that's all for this edition of "dateline." i'm andrea canning. thanks for joining us. [theme music] >> good morning. >> and welcome to street signs. i'm julianna tatelbaum, and these are your headlines. >> novo nordisk. >> defies the weight of expectation. >> posting a beat on the. >> top and. >> bottom line to. >> send shares. >> sharply higher. >> we'll hear from the. >> ceo shortly. >> santander extends. >> gains climbing toward the top. >> of the stoxx 600 after posting a. >> better. >> than expected fourth quarter net. profit of ■k73.3 billion. executive chair ana botin tells cnbc the lender does not need

m&a. >> to boost. >> its numbers. >> we do not need to buy. >> or sell to allocate capital in or out of certain geographies. we have been doing. >> that in. >> an active way. >> our goal. is to. >> maximize capital. >> allocation, to. >> benefit shareholder value. >> and so. >> again. >> we do not need to buy or sell. >> president trump announces. >> plans to, quote, take over. gaza and redevelop it during a state visit by the israeli prime minister. >> i do see a long term ownership position and i see it bringing great stability to that. >> part of the middle east. >> and. >> maybe the entire middle east. >> and investors. >> turn cautious over. >> alphabet's big. i spend after the google parent company announces a whopping $75 billion investment in the sector this year, far exceeding forecasts.

got a very warm. >> welcome to street signs. let's get. straight to the market action. >> this morning. the stoxx 600. >> has been hovering around the. >> flat line. >> but we have seen a. lot of moves at. >> the single stock. >> level this. >> morning as. >> investors refocus on earnings after. >> all of the tariff. saga over the course of the first. >> couple days of this week really dominated. >> the. >> market narrative in. >> terms of individual regions. >> this morning. >> here's the picture. we're down at six basis. >> points at the stoxx 600 level. >> on an individual region basis. you got the. >> xetra dax down 4/10. >> of a percent. the cac40. >> over in france down about a third of. >> a percent, ftse mid. >> down 7/10 and. >> the ftse 100. >> just slightly below the flat line. >> putting it. >> into context. >> this. >> comes after a. >> positive session. >> yesterday here in europe. >> and on. >> wall street. more confidence or rather. >> less concern around the. >> tariff outlook. >> seem to.

>> be underpinning the performance on both sides of the atlantic in. terms of the sectors today in europe. really interesting to see the divergence here. and a lot of that. >> comes from what we're seeing. >> on an individual stock basis. you've got health. care out in. >> front. up more than. >> 1% this morning, novo nordisk and gsk leading that sector higher. the banks also catching a strong bid. this morning. santander driving that sector higher. on the downside this morning. here's the picture of the underperformers. you've got autos down 1.4%. >> yesterday we saw a major. >> rebound in the european auto makers. the basket rose about 2% yesterday as investors again grew a little bit less concerned around the tariff outlook. and that provided some support for the sector. but today we're seeing money come back out of that basket of stocks. technology also under some selling pressure this morning that basket down about 8/10 of a percent. alphabet shares perhaps weighing on sentiment in the overall sector. taking a look at the individual stocks i mentioned a couple of the big movers already.

>> but here's a. >> look for you at how. the big earners are shaping up today. novo nordisk up 3%, gsk up 5.5%. so a lot of focus on the pharma sector. let's dive straight into those novo earnings. the company posted. >> a. >> fourth quarter beat on the top and bottom line, but the sales sales of its weight loss drug, wegovy did miss expectations, and growth for the year ahead is also expected to slow as competitors look to tip the scales in their favor. now sylvia joins us with the ceo of novo nordisk to tell us a little bit more about what's going on at the pharma giant sylvia. >> that's right giuliana. so let's get straight into the conversation. >> i'm pleased to say. >> that i have with. >> me lars. >> jorgensen, the. >> ceo of novo nordisk. >> good morning, and thanks for having us over. >> thanks for having me. >> first and foremost, i would like. >> to focus on. >> some investors had a lot of questions about the trial results we obtained in december. but today. you're saying that you will be asking for regulatory approval in the first

quarter of 2026. tell us what's making you confident to achieve that timeline. >> so what we've seen is a very potent. >> biology that. >> delivers. i think, among the. >> best weight. >> loss seen in the industry so far. we have also. >> looked into the data and. >> see that it's. >> appearing to be very safe. >> and also. >> well tolerated. >> so that really. >> caters for. >> a very strong. >> product to the market. we have also said that we will be doing one. >> more trial to. >> further seek out the. full potential of kagoshima, because we believe there's. >> more to be delivered. >> by extending the treatment. >> period a bit and. >> also looking. >> at. >> you know, really escalating. >> dosing for some patients. >> so we remain confident in the profile. >> of kagoshima. >> perhaps you can give. >> us. >> a. >> little bit more color. >> on why we only saw 57% of the patients achieving the highest dose. was that a question of tolerability or any other issue that prevented more people from achieving that dose? >> i think it's. >> important to. understand that. >> when you deal with a really. >> potent biology like.

