. >> meantime, phil, you got some ford numbers, right? >> yeah.

and the february numbers -- keep in mind, february is a low-volume month for the automakers, including ford but the numbers were solid up 21.9% overall evs, and we know they're just ramping so they're going to be an increase here, but this is a nice gain of 68.1% with trucks up 27% that is the bread and butter, guys the f 150, separate from the lightning, it is the bread and butter and remay understand the bread and butter for ford. >> meantime, couple of downgrades of neo today at barclay's and jpm as they go from targets in the mid-teens down to ten. after lucid and rivian, phil, it's clear that others are still trying to figure it all out and narrow that lead that tesla has. >> 100% right. and look, elon musk has always used this phrase, manufacturing is hard, and it seems kind of trite after you hear him say it over and over, but it's true, whether it's rivian, lucid, neo,

these guys are trying to ramp up and develop a market at the same time we forget that that's where where tesla was back in 2013 to 2015 i remember that they would do these quarterly reports on deliveries completely lumpy, and people would say, what's the deal they would have a good quarter and then fall off, and then have a good quarter that's what we're seeing now with the ev start-ups. they are trying to establish their manufacturing footprint and a market at the same time, and it's going to be like this for those guys >> yeah. that was back when the cost of capital was a lot lower than it is today phil, thank you. talk in a bit. when we come back this morning, a lot of names to get to we'll dive in on snow and some of the retailers, including best buy, american eagle, some news this morning on the microsofts and apples and metas, we'll get a look at what macy's said as well and how that colors the picture of retail when we return

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that's why i do what i do. that and the paycheck. take a look at some s&p gainers this morning we mentioned salesforce, but there are a few companies guiding above today, including crm, okta, macy's, and kroger. they're in the number two spot they guide above on full-year adjusted eps, guide below on capex. we'll talk more about some of those numbers when we come back after a break.

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looking at quarterly numbers with the consumer in mind, best buy is going to open down about 2%, earnings beat revenues in line, but the guidance, a bit soft due to weaker demand for electronics. macy's up sharply, did impress the street the comp guidance, guys, on best buy, is the trouble spot looking for q1 down, full-year down 3 to 6% >> mostly, i think, the street braced for it. nobody expected great things they're still dealing with a very long hangover from that pull forward in demand and as a stock, it's 12 times

earnings today it was 12 times earnings five years ago. it's got this good operator in a very tough industry type status and that was reinforced, i think, by this outlook in general. and then macy's, you know, it's one of those deals where managing what it can manage pretty well, clearly this isn't, you know, a blockbuster quarter, but it's a super cheap situation. it's only $5.5 billion market cap, six times earnings, it's that kind of thing where a little bit of better than expected goes a fairly long way. >> they do guide above on full-year eps. comps were down, although they were up at bloomy's, which some people took note of. just trying to control what you can control. >> and burlington, i guess, was the other one that did raise guidance and seems like it's going to get rewarded for it there's a world in which you could have imagined them blaming warm weather for a miss, but they did okay in the last quarter and actually lifted their outlook for the current one. and i would just say, in terms of broader -- i don't know if you can sum up what the consumer

was about in january and february, except to say, had the ability to spend, did some of it market already is positioned for, it's still a services story when it comes to the share of spending >> all right opening bell is coming up in four minutes don't go anywhere.

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the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. whether the fed is winning the inflation fight could depend on which key indicator you use barclay's says if cpi falls to 2.8 and the fed's preferred pce measure falls to 2.5%, that could imply the fed's work is nearly done. might complicate things if cpi falls below that of pce. "the journal" did a piece on cooling apartment rents, the cooling labor market, and today argued if you look at pce, you're getting close >> they're lining up all of the leading indicators of the inputs and where the data should go and how we're going to anniversary hot numbers to say that the trend remains easing inflation the question is, what's the

pace you have hot inflation numbers coming out of europe overnight again and jacking yields globally so, you know, the fed is where they're going get to in june, well above 5%, it looks like right now. the question is, is that going to be way above where the inflation rate is at that point? in which case, yeah, there might be more. >> look at the opening bell here, the cnbc realtime exchange at the big board, construction company southland celebrating. at the nasdaq, it's movella. also celebrating a listing via spac we're back to 3,931. that's pretty negative by the way, bespoke today, nice piece. if february cpi comes in consensus and march cpi comes in consensus and you look at projected fed funds at the end of march, you'd have real fed fund positive by 20 basis points >> absolutely. there is an undertow to the inflation numbers that should be continuing to take hold. you know, actually, you sort of

peaked above pce right now, so that's part of the process now, that's not super restrictive, but yes, the point being, we're all -- we can see the destination, roughly speaking now, market yields are doing what they're doing, though, so the ten-year, getting above 4% this morning, 4.07% or so right now. that seems to have the market -- the stock market twitchy what happened last time we wen through this october of last year, october 14th as a matter of fact, went above 4% for the first time this cycle, and if you remember, the s&p was declining -- was down, like, 10% in a month, so you already had a weak stock market, we had been going down for a month here in this market, a little bit less, and you chopped around from there. it wasn't as if 4% was, oh, we've got to our waterloo moment, but you also have a situation where the ten-year yield is starting to look a little stretched on the chart. probably more so than it has since october.

