the 17, it's going to help. there's going to be a little bit more pushback on that, i believe. okay, tim, we got to run. we want to thank you. of course we will be watching those apple earnings. we'll be talking a lot about them i imagine tomorrow morning. you probably will be talking about them later today all day. thank you both of you for being here with us. make sure you join us tomorrow. squawk on the street begins right now. >> good thursday morning. >> welcome to. >> squawk on the street. i'm carl quintanilla with david faber, sara eisen at post nine of the new york stock exchange. cramer has the morning off. futures are mixed as the market responds to the fed meeting. fourth quarter gdp numbers and our first batch of mega-cap tech earnings. but we are going to begin with last night's tragic collision between an american airlines jet and an army helicopter. a search and recovery mission is now underway in the waters of the potomac. our eamon javers is at reagan national airport with the

latest. eamon good morning. >> good morning carl. it is a heartbreaking morning here at reagan national airport authorities just within the past hour or so giving us some updated details about what we know about last night's horrific crash involving a commercial jetliner and an army blackhawk helicopter just south of this airport. what we know right now is that there are no survivors in this incident, and that means that as many as 67 people are dead, 64 people were on board the airplane, three people on board the helicopter, 27 bodies, they say have now been recovered from the airplane wreckage, one recovered from the helicopter. the secretary of transportation, sean duffy, who was sworn in just a couple of hours before this incident, said that despite last night's tragedy, air travel in the united states is still safe. here's what he said. >> safety is our expectation. >> everyone who flies in american skies expects that we

fly safely. >> that didn't happen. >> last night, and i know that president trump, his administration, the faa, the dot. we will not. rest until we have. answers for the. families and for the. >> flying public. >> you should be assured that when you fly, you're safe. >> and, carl, there have been a number of incidents over the past couple of years involving near misses here at ronald reagan national airport. take a look at some of the recent incidents that we spotted. just over the past year or so. there have been this repeated concern that maybe there would be an incident here. on may 30th of 2024, an american airlines plane was forced to abort a takeoff. on april 18th of 2024, a southwest flight and a jetblue flight came very close to one another. and on march 7th, 2023, an american eagle and a united airlines flight all came close to each other here at reagan national airport. so this safety

concern has been percolating for a long time. none of those incidents, though, involved an army blackhawk helicopter, as last night's incident did. and i can tell you that as just somebody who flies out of this airport all the time, carl, and drives up and down the george washington parkway, which is adjacent to it, you see blackhawks, you know, 3400ft off the water, flying up and down the potomac all day and all night long here, a very common sight for the civilian and military aircraft to share this airspace. so the fact that something happened last night indicates something dramatic went wrong with the normal systems, which operate day in and day out here. and we'll find out a little bit more about what that is as the days and hours go on. we do expect a briefing now from the pentagon. the new defense secretary, pete hegseth, is expected to brief later today. so we'll bring you that detail as soon as we have it. guys, back over to you. >> i feel like that. >> there's going to be a lot of eyes on. >> that, eamon. >> i mean, president trump. for his. >> part. >> weighed in on truth social asking a question about, you

know, the fact that he wrote the helicopter was going straight. >> at the airplane. >> for an extended. >> period of time, which raises a lot of questions. >> anything else. >> from the white house? >> well, the white house is simply saying that the president is aware of the situation. he was briefed. he was in the situation room last night and is monitoring developments. and we'll see what additional information we get from them. but as you watch this video, sara, you can see two points of light very low on the horizon there, a very small one coming into contact with a very large point of light there. and that's where you see the explosion and the debris falling from the air. and as you watch those points of light converge and you sort of count in your head, one, 1000, two, 1000, three, 1000, it does seem like as a non-pilot, it does seem like there would have been time to avert this if people had been aware of their relative positions. clearly something went wrong with these pilots. awareness of where they were in the airspace and resulted in this horrific tragedy. we are learning also that u.s. figure skating is

saying that a number of figure skaters and coaches were on board that aircraft. returning from wichita, kansas, to washington, d.c, after a national event. so you think about all the people whose lives were lost here last night, the promise and the talent of so many of those young folks. it is just heartbreaking to contemplate. and as much as we'll watch for the investigative details and learn what happened here, you know nothing can undo what has been done. sarah. >> it's a great point, eamon. every crash is very has its own particulars. and today is very much about these victims. and this particular crash. however, every incident sort of brings up discussions about faa infrastructure, air traffic control. this one is happening at a time where we're considering how lean and efficient federal agencies can be. and i wonder if you think incidents like this will give that discussion a set of fresh eyes? >> well, i think it will. and you'll watch for now, this effort by the incoming trump

administration, the new trump administration, i should say, to slim down the federal bureaucracy they've offered now what amounts to a buyout effort to every federal employee. and one of the big questions after this incident will be how many employees in the faa, in the air safety piece of the federal government will take that buyout offer, and will that affect readiness and the ability of the faa to make sure that america's airspace is safe? you heard sean duffy there last night saying they'll spare no effort to get to the bottom of this and make sure that people are safe. but you do wonder, given that it's an unknown now, carl, how many of the officials in this safe air safety bureaucracy will take that buyout and what the implications of that might be? >> eamon. >> thank you. >> eamon javers. let's continue. >> coverage here. get to phil lebeau. >> of course has. >> more. >> details on. >> the. >> crash. >> as well. >> phil david you heard eamon say that it's not unusual to see black hawk helicopters flying 3 or 400ft above the surface as

you're going out to reagan national or as you're taking off or landing. we want to show you this footage again from the security camera looking back from the airport, and you see the moment of impact for this collision here. it happened about 300ft above the surface as that american eagle flight was coming in on final approach to runway 33 at reagan national. and then you see the light of the helicopter as it collides with the american eagle plane. both aircraft after the collision then crashed in the potomac. the american eagle plane in three pieces, according to the latest briefing, haven't gotten an update in terms of debris field regarding the helicopter. but if you look at the runways at reagan national, i've had a few people say to me, well, why were they coming in on this runway that, you know, that is often a runway. and i've heard from other pilots saying, yeah, we've i've landed on that

runway a number of times. and then the question of, well, should the two aircraft or should the two pilots have seen each other, that's all going to have to come out during the investigation. the transportation secretary did say within the last hour that he believes this collision was preventable. as for the experience of the pilots, here is american ceo robert isom. within the last hour. >> these were experienced pilots. i know that the captain was had six years with with psa or almost six years with psa and the first officer almost two years. and again, standard approach. and that's about all i can say. >> you heard him say psa, psa airlines is the subsidiary of american that operates the regional jets. all right. so what happens next? the ntsb is leading the investigation. the focus is on recovering the black boxes. that has so much information. both the you know, all of them have information that we just don't have at this

point. and it may give us a better insight into what the crews of both the airplane as well as the helicopter were experiencing, thinking, saying shortly before the collision, mid-air. as you take a look at shares of american airlines, keep in mind that this is the first u.s. airline crash since 2009, and it does raise the question of congestion, not just at reagan national, but at a number of other airports. no better day than today. unfortunately for us to be talking with the ceo of an airline, and that's going to be bob jordan coming up within the next half hour. now, we're not going to ask him about particulars in this accident in terms of what he thinks might have happened, but we will be asking him about congestion and about the fact that there are more than a few people in dc who have said we should be doing more to make sure that the airspace, not just at reagan national, but at other airports, is as safe as possible. you'll want to hear what he has to say, and that's going to be coming up

within the next half hour. guys, back to you. >> you had a good discussion on squawk this morning, phil, about this particular runway, which i think you pointed out is one of or not the busiest in the country. >> and this runway. >> growth, this unending growth in commercial air service demand. and at what point are we beginning to stretch the limits of these more urban, smaller airports? >> and also, is there technology that could be incorporated into the air traffic control system that is not being used at this point? this guys, this is an ongoing commentary within the airline industry that there could be new technology incorporated, there could be advancements. whether you use ai or other new technology to make it easier to route the traffic in and out of airports. that's going to be front and center, i'm sure over the next several months, as we look into not only what happened with this crash, but the congestion and the traffic at these airports. >> and as american airlines now

responsible. >> for contacting. >> the family. >> members. >> how do. >> they deal with. >> the aftermath? >> they have a go team there. all airlines have. whenever these accidents happen, all airlines have what they call go teams that are ready to immediately respond to the families to others. and they're there. they've been in place since shortly after the accident. >> phil, we'll be looking for further updates this morning. i think dca is still on track to reopen at 11 a.m. appreciate your help understanding the story on this tragic event. story on this tragic event. squawk on the street wi [sfx: wind, rain and rolling thunder] with the vision to see what's possible and the grit to make it happen, morgan stanley can help create the future only you can see. [crowd cheers] [music out] market and not franklin

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think of a sured guarantees bond insurance as. >> your guardrail assured. guarantee a stronger bond. >> let's talk ai. >> ai in china versus ai in the united states. deep sea. one of the companies within china. it's been reported at least that they have a cluster of 50,000 nvidia gpus. deep sea. their model is actually the. >> top performing, or. >> roughly on. >> par with. >> the best american models. you can see the deep sea new model. >> it's super impressive and. >> it's super. >> compute efficient. we're not just. >> about managing. >> information. >> we're about supplying. >> digital workers. >> now we're

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growth guidance. cloud growth guidance disappointed azure 31 the percent of azure that's i went up a tick. but it's not that much of an acceleration from the prior quarter. >> no. and carl. >> there's a lot of questions in terms of balancing. >> of. >> ai workloads with the other workloads at azure. and one plus one. >> here may not equal two, because maybe some. >> of the other workloads are coming off. >> as people move more to ai. >> and so last quarter, remember with. >> microsoft, there was. >> a. >> miss in terms of at. >> least sort of a supply issue. >> this time it seems more around execution to a certain extent. now they beat on ebit. opex was up only 5.6%. operating expenses. >> there was. >> an expectation. >> it. >> would be as much as 6%. >> so they're certainly. >> managing well in. >> terms of costs. >> there is still a belief. >> there's. >> going to be upside. >> to their. >> capex spend. but i. >> think some. >> people are. >> starting yet again to question. >> the return on investment.

