that's all for this edition of "dateline." i'm andrea canning. thank you for watching. >> good morning, and welcome to street signs. >> i'm julianna. >> tatelbaum, and these are your headlines. >> u.s. chip stocks are reopening for premarket trade after deep six ai model sparks the biggest one day wipeout in wall street history. sartorius lines up its best day since october, surging to the top of the stoxx 600 after full year revenue beats expectations. i will be speaking exclusively to ceo joachim kreuzburg later this

hour. sap hikes its guidance, boosted by strong cloud business growth on the back of ai demand, cfo dominik asam tells cnbc he's optimistic about the impact of deep seeks new model. >> the more. >> supply, the more choice we can use on our ai hub, the better for us, actually, so i'm not concerned about that. to the contrary. competition. innovation on that front is extremely helpful for creating better products for our customers. >> and siemens energy moves higher as preliminary q1 revenue comes in ahead of expectations. a day after being hit hard in the deep tech selloff. a very warm welcome to you. it's wonderful to be back after more than a year away, back on street signs and what a day to do it. it is the day after one of tech's biggest market routes in years, with european names

reclaiming some ground in early trade this morning after concern over the impact of deep sik's latest ai model slashed $600 billion off of nvidia's market cap yesterday. that is the worst day for a single stock in history, and nvidia's plummet in market cap is larger than the entire market value of netflix, to put it into perspective. so what a way to start the week. if you were long, the market if you were long. those tech names, i think for some of the investment community, it was a welcome development. a lot of the hedge fund community not in those names, and it's been a frustrating period for them. so it really has had something for everyone. the big market volatility that we have seen, bringing it back to europe. let's take a look at how the european market is trading this morning. you've got the stoxx 600 up about 4/10 of a percent. so investors finding their footing this morning after the big sell off. there are a ton of analyst notes out there. analyst hot takes are circling around as to whether the market selloff we saw yesterday was justified or

whether it was overdone. and if you thought it was overdone, man, that is an opportunity to get involved in some of these stocks that have really run away over the last year. now breaking it down by region in europe. here's a picture for you. what's behind that modest uptick that we're seeing. you've got green across the board ftse 100 up 4/10 of a percent this morning. the xetra dax gaining ground about 0.3% higher. the cac40 and the ftse meb also in the green. obviously the magnitude of those moves fairly muted. but it is worth noting that we are seeing some stabilization come through the market. as for u.s. futures, let's take a look at where we stand. we've also got some stabilization there. the nasdaq looking to bounce back by about 7/10 of a percent. the dow jones and the s&p 500. of course this comes after the massive selling that we saw yesterday. now looking at the european chip stocks in particular, we did see heavy selling in these names yesterday as well. you've got asml this morning on some solid footing smi down 1.5%. stmicro

and infineon both trading lower this morning. it was those u.s. chip firms though that bore the brunt of the sell off this morning in premarket. we are seeing a little bit of a bounce back. nothing compared to the size of the selling that we saw yesterday though. so nvidia looking to gain back about 4.5% at this early stage. micro micron looking to gain back about 2.5% qualcomm and broadcom as well. now the other part of the market that saw some brutal selling the data center exposed energy sector, a lot of investors had really pulled up on these names on the basis that we would need increased power generation to power these data centers moving forward. if we're now looking at a world in which the ai space can create models that use less energy than we won't need as much energy moving forward. so obviously a hit for some of these names. so you've got siemens energy this morning trading 3.5% higher. but this comes after the stock dropped 20% yesterday. schneider electric, constellation energy vistra. those are the moves lower that we saw yesterday. and we'll keep an eye on those this

morning. now in cnbc has not been able to verify these claims. but alexander wang, founder and ceo of scale ai, accused deep tech of violating u.s. export controls. >> what we found is that deep seek, which is the leading chinese ai lab, their model is actually the top performing or roughly on par with the best american models. my understanding is that is that deep seek has about 50,000 a100s, which they can't talk about, obviously, because it is against the export controls that the united states has put in place. and i think it is true that, you know, i think they have more chips than other people expect, but also going to go forward basis. they are going to be limited by the chip controls and the export controls that we have in place. >> but we are closely tracking all developments around deep seek. we've got a comment coming now through from deep seek that an issue has been identified and a fix is being implemented. now this appears to be in relation to the cyber attack news yesterday, which restricted

registrations of the new application. it soared to number one in the app store in the us. so investors and consumers flocking to the app to understand what the offering looked like compared to the major us rivals. chatgpt, perplexity and the like. now, continuing on this story, donald trump said the deep state drama should be a wake up call to us tech firms after claims it cost only $6 million to produce. its latest ai model put us companies mammoth capex under fresh scrutiny. trump told reporters he sees the low cost model as a positive development, since it could mean less spending is needed to get the same solution. openai ceo sam altman has welcomed the deep seek release, describing the model as impressive. in a social media post, altman said openai will accelerate some upcoming releases, pledging to deliver better models. he also appeared to push back on expectations that future models would need less computing power, saying, quote, more compute is more important now than ever before.