so, bond investors are kind of sitting back a little bit, waiting for the jobs number next week, and so if the jobs number doesn't look so hawkish for the -- in fed terms, 4% starts to look like a good buy. >> that's exactly jpm today. we may see some additional selling, they say, david, but many bond investors are sitting on the sidelines ahead of nfp so the bonds may not fully reflect the bond market's fundamental view >> i don't know. 5% doesn't look bad to me. >> that's the thing. yeah so, the short end of the curve is like calling out to everybody to say, we're going to pay you for being cautious and so, you have that dynamic, and there's no doubt that's affecting equity sentiment >> it's got to be, right it's got to be >> pretty good flows into bonds into the year. there's been a significant outflow from equity funds over the last 12 months, 13 weeks, so there has been a reorientation in that direction, and it does make some sense, even if, again,

when we hit 4% in october, the s&p was at, like, 3,600 or 3,700, so you can kind of make your peace with these levels if you feel like it's not really running away from you at that point. also, i'll point out, in october, triple b corporate spreads were above 200 basis points right now, they're like 160. so, the credit market is not really disturbed yet by the macro story. and by the way, same thing with the equity sectors that are working and not working. it's the rate-sensitive defensive groups like utilities and real estate that have been leading to the downside in the past month that's not a bad economic story. the question is, can you keep that balance going for a while without the bond market breaking something? >> it leads to the budding discussion about commercial real estate and the impact that would have on municipal budgets and whether or not that crack would be more interesting to the fed than, say, a crack in the labor market >> oh, potentially i mean, and you know, the fed -- i don't agree with that view,

that they're trying to create these stress fractures in the market or in the economy, but it can happen along the way by the way, i also think it's almost necessary for something kind of somewhat unexpected to go wrong to have this market follow that 2000 to 2002 to '3 pattern, which is the bear case right now is, hey, we had really good rallies in '02 and '01 into '02 and it didn't mean it was over the market wasn't cheap yet. that is true but you also had 9/11, a massively overlevered corporate sector, matssive accounting scandals and all this other cascade that we remember bad stuff happens in bear markets and so you should expect something weird, but that was a lot. >> we haven't had anything overly weird happen yet. >> it's been very real >> it has. yeah >> well, on the one hand, i mean, goldman -- >> this trillion dollars being wiped away from crypto market cap, weird yeah >> i mean, sam bankman-fried,

maybe, but nothing -- yeah >> goldman has a chart out, 99% of borrowers have a mortgage rate below the current market rate >> incredible. >> there's an argument that any corporate treasurer that hasn't prepared for whatever that may be probably doesn't belong in the job. >> should be fired, yeah >> there's some stuff. >> you have to roll debt every once in a while, and there's some floating rate out there people are going to fall by the wayside, but that just happens >> and to carl's point on commercial real estate, there are going to be buildings with capital structures that don't hold up in this market we know that that's happening, and that will continue to. but the reserves would seem to be there guys, back to the stock market obviously, we've got the s&p starting down 0.5%, the nasdaq more than that outliers are going to be salesforce meta's also up microsoft. i did want to come to activision when speaking about microsoft because that stock is also up, although not as much as it was for a moment there on this reuters story. eu antitrust regulators not

expected to demand that microsoft sell assets to get their approval for the $95 a share purchase of activision that's not unimportant, but it's, as we've said many times, not the main impediment to a potential transaction, that being the uk, the antitrust regulator there, the cma, which has already said most likely, no not entirely no, but and they have until the end of march right now to submit everything they need to submit to convince them otherwise, but the belief is that there's a very narrow path for microsoft to deal with the concerns that the cma has and that the remedies needed might need to be more structural in nature, meaning selling things that's something that microsoft has said they are not likely or at least the sense is not likely to do. sell "call of duty," right

do a deal, a behavioral deal where you license "call of duty," sure. but when you get the eu saying you don't need to sell assets, does it, in some way, put pressure on the cma or even the ftc here in the united states by sort of at least question whether their review has more political overtones? possibly and that is the hope of market participants who perhaps would buy activision at this point but again, it's the cma. we're talking about a final report due april 26th from the cma. as i said, end of march is when the deadline for all responses, but we may get something much sooner than that, because you can move that up >> interesting and you know, microsoft is getting a little bump today, it seems also, from credit suisse, making it a top pick and it really is about the chatgpt and the way that that -- the firm thinks it can actual

monetize it, to the tune of something like $14 billion in incremental revenue over multiple years down the road someone's trying to do the work that's about implementation and not just the general aura of a.i. around the name but obviously, there's plenty else going on with microsoft where it's just kind of this, you know, machine for delivering earnings and dividends and just that kind of franchise, but it is interesting that all of a sudden this is now a line item, in a sense, at least in some analyst models >> yes meanwhile, both companies and regulators arguably continue to struggle with the incredible advancement and innovation on a.i. "journal" has this piece about apple blocking an update of an app due to concerns that the app, a.i.-driven, could put inappropriate content in front of kids. meanwhile, a couple of democratic senators have sent a letter to meta asking them not to ship a metaverse product, again, out of concerns about

material that might be presented to young people. >> have you guys used it at all? i was using it last night. >> what did you ask? >> i was asking questions for our guests in the next hour, who's going to be the dean at the m.i.t. schwartzman college of computing he's one of those who wrote that editorial i was referencing earlier in the week that was kisinger schmidt, and he wrote it about a.i. and what generative a.i. is going to mean for all of us in society, and so i asked it a series of questions. they weren't bad it's not long. it's coming for us it's coming for us all >> yeah. >> i haven't dabbled even a bit. i'm just in denial about it a little bit plus i feel like i just see enough out there of examples of what it can and can't do i don't know i just default to, you know what software does? get better, smarter, faster all the time people find interesting ways to use it this is another accelerant, and we'll see. >> absolutely.

and it's nothing new as we try to make it clear, as has been in the works for a long time >> it has. it's just the consumer application of it now that suddenly has brought it to the fore and the enormous adoption of it by consumers, but you're right. i mean, at the corporate level, a.i.'s been advancing consistently and taking over certain functions and/or a huge productivity gain for other functions, and that will continue but this consumer interface now sort of changed the game to a certain extent >> i'm also open to the notion, and we've seen it happen the way the market reacted to it, is it just creates this other wedge to question the search franchise and the way we do search and just how ad-saturated the search experience is, and those types of things, which, you know, can change and have a little bit of a backlash, even if chatgpt doesn't take over the world. >> it's hard to question, though, the idea that, as microsoft starts to embed this in all of its enterprise

products, that that is not going to be a huge potential help for those that use them and to microsoft as well in selling >> sure. >> and adding on -- >> and as a productivity enhancement. >> a huge productivity enhancer until the machine just takes over entirely for all of us. >> the worries you're expressing were shared to some degree by elon musk at the event yesterday, and even, i guess you could argue, a bit of a mea culpa of what he's done to further it t take a listen. >> i'm a little worried about the a.i. stuff i think it's something, i don't know, we should be concerned about. i don't know, i think we should need some kind of regulatory authority or something overseeing a.i. and making sure that it's operating within the public interest, and you know, it's quite a dangerous

