u we all talk about richard. that's all for this edition of "dateline." i'm craig melvin. thank you for watching. good morning and welcome to "street signs." we're live from london, ba o', and copenhagen. we've got reporters covering it from all angles, but first let's get you the headlines. full speed ahead, novo hits an all-time high as they report a surge in wegovy sales. that's orever 10 billion in the

quarter. novartis falls toward the baum of the stoxx 600. we high light some of the challenges facing the business. >> you do face some products losing exclusivity. we have three products, which we expect to use exclusivity in the united states. >> santander provides a lift to european banks after the fourth quarter profit hits an all-time high. this is amid divergence between u.s. and european banks. >> we're more than half of america. that's one reason why we will continue to deliver next year when a lot of european-only-based banks will slow down. we will continue to grow.

>> h&m plummets to the bottom after the fourth quarter report shows a 4% slump in christmas sales. well, good morning, again, everybody, to "street signs." it's fed day, so there's going to be a lot of chatter about what the fed are going to announce later on today, but before that, it has been such a busy day for reporting over here in europe. a lot going through in these markets. so let me just begin with novartis. as you can see, one of the biggest downmovers right at the bottom of the stoxx 600, more than 4.3%. we'll talk to sylvia about what's going on there. she spoke with the ceo a short

while ago. compare that to know vnovo nordisk. growing by more than 26% this year. what's aiding them is their blockbuster obesity drugs, wegovy. the orders keep coming thick and fast. again, charlotte is going to be speaking to the ceo in a couple of minutes about how the outlook looks for novo nordisk in 2024. in the retail sector, look at h&m. it's not a pretty day at all for the world's second largest retailer. you can see the stock is down more than 6.6% after a surprise change in the ceo and a weak festive period. it didn't match up to what they had priced in. the stock is down 7%.

and then finally in banking space, we've had a bunch of span is banks report the last couple of days. yesterday we had bbva come in with solid results and today up half a percent after a 28% jump. so many banks have a big gearing toward latin america. the growth for many of these banks is actually coming from not parts of europe but actually from south america, the likes of brazil, mexico giving a booth to both santander and bbca. very interesting environment when you think about banks and the net margin headwinds. let's go back to one of the stocks we looked at this morning. know vor know disk trading at a new record-high. the sales jumped by almost a third in 2023 as they surged

150% to more than 40 billion danish corona. it starts to increase the supply of lower strength doses of its flagship wegovy weight loss drug in the u.s. it announced a share buyback p program. charlotte joins us from copenhagen. >> reporter: good morning. we're pleased to say we're joined by the ceo. thank you so much for having us here. so congratulations on your results. of course, we know 2023 was the year of novo nordisk, europe's largest market cap. the issue for you is supply. i want to ask you, you mentioned there was still constraints in q4 and it will continue in 2024.

can you give us a bit of hindsight on how things are going to go? >> yeah. you're right. look at our software of 2023. it grew 60%. it's the best diabetes product in the world. we've been bringing more doses into the u.s. market, so more than doubling the standard doses. so we're producing more each and every day, but there is a very strong demand out there. >> let me ask you about competitors. there are a few more in the pipeline. you look at the supply explosion over the next couple of years. i want to ask you. you're forecasting lower demand in 2024 on the back of intensifying competition. so how are you positioning yourself in the face of this upcoming competition, the price pressure that this implies?

>> we actually expect the same level of demand in the new year, and when you look at the fact we're only serving a couple of million of patients living with obesity, some 40 million living with diabetes, there's a huge market out there. and if you're really going to make a big acciddent in doing t it will take more. we're used to competing on vegas the best products, and the incoming competitor we've been competing with for the last 100 years, we have a huge respect for. i think it's a win-win for not only the two companies but also for society. >> what about the price pressures? we know the competition in the u.s. is a little bit cheaper. is that putting pressure on you to lower your prices? >> typically in the u.s. we have a market structure where you