speaking to cnbc, an nvidia spokesperson praised deep seek as an ai advancement, saying it showed how new models could be created using chips that comply with u.s. export curbs. anthropic co-founder jack clark said in a blog post that the development would make ai controls more difficult with global capabilities. taking a quote one way ratchet forward, arjun joins us now with more on this story. arjun, one of the things that captured my attention this morning was looking through and listening to the tech community's response to the emergence of deep sea. this is, you know, the biggest threat to their business. it might seem that they've had yet. and yet we've got sam altman, we've got nvidia coming out praising the emergence of deep sea. why are the incumbents welcoming deep seek at this stage? >> i think. >> they they need to kind of show they're not perhaps jealous of some of these these developments that are happening and that they're supportive of innovation more broadly when it comes to artificial intelligence, what deep seek has

done is an incredible feat in the sense of being able to come up with a model architecture that is different to what openai is doing, and that can run more efficiently on on less compute power. and that's really the kind of basis of this entire story. and the way they've done that is around the actual architecture of the model itself. you look at what openai does and a lot of the other companies, the common wisdom was bigger is better keep going larger and larger. with the parameters of these models. what deep sea is doing is using an architecture called a mixture of experts and effectively, rather than one big model. there's a bunch of smaller models put together, and at any one moment the model can can kind of pick and choose where it's getting the information from. and that means it's not having to run the entire model all the time to get the answers. and so that's the basis model for deep seek. and then it's the one of the models that has really caused a lot of stir is its model called r1. this is reasoning. so this works

on on a sort of basis of what's known in the industry as test time compute. so instead of scaling up the model size and the compute, they're focusing more on giving the model time to think much like humans do. and so the model will come up with various avenues. you won't see it. it's happening in the background. and then feed up a response. that is what the conclusion that it's come to in regards to the prompt. and this is where it's been very impressive based on its foundational model and able to compete with some of the big us models out there. and so, you know, there will be some fear, no doubt, within the us tech community about what china's been able to conjure up. but actually, there will also be, you know, publicly facing at least some praise for innovation to show that, yes, we are still in a very innovative phase of the ai sort of journey right here. and so that's why you see sam altman and nvidia etc, seeking to kind of show that they are in support of what deep sea is doing. >> and it's not just that china was able to conjure it up, but

china was able to conjure it up at a much lower cost base. and with restrictions in terms of which ships they had access to, they didn't have access to the most advanced ones. well, arjun, stick around. let's continue the conversation with ben beringer, technology analyst at quilter cheviot. wonderful to have you with us. ben. let me ask you about the market reaction we saw yesterday. i think investors today are going to be asking themselves, you know, the main question they're going to be in some of these ai names which have soared of late, or is this the beginning of the tech bubble popping. what is your take. >> so yeah, so. >> we saw. >> very broad selling across. >> all tech really. you know it started in europe with the. >> semi cap. >> equipment names. and then you know when the us opened nvidia was weak. but we also saw you know broadcom marvell very weak as well. >> less pronounced. >> reductions in companies like google or amazon. meta was sort of up and down through the day and apple was actually quite strong. so people are being a little. bit more discerning.

it's not a broad sell off. and i think, you know, it's very important though, to put this whole deep sea issue into context. right. so we've spent the last week listening to the us talk about their stargate project, $500 billion, and we've had the us china restrictions. it wasn't, you know, three months ago we were talking about scaling laws running out. this is clearly showing that people are getting more efficiency. and so the market is always going to be nervous when you've had the performance that you've had from nvidia and the ai trade. but actually i think this is quite a, you know, a good thing for the industry in terms of an advancement, not just from hardware, but an advancement from software. and the models that are are being used. arjun is absolutely right. you know, v3, the base model is very efficient and so is the r1, the reasoning model as well. we can go into the details of how they are, how they are, if you like. >> it sounds like the expectation should always have

been that the models would become more and more efficient, that this is always the direction of travel that we were hoping for. so in that sense it is positive, but clearly it has taken some investors by surprise. does this change where you should be investing your money? does it change whether you know you should be going after the picks and shovels of the ai boom, or some of the other players? >> yeah. look, i think this is always going to be the sort of broadening narrative. and, and we've seen some of that like by the picks and shovels, then by the infrastructure names that sort of enable some of that. then we can think about the software names those have started to have. they've had a mixed picture actually, over the last year and a half. those that have been able to show benefit from i have really benefited. sap has just reported some, you know, some reasonable benefit there. salesforce has sort of flip flopped between a winner to a loser, as has adobe. so yeah, this is this broadening that we're seeing. and then obviously there are going to be companies that are x, you know, not tech

companies that start to use this and see real benefits from it as well. so it's nothing outside of our expectations. actually. it's very important to say that the benefits that that deep seek have seen, though all those techniques have been around for quite a while. it's just that they because deep tech has been forced by the hardware restrictions to have, you know, to use worse chips if you will, or older chips, they have to focus on model efficiency. but that's good for the for the whole ai complex because it basically makes makes the cost of production lower. ben, it's arjun here last year you know through the tech earnings season throughout the year a lot of the focus was investors giving leeway to a lot of the big tech companies to come out and say, hey, we're going to spend x billion dollars on ai infrastructure this year. do you think that narrative changes as we go into the earnings season for us tech coming up, is there going to be a lot of questions