technology, and i fear i may have done some things to accelerate it. >> that scares the heck out of me i don't know about you i mean, he's been saying that for a while. >> he has been in that camp. >> he has, but he's sitting there, just saying, all right, are we really going to get some sort of public oversight board of a.i.? it seems hard to imagine and if we do it here, are they going to do it in china too or russia >> through the u.n.? how's that going to work >> but even, like, if it really is coming down to another version or another front in the content, you know, mitigation type wars, it maybe isn't that different. it's just harder to corral, i suppose. people are trying to get out in front of it. you mentioned the metaverse, you know, the meta thing they just don't want certain things to get to kids. that's been the case all along, and if this is somehow, you know, a work around that it's more likely to kind of find its way, it's like the runaway algorithm story with youtube, which is in the supreme court

right now. >> sure. mike, as we are talking we are losing the 200-day on the s&p. intraday we'll see what happens >> it's kind of been sort of flirting around it far while, so have buckle below it a lot of folks are talking about a little bit more 3,900-ish as that sort of general zone as being somewhat more important. it really feels -- it's tough to escape the idea that it's some kind of a broad trading range. maybe 3,800 is the lower end of it it's really a low intensity test, though, so you're starting to have the market look internally almost oversold, as i said, as bond yields start to look stretched you'll see there's a little of an impetus for mean reversion here the earnings picture continues to really not give you much, to work on in aggregate, although i think credit suisse noted that, you know, you're down slightly at this point in the first quarter earnings, year over

year x-tech up 5% so, the beat rate femphasis rewas really lousy the overall estimate was not good, and the market has only partially looked through that at this point >> mike, you know, i mentioned snowflake very briefly at the top of the program i'd like to come back to it now and also put up a two of three-year chart i guess i'm getting exactly when it went public because it's representative of those stocks that you have talked about so often in terms of -- remember the multiple to revenues this thing traded you can say, oh, it's 20 times revenues, that's amazing it's cheap snowflake is down 14% because, in part, while the results actually were better than consensus, they weren't better by much, and it was the outlook -- you see it right there. they also said product revenue guidance for fiscal year '24 is now 40% growth versus 47% as the ramp on recently captured customers has been slower than

usual. so, you know, underconsumption in a sense of their compute large customers perhaps not implementing as many use cases for using snowflake, but i mean, mike, there it is, right you've talked about that whatever -- i don't know what you call that, technically >> yeah. i mean, that's a massive double top peak, whatever, but it also is interesting because by every account, it's going to thrive as a business, and so it actually has all these advantages it's just about, that's how, at this valuation, that's how sensitive you are to slowing from 48% down to 40% >> right >> in terms of your growth rate. >> right >> so, that's what it's -- >> it's still a great growth company. >> it's a quarter of salesforce's market cap, and it's like less than a tenth of the revenue. >> yeah. >> even with the operating margin blowing past the estimate, they got to six. street was at 1.2. so we're looking at losses here.

3,930. let's get to bob pisani. >> good morning, guys, six to one declining to advancing stocks these inflation numbers are not going to the right direction final unit labor costs, higher than expected. the ism yesterday, prices paid went up, the pce on friday, cpi, all of the recent numbers are going to the wrong direction by emails filled with comments, bob, the two-year is going to 5% why don't we just stay there that's where the action is that's where the excitement is right now. so, you can see the impact this higher rates are having on the markets, the growthier parts of the market cathie wood's ark, great january, not great february, off to a lousy start in march. semis are also, same story medical is a good proxy for global growth, weaker recently banks, a little bit weaker today. i want to put up another sector chart and mention that the consumer names are actually having a very tough time, too, even worse in terms of momentum. so, health care just looks terrible the last few weeks, and

anything interest rate sensitive, the reet sector, utility are not there yet, but consumer and interest rate sensitive sectors have terribly negative momentum right now, and in fact, if you look at the new lows, there's not much on the new lows list, but i tend to pay attention to new lows when big names get within 1% or 2% of the new lows pfizer and lilly very terrible johnson & johnson has looked terrible hormel has looked on the weak side some of the other names haven't looked very well on top of that. keep an eye on the momentum of the markets. it's just terrible right now the inflation numbers, look at the s&p 500. we broke as you heard with mike, 3,940 was the 200-day moving average. the next support level is about 3,800 on the s&p that's where we were in the early part of january. what's happening now is that the inflation numbers, these terrible numbers are starting to force the analysts and

strategists to re-examine earnings estimates for the second half of the year. so, remember what happened we had jonathan this morning at credit suisse, he's cut his estimates to 210 he was at 215. but these numbers have been coming down for several months here we're at $250, june of last year we went to $231, now we're at $222 today he's at $210 a lot of strategists are at $210 and even close to $200 right now. 2022 was $220, so $220 is break even right now, and a lot of people are now below that. the problem is the concern about earnings cuts starting to reaccelerate, so they have -- were cut rather dramatically but not much in february, because people started to believe the soft landing hypothesis. what's that mean soft landing means lower inflation and moderating rates would mean stable earnings in the second half of the year, but this hypothesis with these inflation reports may be wrong

we may have the new paradigm being higher inflation and higher rates and that would mean earnings decline again in the second half of the year, and that is the problem that the stock market is now grappling with, that they're going to start tackling second-half earnings and the bottom line, guys, is we just need a change in the inflation narrative otherwise, that 3,800 number is going to be very, very real very quickly. guys, back to you. >> yeah, and that's just, in this country, we didn't even mention euro zone inflation today, record core at 5.6% bob, thanks. speaking of all that, let's get a check on bonds today yields higher across the curve ten-year, off the session high but still 4.06%. don't go anywhere.