>> kagoshima. >> you will see a lot of. patients actually reaching a very, very. >> attractive bmi. to lose the weight they were looking to. to, to lose. and that's something we have not. >> seen. >> to. the same. >> magnitude in the past. >> where we're dealing with. >> less potent biologies. so again, we. >> believe kagoshima. >> is well tolerated. but tolerability is also a notion of how much weight. >> do you. >> lose and how. >> fast do you lose it. so i actually think that's a positive for kagoshima. >> so perhaps patients. >> were actually happy with how much weight they. >> had lost. >> yeah. >> when you if. >> you do. >> just the. >> math. >> if you for. >> instance start with a bmi. >> of 32, you lose 25% body. weight and you approach a body weight. >> of. >> you know, 25, then you're no longer considered obese. so when you deal with really potent. >> biologies like we. >> do with asthma, you'll see patients responding differently and some responding very, very significantly. and that's i think, a positive. >> you also. >> working on another drug called amikacin.

>> explain to. >> us the strategy. >> here with grissom and amy creighton. >> yeah. >> so we. >> have all along. >> felt that. >> the two most powerful. >> biologies in weight loss is. >> glp. >> one and amylin, and that we now combine in different ways based on different underlying, say, molecules in kagoshima. >> it's a. >> it's a it's a loose combination. >> we always try. >> to make it co-formulated. and in marketing we have a unimolecular format where we have further optimized it. and that showed, you know, a very. >> attractive weight. >> loss profile in a phase one, phase two trial, which we are very enthusiastic about. and we are seeing, you know, in dialog with the regulators, how fast we can get that into phase three development. >> perhaps we can clarify to us. >> which one do you think is actually your best bet to compete with eli. >> lilly's pill for weight loss? >> well, actually, also this quarter we announced that we are seeking, you know, approval of our pill in the us. so we have

we go in in a tablet that actually delivers the same weight loss as we do with gobi. so we actually think we can compete actually in the us market with a tablet based obesity treatment before lilly can launch. so we have a really broad portfolio of different, say, biologies, also both injectable and tablet based, and that really caters for a strong position in catering for many different patient needs from both an efficacy point of view and a convenience point of view. >> so just to clarify. >> the pill you have prepared with egov will be. available this year. >> well, we announced that within a couple of months we will submit it in the us. and then the regulators will have to look at that so that that can cater for if all go well, launch next year. >> i also want to look at the guidance for 2025. you know, you met your expectations for 2024. but going forward, do you expect

slower performance in the new year? >> where is the biggest. >> pressure coming from? >> so when you look at it, we grow from a bigger and bigger base. and if you do the math, actually what we are adding in terms of volume, new patients in 2025 is the same as what we add in 2024. so it's actually a continued steady growth. but of course, as the base gets bigger and bigger, the relative growth becomes smaller. so it's really about continued serving on patients living with diabetes, obesity. both in the us, we had a bit of a soft start to the us. in the us for wegovy some specific explanation to that change in formulary coverage and also supplies moving through the supply chain. so in our guidance lines lies a very robust performance also in the us. and we're more than doubling our business outside of the us. so we're very confident in the continued growth in this

category and also the demand in the obesity category. >> talk to us about the. >> outlook for the united states in more detail. when you think about the price pressures that wegovy could be facing in the united states, when you think about the whole new rhetoric from the administration, how are you preparing your business to protect it, really for these pressures that are coming? >> well, when you do business in the us, we are used to a market structure where when you launch products, you see a steep uptake and then you see a gradual, say, serving and more and more channels and price go down. so on all the product launches we have done in the us, we see a gradual decline in pricing over time. and that's also what i think will be happening in the future. we have experience in dealing with this inflation reduction act, where our instruments were price negotiated, and now we have glp1 products coming up looking to be included in that. so when i look at our business medium long

term, we have already factored in those dynamics. and when you look at the us, we have access to 55 million patients living with obesity. and we're only serving 2 million of those. so the volume opportunity is immense. we ramp up manufacturing to do that. and that's really bringing treatment to patients who can lose weight and are on our products. we also have all the comorbidity benefits. so it's really about changing health for millions of people. and that's really our purpose. >> and yet when you hear some comments of the new administration, when you think about how the likely person to be the new health secretary, some comments he has made also in the past, have you actually had conversations with robert f kennedy junior about how he views glp one drugs? so he had a chance to speak. >> to that? i have not had a chance to speak with him directly, but i see there's a lot of overlap in what he's trying to do. so helping people living with chronic diseases

that to some degree is linked to how we live, what we eat. that's all along, all along down the agenda that we are driving. we also drive prevention of obesity. we focus on preventing that children develop obesity. so what what are the health systems we need to work with. so you know i support that agenda. then we also have to accept that there are many for whom it's too late to talk about prevention, because they already progressed with obesity. and we know it's very difficult to change lifestyle. they need care. and i think we have amazing products that can help them lose weight, improve health and live active and. participative lives in the us. so i'm i'm open for any kind of dialog that can help driving health and, you know, defeat the burden of people living with serious chronic diseases. >> when you think about what. >> some of his comments were regarding vaccines and even glp one drugs, when you think about the incoming administration