put to the executive teams around big tech about how much are you going to spend? are you cutting back on capex? what does deep sex advancements mean? yeah. so look, i mean, it's absolutely front and center. is this evening isn't it. so microsoft report, they've already sort of soft guided an $80 billion capex number. and then we've also got meta. they've soft guided 60 to 65 billion. so and that they've given those sort of guide those those guidances, they will have been aware of deep tech and some of the, the, the benefits that that they've achieved. so i don't think it's going to change those numbers. maybe in sort of it changes the 2027, 2028 numbers in terms of capex. but certainly for the next, you know, sort of year or so, i don't think those numbers change particularly. but you're absolutely right. there will be an awful lot of scrutiny around deep sea. of course, this is a big moment, i guess, for open source in the world of ai models and a lot of the sort of

conversations i were having with ai startups in the space last year was, yes, there are models that are getting bigger, but there will be a focus on smaller models. and ultimately we think that models fundamentally become commoditized, that actually the real value is what's built on top of them, etc. and so are we beginning to see some of those predictions coming true with this? yeah, absolutely. so, you know, the very best models will want to keep their secrets to themselves. but if you're the second or third player, then being open source means that you have an opportunity to sort of try and catch up using the resources of the world, the open source community. and so you're absolutely right. and, you know, there's been lots of technologies and some of them have won because they've been open source and some have been won because they're closed source. we could go through a very long list, but if you are my personal view on on when we think about ai models is that they will commoditize over time. and you've actually seen satya

nadella make comments in that direction as well. and so yeah, the value you're absolutely right comes from how if you own the data and then how you use that data in your own proprietary way to, to leverage your existing business. and as i say, there are in this sort of fourth phase of this ai revolution, there's going to be lots of companies, and, you know, non-tech companies that are going to be able to leverage ai. and the really important thing, as i say, is if you bring the cost of inferencing down, that lowers the entry point that the cost of entry, if you will. so it's generally good for the for the for the world of ai. i won't talk about jevons paradox. there's been lots of talked about it. but essentially, you know, if you can get the price to start to fall, the price elasticity should hopefully make the market bigger, not smaller. >> ben. well, perhaps we can talk about that next time. i want to just wrap up asking you about how this ties into

us-china tech dynamics at a political level. and clearly washington had tried to restrict china's access to advanced chips. china was able to innovate around this and come up with this low cost rival to openai to perplexity and the like. we've seen washington come down on tiktok. obviously, that was a prior administration, but is there a risk or perhaps a better way to say it? how is washington likely to approach china moving forward, and is there a risk that the us steps up restrictions on use of deep sea? >> well, let's let's just deal with the context into, you know, the concerns around deep sea. so as i say, last week we had stargate and the $500 billion we're moving into chinese new year. the chinese, i think, would quite, quite pleased that they've had a response before chinese new year to sort of unsettle the us a little bit following the stargate

announcements. do i think there will be further restrictions? i think there might be some geographic restrictions. if you think about the sort of semi cap equipment, asml restrictions, they're already restricting the latest chips and so it's hard to see, you know, further restrictions there. but it's always possible. you know, there are these rumors that actually deep sea used h one hundreds rather than h eight hundreds. that's unconfirmed. but what will be happening at the moment, because this is an open source model, is lots of companies will be testing and trying to replicate the cost and performance that has been seen by deep sea. do i think it leads to a further escalation? look, i think this cold war between china and the us continues exactly how what the sort of, you know, next weapon or the next exchange of exchange of salvos is i'm not i'm not quite sure. but yeah, i think it it further increases the tension

and just shows that, you know, ai is, is, is one of the new ways that these companies, these countries can compete. do i think there'll be restrictions around usage of deep tech? look, this is a commercial sorry a consumer application. i doubt very much that large us organizations are going to be using deep sea rather than chatgpt. but i do think that the benefits that deep sea have shown will be proliferated into existing models, other existing models. >> well, ben, thank you so much for sharing your thoughts. definitely interesting to see that trump's first response has been that it's a wake up call for the us. he hasn't used it as an opportunity to antagonize china, so we'll see how it plays out. but ben, thanks for sharing your time. ben beringer, tech analyst from quilter cheviot. and arjun, thank you for running us through the detail on the tech side. us president donald trump says microsoft is in talks to buy tiktok, adding he would like to see a bidding war for

the social media app. speaking to reporters, trump said he saw great interest in the app from a number of companies. the us president previously said he was open to. tesla ceo elon musk or oracle cto larry ellison buying the app. microsoft and bytedance have not responded to the comments. coming up on the show, sartorius shares are on a tear as the company beats revenue expectations will be speaking exclusively to the ceo, joachim kreutzberg, after this break. >> home. >> where routine. >> meets remarkable. with unexpected moments of inspiration around every. corner and through. >> every window. quiet mornings in the. >> sun with. portals to new worlds and fine dining with a

view. your window treatments should be as inspiring as your home, and the remarkable routine home, and the remarkable routine of your daily life. (vo) if you're only maxing out a 401k, you can add a robinhood ira with a 3% contribution boost. (nasa pilot vo) roger that. (vo) robinhood gold gives you an instant 3% match on your annual ira contributions. ♪ for all those making it big out there... ...shouldn't your mobile service be able to keep up with you? get wifi speeds up to a gig at home and on the go. introducing powerboost, only from xfinity mobile. now that's big. xfinity internet customers, cut your mobile bill in half vs. t-mobile, verizon, and at&t for your first year. plus, ask how to get the new samsung galaxy s25+ on us.