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we're a big company and i'll tell you, matthew mcconaughey is an amazing person, he's done incredible work for us you've seen the spots, they're award winning. we're lucky to have a spokesperson like matthew mcconna hi and most companies would love to have him. >> that's benioff on "mad money" trying to defend the retainer of matt mcconaughey in the face of the times piece they're paying him quite a bit of money even as they're focusing on costs. >> seemed like an attention catching wedge to sort of just point out, you know, the spending and the sales and

marketing culture we talked about before do we have news on what linkedin pays him to be a spokes mab? i man? salesforce is a brand that's not like consumer, you know, decision makers need to know a ton about. >> it does give me a brief moment to mention on the call the cfo did say they are focused on the 30 plus margin world so to speak, perhaps as soon as say the first quarter of '25. >> yeah. that pull forward we were talking about -- >> next year. >> that's right. >> we'll take a break here and dow is up 50, but s&p still in the red. don't go away.

good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla and david faber, melissa lee in for sara eisen who has the morning off. we're live at post nine. higher yields an obstacle for equity bulls today as productivity misses, costs come in higher than expected, doubled the estimate and yields are up

across the curve with the long bond with the 4 handle once again. >> doing well considering 4%. >> thank salesforce. >> 30 minutes into the trading session. here are three movers we're watching for you crypto silvergate plummeting, downgrading the number following numbers there. jpmorgan warning the company could go bust in the next year anheuser-busch weaker results, lower than expected volumes but pricing gains and a recovery in china did help profit. the move in force beating street system across the board, issuing a strong forecast with an expansion of its share buyback program. that's where we start here with this huge move in salesforce, with all the activists involved here, david. >> yeah. one question, of course, is how many will stick around will they take 12% and say our work here is done? i don't think so i don't think that's likely. elliott has been the recent focus. we talked about it yesterday, having nominated a slate of directors, the expectation is they're going to stick around.

the question remains, will they go to a proxy fight that goes to a vote here to get those directors on the board for its part elliott coming out and certainly saying in a statement that they are very much heartened by this quarter a quarter that included not just better than expected numbers, but guidance that was above anticipation, margin guidance that was above and a buyback that was essentially doubled. >> right i thought it was really interesting, elliott seemed to want to take some credit for the results this quarter. this is in part a result of what we've done there already i mean, wow, elliott, great job. >> i agree it's a little self-serving i think to say to make a point listen, they can do it. >> sure. >> doesn't mean they had anything to do with it and to be fair, starboard was the first to be there vehiclely at the very least. jeff smith, last fall on our air

when he talked about a large position in salesforce and called on the company to increase its profitability very positive about what it's achieved saying hey, you have revenue growth that's far above what your profit growth is and you need to focus on your margins. that started the discussion that continues to this point, but certainly seems something marc benioff has heard loud and clear given the cost-cutting that they are doing. >> this is, of course, a sector that has been taken down by the specter of rising rates. 4% here to see some of the names do well off the back of pretty good results the exception of bosch and snowflake. according to the analyst community, evaluation community, snowflake trades more expensively which trades on a 7 priced to sales roughly across the board, and snowflake is a different ball game there at 23. >> yeah. real push and pull across the

space as you can see there's the crm snow versus snow splunk's guidance mixed. okta pretty good, guiding above and blowout numbers at 30 cents is nearly three times the estimate as for snow, a little buyback thrown in there. talked about some of this yesterday. take a listen. >> we continue to be on track for our $10 billion product revenue goal in fiscal '29 the main performance obligations grew totalling $3.7 billion. you saw a measure of bookings with certain customer segments in q4. reflecting a lack of visibility in the business and preferring a cautious short-term stance versus larger longer term expansions. >> interesting net retention was actually a little bit better than people thought, but, obviously, valuation here as you point out is the key. >> yeah. in a 4% interest rate environment right now where we see the 10-year, this is a sector overall over the past year, that has been a sector

that has been a favorite short with the specter rising rates. it's higher for the year to date because of the huge draw down last year. we'll see how we fair as the markets seem to be grappling with this reality that longer, higher for longer is for real. the fed actually means it. we had kashkari saying 50 basis points on the table. maybe markets absorbed this as reality. >> real quick point on snowflake, stock based comp continues to result in a significant increase in the share count, which, obviously, can then be offset by the buyback. but it's worth mentioning it was up more than 13 million shares over the prior period. >> salesforce overall adding about 130 points to the dow, so fair to say without it, the dow would also be in the red meantime elon musk unveiling his master plan 3 for tesla, the company's investor day that said, clearly didn't impress a lot of shareholders this morning let's get to phil lebeau with some of the highlights hi again, phil.

>> hey, carl they were not impressed. analysts look at their reaction and notes they liked what they heard in terms of the vision they didn't like they didn't get many details what's coming up near term. dan ives writing ev stage is set. no $25,000 car yet referencing the fact that people expected some type of announcement about a $25,000 or $30,000 vehicle. bernstein wrote long on vision, short on specifics and then you've got patrick at ubs saying no new car but a compelling road map. that road map, by the way, basically comes down to this much lower costs over the next several years, if not decade, and higher volume. how are they going to get higher volume in part because they're going to be adding capacity including a gig da factory in mexico which they announced yesterday as for demand, elon musk says it remains strong and they believe that it will stay that way and if they have to cut prices they know they can stoke demand that

way. >> one of the things we weren't sure about was the price elasticity of demand for tesla, so like, as we lower the price, how much does demand increase? and we found out that even small changes in the price have a big effect on demand, very big so that was a good thing to learn. >> we should point out as they cut prices here in the u.s., yeah, it definitely stoked demand hasn't been the same case in china or in europe taking a look at shares of tesla down basically 5% today. they will have their lithium refinery in corpus chisty up and operational in about 12 months, which is faster than some people expected you see that vertical integration coming together for tesla yet again. >> phil, i have some people who want to be positive about it talking about the fact that while there was no specifics on the long-term plan offered they showed you how they will cut