saying that they actually want to buy greenland, when you think about tariffs of the new incoming of the new us administration, are you worried about what the geopolitical scene could impact, how they could impact your business? >> i think that's part of doing business as a global company. you need to deal with changing regulatory systems around the world. but i would like to underline that novo nordisk is actually also a us company. we have more than 10,000 employees in the us. we have manufacturing in the us. we just finished a $2.5 billion manufacturing plant investment, and we are already started the next more than $4 billion being invested into a new facility. we have also bought new facilities in the us. we have research and development in the us, so we operate in the us for the us, bringing the benefit of our amazing innovations to those patients who have struggled a good part of their life. losing weight and concern about developing comorbidities. we are there for them, and i actually think that agenda is aligned with most governments around the world

now. >> david, rex, your arrival at the eli lilly, he was speaking to my colleague stateside a couple of weeks ago, and he said that that eli lilly is ahead of you, of novo nordisk. in this market. what's your response given this fierce competition with eli lilly? >> i think we have, you know, a 100 year combat going on with lilly and that, i think has made lilly strong and made no noise strong. when you look at the facts today, we serve two thirds of all people getting a glp one. so when you look at the volumes worldwide, we serve twice as many as many patients as lilly does. so you can you can count leadership in many ways. i count it in the number of people who benefit from our medicines. and there we are, the clear leader, and i think we are investing in the volumes and our pipeline that we can stay a very, very important company for all those people struggling with serious chronic diseases like obesity. >> before i. >> let you go. >> i just would like to understand whether you think this is peak performance for

novo nordisk, with the. results for 2024. given the lower guidance for 2025. >> i would just like to again address the guidance for next year is a lower percentage on a bigger base, but the absolute growth of nordisk is similar. so we keep growing at a at a constant pace and i'm really, really pleased with that. i think it's a testimonial to a lot of great colleagues in the company who work hard every day, and we'll keep investing in the future because we believe in this market and we see demand for our products. >> and just. >> to clarify on that, what is the chance, the likelihood that you'll be forced to actually cut the guidance for 2025? so when we met, given all the uncertainties. >> when we give a guidance, the midpoint of the guidance is the plan we have, and then we have put a range around it to accommodate what we see of uncertainties. and i think in healthcare, when you serve people living with serious chronic diseases, there is a

constant demand and our job is to make sure that we maneuver the environment to the best possible degree so those patients can trust the medicine they get from us. >> it's always great. >> to speak with you. thank you for your time today. lars jorgensen. >> the ceo of. >> novo nordisk. on a day where giuliana, clearly looking at the share price move, investors are so far happy with what the company has delivered today. >> that's right sylvia, one of the best performers in the european market. thanks for bringing us that interview. for more on novo nordisk's earnings, you can check out cnbc.com. now. elsewhere in the earnings earnings world, santander is in focus. the company announced a share buyback program amounting to around 25% of the bank's profit in the second half of last year. fourth quarter attributable profit rose 11% on the year to ■k73.3 billion. executive chair ana botin told cnbc the bank does not need to rely on cross-border m&a to allocate capital. >> there is no framework. >> today for. >> cross-border m&a. so what you're going to see and you're

seeing already is. in market consolidation. >> a lot of the players don't. >> have the option that santander has. >> to. grow organically. across our. existing footprint. we do not need to buy. >> or. >> sell to. >> allocate capital. >> in or out of. certain geographies. we have been doing. >> that in an. >> active way. >> our goal is to maximize capital allocation, to. benefit shareholder value. >> and so again, we do not need. >> to buy. >> or sell to allocate capital. many of. >> our. >> peers are more. >> single market. >> that means that when there is, you know, not a lot of growth. >> there's not the option of cross-border. >> you are going to. >> see in. >> market consolidation. >> now, another strong performer this morning, gsk beat expectations for its fourth quarter earnings amid continued strength in its hiv and oncology portfolios. the pharma giant, however, did see weaker vaccine sales in 2024, flagging they were expected to fall further this year. nevertheless, the company raised its long term forecast, expecting overall

sales to grow to more than 40 billion pounds in the next six years. gsk also issuing a share buyback program $2.5 billion, and that's perhaps part of why the stock is doing well this morning. it's up more than 5%. total energy is also advancing in the early moments of trade, posting a 15% decline in fourth quarter earnings. but adjusted net income in the final three months of the year came in slightly ahead of expectations at $4.4 billion. the energy giant says it has seen strong growth in its lng trading, and that higher electricity sales helped to offset weakness in oil prices. the company also said it will pursue a secondary listing in new york this year, in addition to its main listing in paris. let's get you a check on us futures and what's in store for the wall street open. after what has been a quite a volatile week for u.s. stocks right now, we're looking at a pullback. the nasdaq looking to drop about 190 points. yesterday we saw wall street rebound the first time in three days that all three of the major indices ended higher. but after hours we did hear from

alphabet. and it took some of the shine off of the tech trade. shares are down in extended trade after the tech giant missed fourth quarter revenue expectations and announced further investments into ai. massive investments. so that stock down 7.25% after hours. we're also keeping an eye on apple. the stock is down in premarket trade by about 2.8%. last i checked, bloomberg reporting that china is considering a probe into its app store policies. we are chasing this story, but that is something weighing on investors minds in the tech space this morning. coming up on the show, president donald trump floats us ownership of the gaza strip, saying it could become the riviera of the middle east. we'll have the details up next. >> home, the place. >> where you. >> create those. >> special moments. we celebrate the. >> home and the way you live in