customer and use discount code tv18. >> experience the power of cnbc pro. never miss a moment with exclusive access to market moving interviews and stock picks. become a smarter investor with the power of cnbc pro. go to cnbc. com slash get pro now. >> welcome back to street signs. sartorius shares are on track for their best day since octobe, after full year revenue came in above expectations at ■k73.38 billion. the german pharma company said it is cautiously,

cautiously positive on its outlook for 2025, expecting profitable growth across both its divisions. joachim kreuzberg, ceo of sartorius, joins me now. thank you for being with us on the back of these numbers, sir. let me first ask you about the quarter. it looks like you ended the year on pretty solid footing. you managed to achieve your full year guidance in what's been a pretty challenging year, not only for the company, but for the industry. how would you describe the recovery in demand? >> yeah, absolutely. >> it has been a challenging year for the entire industry. and indeed i think. >> we. >> we finished the year with a very good. fourth quarter and a positive. >> trend. >> in particular. >> what was visible. >> was that. customers are returning back. >> to their more normal ordering patterns. >> particularly regarding consumable products. >> in your guidance today, though, you seem somewhat cautious and i might even say conservative, using the word deliberately that you are deliberately cautious around the

outlook. what do you mean by that? and why are you being so cautious if you are seeing these green shoots? >> well, we always would say, let's not overinterpret the results from a single quarter, even though we see quite a trend that's becoming increasingly robust. so that's one point. let's not overinterpret the quarter. but secondly, we do still believe that we will see market growth next year. but below the mid term average rate. so therefore the market growth will not be fully back to what we have seen in the years before. and one reason for that is that customers are still a little bit reluctant to start investing again into systems and instruments. >> why is that? why are they still reluctant to invest? >> we shouldn't forget that there has been a lot of investments into additional capacities during the pandemic.

so a lot of labs are well equipped and also capacities are available in some areas. whereas in in some more advanced areas like cell and gene therapies, additional capacities are needed. so it's a little bit a mixed picture. and we shouldn't forget that interest rates are still relatively high in comparison to the to the years before. i'm talking about 20, 20, 21, etc. so i think that's that's a bit of the environment. but again we do see that also this is picking up gradually now. >> one area that's been tough for you is the china market. chinese market has been particularly weak. it continues to be an issue. are there any signs of improvement there? >> so the government has issued their stimulus program in mid of last year. and we have encouraging conversations with a number of customers, but yet it hasn't materialized to a

tangible extent i would say. so we would expect some positive developments in china, but also not to a very significant extent given the full year or the full year level. so that's one other reason why we remain being cautious. but to put it into perspective. sartorius has less than 10% of its global turnover in china. so we are not very vulnerable here. but yet it's another element why we stay a little bit more on the cautious side. >> okay. that makes sense. so that's part of the reason that you're deliberately cautious on 2025. joachim. your time at the company is coming to an end shortly, and it's been quite a tenure more than 20 years as ceo, a really impressive run. you've got michael gross coming in to take over from july. what can investors expect in terms of strategy from michael? is this going to be more evolution or revolution for sartorius? >> well, so i guess this will be the first question that you will ask michael after he has joined.

but from my perspective, i think we are very well positioned in an industry that is highly attractive, which still offers plenty of growth opportunities. it's very innovative. so i would assume that the tourist is rather up for evolution and not for revolution. >> we'll be sure to follow up with michael when he does come on board. lastly, we are all trying to understand what the next four years are going to look like in the us with the trump administration in dc, there's obviously a lot of focus on the drug industry with the new appointments that he's made, but also his general approach to drug pricing, drug approvals, drug manufacturing. what is your take on whether this is going to be a net positive or negative for the sector? >> probably a little bit too early to really tell, but what i can say is that the tourist is very well positioned to deal with whatever is up there, because we have a very significant footprint, both for manufacturing as well as for

product development and services in the us. so we are not importing everything that we are selling to us customers into into the country. so therefore, i think we have a very resilient global footprint, by the way, that also is the case in regards to asia, where we have our most significant manufacturing site coming up in south korea. so we are not dependent on a on a chinese side. so i think very resilient setup, and we don't consider ourselves to have any competitive disadvantage in comparison to peers. and yeah, and for the sector, i have to say overall, yes, there might be some political influence for sure. but on the other hand, the underlying growth drivers are regarding demographics, regarding innovation in the sector, regarding the need for new treatments against areas like cancer, diabetes, etc. is

so huge that i'm very positive for the entire sector for the next four years and beyond. >> well, joachim, good luck with the investor meeting today. i'm sure you've got plenty on the agenda. with the stock up more than 10%. should be a good day for you. joachim kreuzberg, ceo of sartorius. coming up on the program, siemens energy bounces back from a deep sea sell off as first quarter revenue beats. we'll bring you the latest next. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the

number on your screen, or visit coventrydirect.com. in testosterone. don't worry, it happens to all of us. some guys took my advice about how to boost their testosterone and some didn't. this guy got the message loud and clear. >> that's right. eugenics. total t. >> eugenics total t is the unique man boosting formula powered by techno, a key ingredient clinically researched to help increase testosterone levels. to help you feel stronger, leaner, with more muscle and drive. eugenics is the number one selling testosterone brand at gnc, but you can only get your complimentary bottle by texting jet to 215215. >> thanks. >> it'll make you feel like a new man. and by the way, she'll like it too. >> get your complimentary bottle of eugenics now. text jet to