costs down a lot and the infrastructure to do it. >> oh, yeah yeah. >>. >> do you agree with that? >> on paper, absolutely. there was nothing that you saw yesterday where you rolled your eyes and said, what are they smoking? everything they laid out makes complete sense, if you buy into the idea that they have continued on this path of innovation and that will continue in the years to come. whether it's with battery manufacturing or with what they plan to do with the giga factories and cutting costs. on paper it makes 100% sense you can see in the analyst notes. everybody says these guys know what they're doing in terms of where they want to go. you guys, you know, the story here is, can you actually execute? can you deliver a vehicle that costs 50% less because if you can, then you're talking about dropping down the price, the cost of manufacturing a vehicle to 20, $22,000 from about 45,000 right now that's a huge, huge cut in

manufacturing costs. >> and that would up the ante when it comes to the competition and the pressure of the other competitors in terms of reducing costs to manufacture evs, phil i thought the other interesting thing is getting to this target of 20 million vehicles by 2030 and they would have to spend an additional approximately $175 billion on top of the $28 billion they've already spent in new factories. i'm wondering what the general reaction is to that? in a time where we're hearing companies pulling back on cap x and spending and reducing costs, it seemed to go over fairly well stock is down 5% right now. >> right well, i think in general, what i take away from talking with analysts about the future cap x spending plans from tesla almost all say the same thing, look, you can't look out 15, 20 years and say yeah, we definitely expect them to spend that. things change. you know this.

things change over the course of 12 months, let alone five years, ten years. the 20 million vehicle number, everybody i've talked to says, i would be stunned if they can get much above 10, 11, 12 million. the highest nv terms of annual sales was volkswagen in 2006, 2007, about 12.5 million it becomes tough to get that many people in that many markets buying those vehicles from a manufacture. it's not to say it's impossible. musk has defied it in the past but 20 million, i mean, as mike santoli has pointed out, that's about 16% of what the market would be say in 2030, 2035 that's a huge number >> phil, thank you jobless claims seeing their third straight weekly gain this morning. let's get over to steve liesman to find out what that means and what it means for the fed.

steve? >> yeah. david, the job market continues to confound policymakers they want the interest rates to create slack in the job market and we learned jobless claims have fallen below 200,000 for seven weeks now running and continuing claims are down now three weeks in a row, all of this leading markets to price in more fed rate hikes. three hikes are expected over the next three meetings. that's going to bring the rate to the range of 5.25 by june there's some probability of another quarter point hike in july or september. take a look while the year-end rate is up 100 basis points in a month, at or near high, trades with easing from the peak rate i call this the melissa lee chart. she's the first person that asked me about it. between now and october, we've got 90 basis points of hikes built in, and then through the end of next year 135 basis points of cuts are expected. steven from mizuho say he thinks

markets have this wrong that a pivot will follow the pause. neither the fomc announced this. joe from smbc takes the other side writing we worry the fed is making a classic policy error tightening too quickly and too much we are doubtful the fed can keep rates in restrictive territory for as long as policymakers proclaim how can you make sense one way, near term, markets are backing the hawkish idea of more for the fed to do. beyond the fall, beyond the hump, a more dovish outlook controls the trade i can tell you this, the dovish trade has been wrong for almost 18 months now. guys >> i feel like since i have a chart named after me i can drop mic and go home, steve. >> there you go. >> but, you know - >> that's it >> terms of higher for longer, the markets have the first part but not the second part. the question is, do you think -- what do you think the fed has in mind when they say longer?

is it six months because that's sort of what the markets are thinking right now six months at this rate and then in the -- in january of next year, first quarter of next year we see them cut. >> so if you can pull that chart up i can show you what fed has in mind. what the fed has in mind is the tail part that comes down, that needs to shift up. and the question becomes, why does the market have that falloff in there is it because they see recession? do they see soft landing in there? do they see lower inflation? that's really the question i think that slope down is a mix of a variety of attitudes in the market some who are taking the lower end are saying there's a recession. some see the soft landing. it's still not a bad outcome for the fed it's up near 4% a year from now i think the way the fed is looking at the world, bostic yesterday saying higher rates

into 2024. the whole slope would be shifted up on the right-hand side. >> we'll look for waller and kashkari take a look at the roop road map for the hour one long-time tesla shareholder thinks musk's master plan 3 is a game changer and he will join us to explain why. >> 13 d weighs in on salesforce as the activist battles continue there. the a.i. arms race we'll be joined by the dean of mit's college of computing who says technology will change not only how we interact with machines but how we interact with each other. coming up next what do you see on the horizon? uncertainty? or opportunity.

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. interest in artificial intelligence is surging through corporate america, not to mention consumer america in just the last week we've seen countless ceos address this latest, very important change in technology. >> this is a dramatic change and people should get geared up for how you can use a.i. for good, remember it can be use for bad. >> a.i. technologies have the potential to be very, very transformative. >> i'm worried about the a.i. stuff. it's quite a dangerous technology, and i fear i may have done some things to accelerate it. >> our next guest co-authored a

piece in the journal that ran over the last weekend saying a lot remains unknown with this type of jen raytive a.i. and it will be a challenge for a human cognition for the future joining us is dan, the dean at the m.i.t. college of computing and sits on the board of amazon. great to have you. i read the piece this weekend. i think like many, i was both fascinated and frightened. when you write things such as jen raytive a.i. is poised to generate a new form of human consciousness, as yet however the opportunity exists in colors for which we have no spectrum and in directions for which we have no compass, explain to our viewers what you're trying to tell them, perhaps warning them? >> yeah. absolutely well, good morning good to be with you. so i think the first thing to realize here is these recent advances in this againer in rative a.i. technology represent

a different capability in computing than they've experienced. this is the first technology that can actually create human-like expression. the whole history of computing and communications technology is really about disseminating expression that we create as humans this is about creating expression from the machine directly that's a really fundamental shift. we've seen labor of this over the last couple years, but concerns in the last couple of years around deep fakes and so forth, but that technology was really subpar. we're now at the point where this technology really is at the level of humans. so that's extremely [ inaudible ] but poses challenges. >> and those challenges would be what, in your opinion? >> i think the biggest challenge really is something that we all need to try to get a handle on, which is that just because something can create human-like expression, does not mean that