launch at this price and then you give rebates to get on the insurance schemes and you enhance rebates year over year, so we actually see that it's a stable competitive environmental where we enhance these rebates and we realize the lower price. but, again, the volume is much bigger, and that's what leads to this also for 2024. as you say, there are millions who stand to benefit from wee go very. what about all the health systems and convincing them to pay? it's a good investment to pay for it now because you avoid illnesses later on. it's tough for them because they could have to pay for millions of patients potentially. how are the discussions on the front? >> it's an important topic and it draws attention to the data

announced in the second half of 2023 that we proved that by being on anti-obese it medicine, you actually reduce the risk of cardiac disease by 20%. when you start adding up all the ways of treating obesity, it's a strong case for governance. of course you have to understand obesity is a disease and what are the impacts of these, and we cannot promote the slelect data. i see a growing interest and the cost burden that comes from that, and we're willing to make, say, contracts where we can make ends meet in terms of sharing the risk and the benefit of these medical interventions. >> your regulators are just starting to consider the use of wegovy around heart attacks, et cetera. do you have any idea when they can potentially look at that?

we look at the uk where the system supports obesity medicines with the comorbidity. there's reimbursety for that. it's long been recognizedas a chronic disease. as we ramp up surprise as we look at the medicines, this goes nice and hand in hand, and we can grow and bring these systems to health care systems. >> can i ask you about china? again, do you have any sense when potentially you can get a green light and start launching that? >> it's still early in the process. i would say we have announced or

one product ozempic in china that. i'm hopeful we can also dry a big benefit for people who are obese in china eventually. >> of course, wegovy has been a huge success. some are a bit concerned on your overrye leans of the blockbuster drug. how about anything else? >> we believe we can build more and ramp up the orders. we have exciting data coming in all. we have our next generation of medicine reaching out toward the end of this year. in cardiovascular disease, we're

exciting about our products also. i actually believe we have a very, very strong and broadening and deepening pipeline, but we focus on a few places where we understand the disease the best. >> i read somewhere we're comparing the arrival of wegovy and other diabetes drugs similar to mobile phones, in a way it could transform society in depth. is that something you agree with? is that something that transformational and that deep? >> it's hard to relate to such different technology, but i would say many diseases are linked to obesity. for many, many years we saw people living with obesity as people who should just get their act together. so a lot of stigma around it. now we are establishing it's a

chronic disease and one that treats with medical intervention. by doing that, if we can prevent type 2 diabetes, perhaps less cardiovascular disease, kidney disease, that's one of the biggest benefits to society, and that is we're living with purpose when it comes to kron it diseases. so that's something that motivates more than 60,000 each and every day. that's why we can get to work. >> thank you so much for having us here today at the hq of novo nordisk. back to you. >> fantastic interview. so many invest ters wanted to hear from him. it's fascinating to hear what he has to say. don't forget, novo nordisk is the most valuable company in europe. the stock is up more than 60% in less than 12 months after the release of their blockbuster wegovy obesity drug. coming up, a bottomline miss

sends novartis shares lower. it's a hail of two sides as we speak about the context of pharmaceutical companies versus how about novo nordisk is doing after the break. of your business. take full control of your brand with your own custom store. scale faster with tools that let you manage every sale from every channel. and sell more with the best converting checkout on the planet. a lot more. take your business to the next stage when you switch to shopify. shipstation saves us so much time it makes it really easy and seamless pick an order print everything you need slap the label on ito the box and it's ready to go our cost for shipping, were cut in half just like that go to shipstation/tv and get 2 months free