215215. text now, and we'll include a bottle of new gen x thermo x, our most powerful fat incinerator ever, with key ingredients to help you lose stubborn body fat. absolutely free. >> some people. >> like doing things the hard way. >> like doing their finances with a spreadsheet instead of using quicken. quicken pulls all your financial info together in one place and updates it automatically. how easy is that. >> for me? squawk box is breakfast with the most interesting people in the world. >> it's a privilege to get to talk to them every day. >> it's more entertaining than any other morning show, but you might get some useful information. >> squawk box weekday mornings, 6 a.m. eastern. cnbc. >> welcome back to street signs. i'm giuliana tatelbaum and these are your headlines. u.s. chip stocks rebound in premarket trade led by nvidia after deep six ai models sparked the biggest one day market cap wipeout in wall street history.

the energy sector joins the bounce back, shrugging off concerns that new ai models could need less power than previously expected. sap hikes its guidance, boosted by strong cloud business growth on the back of ai demand, cfo dominik asam tells cnbc he's optimistic about the impact of deep sea new model. >> the more supply, the more choice we can use on our ai hub, the better for us, actually. so i'm not concerned about that. to the contrary. competition. innovation on that front is extremely helpful for creating better products for our customers. >> and siemens energy moves higher as preliminary q1 revenue comes in ahead of expectations. a day after being hit hard in the deep sea sell off. well after the turmoil we saw on wall street yesterday, we're seeing some stabilization in europe today. investors pausing

for breath, it would seem, as they digest and try to analyze what this the emergence of china's low cost rival to the ai tech giants in the us. deep tech means moving forward. you've got the stoxx 600, up 0.5% around the 532 level. as for the individual bourses, here's where things stand. about an hour and a half into the trading session. it's green across the board ftse 100 in the uk up half a percent. the xetra dax up 4/10 of a percent. cac40 and the footsie mid. over in italy both trading higher as well. in terms of the sectors here are the leaders in europe this morning. you've got retail up 1.9%. utilities also bouncing back. a lot of focus yesterday on the power generation sector in the us. we saw massive selling in europe as well on the basis that if we are seeing more efficient ai models, will we actually need as much energy as previously thought? now, there is a lot of debate around that, a lot of debate as to how much that was actually

driving these stocks in the first place this morning. again, it seems investors are pausing for breath before they make a broader determination. on the downside. this morning, the sector laggards in europe. you've got basic resources down 2/10 of a percent. banks also lagging somewhat. but overall the market is higher. just those two sectors in the red. looking at us futures we are in for a positive start to trade today. a rebound in store. the tech heavy nasdaq is looking to regain about 100 points at this stage. the dow in the s&p as well. let's not forget it is a major week for earnings. and it's not going to be long before we hear from some of these tech giants directly. we've got 102 s&p companies reporting this week. four of the mag seven. and everything kicks off shortly. so it won't be long before we get more clarity on what they're thinking strategically. now back here in europe, we're keeping a close eye on siemens energy. the company posted preliminary first quarter revenue of ■k78.94 billion, slightly ahead of consensus, and says it expects to exceed its pretax free cash flow guidance for the full year.

so this was a positive prerelease and the shares are bouncing this morning. we're up nearly 3% annette to joins us for more on this story. now annette we could have had you on this morning to talk about the reaction we had in markets yesterday. now we've got this prerelease, this positive prerelease to throw into the mix. and you have been speaking to analysts across the street i know this morning what is the analyst community saying about siemens energy here. was that 20% plunge we saw yesterday overdone or was it justified. >> well. >> actually, i. >> think the majority of analysts. >> do think that. >> has has been has been. >> hugely overdone. so it was an overreaction. >> because clearly if you if you look at siemens energy dependency on what actually is ai related, it is. >> only a. very small fraction of the overall revenue. >> so it perhaps we can say that the market reaction last. >> week was also overdone. >> when they rose on that. ai

hype in. >> the states. >> and that they could. actually be one of the best positioned companies to deliver the. electricity grid needed for more. electricity demand. so what we've seen is just a coming back, so to say. and some analysts at deutsche bank are even suggesting it's a good buying opportunity now to tap into the shares. so let me bring you back to what siemens energy now said last late, last last evening. essentially the free cash flow target might be over exceeded. and we'll know more from them when they actually report their full set of earnings for their first quarter. but also, what we know already is that they're beating expectations more or less across the board. the only small item where they don't beat is in their gamesa unit when it comes to the bottom line loss, that's a bit wider than expected. but overall, orders are stronger than expected. revenues are

stronger, operating profit is stronger, so they are on a good way out of the trust they were in. but mind you, the shares had a gigantic rally last year. they are up more than 230%. last year, around the same time they were trading at around ■k714. jt to give you an idea of the dimension that the way the shares went up last year, of course a lot of bad news was priced in, and also the possibility of a state rescue was still on the table last year around that time, but now they're clearly riding that wave that they will benefit from an increase in electricity demand. and that's not only coming from ai solution, it's also if you look at the electrification of the car industry, but also in other industries. so i think everybody is on one page when it comes to the opinion that electricity demand will rise and the likes of siemens energy will benefit from it. whether this