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powering possibilities. comcast business. >> after a strong jobs report in december, will the january jobs report continue the trend? what it signals for the economy and interest rates, employment numbers and analysis. squawk box friday, 8:30 a.m. eastern. cnbc.

>> welcome back to the program. president donald trump has said the u.s. will, quote, take over the gaza strip, saying palestinians currently living in the enclave should leave and be placed in other middle eastern countries while the us develops it. dan joins us now with more on this story. dan, we have all grown accustomed to pretty shocking statements, stunning statements from the president. how serious is this assertion that the us could take, quote, ownership of gaza? >> giuliana, we still don't know how serious the president is being here, but of course, this has really raised a lot of eyebrows in the region. the president didn't say how this would be carried out or under what legal framework. and of course, supporters of the palestinian cause are really outraged here. the president, during this press conference alongside the israeli leader, floating the idea that egypt and jordan could be potential destinations for the palestinians, claiming other

arab nations might also be willing to accept them. but that's not something the palestinians, nor egypt or jordan want. it's also been firmly rejected, and not just firmly but publicly rejected by saudi arabia. early this morning, it issued a very early morning statement saying its commitment to the establishment of a palestinian state is firm and unwavering. nevertheless, it will be. >> interesting to. >> see exactly what the president does next here. here's how he characterized this occupation of gaza for the united states. >> i do see a long term ownership position, and i see it bringing great stability to. >> that part of the middle east. >> and. >> maybe the entire middle east. >> and everybody. >> i've spoken to. this was. not a decision made lightly. everybody i've spoken to loves the idea of the united states owning that piece of land. >> we're talking about it. he's exploring. it with his people, with his staff. i think it's something that could change

history, and it's. worthwhile really pursuing this avenue. >> you heard from prime minister netanyahu there as well. this is certainly a win for him. the optics of being the first foreign leader to visit trump show that bibi is back and he's riding high. of course, his visit is aimed at making sure, essentially, that gaza never poses a threat to israel again. and you can bet your bottom dollar he'll be extracting as many concessions from trump as possible in order to achieve that. there might be some method to the madness, though, and this is something that we've been discussing through most of the day. as you know very well, trump is a negotiating negotiator. he may have floated this idea to raise the stakes in these talks, basically seeking to build leverage here as he looks to garner more support from the arab states to secure gaza's future. of course, as i said before, what this looks like moving forward, though, remains to be seen. and clearly, a lot of concern in the region about what the president has announced in the last few hours.

>> dan, thank you so much for the overview, and please stick around for this next conversation with paul musgrave, associate professor of government at georgetown university in qatar. paul, thank you for being with us. let me pick up on dan's first point there around how this would actually be carried out. if we are going to go down the line of assuming that there is some credibility to this assertion from the president, that he wants to take long term ownership of gaza. how would this actually work? >> you know, this is. >> genuinely unprecedented. >> the united. >> states has. >> not been an. >> imperial power. >> in that part of the middle east. >> one would assume. >> that this. would have to. >> go through. >> either defense or state. >> it's ironic. >> the president is. proposing this on the same weekend, the same week. that elon musk and other folks in the trump orbit are dismantling usaid, which in some ways would be the most obvious agency to carry. >> out. >> this kind of reconstruction. but the long and short of it is, we don't know. it is

unprecedented. the reaction internationally, us in the arab world, even in israel, has been stunned because this. >> is such. >> a transformation, such a difference. and it's. >> hard to. >> think about the practicalities. the one thing that president trump is right about is gaza lies in rubble, and the simple physical. reconstruction of that place of that city is going to require an immense amount of work. but i don't think that when folks had thought about reconstructing gaza, they had thought about turning it into, as you mentioned, the riviera of the middle east. >> it's a great point. and not just an immense amount of work, but also an immense amount of money as well. i'm curious to get your take as to whether you think this is a leverage building exercise from the president in order to extract more concessions from the arab states, to pay for the rebuilding of gaza, and, of course, ensure that they also become stakeholders in the future of the palestinians as well. >> i think that what you point

out makes a lot of sense with president trump. the problem is always that we're never sure which of his statements to take seriously and which of them to take literally. i note that prime minister netanyahu. is very canny. and did not endorse the idea, but endorsed exploring the idea. >> i think. >> this is the first time that prime minister netanyahu has ever looked like the moderate when it comes to gaza reconstruction, but i do think that there's something to be said for the idea that this is a window shifting exercise in which president trump could be trying to move things along. >> that being said. >> this. is not the first time that he's proposed a beachfront real estate deal as a way to heal enmities. this reminds me of nothing else so much as his proposal for a north korean real estate development back in 20 1718 with kim jong un. so he may be very serious and he may walk it back as he walked back the mexico and canada tariffs. but it is certainly. >> going to. >> change the conversation. and it's going to make waves in a