that thing is itself human-like. so, you know, when you and i are talking things are running through my head, what did he mean by that and so on and so forth. that's our natural way of interacting with people, is to think about what's going on inside their heads this machine has no head for you to think about what's going on inside it. we really need to start to think about interacting with these machines as machines, which is challenging because with this level of chatting with chatgpt, we're only used to interacting with other humans where we're thinking about their motivations and, you know, whether they, you know, have a headache or not, wept to the bar last night, stayed out too late, all of these things >> we can make an assumption at least about how people are thinking and got to whatever it is they're thinking. you're right, by what process the learning machine stores its knowledge, disstills it and retrieves it remains unknown, and you question whether that

will be discovered that process or the mystery associated with machine learning is it possible we'll never figure out it gets to the conclusion it gets to? >> my crystal ball is not so great otherwise i would be in another line of work other than academia i would postulate, people get to conclusions, i think when you get to systems that are this complicated, sort of level of representation, you know, you can sort of guess why a person got to a particular conclusion or not and come to build a model of them and the kind of conclusions that they do reach that doesn't really mean that you know how they got it there i think a.i. will be like that we will start learning about how different a.i.s behave essentially and start to understanding them from that way. >> so dan, it seems then that there are two things that we don't know, that is, how it draws the conclusion and how

good that conclusion is because we don't understand what data that a.i. chat bot whatever it is is using and that raises the question there are two ways to interfere or hack regenerative a.i., that could be in the data set itself as well as the algorithm which proses that data set? >> absolutely. i think these are really critical issues that you just raised, which is that, you know, people still, because of science fiction, are worried about a.i. itself it's really the, you know, the data that we train things on, the particular algorithms we develop that may be evil and used for evil purposes i think that it's very important and there's rightly a lot of focus right now on, you know, the kinds of data that's put into these systems and what kind of behaviors from the systems that elicits. >> we're taking a look now at how many times a.i. was mentioned on various earnings

calls and, of course, nvidia which is perhaps one of the most important companies, 75 times. when it comes to corporate america, so to speak, or the promise of this technology and what it will mean for productivity, you want to give us some predictions here in terms of what we may see, particularly because it seems to be moving so quickly >> it is it's moving incredibly quickly and some of the things that are a little crazy right now, the sort of hallucinations these chat bots have, i think those are things that will rapidly get addressed by the technological advances this will become more applicable to, you know, almost any kind of interaction. think of how call centers have moved to text and chat-based interactions phone calls, you will get good a.i. chats for call centers and support unlike maybe better than some of the human side the -- so i think these are

places where we're going to see rapid kinds of advancement you know, i think that because this technology is so different, again, it's really hard to get your head around the fact that the whole history of computing communications technology has been about preserving communication, now we're trying to augment it and change it, i think it's hard to think right now about the variety of applications this is probably even a harder point than say, you know, the mid 1990s when the internet started and people didn't an idea about what the internet would be useful for. that is what we face with this technology today. >> yeah. and i mean, i've noted how many times it was mentioned obviously, not in the amazon conference call which you're a board member, but is it going to be the large organizations that have enormous access to capital that dominate here, given the

enormous amount of costs for computing alone? >> we're currently in a situation where the amount of computing power required means it's a limited number of organization tas can create these a.i. models. although it's a very active space for startups they're the well funded startups the starts up up -- startups that can afford to spend hundreds of millions of dollars on these models. i think this is a big focus in the research community now of how do these things get more efficient to train it's an open question but there's a lot of effort going into that. for the foreseeable future it's going to be a large organizations and governments, not just private industry. >> right we noted on the amazon call it wasn't mentioned once, but i would imagine it's a conversation at the board level, right? >> i think everybody is discussing generative a.i. these

days >> dean, we appreciate you joining us thanks for your time. >> great to be with you. thank you. >> a tough morning for tesla down 6.25% 'rbackn moitus wee ia ment too long. at least it used to. now, there's roll, the app that makes payroll as easy as sending a text. you. you're slinging tacos and you've got a minute between orders to handle payroll. what do you do? step one, type 'run payroll', respond to a couple questions, and that's it... done! and they're paid tomorrow, not four days from now. if you know how to send a text, you know how to use roll. go to getroll.com/tv and get your first three months free and unlimited payroll.

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tesla shares under pressure, but it's not alone some of the derivative plays are getting hurt kristina partsinevelos can explain why. >> tesla intends to remove rare earths from the motors in future vehicles and they could use 75% silicon carbide in its cars. you're seeing these plunging this morning wolfspeed down 11% so they are selling off and if we continue with this, the sell-off might be too premature because there's so many analyst notes that came out saying that model 2 won't wrap up in volume before 2025 or 2026 and tesla wants to increase its net training system. i'm switching to talk about a.i.

i know you talked about it in the previous block citi and wells fargo point out this could mean more demand for nvidia gpus. the stock has soared 55% year to date, but i want to point out am amd, we don't mention amd provide a.i. capabilities, it's up 19% year to date. those are the derivatives from the tesla story. i want to mention marvel and broadcom, both of those names are lower this morning ahead of earnings out after the bell this afternoon. we'll be looking for whether the data center will stay resilient especially among enterprise customers. that's been an area where we're waiting for that shoe to fall. any commentary around apple given 20% of broadcom's sales came from apple. just yesterday we heard from qualcomm's ceo who said he's expecting apple to use its own semiconductor chips in iphones next year. where does that leave broadcom's relationship with apple? there you have it. chips in 60 seconds.

>> thank you very much kristina partsinevelos we'll talk more tesla after the break with one long-term investor who ended his run for the board as shares are down about 5.5% s&p just above the 200 day although we diedpp below it earlier this morning don't go away. even if you got ppp and it only takes eight minutes to qualify. i went on their website, uploaded everything, and i was blown away by what they could do. getrefunds.com has helped businesses get over a billion dollars and we can help your business too. qualify your business for a big refund in eight minutes. go to getrefunds.com to get started. powered by innovation refunds. i'm kareem abdul-jabbar. go to getrefunds.com to get started. i was diagnosed with afib. when i first noticed symptoms, which kept coming and going, i should have gone to the doctor. instead, i tried to let it pass.