current level is a level where where we see that overreaction and the buying opportunity, of course, that's up to everybody as mind. and whether you think that share still has a long way to go. >> and that's a brilliant recap of the stories that are behind the debates, rather that are that are behind the stock right now and that to really appreciate it. now, sticking with the corporates that sap has raised its profit and sales guidance for the year thanks to strong demand for its core cloud business. the european software maker now says it expects operating profit to rise between 26 to 30% this year on a constant currency basis. squawk caught up with sap cfo dominik asam earlier, and asked him what the implications of more competition in the large language model space means for his business. >> that's very good news for us, sap, because we really try to be agnostic of the foundation model. we plug into our solutions. what we focus on is really leveraging the context of the customer problems we want to

solve. how can we make them more productive? it's about the data connecting the data to these foundation models, and we try to partition the software solution in a way that if innovation comes, we can quickly capitalize on it and basically upgrade our systems. so the more supply, the more choice we can use on our ai hub, the better for us, actually. so i'm not concerned about that to the contrary. competition. innovation on that front is extremely helpful for creating better products for our customers. >> now over in the us, boeing will report fourth quarter earnings before the opening bell today, just days after the planemaker issued preliminary results, including a far wider loss than analysts had been expecting. the quarterly results will be boeing's first since the end of a nearly two month strike by its union machinists that halted production at several facilities. ryanair cfo neil sorahan told cnbc yesterday he's optimistic boeing will work through its supply chain issues. >> i was. >> there in january. >> at this time last year and i've seen.

>> huge improvements in. >> relation to supply. >> chain and everything else. >> so while i'm disappointed. >> that we're not going to get more aircraft for this summer. >> i have a high level of confidence that the remaining. >> nine aircraft. >> that we need to. >> get to 181. >> game changers along with the existing fleet will come in. >> i saw a number of them myself in the factory. others are either on rail carts from wichita or are already built. >> anita mendiratta, founder of anita mehndiratta and associates, joins me now to talk through boeing numbers. anita, good morning to you. so boeing already prereleased their numbers and the market is now expecting about a $4 billion loss for the company. so what is going to be the focus for investors today? >> i think the focus is going to be very much how the new ceo, kelly ortberg, who came in in august, is going to be carrying the business forward because he has demonstrated in his first months of leadership incredible, incredible focus as a leader through crisis. the numbers that are coming out in terms of the

preliminary results that have been reported by boeing are not a surprise, but it's exactly as you said. he walked into the start of a seven week strike costing over 4.5 billion. so there's a lot of recovery required. and as is very clear, you can't just switch on production. again. the entire supply chain has to be reactivated. and it's very good to hear from your clip. just before you and i talked that the airlines are being empathetic towards that, because ultimately the world needs aviation, and aviation needs boeing for cargo, for travel, for military. so there's a great degree of empathy and support that we're seeing, because ultimately, there's fundamental belief in boeing as being one of the most innovative, trusted, iconic airline manufacturer aircraft manufacturers that our world has. and we all need boeing to get back in the sky again and do it without the red ink. >> it's interesting, anita, to hear you talk about boeing as one of the most trusted aircraft manufacturers that we have given the events of the last few

years. so how would you describe investor confidence in the aircraft maker? yes. the airlines are becoming more constructive in how they talk about it, but they've obviously got something at stake there. they need the deliveries to come through. so what is the investment community thinking? >> there's a proceeding with caution, but enormous optimism from the point of view of the deliveries are going to be held back in terms of momentum until before then. that won't change until the regulators give the permission for the airline manufacturers to start turning up the product, the production rates. so there's going to be an enormous amount of focus, put not just on the numbers, but actually on the engagement that's taking place between the ceo of boeing, kelly ortberg, and the regulators, the faa in the united states. this is going to be critical. thankfully, kelly has provided quite remarkable leadership strength walking into the job. he came out of retirement. he has been very visible, very audible to all of the key stakeholders to

staff, to regulators, to investors, to customers and to the flying public. but what we know is going forward, he cannot do this alone. boeing is taking on this challenge. they're doing it with enormous focus. they've had to make some very hard decisions. but going forward, i do believe there is reason to remain extremely confident because again, we fundamentally need boeing to get back in the air because it is ultimately part of the critical ecosystem of our world's economy and our world society, not to mention the future of sustainable aviation. so there is a great deal of hope, and it's nice to see again that the stakeholder ecosystem is being very supportive of boeing and the challenge that it faces. >> anita, let me ask you, just for disclosure purposes, whether you're consulting firm has a relationship with boeing. for our viewers. >> i do not have a commercial relationship with boeing, nor a political relationship in any way. i'm an independent consultant and thank you for asking about that. i work very

closely with the aviation and travel and tourism community as a whole, but i do not have any employment or commercial relationship at all with boeing. i do, however, have enormous respect and enormous faith in the future of boeing. >> they certainly have had to do a ton of work to restore confidence across the industry and across the investment community after the difficulties that they've had. and one of the things that they are looking at from a strategic perspective is the possible sale of some of their divisions. can we expect to hear more on that in their earnings today? >> and without question, again, as the new ceo came in, very hard decisions were needing to be made not only around managing the strike, but also staff the structure of the organization and, by implication, the business units. so the decisions are going to be need to be taken and i anticipate there'll be some whispers around what areas of the business are going to be looked at as priority to be able to recover the organization and therefore future, in terms of possible changes that would have