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novartis'fourth quarter profits came in weaker than expected. it extended its midterm guidance expecting sales to grow 5% a year until 2028. you can see the reaction in the stock price today it's been quite negative. it's down 4% in trading. as sylvia joins us now with more, you spoke to the ceo a short while ago. what do you make of the market reaction of the set of numbers we got out of novartis today? is this move warranted? >> so investors seem to be more focused on the fact that perhaps we got below expectations

numbers when it came to net sales, and then the other point investors seem to be focusing on is on the guidance for 2024, which is weaker from what we had heard from the company for 2023. but as you mentioned, joumanna, i had a chance to speak to the ceo. here's an explanation of why it's this low in 2024. >> we had a strong quarter. a lot of growth drivers performing really well. right now we have ten different products that had positive phase 3 readouts. the difference in 2024 is we do face some products losing and exclusivity. we have three products in the united states. that creates a little bit of headwinds for us. when you look at the underlying

growth, we're growing in double digits, and that should continue. >> one of the uncertainties is what will come out of negotiations stateside for medicare. if you look at some of the expectations among analysts, these negotiations on medicare could lead to price cuts between 25 and 60%. the range from analysts at this stage is quite wide. of course, we're still far from understanding where they will land when it comes to these negotiations. but it's one of the uncertainties that's impacting the whole sector, but it's impacting novartis. one of their drugs is indeed part of those negotiations. the drug in question is responsible for addressing heart failure problems. however, the ceo did say when it comes to these negotiations with medicare, they do not expect for this year at least that interest will be part of the generic market. let's take a look.

>> we don't know yet what is the first round of these negotiations. it's really price-setting the government has undertaken. we'll get that ore the course of february, and we'll have a back and forth-and understand more in september. for us it's not a driver that it lost exclusivity in this period. i think it's important from a policy standpoint, we need to get the policy fixed and we need to get adjustments made in terms of nine years versus 13 years as far as price protection in the united states. otherwise you're going to have fewer drugs for seniors in the future. >> intress toe is important for novartis in the context it's the biggest performer, and, of course, whatever happens when it comes to prices of this drug could impact the broader performance of this company.

novartis says when it comes to sales growth target for 2028, that will continue at 5%. we have gotten that guidance until 2027 and now that is extending into 2028. we're getting a little more clarity on what novartis is planning for the coming years. i also want to highlight the differ devi dividend. it's important when itcomes to shareholders and expectations. it's increasing by 3.1%. all in all, joumanna, there's essentially mixed results from novartis and it really depends on what part of the market you're taking a step here, whether you look at results and think there's quite a lot of positives in here, i'll buy into the narratives or whether you're focusing on the negatives. one thing is clear, in order to buy into novartis at this stage

is because you believe in the innovation and that the company will deliver on these drugs going forward. >> sylvia, very quick one for me. novo nordisk is getting a lot of attention. they're the market leader. there are two, eli lilly and obesity drugs. is that a space they're looking to get involved in as well? >> so for the time being, no, no a into the market. they do not want to come up with just another me too product, but that is not the focus for novartis. so in essence when you think about this company, the thing to keep in mind, they're very much focused on the innovation part of the business, and that has to do with the cancer drugs and so on. we'll see what innovation comes

from this company. but when it comes to this hype we have seen in 2023 when it comes to weight loss drugs, that's not the focus for novartis drugs at least for the time being. >> so interesting to hear. of course, we know it's a very competitive market. but i guess those two i mentioned, they do have the first mover advantage there. sylvia, thank you for the overview of what's going on with novartis after the earnings today. let's move on and talk about the retail space. take a look at h&m shares. they're down more than 6.5% after posting a fourth quarter product. sharply higher than a year ago but lagging in expectations. the fashion retailer is leading h&m brands. one of the major headlines is we're getting a new ceo. the existing ceo is stepping

down, but that doesn't explain the stock price, down 6.5%. they also have margin issues. >> they certainly do. you speak of the margin growth. there was that slight miss on the operating profit, 4.509 swe swedish crowns. sales managed to pick up a little bit. the ceo is stepping down. has been a little bit out of energy when it come lgs to this job. exhaustion is part of the reason. danielle erver is part of the mitt romney brand. overall when it comes to some of the numbers, we thought it would take over.