less than productive way in the short term. >> we also know. behind the scenes, the president's son in law, jared kushner, is also working to advance the normalization of arab-israeli ties in the region and, of course, seek to secure what could be the grand deal in the region, which would be saudi israeli normalization. before we get to that point, though. tell me what this means for immediate stability in the region and this very fragile ceasefire deal still playing out? do you think hamas is going to maintain this ceasefire if it knows that the americans are coming to occupy gaza? won't this just embolden the palestinian resistance efforts here from the iranians and its proxies? >> i think. >> that you've got it absolutely correct. if you remove an endgame in which every actor can see themselves getting a piece of the pie. you remove any reason that they have to

cooperate. you know, hamas has come out of the conflict battered but not beaten. certainly they've taken a lot of lumps, but they are not destroyed as a fighting force. and i would also add to this that it's not clear that this would make the west bank any more stable than gaza has been, because now, if you're living in the west bank and you know that the united states is even floating the idea of a population transfers, clearly what would be next would be, if not the entire palestinian authority, then certainly large chunks of what's happening, greatly accelerating the process of settlement and displacement that's been taking place. and that would expand the conflict quite a bit more. so, you know, this is something where even if the president floats an idea, i think he needs to be conscious that other folks are listening to this. and it might have been better to have somebody like jared kushner float this idea in order to catch the flak that's going to be associated with it. >> paul, thank you so much for sharing your views with us and helping us understand the

potential implications of this assertion from the president will, of course, be watching very closely for any additional comments. that's paul musgrave, associate professor of government at georgetown university in qatar. and of course, dan, for giving us the story directly from the region. dan, thank you so much for joining us on street signs. now back here in the uk, we are awaiting final pmis on the economic front. we're closely watching these numbers ahead of the bank of england decision tomorrow. the final composite has come in at 50.6. that was a touch lighter than the flash number 50.9. the services pmi coming in at 50.8. that was much weaker than the flash 51.2. still in expansion territory. so that's encouraging in terms of the overall level of the index. but not quite as strong as the initial indication suggested. so growth continues to be continues to be an issue in the uk. but things are improving. there's a look for you at sterling dollar.

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now with robinhood gold. >> go pro with a flash sale offer for a limited time at cnbc.com pro. flash terms and restrictions apply. >> welcome back to street signs i'm julianna tatelbaum and these are your headlines. president trump announces plans to quote take over gaza and redevelop it during a state visit by the israeli prime minister. >> i do see a long term ownership position, and i. see it bringing great. >> stability to that part of the middle east and maybe the entire middle east. >> novo nordisk defies the weight of expectation, posting a beat on the top and bottom line to send shares sharply higher. the ceo telling cnbc the company's pipeline remains

strong. >> we have a really broad portfolio of different, say, biologies, also both injectable and tablet based, and that really caters for a strong position in catering for many different patient needs from both an efficacy point of view and a convenience point of view. >> santander extends gains climbing toward the top of the stoxx 600 after posting a better than expected fourth quarter net profit of ■k73.3 billion. executive chair ana botin tells. cnbc the lender does not need m&a to boost its numbers. >> we do not need to buy or sell to allocate capital in or out of. certain geographies. we have been doing that in an active way. our goal is to maximize capital. >> allocation. >> to benefit shareholder value. and so again. >> we do. >> not need to buy or sell. >> and apple shares sour in premarket trade as china's antitrust watchdog reportedly eyes a probe into its app store. fees and practices.

european equity markets this morning are seesawing around the flat line. a lot of focus on individual names this morning, with earnings coming sharply into focus. you can see overall we are lower at this stage. the xetra dax down about 4/10 of a percent. the cac40 about the same. the ftse mid down 7/10 of a percent. but the real story lies under the hood here. so let's take a look at the individual names in focus. you've got santander right at the top of the stoxx 600. that stock up more than 8% gsk in the pharma space also catching a strong bid this morning alongside novo nordisk. on the downside, pandora shares about 1.6% lower. also in focus from an earnings perspective. now, i also want to mention that china has returned to action today, returning from the lunar new year. here's a look at how things shaped up overnight. shanghai composite down 6/10 of

a percent as investors of course, digest all the news over the last week or two. you've got the tariff risk, deep sea, the emergence of the low cost, the low cost rival to those us incumbents. so much to interpret there from a china perspective. hang seng index down 9/10 of a percent in overnight trade. now on to us futures. here's the picture for wall street. we are looking now at a more than 200 point drop in the nasdaq. apple shares are down premarket as we just mentioned in the headlines. alphabet also down in extended trade after delivering earnings last night that really shook investors from a capex perspective. thankfully i've got graham benkert with me, co-manager of amonte global investment innovation fund, to talk through what's been going on in markets. so graham, great to have you with us. >> thank you. >> yeah thanks. i had a look through your year end investment report and you sounded pretty bullish on the us. the us economy anything in the last couple of weeks changed that view. >> no. >> not really i don't think so. i think a lot of the companies. >> that we look at, we're an innovation fund, as you say.