business units released and at the same time increased investment in terms of innovation, because, again, we know that the future of aviation is about sustainable aviation, managing carbon emissions. and boeing is ultimately the producer of the 737, which is the most fuel efficient, low emitting aircraft that we have, especially for short and medium haul traffic, which is going to be very much important for nations to develop domestic and regional traffic going around the aviation growth curve. so it'll be interesting to see what happens. but again, we should not be surprised by the negativity that comes through the numbers that is going to be reported. they are coming through a tragic time of change and disruption. but thankfully again, the organization and its leadership is looking at rebuilding trust not only externally but very critically internally, which is part of, as kelly ortberg said in the last results release, part of a fundamental change in culture

that must happen and we know has started to happen. >> well, with shares down about 14% in the past year, 45% in the last five years. still, the investment community needs some convincing. anita, thank you for joining us. anita mendiratta, founder of anita mendiratta and associates. coming up on the show, president trump ramps up the rhetoric on tariffs, saying they could be introduced at a higher level than reportedly backed by his new treasury secretary. we'll bring you those secretary. we'll bring you those details next. a sleep number® smart bed is perfect for couples. the climate360® smart bed is the only bed that cools and warms on each side and all our smart beds adjust the firmness for each of you. and now, save 50% on the new sleep number® limited edition smart bed. shop a sleep number® store near you. (auctioneer) let's start the bidding at 5 million dollars. limited edition smart bed. thank you, sir. (man) these people of privilege... hoarding the financial advantages for far too long. (auctioneer) 7.5 at the back. (man) look at them — unaware that robinhood gold members now enjoy the vip treatment — a 3% ira match

on retirement contributions. (auctioneer) 11 million sir. (man) once they discover their privileges are no longer exclusive... their fragile reality will plunge into disarray. ♪ dave's been very excited about saving big with the comcast business 5-year price lock guarantee. five years? -five years. and he's not alone. -high five. it's five years of reliable gig speed internet. five years of advanced securit. five years of a great rate that won't change. it's back. but only for a limited time. high five. five years? -nope. comcast business 5-year price lock guarantee. powering five years of savings. powering possibilities. comcast business.

to go. discover the magic of tovala today. earnings season on cnbc takes you inside the numbers. and when the ceos have a big announcement, they come here first. >> a wild hour of. >> earnings, earnings season special coverage all this month on cnbc. >> welcome back to the program. trump's pick to serve as the country's 79th treasury secretary, scott bessent, has been confirmed by the u.s. senate. he has reportedly pushed for universal tariffs on u.s. imports to start at 2.5% and rise gradually, according to the financial times. tariff levels could be pushed as high as 20%.

meanwhile, president trump pledged to impose sweeping tariffs much bigger than 2.5%. the u.s. president said the measures could impact foreign pharmaceuticals, semiconductors and metals as he looks to boost domestic production. a trio of lower borrowing costs, declining default risk and solid economic strength is set to boost the size and scope of global private credit markets in 2025. that is according to our next guest, antonello aquino, head of emea private credit at moody's ratings, joins us now. antonella, great to have you with us. we've been tracking what's been going on in public markets for quite some time now, with credit spreads tightening across the board, a euro ig credit spreads, spreads falling to their tightest level in three years. last week, u.s. credit spreads also tightening considerably. what's the story in private markets. >> yeah thank you. good morning everyone. >> thanks for. >> having me. indeed. i mean, we just published.

>> last week. >> our outlook for. private credit. and we. >> see the. >> private credit. >> market to continue to grow. our expectation is that in asset under management will jump to 3. >> trillion. >> usd. by the current 2 trillion. >> most of the growth will be in the us. but clearly. >> there is a greater momentum. >> of growth. >> than in the past two years. you may ask, why is that the reason? it's really, you know, two main factors that are creating an ideal backdrop for private credit. the first one are macro driven factors. you know, the economic trends. we expect solid gdp growth across the g20 economies. you know, we are expecting declining default rates. we are expecting core inflation to head towards the 2% targets. and so resulting in, you know, lower rates. so that's all very positive from a macro point of view. and then there are the dynamics of the private equity sector right. the private

equity sponsors are trying to push through more deals. you know they're sitting on around $300 billion of outstanding dry powder. and that means that we expect, you know, more m&a, more event driven deals. and that's, you know, positive for the private credit market more generally. >> how has that impacted pricing in the private credit market? >> yeah, it's a good question actually, because when you look at the direct lending space, we have seen a, you know, price compression, spread, compression, you know, by almost 100 basis points. so you have seen this dynamic where the broadly syndicated market that is basically the banking market coming back in competing with the private credit. and that meant that the lending spread has really compressed. and as a result of that, actually, what we see is that these alternative asset manager are going into new territories. and when i say new