most of the purchasing was online. there was lower power due to high inflation and higher rates. profitability, they hope will exceed 10% over time including in 2024 and set a sales target of 10% to 15% every year. they said also that they're looking at the red sea situation almost daily and are doing everything they can to minimize their impact on profitability, freight costs as well as stock levels. >> i have a question with respect to the shein listing. they're much cheaper. their whole objective is sales

bulk as opposed to maintaining profitability. i wonder to what extent that's disrupting the whole retail sector given how successful shein has been? >> even in the notes to the company, helima helmersson, the current ceo, is looking how to increase the availability of stock to consumers on a consistent basis. she intook the likes of h&m and just upended it and made it even quicker and faster in that sense. and with the trading then, they're at 10. a little cheaper, but it has that food category as well which changes things for it. that's a point of contention and one investors will look at. >> is it something that

investors are asking what can it do to maintain market share and increase profitability. it's not fair when you have shein competing from behind. arabile,thanks for sharing what's going on. today we're talking about santander. the bank reported a 28% jump in profit in the fourth quarter to a much better than expected 2.9 billion euros as the bank extended lended in europe and brazil. that topped expectations. there you go. that's a bit of a surprise. the legender says it expects greater profitability in 2024. now santander executive chair outlines a divergence between u.s. and european growth and told us what this means for the bank's outlook. >> santander is in europe. 50%, 60% is coming from the u.s.

and latin america. than's one reason why we will continue to deliver next year when a lot of the european-only-based banks will continue to slow down. we will continue to grow. most of our growth is going to come either from the americas or from our consumer bafrp, which is also europe. if you go to europe as an economy -- by the way, this is no different from the world. what do we need in the world? we need growth. without growth, we cannot grow. europe needs faster growth. they need to attract more investment, attract more talent. this is something we all know and, i believe, we're conscious. the study is working on that, how can europe be more competitive. >> i'm impressed at "street signs" we've made it through half an hour of the show and have not talked about fed, which is coming up later today. can fed chair jerome powell

deliver a soft landing, and what clues will he give in the timeline of tera cuts? we'll talk about that in a few moments. we'll be right back.

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welcome back to "street signs." i'm joumanna bercetche and these are your headlines. k novo nordisk shares hit an all-time high. the ceo tells cnbc what is next on the approval horizon. >> it's a dynamic situation now, and as we ramp up, it's a surprise. this goes nice and hand in hand, and we can grow and benefit and bring this to health care systems. >> novartis grows. the ceo highlights some of the challenges facing the business. >> we do face some products losing exclusivity. we have three products chl we expect to lose exclusivity in

the u.s., so that creates a little bit of headwinds for us. >> microsoft's and alphabet's numbers fails to impress investors with google sharply lower in trades after ad revenue missed expectations. and paramount soars in u.s. premarket after media entrepreneur submits a $30 million offer a month after cnbc learns warner brothers entered its own preliminary merger talks with the firm. well, it's difficult to believe this, but it's already january 31st, the end of the month already. we're going to take a look back how some of the key indices performed over the month of january, and after a shaking start, you can see for the most part, all of these indices have ended up the month in the green.

the nasdaq up 3.3%. so we're going to dig a little deeper into what's been happening with some of the key tech stocks there, and, of course, the magnificent seven have been under focus. with the exception of tesla and apple, all of the other names in the basket have done pretty well throughout the course of january. s&p, the main index up 2.5% for the month, sitting shy of 5,000 now, about 150 points higher. again, i think it's interesting because at the end of the year, many analysts put out their targets for where they see the s&p ending in 2024. many of them had 5,000. we're not that far away from the end of the year targets put out by the community. it's been a strong start to the year. the dow you have also sitting at 2% higher for the month of january, again, getting closer and closer to 39,000 new record highs being eeked out by the u.s. index. well, let's take a further look at tech. as i mentioned with the exception of apple and tesla,