>> on ai. >> and you see some of that reflected. >> there. >> a 12% overall growth in sales. >> is strong. >> so is. >> azure 31%? >> yes. >> but not. >> as. >> good. >> as had been anticipated. >> and again. >> you know. >> amy hood sort of spoke to it on. >> the call. >> i'm looking for the exact quote, but there's just so many different pieces of paper here i'll never find it. >> but basically it goes to, well. >> our, you know, you're running our. >> companies running more now on ai, but therefore not running as much of their other off ai workloads. and so. >> that may be. >> at least in part. of what's. >> behind. >> i guess, this somewhat. >> disappointing guidance. >> or number in terms of azure. >> just to fold in. another question that bears are asking is how much of the bookings are related to open ai, right. and not necessarily the microsoft products themselves. so there's the bull bear debate. >> continues on this one. >> it was. >> a good setup compared to some of the others in terms of it hadn't run up as much. but clearly. >> no, i mean the stock. >> did. >> not have a great year last

year. >> certainly not compared. >> to its brethren. >> in the back seven. >> yeah. but it. >> didn't. >> get it done. the only thing. >> i just wanted to add is that. >> you know, for those. freaking out about. deep seek and the capex intentions, i mean, really what we got from microsoft and meta was no change. >> no change, right? >> no, no big this is going to cost us a lot less. in fact. >> capex guidance mostly. maintained at both. >> of them, which is huge. yeah, that i. >> mean. >> to the extent it will change, it certainly. >> didn't this quarter. >> i think going in there was not an expectation. >> you'd. >> suddenly get this articulation of a woe. and i think many people have revisited, to a certain extent, deep seek in terms of how much they actually spent to train that model. now, there's. >> no doubt they. >> used somewhat creative techniques in terms of mixture of experts or reinforcement learning. and not that these are unknown to our software engineers. >> they're not. >> but ultimately they didn't spend that much less. it's you know, the question becomes still about inference and how much you're going to need in terms of compute power. to be able to run. >> these constant. inference loads.

>> so i agree with you. there was no let up there and that was important for the market overall. not that i think anybody was fully expecting zuckerberg to suddenly say, oh no, we're taking back the 60 to 65 billion that we just shared. >> with you. on friday. you're watching pre-market is. >> is nvidia. >> which is down 1%, broadcom which is higher. >> marvell technologies which. is higher. >> so they mentioned meta. >> yeah yeah some relief there perhaps. >> yeah it's interesting market really slicing and dicing servicenow is down ten on this sub revenue miss. on the other hand ibm's ai book is up almost $2 billion quarter on quarter. and they raised their guidance. that's sure to be a fresh record high on ibm. right. or close to it. >> i. >> mean yeah, ibm. this was a very strong report in terms of what was internally driving it. first of all, consulting is turning a corner. we'll talk a little bit more about that. i have some. comments to share later. >> from arvind. >> krishna, the ceo consulting business is looking up. the ai business. >> is doing. >> very well and. >> they see deep. >> seek as a proof. point that their strategy is working because they say, look, you don't. need the open eyes, the huge models. you can have much

more fit for purpose models for what customers need. and that's what's working on the ai front. >> with ibm. >> quickly squeeze in meta and tesla, if we can, on meta. just real quick, you'll see the stock is looking up a couple of percentage points. they did extend their server depreciation, which had the effect perhaps of lowering opex from what it might have otherwise been. the revenue number being applauded broadly speaking quite good. and of course that stock had a great year last year and has had a very strong year so far. this year into this number. and then there's tesla. which reported what was the worst operating, the worst auto margins it's had in seven years. not really a lot of growth there. but elon musk. man i mean, he knows how to conduct a conference call and get people excited. and it's not about selling evs. it's about optimus the robot. and it's about full self-driving. and the enthusiasm seems to be being embraced by investors. i mean,

the numbers. he uses on optimus are, he said, $10 trillion. i mean, you know, you look again, you're like, i mean, i've heard him kind of say it before, but, you know, he believes tesla at some point can be worth more than all the other companies combined. times five. he talks about it more than $10 trillion revenue number from optimus just for optimus. and here's some sound as well in terms of how he characterizes that number. >> with regard to optimus. obviously. >> i'm making, you know, these. >> revenue projections, predictions that sound absolutely insane. >> i realize that, >> but but they. >> are i think they will prove to be accurate. >> he's compelling. >> you know, i guess that's all you i mean, when you hear elon say it, people believe it. >> how about the. >> unsupervised self-driving models launching in austin, texas in june? i mean, that was more specific than we've. ever gotten. and he said it's. >> not. >> mythical anymore. this is literally five months away. >> now.

>> he fully admits that he's been talking about full self-driving being around the corner for years. and of course, it hasn't been. we should have. i mean, there should be teslas everywhere. full self-driving. if you took his original projections that said, it certainly happening with waymo, obviously different company, different technology. and conceivably it will happen with in austin. >> meantime their share of the us ev market is down seven points in the course of the year. cybertruck sales stumbled a lot lower than they were in the prior quarter. i think 13,000 models sold. so yeah, we'll see if fsd actually happens and moves off the movie lot. >> but if the debate. >> is do. >> you own tesla. >> for. >> now or the future? i think the future is winning. as the stock turned around after market on this conference call and is higher now pre-market because i mentioned 13.6%. david, that was the auto gross automotive margin. and that is something to your point. we haven't. >> seen since. >> 2018 taking out the credits, that is that used. >> to be how the stock. >> was judged. that was.

>> how the company was judged. clearly, it's. >> all about. >> the future. >> he's very good at at so many things, but certainly at getting people. >> focused on on other areas. we should also mention battery packs. has been a very strong part. >> of the of. >> the overall production there. >> as well. and they're. >> working on addressing what they say is a constraint. >> and. >> think they'll make progress in addressing that constraint. and then things here it is again going to go ballistic next year carl. ballistic. >> oh really. not ludicrous anymore. no really. on to ballistic. >> ballistic really ballistic in 27 and 28. >> that's for. >> battery packs. >> it's going to be great. >> what did jensen say. >> insane i mean these guys. >> are good with the adjectives. zuckerberg was very bullish to bullish on the administration. he even mentioned it on the call. when we come back, southwest. >> airlines ceo. >> bob jordan, with his perspective on last night's plane crash as. >> well as his. >> company's quarterly results. we'll be right back. taking another look at futures as we head into the opening bell. digesting the fed. the ecb. >> all. >> of these earnings movers dow futures down 94. >> but s&p. >> futures pointed up 13 nasdaq

two looking for a recovery from yesterday up 95 ahead of the yesterday up 95 ahead of the open. we'll be right back. ♪ who knows what tomorrow will bring ♪ (dog whines) ♪ but as for me ♪ (knock at door) ♪ i'll wait and see ♪ ♪ and maybe it'll bring my love to me ♪ ♪ who knows ♪ ♪ who knows ♪ you founded your kayak company because you love the ocean. not spreadsheets... you need to hire. i need indeed. indeed you do. our matching platform lets you spend less time searching and more time connecting with candidates. visit indeed.com/hire you get what you. >> plan for. you may have a retirement plan in place, but are you sure it's. the right one for you? creating a plan with fisher investments gives you the confidence your. money can last through retirement.

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gainers this morning. lrc x earlier in the week it was asml. this time it's lam research with a beat in the race as we continue to watch the chip space. avago. broadcom is not far behind on this comment from zuckerberg last night about increasing their use of their custom chips. we'll get the opening bell in a few moments, and we'll talk to southwest chief bob jordan about the quarter and air safety in a minute. >> i. >> want to apply to be on cnbc's disruptor 50 list. is your startup disrupting the status quo? scan this code or go to quo? scan this code or go to >> part abouash disruptors

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solving for the needs of investors today and tomorrow. that's the power of nuveen. >> the opening bell is brought to you by nuveen, a leader in income alternatives and responsible investing. >> the economy is strong. the labor market is solid. downside risks to the labor market appear to. >> have abated. >> and we think disinflation continues on a slow and sometimes bumpy path. that tells me and the other members of the committee, the broad sense of the committee actually, is that we don't need to be in a hurry to adjust our policy stance. >> that was. >> fed chair jay powell yesterday after policymakers. >> decided to stand. >> pat on rates. >> and, guys. >> if you were looking for. a clue about when they were going to cut next or how they're thinking about that timeline, you just did not get one. this was a pause. no news. >> kind of presser from fed chair powell.

>> there wasn't. >> a big immediate move. some people thought that. >> the statement looked. >> a little more hawkish. >> because they. >> moved on. >> inflation language, saying. >> that it's. >> starting to move toward target. >> but then fed chair. powell played that down in the news. >> conference and said we were just trying to clean up the. >> language there. >> i think he got nothing. nothing from. >> fed chair powell about. >> when the next cut is coming and whether he's thinking about march or june or december. >> no big news there. >> let's get the opening bell here in the cnbc realtime exchange at the big board. it's latinfinance. a financial markets publication on latin america. at the nasdaq, beta bionics, a medical device company focused on diabetes, as we're holding 6060 here at the open, decent breadth. i think it was b of a last night said, you're right, we didn't learn anything from the fed. and the fed probably likes it that way. they go on to say we stand by our view that we think the cutting cycle is over. >> my biggest takeaway is that waller, who came on with us a few weeks ago, who is a little more sort of hungry to be

cutting rates first half of the year, he mentioned four possible. this year he mentioned tariffs don't seem inflationary. he mentioned that's not where powell is. i mean, he was not willing to commit or talk about any sort of timeline. said that the risks are in balance in terms of inflation and jobs. and he left a lot of optionality on the table. d.o.j. says it's probably what the fed intended to make no news. we remain. comfortable with our call that cutting cycle is over, as you just said, carl. but not everybody thinks that. for instance, goldman sachs says two more 25 basis cut, 25 basis point cuts in june and december, which is pretty where pretty much where the market is one more in 2026. what's notable is that the ecb, the european central bank, did cut today. as expected, widely. and president lagarde said that inflation is on target to go down to 2%. so this sets up a little bit of a divergence, again, where the fed is on hold. >> and the. >> ecb and some of the other majors like canada this week are cutting rates. dollar remains strong. as the upshot.