territories, i really mean like asset based finance. so for example, data center, you know, consumer finance, commercial finance. and that means that, you know, they are really trying to compete to, you know, with the banks from the direct lending that is more competitive now in terms of spreads to a new asset class, asset base, finance. >> i know you've done a lot of work looking at asset based finance, and i think it's appealing to the investment community for the diversification it can offer. what is the specific appeal to insurers, which i know have become a lot more active in this space and are poised to continue doing so in the years ahead? >> yeah, you're completely right. i mean, the main driver of one of the main drivers of this growth in the private credit market has been the demands of illiquid assets from the insurance sectors. right. and this is because really they have some sticky liabilities, you know, long term liabilities. so investing in illiquid assets

as makes complete sense, particularly in the us we see 30% of the assets in in liquid assets for the insurance companies. and asset based finance can be very, you know interesting because you know some of these exposure is clearly investment grade. and so clearly insurance companies are looking to expand their investments in the investment grade area of the market. >> you know, the downside, of course, to investing in private credit versus credit in the public market is liquidity risk. and this is always a feature of this market. how should investors think about the liquidity concerns at this point in the cycle? >> yeah. also very good question. i mean for insurance companies, they said if they have long term liabilities like annuity products, right. they don't have really liquidity risk. so in that sense the risk is very minimal. having said that right. what we see is that

these alternative asset manager are trying to expand and access the retail markets. and so clearly, i mean, at the moment the retail market represents around 20% of the total private debt of, you know, asset under management. but as they try to expand with, you know, the first private etf and the lpf legislation here in europe, we see that there is a risk here potentially because clearly the retail investor may be not ready to give up to their liquidity, you know, and so, you know, if they do invest in private credit that is illiquid, they really need to be explained very clearly. what are the risks associated to those kind of investments. >> certainly a very different picture if you're an insurer versus a retail investor getting involved in this space. antonella, we'll leave it there. thank you for sharing your outlook with us. antonella aquino, head of emea private credit at moody's ratings. let's take a look now at what

investors are watching out for this week. in addition, of course, to the continued fallout from deep seek and its emergence in the ai landscape, the ecb is expected to cut rates by another 25 basis points on thursday, bringing the deposit rate down to 2.75%. but before that, we'll get the first fed meeting of the year tomorrow, with chair jerome powell set to speak after the decision. this ahead of fourth quarter gdp data thursday and core pce prices on friday. and deep seek is top of mind, of course, with big tech companies set to report results this week. microsoft, meta and tesla will all report tomorrow, followed by apple on thursday. and interestingly, apple shares actually moved higher in yesterday's trade. so it wasn't part of the big sell off that we saw. will be interesting to hear their take on developments over the last 48 hours. as for trade in europe, let's get a check on how the stoxx 600 and the bourses are faring right now. the positive start seems to be holding. it's still green across the board. stoxx 600 moving higher after the major tech sell off yesterday. all major regions

are higher at this stage. looking at the us chip makers pre-market, we've got nvidia shares rebounding about 5% at this stage. but to put it into context, the stock dropped 17% yesterday, losing $600 billion in market value, the biggest one day drop on record and larger than the entire market value of netflix. so yes, we're seeing a bit of a rebound, but nothing compared to the losses we saw yesterday. as for us futures as a whole, we are looking at a bit of a rebound. nasdaq looking to gain about 125 points at this stage. the s&p and the dow looking to open higher as well. that is it for street signs. thanks for joining me i'm julianna tatelbaum. worldwide exchange is up next. >> some people like doing things the hard way, like doing their finances with a spreadsheet instead of using quicken. quicken pulls all your financial

info together in one place and updates it automatically. how easy is that? >> they are trying to shut down this legal loophole to get 100mg generic viagra, or 20mg generic cialis, delivered to your door for just $0.87 in less than two minutes. do this first, scan the qr code to go to get friday plans.com. then you select if you need generic viagra or cialis, the quantity you need, and the dosage i'll pick 100 milligram. thank you very much. and then their system will see if you qualify. give it a second to find the best deals. and boom look at that $0.87 for each 100 milligram generic viagra tablet 20mg cialis is the same price. the prescription and shipping are free. scan the qr code to go to get friday plans.com and see for yourself. don't wait. scan

the qr code or go to get friday the qr code or go to get friday pl a sleep number® smart bed is perfect for couples. the climate360® smart bed is the only bed that cools and warms on each side and all our smart beds adjust the firmness for each of you. and now, save 50% on the new sleep number® limited edition smart bed. shop a sleep number® store near you. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining seasons, 50 years of quality,

innovation, and best in class service. why change? >> why disrupt? one of the hardest things to do in business is fix something that isn't broken. that's where ambition can play a really powerful role

in driving the kind of change we experience at fortune brands innovations i fundamentally believe if we don't disrupt, we will be disrupted. there is a clear need for products that are going to make people safer, that are going to make environments better, that can be good for business, good for people and good for the planet all at the same time. >> it is fabian here at cnbc global headquarters. welcome to worldwide exchange. here is your. >> five. >> at five. >> $1 trillion. that's the damage on wall street after concerns about chinese i deep sea tears. through tech leading nvidia to the largest single day stock wipeout in history. president trump calling it a wake up call. and we have the calm after the storm. stock futures are holding steady as investors look for a possible entry point to buy the dip. in washington, the senate confirmed scott besson as the next treasury secretary as he looks to take on the trump tariff agenda. plus a look at the massive wealth wipeout courtesy of deep sea