every single one of these names -- big names within the nasdaq have had a solid month. tesla down 23%. a lot of that happened last week after disappointing outlook and a disappointing earnings call. it didn't have a positive impact on where the stock was trading and also expectations on the months ahead. apple down 2.3%. remember a couple of brokered downgrades came earlier in the year. the rest still pretty positive. microsoft still up 8.7% for the month of january even though e we had results yesterday, and on the back of that, the stock is trading down in after hours, down 2%. we had a huge run-up in the price going into the earnings numbers yesterday. netflix also up 16%. it ee been quite a volatile stock. meta, one of the best performing stocks last year, up 13% from last month. and nvidia, a stellar start to the stocks as we continue this

big hype around artificial intelligence that started in the end of 2023 and continues into 2024. a lot of green when it comes to the magnificent seven stocks. as to the asian markets, a lot has been happening with the chinese property sector. the australian index up 1.2% for the month. a new high. that was a milestone reached for today. hang seng down 9%. so these chinese indices are actually sitting at a five-year low. that i seem to be operating in a different environmental to european stocks,s which are at a two-year high, u.s. stocks are sitting at all-time record-highs. the chinese markets cannot seat to get ahead as we deal with a weaker property. nikkei, however, very strong start to the year, up 8.4%, this as investors dialed back

expectations after hawkic results out of the bank of japan. in the meantime the dovishness has been positive for the nikkei. as for european markets, this is what january looked like. the ftse was the relative underperformer. linkage to china and comcommodis down. we talk about this with a stagnating european bank drop. yesterday it came in at zero percent. it does paint a picture of the stagnating economy as we talk about the prospect of central european bank cuts this year. the ibex trading around flat for january as well. the major event today, let's get to it. we're counting down to the first fed decision of the year today.

no change the expected. a quick look at u.s. treasury yields, this is what we're looking like today. we have the 2-year note down four basis points, u.s. down three. we saw a huge rally in fixed income. today we're going to get more on which sector they'll be issuing in. that will be a huge driver for the bond markets. results are in. respondents see the central bank cutting rates later than market expectations with just 9% expecting a cut in march. cnbc's steve liesman filed this report. >> in contrast to the markets, respondents to the cnbc fed cut survey see fewer cuts starting later in 2024. only in june is there a majority

of 70% looking for a rate cut. while future rate cuts are looking at six rate cuts, the expectation is not more than three. they're looking at a reduction of its balance sheet by november. the probability of recession is at 39%. it looks like the 25 respondents on average figure the fed rates will be cut every other meeting. that's in june and again in december. they think it aud auld to be m more progressive. 56% say the cuts are going too late while 44% think it's cutting too early. they'll not risk the gains in inflation by increasing early. the probability of a soft

landing is unchanged at 47%. it's fairly typical for this group of fed watchers to be more closely alined with the fed's own outlook than the markets. the question remains of who has it right and how much it matters. by 2025, the market, the survey, and the fed all converge in their outlooks, but it looks like there's going to be some back-and-forth and some tussling in the interim beginning with the fed meeting in january. steve liesman, cnbc business news. let's talk about the fed and what we can expect. i'm happy to be joined by our next guest. good morning, ramy. so many different drivers to anticipate. we've had a lot of o the tech earnings and what to watch out for on friday, but, of course, the main event is going to be the fed meeting later today, and i think many market participants are hopeful that the fed chair will start signaling that they're ready to start thinking about cutting rates and perhaps even signal that march is a live

one. in the absence of dovish commentary from the fed claire jerome powell, how do you think markets will react? >> thanks, joumanna, for having me. i think that the main event will be a nonevent. where i think there could be some interesting commentary is in the q & a. when jay powell actually answers questions to the press, he then sort of breaks script and you'll get a sense of where the mind-set is. we've got from no rate cut in massachusetts to a full rate cut priced into now less than 50-50 to now, you know, negligible. so i think our base case scenario is we're probably going to see a rate cut in may, probably june, and you'll -- then it'll come through in the q & a session with powell.