>> everyone except brazil are hiking 100. >> they've got other things going on. >> yes, david, so many movers to get to. i don't know what you want to bang through here. >> you know. i mean overall the market is starting off fairly strong here. we've already hit to a certain extent meta and tesla, both of which are up. microsoft, which is down amongst the mag seven, obviously going to be awaiting apple later in the day to day. we'll be keeping an eye on that as well. got to circle back guys to our parent company comcast because it is down over 8%. also reported numbers this morning. you may recall the stock suffered a significant decline late last year when the company's cfo at a conference talked about an unexpected decline in broadband subs. they were talking about 100,000 then. that was just right at the end of the year, but somehow it went from 100,000 to 139,000 fewer broadband subs. take a listen to president mike cavanaugh on the call. in terms of explaining the status in

broadband. >> despite our incumbent. status in broadband. >> and as. >> we faced continued overbuilding. >> fixed wireless. >> expansion and the. >> challenges associated. >> with the end. >> of the acp program. >> as you've. >> already seen. >> in. >> our earnings release. net broadband. >> subscriber additions. >> were -139,000in the fourth quarter. which is disappointing and worse than what we indicated. >> in early december. >> stock went down substantially on those on those comments from cavanaugh. peacock, of course, also did not post particularly strong additions in terms of quarter to quarter and in the year at 36 million, which is where seemingly ended the third quarter as well. so no real growth in subs at peacock, although they did say losses have come in right around a billion. so they seem to be moderating. they're spinning off the cable companies other than bravo into a new company that

includes us. they talked a bit about that, and then there's a lot of chatter around, well, what's left? and will there be a big deal to be done for comcast at some point? who knows. but guys, at this point, of course, it's the continued weakness in the core business, essentially connecting people to broadband and the challenges from fixed wireless that we've been talking about here for years. at this point. we just had mike sievert on the other day from t-mobile. they were sort of a first mover there, but verizon has become very aggressive. the fiber overbuilding from the likes of other competitors, it's taking a toll, there's no doubt about it. not to mention the overarching threat one day from starlink that i talk about a lot, as well as the capacity there only grows. >> yeah, studios at least did benefit from from wicked. and they did say that the opening of epic universe probably would supercharge the theme park business, and that might be beneficial to both them and disney. we'll see what happens in just a couple of months. >> up 6.7%. yeah, that's studio

business. wicked. highest grossing film adaptation of a broadway musical ever. there you go. it was really good. >> it was great. >> it was good. >> i didn't. >> even see. >> it, but i know it was. >> no, it was. you should see it. my kids loved it. and it also led us to see the broadway show as well. that revitalized that a little bit. guys, this is something you do not see every day, which is ibm is at the top of the s&p 500. it's the top of the tech sector. it's up 10% on this earnings. so bottom line was a big beat for ibm. top line was a little bit of a beat. but it was strong results through the software business. red hat saw the acceleration that the street was looking for. consulting is starting to turn a corner. that was some of the weaker. that was a weaker spot across the industry on sort of discretionary pullback and spending and then infrastructure also. that's the third pole doing better. i talked to arvind krishna, the ceo, on consulting. importantly, he said we see a second half recovery and are past the trough. the business confidence is driving it more than anything on ai, which they continue to increase their book

of business by billions of dollars. we talked a lot about that and some of the some of the use cases that they're seeing, he says. customers are realizing that they need smaller models and more cost efficient models. >> he sees. >> deep sikh. >> arvind krishna as proof point of their strategy that models don't need to be the biggest, like an open ai to be efficient. some examples that he gave me, you know, the banks, the financials are big customers of ibm. they're using it to improve customer service. they just built a model for l'oreal using chemistry. interestingly enough, because ibm has some experience there as well to help l'oreal reformulate or formulate new products. those are some examples of the sort of what they call fit for purpose ai models that they are, that they're building. as far as a read overall on enterprise spending, i said, where are the good spots? where are the weak spots? you said it was healthy overall. even europe, you know, people are all doom and gloom on europe as the as the growth flatlines, he said. look, europe has exceeded our expectations. it's not homogeneous as far as

where the global where the growth is. and then as far as overall spending, he thinks it's going to be a good year. three, four, 5% enterprise spending growth above gdp. >> yeah interesting on europe of course our gdp number we haven't quite mentioned it yet was a pretty solid as we even with those downward revisions. yeah we got to two three but italy flat germany down 2/10 france down one tenth. so we're definitely looking for growth a lot of political elements playing in european growth as well. i think what's interesting are some of the old line companies here. caterpillar is the second worst down name behind microsoft today as you had construction down eight and resources down nine. ups as amazon's going. >> to just looking at that as well carl ups. >> down 14% by the way there's caterpillar that carl was just talking about. and coming off a bad year last year in the market at ups. they've been dealing with so many challenges. the number was okay in terms of what they posted for the fourth quarter. but they guided to what is a light number for 2025. and as carl referenced, cutting

amazon volume by 50% by the second half of 2026. and so also reconfiguring the us network a number of other things. but it does appear that it's the slashing of the guidance. >> right? i think tom is on this afternoon at 1 p.m. eastern time. interesting as some, some try to use the delivery services as a bit of a macro tell. >> also service. now speaking of macro tell, it's at the bottom of the list down 10%. we're going to talk to bill mcdermott next hour ceo find out they're on a rare also slip in guidance. and look these stocks are getting punished for sounds like the guidance declines. but they're also being rewarded. on the upside. if you look at not just ibm at the top of the market, las vegas sands was also a good winner today. in the overall market, it looks like the only sector that's lower right now in the s&p 500 is information technologies. and you've got servicenow in there. microsoft is in there down 5.25%. salesforce potentially down in sympathy nvidia is down another 1.5%. so that's been

sort of a problem since the deep seek news nvidia continues to get hit. >> yeah it's i mean everybody's still grappling with the longer term impact conceivably if there is any. despite coming to the near term conclusions that there's not going to be any let up. and as was reinforced on the conference calls from meta and microsoft, there will be no letup in capex. but there is sort of this lingering concern over time in terms of what it will mean for compute, right. >> meantime, the consumer we should just briefly mention the consumption number within gdp was the best since q1 of 23. and look at mastercard today with their quarterly results. i know that payment volume i think was roughly in line, but it was a beat revenue ahead. and that looks like it's going to be an all time high sort of just come in a comment on what how the consumer is faring. so far. >> 4.2% was the consumption number inside of gdp. the overall number was, you know, 2.3% overall growth. and part of what subtracted were the inventories, because everybody's

stocking up on stuff ahead of expected tariffs from president trump. >> definitely. that's what whirlpool said today about some of their deliveries or at least orders from consumers. airlines are very much in focus following that tragic plane crash in dc last night. let's get to phil lebeau this morning with a guest. hey, phil. >> hi, carl. let's bring in bob jordan, the ceo of southwest airlines. bob's joining us from the company's headquarters there in dallas. and bob, i know this was not your flight, and we're not going to ask you specifics, and we're going to talk about that in a little bit. but we're having you on today because you reported your fourth quarter results. before we talk about airport congestion, give me your thoughts on the fourth quarter. you beat on the top and the bottom line, where are you in your turnaround at southwest airlines? >> well. >> you. >> know, it's. >> early. >> but i'm really pleased with the fourth quarter. >> especially the tactical initiatives. you saw. >> the eight point ransom. >> or unit revenue. and that's. >> about. >> six points ahead of a typical.

>> sequential move between the third quarter and the fourth quarter. so that's real. >> evidence that. >> the. >> tactical revenue. >> initiatives are working. and on the strategic side. >> everything there. >> is on track, like the assigned. >> seating and. >> the. >> extra legroom. >> you also saw us execute. >> the new co-brand agreement with chase. so i'm just really proud of our folks. a lot of work. >> left to do. >> but a. >> lot of progress in the quarter. >> and i know we'll have more questions about that maybe a little bit later on today, as well as in the weeks and months to come. but i first want to ask you about what we're seeing out of washington at reagan national, a tragedy that people are saying, wait a second, this is such a congested airspace, could this have been prevented? and in fact, the transportation secretary says he believes this was a preventable accident. i'm not asking you to comment on this collision, but i do want to get your thoughts about the congestion at reagan national. should there be fewer flights in there, you guys fly into there? >> well, first, i mean, our thoughts and prayers go out. >> to the folks that are

affected. >> directly by the incident and. >> all those. >> affected their families. >> and to our partners at. american and. >> psa. >> you know, we're a competitive industry. but we are a community and a family as an industry. so we are doing everything that we can to. assist them. you know, on the airspace, the system is as safe as it has ever been. and lowest level. >> of incidents. >> we are very focused on the priorities that have continued, which. is fund the faa modernization staff, the air traffic. >> control system, and. continue to. >> make progress. >> that's what. >> will help with congestion. >> but no, we're. >> continuing to be. >> focused on the priorities that matter and working with the administration on that. >> what would you tell president trump if you had him on the phone right now in terms of upgrading the air traffic control system in this country? >> you know, the. system has been in need of modernization for literally decades now.