>> we kind. >> of look. >> towards very. specific areas of innovation. >> where there's quite. >> a lot of. >> technological inevitability. >> to them. so these. >> are things. >> like electrification. >> or maybe defense spending or. >> areas in pharmaceuticals. >> so and a lot of those. >> we just. >> see the progression very consistent. if anything. >> things like. >> ai accelerating some. >> of the focus there. >> and some of the spend. so yeah we're. >> still. >> very bullish on those names. >> so you look outside of the magnificent seven i would assume. that's correct. have you felt more emboldened in that trade given the emergence of deep sea and the threat that it perhaps brings to nvidia and the hyperscalers? but the opportunity that that brings to some of the other names? >> yeah, i. >> think so. i think ultimately. we don't think it changes the changes the game materially, except for the fact. that if anything, if you're a if you're somebody who wants to use. >> ai, potentially. >> this lowers the cost. so, you know, if you're a frontier. >> ai company. like like. >> a google. >> or an open. >> ai, this. may help you to.

>> make your. >> models more efficient. >> if you're a user of ai, if. >> you're a company that wants to. >> take it. and create. >> agentic solutions. >> to your. >> business. >> then perhaps. >> this just lowers the cost. >> and makes. >> you know. those that that even. more attractive opportunity for you. so we're still very positive. >> i think. >> if anything, that accelerates the. >> whole ai progression. >> how do you think about europe versus the us? feels like europe. any way you you cut it is really a laggard. >> yeah. >> it's very difficult. >> isn't it. >> i mean. >> europe it is somewhat reflected in the valuations, but. >> it's hard. >> not to look. >> at the fact that. >> the us. >> is cutting. regulation and have has a. >> very pro-growth focus. >> whereas europe you know, it's. >> in many ways the opposite. and particularly in the uk, it feels. >> like we're, you know. >> very high regulation environment, very low. >> growth, high tax. >> so yeah. >> from a from. >> a kind of. >> investment standpoint. >> the us. >> still stands out. >> to us. and the direction of travel seems to be much more positive. >> yeah i guess the problem is valuation. and you mentioned

that's obviously the lure of some of these european plays that it's more attractive from a valuation standpoint. so in the us where do you see that value. where isn't this priced in already. >> yeah i. >> think if you look at the top of the market. >> as you said, the magnificent. >> seven. >> there's you. >> know, a lot of those stocks are pretty expensive. but if you go down a little bit into the mid-cap space, into the sort of russell 2000, you can. >> find some. >> still very attractive stocks there that. >> have. >> you know, this kind of consistent drive, as i was talking about in specific niches. so. >> you know. >> again, we try to get a bit under the hood. if you look in areas, growth areas like radiopharmaceuticals or, you know, again, defense spending, you're really not paying very high multiples for pretty consistent growth. you're getting very strong free cash flow yields, which is something we care about. >> and what about the threat of tariffs is the you know, are these innovation plays immune to the tariffs or is that something that you need to consider. >> yeah. >> no they're definitely not immune i think it's very difficult to say at the moment how how. >> this. >> plays out. it seems at the

moment that it's being used much. >> more as. >> a as. >> a kind of negotiating tool. trump's obviously a dealmaker and he's using that to his advantage. >> but but. >> tariffs typically are not positive. >> for trade. >> and they're just effectively. become a tax on companies. so we're very careful about that. and think. about where are the ultimate where are these businesses selling into you know, what are their markets? a lot of the companies we invest in are based. >> in the us. >> and the majority of their market is in the us domestic economy, so they won't have such an issue, but it is a concern. >> another point that i picked out of your investment report was your comments around ipo activity, and the expectation that we will see an uptick in ipo activity in 2025. why would pe and vc now be looking to exit some of these investments? why is now the time? >> i think they've been sort of trapped to some extent. you know, the ipo activity has been very weak for the last few years, and i think there is a pent up demand to get to move some of those those names off the vc books and, and get a

traditional exit, which is how those those companies operate. if the market weakens again, then probably they're going to have to use more debt and just to keep that cycle moving. but we do think there's definitely demand from that side. whether the market stays and plays ball is very hard to predict. >> and are you going to be looking to get involved in some of these plays sometimes. >> and when we look at ipos, but often they tend to be a bit overhyped and we prefer to wait for a little bit of time and see how the business settles in. and it's an adjustment for a management team to come to the market. >> yeah. >> and so sometimes that can be rocky. >> certainly we've seen that happen time and time again with a lot of these silicon valley companies that have come to market. another one of your your or one of your holdings really stood out to me. and that's eli lilly. we're watching novo nordisk closely today. the stock is up strongly on the back of results. eli lilly has been sharing the leadership in the glp one space with novo nordisk, but the stock is up almost 500% in the last five years. a lot of that has got to be priced in