>> rami, when you think about your investment thesis for 2024, to what extent is that contingent on the fed actually delivering on the rate cut expectations, on the four or five rate cuts pencilled into the market at this point? >> listen, that's a great point. the -- right now the market is stretched in the sense that it's quite aggressively pricing in rate cuts. we still see positive earnings yield of around 2% of bonds. so equities are still favored. that being said, there's not much margin there if the fed does not cut as aggressively as the market is pricing in. what we're looking for in terms of earnings for our clients and for our portfolios is signs that the lower rates are actually seeping into the real economy and into earnings, not simply driving flows or optimism. so i think that's where we're actually looking a lot closer at earnings outside of big tech. we're looking at names and

looking for, you know, businesses and business segments that are grow ing, that are differentiated. signs that they're creating multiple expansion. >> or at least the anticipated lo lower cost of capital. speaking of earnings, we've already had a bunch of earnings come out this week. tesla last week disapoimgting overnight -- somewhat a disappointing reaction to microsoft and alphabet. is this great run for big tech coming to an end? >> no, i don't think it's coming to an end. i just think the expectations are extremely lofty. these companies carried the weight of the market over the last 12 to 14 months. these companies are delivering fantastic earnings. the issue is the expectation. we're so used to earnings trouncing expectations that if they come slightly in line or slightly above or slightly below

in the case of alphabet, they're punished mercifully. what we saw yesterday is their cloud computing revenue was very strong. they had -- you know, going back to my earlier point, they had some segments which grew very strong, which was exciting for us. their xbox services and content was up, which shows the activision is working well for the business. that's exciting. that's the sign of a company that's healthy, diversified, and growing. the market is really reacting to alphabet's miss on ad revenue. it barely missed. we think the market will stabilize. this should not derail the company so to say and we're looking eagerly at other sectors. you know, we were excited by seeing some positive news and communications, industrials, you know, throughout this month, and you can see even with some of the financials and bank earnings that the market reacted

negatively at first and since then has really found its footing. >> rami, let eats talk about one of the headwinds that could potentially have effects on the global economy on the year. i know you're speaking from dubai. i can't let you go without asking you about your take on the disruption that we've seen through the red sea, the attacks on the vessels. i've read a lot of notes that suggest that, yes, we have seen a spike in shipping costs, but it's not going to have a material impact on overall cpi numbers, but yet what we're seeing is a huge dent to sentiment and how people are feeling about investing and also shipping in that part of the world. how would you say it's manifesting in terms of what your clients are seeing and thinking? >> yeah, outside of the tragic human element, you know, of israel's offensive in gaza, you know, this is creating knock-on

economic effects primarily through the red sea supply chain but also sentiment as you mentioned. so about 50% of global seaboard trade goes through the red sea, and this will put pressure on supply chains. i actually think it's having more of an impact than the politicians are letting on. one of the things that you've seen is much stronger language coming out of the eu and europe about the need for cease-fire in gaza, an end to, you know, israel's hostilities in gaza, and the reason why is they're going to feel the pinch in terms of their pricing pressures and inflation much more pronounced than the u.s. will. freight rates have gone up massively. insurance is up over a million dollars each way now for shippers that use that route, and, you know, this will have an impact on the final fight against inflation so to say. i think what we've learned over the last year is that inflation was mostly supply side driven, right? and, therefore, if it was supply

driven, this is going to have an impact. the other thing that's not being talked about enough is really the effect on sentiment, right? you've seen a lot of companies that have been boycotted in the middle east. they've declined as much as -- one company, americana restaurants have declined as much as 30% in the saudi stock exchange after the war started. >> yeah. >> so i think, you know, as earnings come out, you're going to see if this is having, you know, serious impact. >> i was going to say, you know, people often, you know, forget that these companies are not operating in a silo, and to your point, some of the impacts of what's happening geopolitically in the region going to show up in earnings season. rai, we're going to leave it there. always interesting to chat with you. also coming up on "street signs" as i wasn't just speaking about with our guest, alphabet