>> you've got equipment. >> that goes back. >> to the 1960s. >> and modernizing. >> the equipment actually allows. >> for better management of the airspace, more throughput, so more efficiency. the focus, again, is really basic. it is modernize. >> the. faa systems. >> staff the towers staff, our atc system. it's really basic. staff and. >> fulfill the mission of the tsa. >> and we're making terrific progress on both fronts. but continuing. >> the mission. >> especially modernizing the faa systems and the air system. >> you talk about making progress, bob, and you and i have talked about this off camera many times. are you a little frustrated after all these years in the industry, that this seems to be the usual discussion? we can do better as a country when it comes to air traffic control? and yet the conversation, it's almost like it gets kicked down the road. >> well, it's yes. >> it's a. >> it's a decades old conversation. and a lot. >> of that. >> may be to do with leadership.

changes and continuity in the administration and in those offices. but either way, that's that's the focus. so we're going to work hard at southwest airlines. we're going to work hard through our trade association, the faa. to get that done. we need to fund the modernization. and then we need to execute. >> the system. >> is behind and. >> nothing will help the air traffic control system better than. >> modernizing the core systems. >> bob, i want to ask about as you're turning around your company, you're also dealing with the situation at boeing. you've put out your projection in terms of deliveries of 737 maxes, nowhere close to what you were expecting a couple of years ago. but you've probably been in touch with kelly ortberg. we talked with him earlier this week. do you feel like they are turning the corner in terms of max production? >> yeah, we're planning to 38 aircraft deliveries this year, so we're being conservative just like we did in 2024. and it really paid off because we planned to 20. we actually got

22. and if you plan wrong it really affects the operations. so we're planning to 38. i was actually at boeing. last week. had a chance to meet with leadership and walk the floor, talk to the folks that are actually building our aircraft. and i'm really optimistic. i saw tons of progress. so i'm very optimistic that boeing can beat the 38 that we are planning. >> to maybe. >> the top side for us. >> is 50 to. >> 55 aircraft. and all of those incremental aircraft beyond the 38 will go to our fleet monetization strategy that that rewards our shareholders. so i am very optimistic about boeing. they've got a lot of work to do. but what i saw was very encouraging. >> what about getting the dash seven, the max dash seven, the smaller version, getting it certified? are you optimistic that will happen this year? >> you know, that's really in the hands of boeing. and the certification has been going on for years now. you have another. >> change at. >> the head of the faa. so what we're doing i am optimistic. it's a great aircraft, but we're not in control of that. what

we're doing is if we if we don't take a seven, we're going to take an eight. so it's not going to hurt our delivery plans. in that case we are we still want the dash seven. it's probably certainly beyond 2025. hopefully it comes in 2026. but either way we're going to take an aircraft from boeing. >> hey, bob, frontier is making a bid once again for spirit airlines. spirit has said no thanks, we're not interested. we'll see how that plays out. but the discussion in the industry is that mergers and acquisitions are once again on the table. do you feel as though we're going to start to see more consolidation among the airlines, and would you be in play potentially for buying a smaller airline here in the us? >> well, you never want to speculate, certainly in this case. but i think at southwest we start with no matter what the backdrop is, m&a spirit does this frontier does that. we're going to compete vigorously. either way. we're going to take care of our business. we're

going to execute our plan. we're going to execute our transformational plan, hit our numbers and deliver for our shareholders and our customers. you know, certainly a more stable industry, i think is good for everybody. but and perhaps this administration would be more favorable to some of those transactions. but that's all just total speculation on on my part for southwest, we're focused on executing our business and our plan and delivering for our customers and our shareholders quickly. >> bob, how do you feel about the demand that's out there in the market right now as you head through the first quarter into the second quarter? >> well, demand is really strong and demand is strong at southwest airlines for our products specifically. again, you saw that in the in the numbers, particularly in the unit revenue numbers and then the solid guide into the first quarter. you also have a constructive backdrop that we talked about. you have supplier constraints, particularly in the manufacturers. those constraints while they're getting better, as i talked about with boeing,

they're complex. and i think they take years to work out. so i think that constructive backdrop backdrop is going to stay in place for at least several years. the economy appears to be strong. so no, everything that we see forward says demand is strong. we saw very strong demand in the holiday period especially. but now looking ahead, we've got we've got a strong guide in the first quarter into the second quarter. you really see our big network moves kick in. things like the management and reduction of capacity in atlanta, the management of capacity into oakland that will provide more of a constructive backdrop for southwest airlines. our focus is keeping the yield progress that we saw in the fourth quarter, which was really good, and then closing the load factor gap, and i have confidence that we will do that. >> bob, thank you very much for joining us today. bob jordan, ceo of southwest airlines, joining us from the company's headquarters in dallas. sarah, i'll send it back to you. >> yeah, pretty bullish comments there on demand and consumers.

thank you. phil, before we head to break, let's check in on the bond movement for the bond report. show you how treasuries are faring this morning. buying bonds into the fed meeting with lower yields. if you expected two cuts this year i don't think. >> powell. >> said anything to change your mind. you're seeing more buying of bonds but nothing sharp. 4.5 is the yield on the ten year two year yield 4.2 ecb cuts rates. but again that was largely expected as well. we'll be right back. >> the bond report is brought to you by pimco, a global leader in active fixed income. >> are you having a hard time growing. >> your sales. is it tough getting new customers? try info freecom hot. >> sales leads. >> you'll get. >> unlimited sales. >> leads. mailing lists. business profiles. person search, email marketing, and free crm. >> i got four new customers.

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and demoed some technology. i know you can't speak about exactly what you were walking lawmakers and administration folks through. >> but what. >> is your message to washington? maybe give us the big picture takeaway from that? >> well. >> we've long had a. >> policy of coming to dc and talking about. >> how ai. >> is evolving. >> we want to bring everybody. >> along. with us. these are important changes for people personally, also for our nation's economy and so on. >> so that's what we're here talking about. in particular, 2025 is the year that. >> agents will become a big deal. >> and what we mean. >> by that is. >> we're going to go from chatgpt answering questions for you to chatgpt. doing things for you in the real world. >> so we. launched our. >> first agent last week, a product called operator, and it browses the web for. >> you so it can. >> it can do tasks for you on the web. >> whether that's ordering. >> groceries or filling. >> out forms. >> you know, the kind of things that you just want to have done for you so you can work on. >> more important things. >> and then. we talked about today a couple of other agentic products. >> that we'll be delivering soon. >> i think that adds a lot of efficiency. maybe something the

fed would start looking to. i do want to talk about the elephant in the room, which is deep seat. can you share any more about what happened here with deep seat and the recourse for openai? >> look, i think there are. >> a lot. >> of legitimate. and concerning questions about the origins here. and at the same time, there are a couple of novel improvements that they've made and what it what it means for me is like, my takeaway is china is here. >> we knew. >> that this that i was. going to be a you know, it's not just a competition. >> between us companies. it's ultimately a. >> competition between. >> the us and. >> the prc. >> this is. >> the. >> first. >> you know, big. >> kind of salvo. >> in that. >> and ai is. going to transform our personal lives. it's going. >> to transform. >> our professional lives. i want. >> an ai that behaves. >> according to democratic values. >> i don't. >> want an ai that. behaves according to authoritarian values. >> so we at openai, our mission is. >> to make sure that. >> us wins. >> this race. >> and with those ip issues, you

guys have flat out accused them of basically ripping off your technology. i mean, that is the big elephant in the room that they may have stolen some technology to get here. with that in mind and that backdrop, what are the technological advances? what is the cost implication for openai? how does it change the way you maybe think about raising capital in the future? >> well, this is this wouldn't be the first time that china has gone after us ip. but for. >> us, we're. >> focused on. building the. >> the world's most. intelligent models. >> and bringing them to people all over the world. >> in a. >> way that that improves people's lives. and we've already, you know, the we have a new model coming soon that we've already talked about that is. >> head and. shoulders above. >> anything that's out there today. we're focused on that. we're focused on using that to build products like agents. >> that. >> help people be more. >> efficient. >> that help businesses operate more. >> efficiently. >> that help the. >> us grow faster. and like. that's our focus. >> it doesn't mean you need to spend less. to be clear, no. >> if anything like, look,

everything. >> that we've seen. >> over the past ten years of building. >> these. >> products is that. >> the. >> more compute you apply, the more intelligent. >> the model is. >> the more things that it can do for people. so that's why we were so excited. >> we announced last week. >> we're with president trump in the roosevelt room. >> and. >> announced this project, stargate, where we're going to put $500 billion. towards energy infrastructure. chips in the us across a range of states. >> to help. >> openai win. and we're very excited about that. and as you as ai becomes a more of a part of all of our lives, it's only. >> going to be more. >> important that we. have a lot of access. to compute. >> that we can build. >> great products. >> for people. >> how have conversations gone with the administration around this deep sea issue and then export controls? is that something you think that would help if you were semiconductors were getting out of the us? >> yeah. look, president trump wants the us to win. we want the us. >> to win. >> and he wants growth and we want to help drive us growth. so

there's. >> a lot of alignment. >> and we're very excited to work with the administration. it's one of the reasons. >> we're here. you know we're doing an increasing amount. >> with the government. we just earlier this week we launched a product called chatgpt gov. >> which is. >> a version of chatgpt. >> specifically for. us government agencies that respects, you know, security and compliance and all. >> the things that you need to do to build a great product for the us government. we also today announced a partnership with the national labs. so we're working with los alamos, sandia, lawrence. >> livermore. >> these are incredible groups of scientists that do fundamental physics research. they do material science research. they help they do research that helps safeguard the nuclear stockpile. and we're going to bring. >> them our most. >> intelligent models to help them do their jobs and advance. science and advance national security faster. >> national security seems to be such a big theme here, and something officials really obviously care about. what about those export controls? semiconductors are such a big part of that is something. is that something you guys have been lobbying for? >> well, if you if you go and

look some of what even what the deep sea ceo has said is that they wish they had more, they wish they had more gpus. and this is why it's so important for the us to invest in infrastructure. we need more energy. we need more data centers, supercomputers, gpus, because this is what drives the ai revolution. and again, this is us versus prc and the us needs to win. >> i do want to ask you about softbank. i've been hearing from sources that you guys are in the middle of raising. it might not be something you can comment on, but i do need to ask you what is the latest with softbank. do you plan to raise up to 25 billion. >> well softbank is an amazing partner. they were part of our announcement of stargate with president trump. it was president trump, massa larry ellison and sam in the roosevelt room. so softbank is an incredible partner. they see the future the way we do. and we're very excited to continue our partnership there. >> and last question on deep sea. all of these open source models it seems, have really caught people's attention. if these are available to download and tweak for free, what kind of moat does openai have from a