already. do you think the stock is fully valued now or is there more to run? >> no. we do think there's still quite a long way to go for it. i mean, you're right. it's come up a. >> lot. >> that whole shift towards these weight loss diabetes treatment drugs has just revolutionized medicine across the world. and so we're still seeing the impacts of that and that it hasn't reached full penetration by any means yet. also in eli lilly's case in particular, they have potentially an oral drug coming later in the year, which again, would add consistent, you know, another another layer to that market. and plus their pipeline of other things is interesting. they have a very interesting alzheimer's drug. that's again, in the sidelines that. we think could be significant for the business. so still more to go for we. >> how long do you expect it to be effectively a two horse race between novo and eli? you know, before the other pharma companies that are trying to get a piece of the pie anyway begin to really, really step in. >> yeah, there's no doubt competition will come in. i mean, that's that's that's normal. >> yeah. >> and i think the point is that

the market grows so will still grow so significantly that we can afford to have other players come in other entrants, and the pie gets bigger. and maybe your share of the pie goes down a bit, but the overall number goes up. >> all right. graham. well thank you so much for joining us this morning. graham benkert co-manager at amati global innovation fund. ferrari in focus this morning after reporting a 21% rise in net profit for the year. the company guided for further earnings growth in 2025. charlotte filed this report from the ferrari factory in maranello. >> ferrari shares were trading higher after the luxury car maker beat expectations. thanks to personalization, but also a. >> strong demand from the key market. in the us. >> now they. >> see further. growth going into. >> 2025 and as we discussed. >> with the ceo benedetto vigna, about the demand from. >> customers for hybrids. >> but also. >> the arrival. >> in. >> their portfolio of their first fully electric car.

>> we had the. >> 51% hybrid, 49%. >> ic. 23 was. >> a little. >> bit the other way around. the ic was higher. >> we expect. >> 25 to be also. >> the ice. winning over hybrid. >> i think. >> it's the same story. >> of the quarters in ferrari. what is. important is the sales over the years. here it's. >> you see the trend. over many. >> years if you want. so there is always this oscillation because it depends on the customer what they are. >> asking for. >> and look at your portfolio. there's a new comer, an important. >> one coming. >> at the end of the year. you're fully electric car. >> the. >> way i forgot. you presenting. >> it in october, your. >> capital markets day. are you. >> already taking orders for that car? >> how are you. >> on track for. >> for the end of the year? >> we never. >> take orders. >> before we release. i think. >> we are on track. we said multiple times and. >> the team. >> we are on track on the product development. we are on track on the industrial

infrastructure. if you go to the building. >> you see many. >> things that will be fit. >> in the car. >> that was charlotte speaking to the ferrari ceo. you can watch the full interview on our website cnbc.com. coming up on street signs earnings season heating up with google parent alphabet disappointing investors after missing revenue expectations and spending big on. i will bring you all the analysis next. >> you put together. >> like a. >> classic. always work your magic every time you owe. >> make this. >> valentine's day one to remember. don't just get flowers. give her an incredible moment. >> from bubbles to bills. >> to butterflies. >> give her a thoughtful. >> unforgettable, and. >> truly special. >> valentine's day gift. with fast shipping.

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chicago counterpart, austan goolsbee. the earnings keep on coming with disney arm and qualcomm amongst the big names reporting today. and the u.s. postal service is temporarily suspending all inbound packages from china and hong kong following new u.s. tariffs on chinese goods. apple shares are seen lower in premarket trade after a report that china is considering a probe into the tech giant's policies and app store fees. that's according to bloomberg, which cited sources familiar with the matter. cnbc has reached out to apple for comment. apple's not the only one that is down premarket. alphabet shares sank in extended trade after the tech giant missed on fourth quarter revenue expectations and announced further investments into ai. revenue at the google parent company grew 12% year on year, slightly weaker than the same quarter last year amid a slowdown in its search business, as well as its youtube ad business and services unit. richard kramer, senior analyst at arete research, joins me now. richard, thanks for being with us. why is the stock down? what

exactly has investors concerned in these numbers? >> juliana. >> so you need a little. >> context here. the stock hit all time highs yesterday and was posting record margins. now the. shortfall you discussed in cloud was less than 1%. >> and 12 billion. while the. >> street. >> was looking. >> for 12.1 billion. >> and they said they. >> were. capacity constrained. >> in. >> a business. >> now generating. >> 17% plus margins. so in that context, their decision to spend 75. >> billion. >> on capex, we were at 66. the street. was at 58, was surprising to the street, but not surprising in the context of the ai mania and arms. >> race we've seen. >> between all the big. >> tech companies. >> what color did they give around where that $75 billion is going? >> so, you. >> know. >> google has long. talked about being a. full stack ai company. >> they have their. >> own data centers. they develop their own. tpu custom.