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welcome back to "squawk on the street." i'm bertha coombs with your cnbc news update at this hour in their first face-to-face encounter since the ukraine war started anthony blinken and sergey lavrov talked on the sidelines of the g-20 meeting under way in new delhi blinken says he urged russia to reverse what he calls its irresponsible decision to step away from the new start arms treaty >> i told the foreign minister that no matter what else is happening in the world or in our

relationship, the united states will always be ready to engage and act on strategic arms control, just as the united states and the soviet union did even at the height of the cold war. in greece authorities have now confirmed 47 deaths after two trains collided head-on earlier this week. almost 60 remain hospitalized, including several who are receiving intensive care and a juror has been removed in the alex murdaugh trial and replaced by an alternate due to what the judge is calling improper conversations with parties not associated with the case closing arguments are continuing this morning back over to you. >> thanks so much. we're watching shares of tesla falling after the company's investor day presentation down by about 5%. the presentation called master plan 3 came in light on details when it came to financials in the next gen platform. our guest withdrew his nomination for tesla's board,

has been a long-term investor in the name ross, great to have you with us. >> thanks for having me. >> you tweeted that some of the stuff you saw was insane in the factory. so what exactly got you most jazzed about its vigs for reducing costs by 50%? that's a big number. >> right it's all about battery cells and when i originally went to battery day years ago and saw the prototype factory for cell production of the 4680 it was kind of like this new little thing and when i went to the factory yesterday and saw what its become, it's incredible because they've been able to shrink the footprint for manufacturing these cells to quite a small size it allows them to build these factories all over the world much more efficiently and battery production is really the key to alternative energy success for energy as well as for ev and transportation. the 4680 cell is probably one of

the most important technological advances in modern history when they achieve this, which hopefully will be soon, it's going to bring tesla to the next level. >> he also spent a lot of time talking about moving away from the raw materials that battery technology is reliant on now, talking about lithium iron phosphate, iron-cell based battery used in china right now. it's throughout right now in commercially produced evs. he talked about moving away from rare earths and you see the consequence in shares of mp materials this morning which is down 13% on this notion you can actually engineer rare earths out of the process i'm wondering, you know, how quickly you said it's going to happen in the future, but as a bull, and somebody who is invested in the stock, how soon do you want to see this? what are your expectations on timeline >> well, first of all, i think that when elon is laying out a plan he's talking about long term his vision is very broad.

a lot of things he said and the markets are reacting to today are premature because we're far away from doing all those things yet, and the chemistry of building a battery is quite difficult and complicated and so like all these are ideas that are incredibly efushts ways to improve battery production bunt haven't been invented yet. i think the markets may be rushing to judgment not to mention the ev players that need magnet i own mp it's a great company and they make these rare earths that are crucial to motor production. we don't see anything on the short term to affect these companies. longer term i think for an electric future we have to be very efficient with the use of the commodities involved. >> ross, i mean, even goldman says the ability to cut your costs in half is huge, but then they say people were looking for a third generation vehicle or at least some specifics this is a company with a magical

ability to form narratives they rolled out a prototype for the cyber truck. why not this time? >> well, i think, you know, one of the things i was pushing on and towards the board was more transparency about management and teams that are running tesla and that was the purpose of yesterday was to introduce everybody to all the teams that work at tesla and the way tesla is organized i thought they did a great job clarifying their organizational structure, which is one of the things i wanted to see elon is still sort of the king of the heap there and there is really a number two, but what we saw was a really great group of engineers building incredible technologies that will advance, you know, tesla into the future. but when you're talking about vehicle launches those are like parties. like when cyber truck launched or model 3, you know, i've been to the launches and they're super fun and parties. this was for investors and

ever everybod everybody institutional investors. i think they want people to understand where tesla is going long-term and did a good job articulating that. people want a show that's what i do well, put on the show and make it fun and that's going to happen soon when they launch this vehicle but i think they're still finalizing the design. >> i'm glad you brought up the sort of the executives that have existed but we've never heard from or seen before because that was a part of the presentation, a point elon musk made was to sit down with 16 other executives who we typically would never see or hear about and that was part of the show you're talking about a stock that has run over the past couple months - >> five years. >> it's great to talk about the master plan that's 10, 20 years out, but for right now, what do you think keeps the stock afloat >> well, i think for the short term, it's about the three pilars of things that elon and

tesla needs to focus on this year number one is cyber truck. i got close to the cyber truck yesterday and it's really impressive you know, i saw some videos recently and i was like i hope the production verse is good and i was blown away by this thing it will have a huge impact when launched 4680 and full self-driving are not complete and these are huge technological challenges and they need to get this done this year you know, preferably sooner than later. full self-driving is a little bit longer path, but 4680 impact of this is massive for tesla and the industry so i think they've got a big year in front of them and they have to grind out this year. if they're successful in implementing their business plan i think the stock has a meaningful, you know, valuation upside if they can get earnings back from the price cuts that's really what it's about. can they get margin back in the car, and i think they can. demand has been very strong.

but in the end they have a lost to do this year and a lot to accomplish and that's what we're watching closely. >> ross, good to talk to you ross gerber. >> thanks for having me. meantime salesforce shares are surging after the strong results there last night but with so many activists circling is there blood in the water? we'll get ken squier's take after the break. we're back in 2. payroll forms... my business' payroll taxes will calculate themselves. right? uhh...nope. intuit quickbooks helps you manage your payroll taxes, cheers! with 100% accurate tax calculations guaranteed. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done.