technology perspective? how are you guarding against some of that competition? >> well. it's two things. one, we're about to launch some models that are meaningfully beyond the state of the art today. so we're i mean, that that in. >> itself, we need. >> to keep running fast and keep our research ahead of, in particular, what's coming out of china. and then also we don't just build models, we also build products. so we have chatgpt that's helping people every day accomplish a huge variety of tasks. and you've got we've got products for businesses. and so it is both increasingly intelligent models and staying ahead. and it's. >> building. >> great products that help people be. >> more efficient. >> and productive in their daily lives. >> kevin, it's great to see you. thank you so much for spending the time today. thank you so much. through all of that, guys. we will send it back to you at the stock exchange. >> kate. appreciate that. what a key conversation, especially given all of the questions. new wrinkles in the ai debate. as we are now starting to take a look at which names have managed to recover, or at least try to recover through the course of

the week like a vistra about halfway there. but nvidia not the case. >> no, nvidia not the case. and of course, it would have been interesting. if openai was a public company, what would it be down in terms of the you saw, of course, talking about this, their next model and how what that's going to be able to accomplish it will be interesting. but yeah, it would have been probably a very bad period of time as well for shares of openai. would it had been a public company that 25 billion by the way, enormous from softbank. between that and the stargate, you just do wonder what they're going to have to sell to actually fund these commitments of their large ownership stake in arm and large ownership stake as well in t-mobile that we talked. >> about, by the way, masa san, the head of softbank, just sent out a note to his founders and friends, his sort of state of the union letter. he didn't comment on openai or this report that he's going to invest 25 billion, but obviously did talk about just how bullish you are. he is we're at an incredible speed, decades old dream of artificial intelligence toward artificial super intelligence, he says. in ten years, we'll

have that in 10,000 times more powerful than today's models will allow us to do, will be limited only by our imagination, which is typical, you know, very bullish. >> very. >> he listen he has. been that he's been i remember the last time i interviewed him which is many years ago. i'm talking you remember carl about it'll be like, you know, people will just be sitting and doing nothing and the machines will be doing all the work. that said, he missed a lot of investment opportunities. and most key, of course, he owns 7% of nvidia. >> yes. there were tears. yeah, the other day. that's true. true by the way it's a very strong morning. we're only about 30 points away from going positive for the week on the s&p. dow is up 100. it's a big morning on capitol hill as well robert f kennedy jr in the hot seat for day two of his confirmation hearings to become secretary of health and human services. this time he is before the senate health senate intel holding a confirmation hearing for tulsi gabbard to be director of national intelligence. and then kash patel will be before senate judiciary to be fbi director. we'll monitor the hearings

yesterday. of course, pretty spicy on the health front. we'll get you headlines as they happen. >> well, hearings, a lot of earnings and also some housing data that just crossed the tape. let's get to diana olick for that. diana. >> well. >> david, pending home. sales a huge miss in december. >> down 5.5%. from november. and off 5%. >> year over year. the street was looking for a small gain. this drop. after four straight months of gains pending home sales, are counted by. signed contracts on existing homes. so the most current indicator of people. out shopping in december. >> and that's. >> when mortgage rates shot over 7% again on the 30 year fixed. >> no matter what. >> the realtors may. >> say about a. >> new normal in higher. >> rates for consumers, that seven handle is an emotional barrier. sales fell in. all regions, with the west and northeast seeing the biggest drops. those are, of course, where home prices are highest. >> and a note on prices. >> we did see. >> annual gains accelerate on. >> the case-shiller home. >> price index released earlier this week. back to you. >> okay. thank you. diana. let's get to that tragic news that broke overnight. the search and

rescue mission is underway in the potomac river after the collision between an american airlines jet and an army helicopter, eamon javers, at reagan national airport with the latest this hour. so what have we learned, eamon? >> well, sara, we're now expecting to hear from president trump at the white house across the river from where we're standing at 11 a.m. east coast time. so just about an hour from now, the president is expected to go to the briefing room and update the country on what he knows now about what happened here last night. we do have a little bit of additional information on what happened, and i can tell you that the airport here is starting to reopen in expectation of flights beginning at 11 a.m, just as you see normal life beginning to reemerge here, passengers with their wheelie bags, tsa lines are filling up. and we did hear from the new defense secretary, pete hegseth, in a social media post just a short time ago, saying that this black hawk helicopter crew was fairly

experienced, that was involved in this crash last night. he said they were equipped with night vision goggles, so they did have the capacity at least to see the other aircraft. they did have the training and experience to understand what they were doing. even though this is described as a training flight. here's what we know right now. officials are saying so far, there are no survivors from this incident. we know that there were 64 people on board the jet aircraft, the commercial plane that crashed, three people on board, the u.s. army helicopter that crashed. they say they've recovered 27 bodies from the airplane so far, one from the helicopter that was involved in this incident. there has been a litany of incidents over the past couple of years where they've had near misses here at ronald reagan national airport, some concern about that. as you take a look at some of the dates associated with those near misses in the past, a number of incidents that have been reported publicly, where airplanes came too close to one another, and there have been some concern that we might see

some kind of incident like this because of all of the incredible amount of traffic that comes through this airport on a day to day basis. we also heard from the secretary of transportation, sean duffy, who was just sworn in hours before this event last night. here's what he had to say. >> we are going to wait for all the information to come in from from this vantage point, but to. >> back up. >> what the president. >> said, what. >> i've seen. so far do i think this was preventable? >> absolutely. >> so the secretary of transportation there saying he does think this incident was preventable. we may learn more from the white house in about an hour's time, guys, but just from here it is a little bit eerie, i have to say, to see passengers starting to fill the airport again. it has been very, very quiet and still here since this incident last night as all air traffic has been stopped. no passengers, no civilians involved on this campus at all overnight. now, you see, you know, the passengers with the wheely bags and the cups of

coffee, the tsa lines starting to fill up, all those things of daily business travel that we're all so familiar with. and it's a little bit of a jarring contrast between what we see here as a crime scene and what we see behind me at the airport, which is business as usual. starting to come back, guys? >> yeah. the train behind you, eamon. what about from the pentagon? i mean, what do we know about this black hawk helicopter who was on board. why it seemingly went straight for that plane and wasn't able to sideswipe or misdirect or just try to move away from it. when do we get an update on that? and have we heard from secretary hegseth, who's also, what, just days into the job? >> yeah, we have heard from secretary hedge that he posted a post on social media a short time ago. we don't have the answers to the ultimate and most important questions here of how this happened. sarah. but what he is saying, though, is that this was an experienced crew and that they were equipped with night vision goggles. so they had the equipment and the

training to prevent what happened last night. so there is some other factor that we still don't know that played into the disaster. so we have heard from pete hegseth over at the pentagon on this social media post, and we will hear from the president at 11:00. maybe we'll get some more answers. my expectation is these, you know, ntsb investigations take months. you know, it's often, you know, looking in the rear view mirror nearly a year or more. by the time you get a report out with the ultimate causes of an incident, and especially one like this, which involves so many different jurisdiction u.s. military, civilian, corporate folks. you've got d.c. and virginia here and the federal government all playing a role here. so i think all of that may slow down, ultimately, the process by which we get some answers here, none of that is going to be good enough for the families who were impacted last night. >> you made the point regarding the recovery that it was at night began late last night, the water fairly deep and the conditions so incredibly cold.

you made the you reminded our audience earlier this morning that wasn't that long ago, that the ice flow on the potomac was you were able to walk on it. it's going to make this recovery even more difficult. >> yeah. i just bitterly cold couple of weeks here in washington and the potomac was iced over. it is now flowing, especially in this area of the potomac where the water is pretty wide, the water is high, the water is flowing fast, officials tell us. and so that all contributes to the difficulty here. and you can just imagine what this scene was like for the divers last night as they went into the wreckage, in that bitter cold, in that darkness, in the wind overnight, and the horrific situation that they found themselves in, in the water last night. and your heart goes out to everybody who's involved in the rescue and recovery effort and everybody who was impacted here, because, i mean, this is just an epic, epic tragedy. carl. >> we'll check in with you later this morning as we look forward to hearing from the president in

about an hour. eamon javers in washington. we will continue to monitor that situation and have more later. let's turn back to the markets this morning and some big tech earnings beginning with meta, which did beat on the top and bottom line sort of adding to this strong start to the year. our julia boorstin looking at some of the street reaction so far i think we did get at least one upgrade today julia. >> yeah meta shares are up about 4%. >> this morning. >> and now 85% of analysts have a buyer. overweight rating on the stock. they are generally bullish about the company's ai. focused rocket record capex spending. for this year. moffettnathanson saying, quote, meta's ability to use ai to sustainably drive. both engagement and pricing growth is a rarity in its and the industry's history, flagging what they're calling untapped revenue opportunities at threads, whatsapp, reality labs, and meta ai. morgan stanley writing meta remains the cleanest gpu. >> enabled winner. >> in the sector, with a bull case of $900 saying, quote, it seems early days and meta's ability. >> to. >> improve its already leading

core with gpu enabled enhancements. now a rare bear on the stock, needham's laura martin, with an underperform asking why buy meta in front of knowing the roi on these risky long term investments, especially before it's clear how open source gen ai will monetize. so guys, zuckerberg said that this will be a pivotal, pivotal year. while laura martin is skeptical and wants to see how it plays out, the analysts are generally bullish. >> i thought the tone of the call was bullish as well. from mark zuckerberg talking about the new relationship with the government, talking about all the all the ai chatbot promise and how he wants to be number one. why the why the revenue growth expected to slow julia from here? >> well, what was. >> so interesting is so this past quarter in q4, revenue growth actually accelerated. analysts had been expecting. >> revenue growth to decelerate. >> instead, it accelerated. but they guided to decelerating revenue growth in q1. they didn't give full year guidance for the 2025 year, but they said

they expect revenue growth to be strong. no explanation of how strong that is expected to be or what that word actually means, but indicating that they do expect these ai investments to continue to pay off. so i think they want to be cautious here. and they they have various reasons why they're optimistic. i think they're going to be monetizing all these new areas. they just started testing ads and threads. they also said that they're not seeing any negative impact of the shift away from third party fact checking towards this community notes model. so we'll see how it all plays out. but some vague optimism for the rest of the year, though not official guidance. >> got it. so it just was better than the slower expected. thank you very much, julia. microsoft and other big tech came out with results and it's under pressure on some weaker guidance. steve kovach joins us with more on that story. morning, steve. >> hey there sarah. >> yeah. >> this is mostly because. >> of. the azure. >> cloud growth slowing down. >> we're seeing some. weaker than. >> expected guidance on the