>> chips, which most. >> of the other big tech. >> companies are now. >> trying to catch up to. them in that effort. >> and they're on their sixth generation of tpus. >> they obviously. >> have incredible research. >> capabilities, including. >> nobel prize. >> winner, you know, head of deepmind and what they're. >> struggling with now. >> but not unusually for everyone else in the sector. >> is to turn. >> that research. >> into ai products. and applications. >> that that billions of people are going to use. >> not. >> just the heavy usage that's getting right. >> now among the developer community. >> what did the company have to say about deep seek? >> so, you know, they got asked a question. >> about deep seek. >> and i. >> think what you see in their. >> gemini family of models. >> is a range of. >> very large scale models to very small scale gemini. >> flash models, which are. suitable to run on smartphones. i don't think deep seek is going. >> to change. >> the trajectory. of big tech. >> capex spend, because a substantial portion of. that is

for those cloud businesses, which, again, are capacity constrained and have literally thousands or tens of thousands of other customers looking to access the compute capacity. >> that. >> they've built. so it's not just simply a matter of building a lightweight model and running it on a smartphone. there's industrial scale applications and many thousands of enterprise. >> customers paying for what is now. >> a 40 to. >> $50 billion. >> run rate business. >> for. >> google, generating. >> a good. >> profits, you know, rivaling. >> or trying to rival aws and azure. >> richard, i wonder to what extent alphabet's fate is tied to gemini and the ai models that it is developing. and i asked this on the basis of all the debate around the future of traditional search. clearly, chatgpt and the other chatbots out there provide an alternative to traditional search, and that is why alphabet is developing its own models. but those models

are surely going to cannibalize standard search. so what is the fate of the search business? >> it's a great question. and look for the past five or. >> more years. >> the wall street analyst community has said, oh, search is dead. >> search grew. >> double digit every quarter this year and added $23. >> billion of sales. >> and that dropped to the bottom line to $25 billion of free cash flow for google. >> so i. >> know that it's very fashionable to say that search behavior will get completely changed overnight. >> google is. obviously trying. >> to. >> do. >> that and cannibalize themselves with ai. >> overviews. >> which consolidate search results. >> into single, multi, >> multi-part answers. >> but bear in mind they're the number four brand in the world. they have enormous distribution via android, via the kind of deals we know that they've struck with apple and others, and they have by. far the largest corpus of search history. and again, having all

of those assets to bring to bear, i think it's a little bit foolish to think that someone is going to come in and take material market share very soon against google search. we've seen many companies try to do that, but. >> but really fail. >> and i think, you know. >> i'm not saying that chatgpt. >> and. >> perplexity and others won't start to. erode query. >> growth for. >> google, but they have their own response. and gemini is certainly one big. >> part of that. >> so we'll continue to watch. gemini, i want to ask you about china's probe into google and how significant you think it is for the stock. >> so look. >> one logical. >> reason why. >> the stock might have fallen back from all time highs is there are still a lot of issues out there, not just the china antitrust probe, which reflects the fact that google android is used on on chinese smartphones everywhere outside of china. although, you know, inside china, huawei, for example, has its own os where you have antitrust remedies that need to

get announced in the us. so there are certainly many risks sort of looming for google that would prompt people to take profits in a stock that had hit all time highs. but the wider issue. for the china question right now is the advertising of china e-commerce players on on platforms like. >> google, both. >> in search and youtube. it's the android probe. it's the dampening effect it might have on e-commerce. >> and google. >> called out how strong its shopping business. >> was in. >> q4 last year. so this wider china us question, as you just referenced with with apple a moment ago, is going to weigh on all the big tech stocks until there's. some resolution of some sort or some steady state understanding. and i think right now we're still in the tit for tat pr battle over, over. >> over china-u.s. relations. >> richard, just finally and this goes to your point about alphabet coming off of record high levels. are the magnificent seven overvalued? is it simply a

matter of all the all the upside already being priced in. and now investors looking elsewhere? >> well. >> when you. >> look at. >> the weight of these companies in the market and you look at the pole of attraction, that is the us market for global equities, the valuations at least have have been less of a concern than people trying to latch on to these businesses as growth stories, and also importantly, as large liquid assets. so it's very easy to move in and out of these mag seven stocks with the news flow, whether they're overvalued. i think if you look out 3 to 4 years with these companies, that the compounding of cash flow growth that they have, they start to look on. much more normal multiples. the risk now is that big tech as a whole, with 2 trillion of sales, with 300 billion of capex, is just outpacing what the smaller rivals are able to do in. competing with it. and they clearly, if you look at the big

tech companies in advertising, for example, amazon, meta and google have outgrown all of their smaller rivals. so it's really a question of whether these companies are going to continue to take market share. and where else would investors go outside of tech to find the kind of growth that these companies are delivering? >> richard. we'll leave it there. thank you so much for sharing your analysis with us. richard kramer senior analyst at rsa research. we will leave you with a look at markets. we are trading lower overall in europe after the rebound we saw yesterday on both sides of the atlantic. plenty to look forward to. stateside u.s. futures at the moment are weaker. that's it for today's show. i'm julianna tatelbaum. worldwide exchange is up next. >> home where. >> routine meets remarkable with unexpected. moments of inspiration. around every corner

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