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welcome back to "street signs." breaking news in the last hour. paramount global shares are sharply higher after byron allen offered to buy the company. his offer would have a total of $13 billion while bloomberg says his voting shares would represent a 50% premium on tuesday's closing price. this coming just after a month -- a month after cnbc learned that warner brothers had entered into its own merger talks with the firm. paramount is opening up at 22% more in trading. meanwhile alphabet posted mixed results for the fourth quarter. it beat on the top and bottom line, but ad revenue for the holiday quarter came in below analysts' forecasts. the ceo says alphabet shares

have fallen sharply. >> i'm happy with what's available through search labs in seven languages. we answer new types of questions including those from market perspectives. people are finding it particularly useful for more complex questions, by clarity, and longer queries. it's also helpful where people are looking for your deeper education and even gift ideas. >> it posted a top line beat fueled by a stronger than expected performance in cloud. however, guidance for the current quarter revenue came in below market expectations. shares also fell in market trade. arjun, i've looked at how the stocks have done throughout the course of january. that i had a big run-up to

yesterday's events. i've got to think a lot of this was expectations were so high and stocks had formed so well in the first quarter of trading. >> the results were very good, but not good enough to meet the high expectations that were already priced in here at this point. i think if you look at the after hours move, 5% on alphabet, we've seen bigger before. it's not that big. microsoft, a couple percent down. this is really investors taking a breather here. the results altogether weren't bad. if you look at alphabet, revenue recovery, the fattest growth since early 2002, there was some weakness in ads, the ad revenue coming shy of expectations, but still up 11% year over year as the ad market recovery takes hold, which is a positive, and cloud growth. 26%. pretty strong growth in cloud as well. so it looked like alphabet was really sort of firing on a lot of cylinders. i think a lot of the concerns at this point is the ai story

around it. is it as strong a narrative as it is for microsoft right now? i don't think that's the case. >> yesterday when you and i were sitting here having a discussion about the preview and what you were looking out for, you were saying you wanted to see to what extent microsoft was generating from ai. what did you receive? >> we got a little bit of guidance on that. the ai boosted azure revenue by six percentage points which is faster than the three percentage points they reported in the prior quarter. we're seeing some. but it's really hard to categorize how much ai directly impacts revenue. what you're seeing from the likes of microsoft, google, and you'll hear from amazon is the way they have these ai products. effectively they're selling them as part of cloud package. i think the strategy is very much to i say, look, we have a lot of ai and it's being infused into our products.

but we're selling you these products, and obviously the other big product is co-pilot, $30 a month, ai software. we didn't hear much about that in terms of concrete figures, but the company says they're very happy with how that's going. i think the way the ceo f microsoft really put it, they're in the early innings of this ai transformation as they call it. they think this is like the early days of the pc. there areaearly adoptions, but they're going to become standard issue across the organizations. of course, that's the hope and the aspiration. microsoft versus alphabet, when you look at the two stories, it's clear microsoft is given the ai premium over alphabet at this point. >> i do want to point out and remind viewers, advertising revenue was up from a year ago. cloud revenue was up 26% from a

year ago as well. the growth figures are still coming in in double-digit territories, but yesterday's numbers were so lofty. great. what's next? amazon? >> for sure. >> all right. we'll circle back with you tomorrow. in the meantime let's talk a look at how european markets are faring. it's been a really busy day in terms of earnings. we started off the show about the price action we've seen with novartis, one of the worst performing stocks. the stoxx 600 down 4.6%. charlotte is over in copenhagen speaking to the pharma company novo nordisk. it's up 1%. a new record high. a focus on the fed meeting coming up later on today. that's it for our show. i'm joumanna bercetche. nt.e"s mi exchang icong upex i knew there would be a lot of orders to fill and i wanted them to ship out fast that's why i chose shipstation

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it is 5:00 a.m. here at cnbc global headquarters and here is your "five @ 5." we start with tech dragging wall street lower ahead othe open with the dow coming off its seventh record close of thee. the big driver today, it's alphabet, shares sinking on q4 advertising sales miss as it misses around the wave. of course, there's microsoft. under pressure despite the record sales in 2023. plus it is fed decision day with investors expected to hang on to jay powell's every single word