azure cloud here. not really due to ai though. this is really sarah. this is mostly due to the traditional or cloud business over at azure that they're having some sales channel problems talking about different partners things here. and so let me tell you. how the street's reacting here. jpm says. >> the ai. >> part of the business is actually healthy. it's just the other part of azure that's been the problem. morgan stanley is actually saying j'en. ai over at microsoft is ramping up faster than anticipated, and calling microsoft the clearest jedai winner in software says shares are. poised to actually rise in the back half of the year, despite what we're seeing today. and then you have bank of america saying that azure is actually a fixable problem here, but it's going to take a couple quarters to sort of shake out these problems that they talked about in the sales part of it. >> and getting those. >> cleared out. i will note, though, microsoft says it's on pace now for an annual run rate of $13 billion in ai sales. >> that implies. >> that they had about 3 billion in the quarter. on top of that,

though, 22.6 billion in capex for the quarter. that's expected to be about the same in the current quarter, guys. >> hey, steve. i mean, their opex came in a bit lower than anticipated. i think they did a good job controlling costs, but there does seem to be this concern at azure in terms of ai workloads versus other workloads and whether, you know, less less of one doesn't mean more of the other. i guess, you know, it's not adding up, essentially. >> yeah. >> that's exactly right. >> and there is. >> so much momentum going on in the ai part of that business, david, even though it. is a very small percentage of the overall growth that we're seeing there, it's only about 13. >> or 12. >> or 13 percentage points of that. azure growth is coming from there. it's the traditional stuff. and cfo david amy hood was talking about some of the changes they need to make with their sales partners to get that part of the azure business back up to operating efficiency. and so it's going to take a while to get that shaken out. and that is

why we're seeing disappointment, because amy hood previously said that we're going to see acceleration of the azure cloud growth. and that is not what they guided towards. and that's why you're seeing shares here down nearly 6%, guys. >> steve, we knew it was going to be a busy week for your beat. but this is on another level. steve kovach covering microsoft this morning. >> indeed. >> thanks. shares of servicenow. meantime, down on the back of its latest results, we're going to check in with bill mcdermott first on cnbc. get his outlook. talk about what happened in the quarter. fx and subscription revenue as well with the dow up 94. squawk on the street's back in a moment. >> my clients deserve. >> someone who. >> understands their world. >> someone who. >> listens. >> who has their best financial

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and he places the trade... talk about easier investing. >> style and comfort. >> use code. >> tv for 20%. >> off sitewide at collars. >> and co com. >> welcome back to squawk on the street. servicenow shares are sinking down 11.5%. the cloud based platform forecasting slightly lower growth slower growth. but underscoring that demand for ai remains very strong. bill mcdermott, servicenow chairman and ceo, joins us first on cnbc. bill, not a typical reaction here for your stock. i guess the street was concerned about the guidance. currencies macros. what are you hearing from investors that warrant this kind of move. >> well i think it's first of all, thank. >> you very much. >> for having me today. >> sarah and i do want to. >> express sympathy. >> for the. >> lives that were. >> lost in the collision near reagan airport. just a tragedy. >> and on behalf of. >> all the. >> employees of. >> servicenow, our heart goes out to those affected. by this tragic event. on in terms of the

business, the business has never. >> been stronger. >> we had. >> several beaten raises. last year. we beat in q4. >> some might think. >> the. >> guide was a little softer than usual, which is. >> okay because we have a history of. >> beating guides. but in the end today. >> wolff. >> bernstein, deutsche bank. >> goldman all. >> have buys out on the company. so what's happening is that we. have consistently. >> beat expectations. >> and when you have that, sometimes the market. >> reacts a little strongly. >> if. >> they don't love the guide. but if. >> you look at. >> our ai. >> business, which is the most. >> important one to look. >> at right now. >> we have nearly. >> 1000 agentic ai customers. i grew. >> 150% quarter over quarter. and if you look. >> at customers who bought our. generative ai capabilities, they're. >> the biggest deals that. >> we've ever seen in the company. and right now. >> we. >> have a. >> company that in rpo terms, remaining. >> performance obligations. >> is almost.

>> 23 billion. >> in software. >> revenue, growing at. >> 26% year. on year. >> with margins near 30%. >> and. >> free cash flow. >> margin at 31.5. >> so i. >> don't know of any other. >> software company in. >> the history of software. >> in. >> the enterprise. >> that's ever done this. >> so i knew you would say that. and the growth is there. and to be fair, a lot of the analysts did say that the stock was priced for perfection going into this quarter. something that was that was called out in some of the concerns was what you mentioned about the federal business and the second half. is this a seasonality thing, or are you worried about cutbacks in government spending because of the new administration? >> i'm actually. >> so excited. >> about. the new. >> administration. >> i. >> think. >> with. >> the trump. administration is doing. >> and what doge is doing is exactly. >> what america deserves. >> and we're not at all concerned. in fact, we simply said that it could. >> be in the case. >> of. >> a. >> new administration, the. >> spend could be. somewhat

delayed. >> early on in the. >> administration as. things get figured out. but we are. >> beautifully positioned. >> in the government. >> as you know, the military, department. >> of defense. >> veteran affairs, all the branches that i can think. >> of in. government already run servicenow as a. >> major factor. >> in taking. >> cost out, improving productivity. and giving all the employees of the government. >> a great experience. >> and if you. >> think about it this. >> way, sara, they're all coming. >> back to work. >> do you think they want a swivel chair in and out. >> of 17 different application. >> experiences in a day. >> with servicenow, you go to. >> one experience. >> you ask. >> servicenow any question and you get. >> an answer. so the productivity curve. >> will go way up. i frankly think it's likely, in. >> fact, that business may be. >> very robust. >> early. >> but we have to see. >> so we simply said it's difficult for us. >> in life, the new. >> administration to predict. >> the timing. it could go more back. >> end. >> based on. >> a new administration.

>> but it also could be earlier. >> we don't know. >> we'll see. >> and how big is that exposure to federal it spending. do you. >> put that. >> have you figure all. that out in. >> the guide. right. >> so in the guidance we. >> factored all of that into our guidance. and incidentally our. >> guidance is still extraordinarily strong. >> you have a company operating. >> at 20 plus percent software growth year over year. that's nearly a 13. >> billion revenue company. >> and that's. >> done. >> it on one. >> single platform. >> with. >> one architecture. >> and one data model. >> it's never been done in enterprise software ever in the history of the. >> software game. >> so we're. >> extremely confident. >> the guide is very good. and we did, of course, in the. >> guide take. >> several factors. >> into account which anyone. >> would do when you have the reputation. >> that we have. >> for. >> overachieving it. >> yeah, i think that consumption based pricing for ai also maybe causes some confusion, right? >> yes, sarah. >> and let me take a. >> minute just.

>> to explain that. okay. >> we have. >> a seat. >> based pricing model. >> we have. >> a pro. plus version. >> of our seat based. pricing model. >> where we're now. giving our customers. >> the agents. these ai agents. >> are going. >> to do massively important. >> things to increase the productivity of companies. >> a lot of. >> people don't talk. >> about this, but there's millions of. >> jobs that are. >> unfilled because. the companies cannot access talented enough it workers. >> in the case of agentic. >> ai, now. >> you have the digital workers. >> that will complement your workforce and do the. >> work you've been looking. for years and years. >> so we're giving that to the customer as part of. >> the pro plus version. we have a springboard. of growth that will actually. complement the seat based pricing. once the customer deploys and. >> gets lots of assists, we give

them a. >> lot for free. and then the meter kicks. >> in when they. >> get lots of assists. >> that's what the customer wants. and what's great about that is the more they use and the more they consume, the more revenue we make. and it's possible. >> that that actually could. >> be a hockey. stick that is bigger than any of us could possibly predict. that is what we think will happen. >> and so. >> far. >> so good. i don't know. >> of any other company. >> growing ai. >> in our industry. growing 150% quarter over quarter, so we like our position, but that did require. >> some explaining. >> and thank. >> you for giving me the. opportunity to. >> do it. >> no, i've seen it come up a number of times in the in the guide and the research notes. right. finally, bill, just zoom out for a moment. and what some in your industry are calling the sputnik moment, what we got from deep tech earlier this week and this this new ai model done, presumably in a much cheaper, more efficient way. how do you think it impacts the industry and software companies like yours? >> it's really great for

platform companies and. >> software companies that. do applications. >> that impact business processes that are tailored for. >> industries and give. >> customers outcomes. why is that? because we. built our own large language models. >> into servicenow. >> platform, finely. >> tuned it. >> so it's fast, it's secure, it's cheap to run, and. >> people love using it. >> so check. that box. >> but we also opened up. >> the platform. to integrate. >> with all the great. >> large language. >> model providers. >> that are out. >> there today, whether. >> it's openai and. chatgpt through. >> microsoft or. >> it's llama. >> through meta. >> or it is gemini through. google or bedrock. >> through aws. >> so all of these seamlessly. >> integrate with servicenow. >> why is that important? because as. >> the price. >> of those. >> compute stations. >> drops, our margins actually go up and. >> it's easier. >> for the customer to access that compute power to do dynamite things to run. >> their business. >> so it's a plus for

application and platform companies. >> okay. >> bill, we got to leave it there. sorry. we've got a lot of breaking news. we've got rfk back on the hill. but thank you for coming on and clearing up some of the questions around the corner. stock coming off the lows. we are monitoring this hearing happening now. the senate confirmation hearing for hhs secretary nominee rfk jr. let's listen to senator cassidy leading the questions. >> and you have previously said yes. but if you are approved to this decision to this. >> position. >> will you. >> say unequivocally. >> will you will you reassure mothers unequivocally and without. >> qualification, that. >> the measles and hepatitis. >> b vaccines do not. >> cause autism? >> senator, i am not going into the agency. >> with any. >> kind of a. >> yes or no question because. >> so if you're the because the data is there and that's kind. >> of a. >> yes or no. and i don't mean to cut you off, but that really

is a yes or no. >> if that is there, i will absolutely do that. >> now there is the data. just because i. >> used to. >> i used to do. hepatitis b, as i said. >> i know. >> the data is there. >> well then then i will be. >> the first person. >> if you show. >> me data. >> i will be the first. person to. assure the american people to say that they need. >> to take those vaccines. >> now, what concerns me is that you've cast doubt on some of these vaccines recently. i mean, like last few years. but the data and i could quote. >> some of it. >> the data has been there for. >> a long time. i've been out of the game. i've been in. >> congress for 16 years, and this data was. >> in. >> large measure generated before i. >> came. >> to congress. so my concern is that that if you're. >> making those claims. >> and being so influential, i mean, your bully pulpit is incredible. but that responsibility that you never acquainted yourself. >> with anything. >> that might contradict that which you were previously saying.