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. take a look at the s&p here. 3941, above the 200 day after slipping below for a short time this morning some of the notable lows today, you'll recognize some of the names, dish, has borrow, hormel, j&j, pfizer, dominion on that list of new 52-week lows still ahead more on the pulse of the consumer we're going to talk to the chief of kroger as shares there rise on the heels of results in the next hour. ayitus

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fourth quarter results making those activists in the stock happy. ceo marc benioff telling investors they've hit the hyper space button on its strategy

elliott management praising the report and saying salesforce now has to deliver on its promises joining us is ken zaire, 13d founder and president and cnbc contr contributor and now on our air all the time tell me what you think elliott will do here let's start with that. you know, you've made the point and i have, they've never gone to a vote with a proxy fight do you think they'll do it here? >> i'm not so sure it's going to go to a vote, but i would -- i would think that they're going to continue on with the proxy fight. by making their nomination to the company right before earnings, i think they're throwing their hat over the wall, so to speak, and they would never do that if they thought an earnings announcement would make them withdraw that nomination it takes a lot to nominate directors. you go public to the company with it. i think if they thought earnings would change their mind they would wait until after earnings to nominate. >> you think they stay in there.

doesn't mean they go to a vote but they have settled many other times closer to the vote. >> exactly. >> all right what about starboard the 14th is when the deadline -- the nominating window doesn't close for 12 more days any chance anybody else tries to nominate here or is elliott -- >> unlike elliott, starboard has made a lot of early on good suggestions to the company they're doing and unlike elliott, starboard hasn't publicly come out and say they want to be on the board. they want shareholder value and they want change and want to see growth in margin exceed 50 and see salesforce be the best of class in growth and margins and i would actually be surprised to see them also nominate, but you never know i'm sure they're considering it. david, also one thing worth mentioning is there's an idea out there that if a company does everything that an activist asks for there's no need to have the activist go on the board anymore and i think it's the opposite. if a person comes to you with

ideas and you agree and implement those ideas an they work that's the exact person you want on your board. >> yeah. fair point although do you think it's a bit much here to see elliott put their letter out almost in a sense claiming credit or at least being in the vicinity of credit for all the things that salesforce has done? i salesforce has done i don't know who started this. i don't know what benioff would have done otherwise, but what do you think? >> i think certain things were done like the $20 billion buyback that wouldn't have been done if there wasn't an activist involved the best activist in my mind, and i know some who have said this, they don't care who gets the credit they just want the share holder to get the value and ultimately the full board deserves the credit on any situation. >> jeff, frequent guest here, did a piece in "fortune" yesterday calling out the activist saying you should sail away from your doomed attack on

benioff saying salesforce's performance of a stock has been far better than any of these activists and they've all trailed the s&p over any relative timeline. i'm just curious your thoughts on that. >> well, there's a british economist who once said, if you torture the data long enough t will confess to anything here we have it confessing to the ludicrous assertion that they have all unsuccessful activist i saw his data i thought it was completely misleading. >> why was it misleading >> what these investors do best is activism and sometimes that gets diluted with other divestiture. starboard has 29% versus 11% for the s&p. elliott averages 19. valueact 47 versus 17. 17.5 versus 4.7 in 52

situations when these activists do their activism, they're generally successful >> so, tell me what you think is going to happen here i'm just sort of curious how do you map it out from here? >> i think we see a slate from elliott of at least four, and i think we'll see it as they've done -- as they do generally a nice diverse slate of nominees i think that's probably all we would see. and like you said, i think it's a longshot that this goes to a vote i think at some point down the road we'll see a settlement, we'll get more directors on the board. >> ken, always great to get your insights and analysis. thank you. >> thanks, david as we go to break, watch six flags, trading higher despite this miss on earnings and revenue. the theme park operator did see attendance down 30 in the quarter. but that was offset by a jump in spending thanks to some higher prices, some strong souvenir and

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we've got a number of big retailers that reported results this morning melissa repko spoke to the ceos of best buy and macy's a moment ago. she joins us with more >> macy's ceo and best buy ceo both told me shoppers are watching their discretionary spending as they're forced to pay more for necessities saying, quote, the consumer is under pressure we're not anticipating that's going to get better in 2023. that has inspired many retailers to go back to a common playbook, dangling lots of promotions. that's why we're seeing kohl's, target and others talking about. macy's margins got extra compressed in the holiday quarter but they said the company has been strategic about

promotions it's personalizing offers and offering specialness and uniqueness, especially luxury consumers at its -- its two stores, bloomingdale's and blue mercury. best buy is in a tougher situation due to sharp pandemic gains. it's looking at way to get customers in the door. ceo corey berry said she's hopeful in the back half of the year the company can use newness to get people in the door, offering things that are unique and getting them to pay full price or closer to it. back to you, david. >> melissa, thank you. melissa repko. of course, we see shares of best buy now in the green as you pointed out, macy's shares having a very nice run here $5.5 billion market value, but nonetheless, nice run. another name i wanted to get to we haven't talked about yet but following somewhat closely, reporting on here and there is

credit suisse, the embattled swiss bank that has seen a lot of assets flow out the door. report from reuters this morning saying that credit suisse is offering higher deposit rates than rivals to attract new funds from wealthy clients in asia they're citing people with knowledge of the matter. again, trying to stem these outflows by offering very high rates of return on dmeposits, perhaps as high as 7%. what are the costs and are they potentially losing money if this is the case, by trying to retain these customers? we'll have to wait and see at the next quarter in terms of what cs reports. but as i've reported in the past, the outflows have been key -- a key consideration, a key concern for so many investors. that's a new low, where we've hit one in the session today the market value of the company falling right back to the level it was prior to the issuance of $4 billion worth of new equity

not to mention a deal they've done to separate the credit suisse, the first boston unit, investment banking unit here in the states to be run by michael cline, $175 million. those shares hitting a new low on that story they are offering very high deposit rates to keep those clients, particularly in asia with that let's get over to carl and melissa on the floor. good thursday morning. i'm carl quintanilla with melissa lee live on the floor of the new york stock exchange. credit suisse, jonathan gollub will be with us. he'll explain the path to his 4050 s&p target. one long-term bear on wall street finally turns bullish the analyst behind the ball call joins us this hour.

the ceo of kroger's beating on profit and same store sales we'll talk consumer inflation and the bullish outlook, where it all stands with the albertsons deal. taking a check on markets, the crm boost, 12% gain is really giving the dow a lift here, up by 0.50%. s&p, just down fractionally and the nasdaq composite is down by 0.4%, 45 points. with bearish sentiment building on wall street, the cboe says traders are the m mostish since late september and writing, not believe the hype around s&p's 200-day, saying we continue to have doubts of the sustain act of any rally and b of a saying it's too early to dive into growth. all that as the ten-year sits firmly above 10%