>> so let me ask. >> once more if the data is brought to you. and these studies that have been out there for quite. >> some time. >> and they've been peer reviewed, and it shows that these two vaccines are not associated with autism, will you ask? >> no, i. >> need even more. or will you say, no, this, this, this, i see this. it's stood the test. >> of time and. >> i unequivocally and without qualification say that this does not cause autism. >> not only will i do that, but i will apologize for any statements. >> that misled. >> people. otherwise. >> thank you. next. >> i just want to pledge to you that i will never stick. >> on a point. >> if somebody. >> shows me data. >> that says i'm. >> wrong, i know that's a that's an interpretation people have, but it's absolutely wrong. i think the science. >> driven and. >> evidence driven, i think the. concern is, is how persuadable. >> people are. but let me go. >> on because i have limited time. i'm going to hold myself to. >> the same five minutes. >> yesterday. >> senator bennett. >> and finance asked. you if you had once. >> previously made. >> statements that lyme disease

was created as a military bioweapon, and. >> you. >> said, you may have said that once, do you still believe that lyme disease was created as a military bioweapon? >> i've never. >> believed that, senator. >> what i said is that if the that we should always follow the evidence. there were three books suggesting that i have not read them through. what i've said is we should. always follow evidence, no matter what it says. so i never. >> have. said that definitively. >> lyme disease. >> was created in a. >> bio lab. okay. >> next. again, this will be kind of a yes or no. do you commit that you will revise any cdc recommendations only based on peer review, consensus based, widely accepted science, in other words, not personal beliefs or the beliefs of any single person that you or your department may identify. >> absolutely, senator, i am not. i am not. >> going to go into. hhs and. impose my preordained opinions.

on anybody at hhs. i'm going to empower the scientists at hhs to do. >> their job and. >> make sure that. we have good science. >> that's evidence based. >> that's replicable where the. the raw data is. >> almost out of time. so let me get to another question. >> all right. >> do you promise that fda will not deprioritize or delay review and or approval of new vaccines, and that vaccine review standards will not change from historical norms? >> well, we will have the best vaccine standards with safety studies and i will not if. >> that's a little bit of a different answer than the question i asked, because what is the best could be in the in the eyes of the beholder. so let me read again, promise that the fda will not deprioritize or delay review and or approval of new vaccines, and that vaccine review standards will not change from historical norms. >> yes, great. >> with that, i will set a good example and i yield my time to.

thank you. member. >> thank you, chairman cassidy. >> and i'm going to do what i very rarely do is actually follow up on a question from senator cassidy. >> there have. >> been, as i understand it, dozens of studies done all over the world that make it very clear that vaccines do not cause autism. now, you just said, if i heard correctly. well, if the evidence is there, the. evidence is there. that's it. vaccines do not cause autism. do you agree with that? >> as i said, i'm not going to go into hhs with any preordained. >> i ask you a simple. >> question, bobby. the studies are. >> all over. >> the world. say it does not. what do you think, senator? >> if you show. >> me those. >> studies, i will. >> absolutely. as i. >> promised to chairman cassidy. >> i will. that is. >> a very. >> troubling response because. the studies are there. your job

was to have looked at those studies as an applicant for this job. all right. >> let me ask you. >> another question about this one about covid. scientists with. >> the yale school of. >> public health and university of maryland have estimated that the covid vaccine saved. >> 3 million. >> lives and prevented 18 million hospitalizations. president trump, someone who i do not often agree with, has said that the covid vaccine was, quote, one of the greatest miracles of the ages. that's donald trump. but. you had a very different. >> perspective at a time when thousands. >> of americans were dying from covid every week. in may of 2021, you petitioned the food and drug administration to revoke the emergency use of covid vaccines. so my question to you is, were the. scientists who told us that the covid vaccine was imperative, and president trump, who told us that it was this great thing,

were they right or were you right when you told people that they should not take covid shots? >> senator, i filed. that lawsuit. >> after cdc recommended. >> the vaccine. >> for six year old children without any evidence that it would benefit them, and without testing on six year old children. and that. >> was. >> my reason. >> for filing. >> that lawsuit. >> was the vaccine covid. >> vaccine successful in saving millions of lives? >> i don't know, we don't have a good surveillance. >> system, unfortunately. >> i. >> don't know. i don't think anybody can. >> say that. >> if you. show me science that. says that, you know, bob, you say, if i show. >> you you're. >> applying for the. >> job, i mean, clearly you should know this. and that is the scientific community has established that, that covid vaccines saved millions of lives. and you're casting doubt that is really problematic. >> all right. let me ask you.

>> another question on another. >> subject. my republican colleagues. >> and president. >> trump are moving toward making massive. cuts into medicaid in order to provide tax breaks for the wealthiest people in this country. as i am sure you know, medicaid provides health insurance to tens of. millions of children, provides the funding for two out of every three seniors in nursing homes. it provides 43% of the revenue for community health centers, something i feel very strongly about. and it is so important for millions of people, if confirmed in terms of making america. healthy again, will you stand up to the white house and say, no, we cannot throw millions of children off of health care, millions of elderly people out of nursing homes. we cannot cut medicaid to give tax breaks to billionaires.

president trump. >> has made no. >> indication to me. >> that he. intends to throw. >> millions of people out. >> of nursing homes, or deprived people of their health care. >> senator, if. >> a. >> health care system that's broken. >> it's not working. you've been working on it your entire career. >> as americans get less. >> and less. >> healthier as. premiums rose, i. >> believe the health. care system is broken. >> you asked. >> me to. >> fix it. >> but do. >> you fix it? >> the american. >> people. but my colleagues here, certainly in the house of representatives, are prepared to make massive cuts in medicaid. now, i happen to believe in a medicare for all system that guarantees health care to all people, not what we're talking about. but in fact, there is serious discussion of massive cuts to medicaid, which will have devastating harms. on children, people in nursing. all i am asking you, if that proposal goes through, will you say, hey, you're not making keeping america healthy by throwing children off of health care? senator. >> i. haven't seen any. >> of the congressional

proposals. i can only tell. >> you what president trump has told. >> me. which is. >> that he wants me to make. >> medicaid. >> medicare and obamacare better. >> well, if you. >> haven't seen. >> those proposals, i suggest you go to any newspaper. they're there. thank you, mr. chairman. senator paul. >> you know. >> i think the discussion. >> over vaccines. >> is so oversimplified and dumbed down that we never. really get to real truths. and it's why people up here are so. >> separated from. >> real people. >> at home. >> so we talk about hepatitis. >> b at the rfk jr. they're talking on day two of his confirmation hearings. obviously, the discussion centering around the efficacy of covid vaccines, whether it saved millions of lives, the safety of hepatitis and measles vaccines. yesterday, it was about sort of how medicare and medicaid are paid for conflating medicare advantage with other health programs. i think politico called it a rocky debut yesterday. we'll see how this one ends up. >> look, i mean, this is an agency with $1.7 trillion in a

budget, overseeing everything from food and hospital inspections, vaccine recommendations, health insurance programs for americans. so there's a lot at stake. democrats, though, sounds like, as you just heard from bernie sanders. and like they continue to focus on the vaccine stuff and previous comments that he's made and books he's pointed out and conspiracy theories he's talked about. senator cassidy in the beginning is the chair and the republican. and that's going to be a key vote. didn't really get a read on whether he's going to support him. we'll continue to monitor that for you. bring you any headlines as they cross. quick note as we head to break next hour on money movers big interview with palantir ceo alex karp, talking everything from the growing ai arms race to national defense spending. he's got a new book out on all of it that's coming up at 11 a.m. eastern time. we'll be right back here on squawk on the street. dow is now up 100 points joining the s&p and the nasdaq in positive territory. >> nothing stands still. not technology, not the market and

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>> all right. welcome back. we continue to monitor, of course, the response to that horrific crash involving a passenger plane and an army helicopter. phil lebeau joins us. he has the latest for us. phil. >> david, this is now a search and recovery. they do not believe that there are any survivors from this collision of an american airlines regional jet and a u.s. army blackhawk helicopter. a total of 67 people are believed to have perished in this accident. 64 were on the american airlines jet, three were on the helicopter operated by the us army. reagan national is just 20 minutes away from reopening. the ntsb will be leading this investigation. they've already got investigators who were there on the scene. the president is going to be talking about this coming up in about 20 minutes at 11:00 eastern time. a lot of what we know so far is based in part on this security cam footage, which shows the helicopter colliding with the american airlines regional jet.

it happened about 300ft above the surface. and we know that the transportation secretary says that both of the pilots involved here, they were in touch with air traffic control. in addition, the transportation secretary says he believes that this was a preventable accident. why? he says that he didn't go into a whole lot of details during the press conference that was held not too long ago, by the way, the jet broke into three pieces, which all landed in the potomac river. and as we've been talking about, the investigation now is focusing on what exactly caused this. and that means the ntsb is looking for the black boxes. here's a map of the runways at reagan national. it is the smallest one, the one that's basically at the top there, runway 33. that's where the american airlines jet was coming in. and by the way, it was on a normal final approach. guys. there's no indication that it was doing anything unusual. again we'll hear from the president in about 20 minutes. karl, back to you. >> all right phil, appreciate that. in the meantime, squawk on

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peter orszag who joins us now to talk about the company's latest earnings quarter and the broader market expectations for business conditions under president trump. stocks up. peter, it looks like a really strong quarter. again, 36% rise in net income. you talk about an inflection point for the advisory business. what are you seeing. >> look we're we're on our pathway to lazard 2030. >> we're ahead of schedule. >> and i. think the. >> year is looking strong. and within. that lazard is on its way. >> it's really exciting. >> so what what about the pipeline for m&a and capital markets activity. there's so much optimism baked in around the incoming administration. >> well i think it wasn't just. >> the incoming administration this was building. and basically you had a lot of strategic activity as we got into the back half. >> of last year. >> sponsors, that is private equity becoming more active as we. >> you know. >> approach the very. >> end of the year. >> and then you layer. on the perception that the regulatory environment is going to be more

accommodating, and you've got a very constructive mix. for m&a activity. >> in particular. >> is it already happening? >> yeah, i mean, well, we our results. >> for the fourth quarter. >> showed strength. >> a lot of what happened towards. >> the. >> end of the year were things that we didn't. >> think were even. >> very likely to occur, just snapping back to. >> life and closing. >> very quickly. and as we enter this year, there are a lot of discussions. >> going on. >> pointing to, again, as i've said, a very constructive environment. >> what about the asset side of the business? asset management, which hasn't been as exciting for investors as the advisory? >> yeah. >> look, i think the big question there is whether the it feels a little like five year old soccer, everyone running to a very limited number of very large cap us stocks. the valuation discounts with emerging markets and even with european stocks are now very wide relative to history, as are the growth differentials. >> that exist. >> and so i think the question becomes in 2025 whether people

start to look to diversify their portfolios away from just, you know, the very, very largest us equities and whether those us equities are priced at or beyond perfection. we're already seeing some of that. so we're seeing inflows for example, into our emerging market equities products and strategies. and we'll see how this plays out during 2025. >> hey peter it's david you know coming into the year. and sarah referenced this i mean there is a great deal of optimism that we're going to see a lot more transactions small medium and large. we're a month in. obviously a lot of that had to do with regulatory but not all. are you still as optimistic? i mean, are we set up in some ways to be disappointed? >> no, i'm still optimistic. i mean, the client discussions that we're having are very constructive. there have been some notable deals. constellation energy, for example. the one. >> that we were on. >> is a good example, but mostly based on the nature of the client discussions that we're having. this is not a linear thing. it's not it's not just

week by week. instead it it it can be lumpy and come and go a little bit. but for the year as a whole, we're we're set up here for success because there's a lot of client dialog going on. and then within that, lazard has been hiring and regaining market share, which is what happened in 2024. >> yeah. >> do you really feel as though you've replenished the ranks at lazard? i mean, there was a sense that you guys had lost your way to a certain extent after, you know, so many decades is sort of one of the key boutiques on wall street. you've rectified that, in your opinion? well. >> it's a process. there's definitely a sense of momentum and an inflection point. we've been really pleased with the talent we've been able to bring on in sports, media and entertainment and consumer retail, private capital. >> in. >> germany, in the middle east. and we're going to keep building in 2025. so i think the sense that lazard. despite being 176 years old, is on the move and a sense of inflection is really now pervasive. >> okay. let's talk about what's happening in the trump administration. peter, i know you have thoughts on it. so

yesterday we got this federal funding freeze that they say remains in full effect, though they did rescind a pretty controversial memo that ordered the freeze from the omb, a department you used to lead in the obama administration. so i'm wondering what you make of all this. >> well. >> on that particular topic, obviously, there's been a lot of confusion. the courts are also involved, so i don't know quite what to make of it yet because i think it's still sorting out. what i would say more broadly is with the core economic agencies. so with treasury secretary, with kevin hassett, who i've known for a long time, i think you've got very competent people in many of the key jobs, and that's quite encouraging. to the extent that personnel is policy, we'll have to see how it plays out. but there's a you know, it's always a little bit chaotic at the beginning of an administration. so i think we have to let these things settle. and i, i will reserve judgment until we see more definitively what sticks and what does not.

>> what would you say? this is a quote a little bit chaotic when you have so many states complaining, at least that medicaid portals were disrupted. and i mean, we've had some some macro commentary this week about what this might do to a couple trillion dollars in spending if this uncertainty lingers. >> i think it's normal at the at the beginning of an administration to have some characteristics like that. and i think, i think that phrasing is probably appropriate. >> right now. >> finally, i started with the fed. peter, they're on hold. we don't know until when. i just wonder what you make of the backdrop now with the fed in wait and see mode on inflation and on jobs and how it's going to affect the overall business that you do, and markets and the economy. >> well, the first thing is i think rates are a secondary factor. the more important thing is the underlying on m&a in particular, the more important factor by far is the tailwinds, the life sciences revolution, the ai revolution, the ongoing

demand for additional energy, etc. coupled with the regulatory environment. those are sort of first order things. and then yes, rates matter, but it's a secondary or even tertiary kind of thing. then with regard to inflation, look, i think it is fair to say that to the extent that people are expecting a very substantial decline in energy prices, in particular, to be the key driver of disinflation in 2025, i'm not at all sure that that's. >> going to happen. >> well, yeah, okay. we'll talk about that another day. and your outlook for inflation peter, but thank you for joining us on the on the quarter and the environment that you're seeing. that is peter herzog from lazard, the ceo. >> all right. let's take a look at comcast shares. yeah that doesn't look good. especially if you own the stock on pace for their biggest loss since 2008. this after results this morning. it's really all about broadband and the continued loss of subscribers there. i mean just towards the end of the year they were pointing to 100,000. the stock got hit then, and then they ended up with losing 139,000 subs. moffett,

nathanson, craig moffett is here. we were going to talk apple, which we'll get to in a bit. craig. but i got to come to you on this one. i mean, you know, you and i have been friends a long time. you are rigorous when it comes to your analysis. you have been wrong on this thing. i mean, when's things going to start to get better? they just keep losing broadband subs. yeah. >> and the market is not. prepared to look at anything else other than the loss of broadband subs. you know, it's funny if for most companies, if you started. >> the conversation. >> by saying. >> they beat on revenues. >> they beat on margins, they beat on earnings, they beat on free cash flow, they beat on eps. you'd probably think it was pretty good. but the market is very much fixated on broadband, and. >> rightly so. >> it's their. most important business. but it actually. >> it strikes me. >> as an interesting setup. for 2025 because. >> the stock is. cheap. and i think almost. >> certainly the broadband picture gets better instead. >> of worse. >> why do you think that? yeah.

why do you think things will start to get better? because, you know, the anticipation of the competition from fixed wireless or the overbuilding in terms of fiber management doesn't seem to have fully appreciated the impact it might have. not to mention, obviously, the affordable connectivity plan and things like that. well. >> i think. >> the affordability. >> let's put the affordability. >> connectivity plan aside. >> for just. >> a second, because. you would think if the narrative is that that competition is. getting worse, that you'd see. >> that. >> in the numbers. but we've seen the numbers for the competitors. >> fixed wireless is. >> actually slowing down a little bit. fiber to the home is actually slowing down a little bit in terms of the competitive impact. >> it is. >> almost certainly the case that the reason. >> you saw. >> this big deceleration in 2024 was because of the withdrawal of the acp program. if that's now behind us, we. >> should see. >> something like a normal market, which i'm not suggesting that comcast is going to start

to grow broadband. >> subscribers subscribers. >> again in 2025. it won't, but you've almost certainly seen by far the. worst of it in in 2024. and now things start to get better on the broadband front. and there's a lot of other good stuff happening at comcast, like the opening of the epic theme park and reduced losses at at peacock coming in 2025. >> yeah. i mean, were you surprised, though at the lack of subscriber growth? third quarter to fourth quarter at peacock? is that concerning? >> no. >> in fact, you. >> could you could look at the glass. >> being half full and say, you almost certainly would expect that there would be some pullback after the big uptick that they had from the olympics. with the olympics ending, some of those subscribers were going to lose. so i think staying at a flat 35 million subscribers is. probably about as good as you could have expected. >> all right. as we continue to watch that stock sink, of course, as our viewers know,

it's the only name that we can really own here. unfortunately. craig, let's talk a little apple because positive though you may be on comcast you're not particularly positive on apple. they're going to be reporting after the bell. you have a sell on it. why. >> well in fact it's go. >> back to comcast. >> for a second. one of the reasons we like. comcast is that it's really cheap. one of the reasons that we're cautious on apple is that. >> it's really expensive. >> i don't think that apple is a broken company. when we downgraded it about, i guess what, maybe a month ago we it wasn't that the company was broken, it was that the valuation was broken and that at 33 times earnings, it discounted essentially all good news. and we said there were some significant risks that weren't being priced in. >> do we believe that china competition is as intense as some of these more recent downgrades have tried to argue? >> i think the evidence suggests that it is. you had comcast. you

had huawei, you had vivo, you had xiaomi all gaining market share honor all gaining market share, and apple losing market share in the chinese market. and you've got real question. and by the way, the chinese market is not very strong anyway because of macro headwinds in china. and you've got real questions about the path forward for ai, which is central to everything at apple in china and how the chinese government is going to allow western models to proliferate or not proliferate in china. and so china looks to us like a big question mark. that was a big part of the reason that we became more cautious on the stock. >> craig, thanks for taking some time on on both these names. appreciate it. >> my pleasure. thanks, david. >> sure thing. craig moffett from moffettnathanson. as we wrap up here, apple shares, as you see down a little less than

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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. >> good thursday morning. welcome to money movers i'm carl quintanilla with sara eisen live at post nine of the new york stock exchange. we're going to start this hour with breaking news and the latest from the plane crash in washington, dc. the president is expected to address reporters in just a moment. we're going to take you there live when that begins. in the meantime, eamon javers is on the ground near reagan international with the latest update. good morning again, eamon. >> yeah good morning to you carl. what we know now is that officials are saying there were no survivors from this incident at about 8:48 p.m. last night when a commercial jet crashed into a us army blackhawk helicopter here just off of reagan national airport. they are