the loop. thank you. your final trade. >> my final trade today is software igv. i think it recovers these losses. i like it for the year. i like it even more at these prices. >> okay. thank you. jason. snipe pfizer clover continues to deliver. >> jimmy cisco continues to perform. >> i like it. >> director brokers. see you on the bell. >> thank you very much scott. and congrats liz and welcome to the exchange i'm kelly evans. we have a big hour ahead, a busy day on washington, but we'll come back to that later on. it's also another busy day on the ai front. this time amazon is launching its new generative ai product. it's a voice product, and the twist is it costs 20 bucks a month. if you're not a prime member. the shares are down 10% from their record high just three weeks ago, and they're on pace to snap a five month win streak with their worst month in two years. now it's the splashiest move we've seen from the tech giant in quite a while, so we'll see if that turns the tideere. and

joining us now to talk about that in a first on cnbc interview is amazon ceo andy jassy, along with our very own jon fortt. welcome to both of you, john. >> all right, kelly, thanks, andy. thanks for coming all the way out to new york. you had a big announcement today, alexa. plus we want to talk about that. i also want to mark 2025 is ten years since you and i first sat down at reinvent 2015. so, yeah. >> it feels like it's been 20. >> we'll see how you feel after the interview. no. so tell me about alexa. plus there's this shift in what alexa can do. and as we've got this this era of new models in ai, you're in this agnostic use the best model for the job. how is alexa plus going to work better in differently for people? >> well, we're really excited to announce alexa plus today. it's our next generation of personal assistant. she's more she's smarter, she's more capable, she's more useful. and you can do all the things you've been

doing with alexa for ten years, but just every single one of those functions gets better with generative ai the way we built it in. and i'll kind of give you some ways, i've been using it myself, playing around for the last few weeks to give you an idea of why i like it so much. you know, i'm a big music fan. you and i have talked about this before, so the other day i was trying to remember i went to the opening night of the guns n roses use your illusion tour in 1991, in alpine valley, wisconsin with my college roommate, and i was trying to remember who the opening act was for it. and so i asked alexa and she reminded me it was skid row. she said, you want to play skid row? i said, maybe not. i did want to play guns n roses song, but i wanted to play the song that i couldn't remember the name of. i said, it's the song that begins that has the word apples in it. she's like bad apples. do you want to play it? i said, yes, like that's, you know, think about that versus what alexa's been. she wouldn't have known the opening act. she wouldn't have known when it was. she wouldn't have been able to get bad apples from guns n roses. so, you know, much smarter takes action. or, you know, if you use alexa for smart

home, you can now say, hey, we have guests coming to the house at 7:00 tonight. please open the drapes, turn the lights on the porch in the driveway, raise the temperature five degrees, and play mellow music in the dining room. like all just verbally. no app, no complexity. just all happens, you know, again, taking action or, you know, in new york i can i can ask where good restaurants around where where we are right now. she'll give me ideas. she'll ask if i want to make a reservation. she can make a reservation for me. so it's not just that she's really smart and can be conversational, but she can also do something that you just don't see today in these chatbots, which is take real actions and get real things done. >> multi-step awareness, context, that kind of thing. now tie that in for me to the business overall, because we know about aws, huge data center

presence, huge scale. you guys are the biggest. you've also got trainium inferentia. you've got chips that are tuned specifically to do the task that you want done in the data center. combine that with what you're doing now with bedrock and the choice of models on top of that. how does that give you a business advantage and maybe even longer term, a profitability advantage over the other players in the space? >> well, i think one of the interesting things about what we're doing with ai and at amazon is we have this very unusual ai flywheel, where if you know, if your mission is to make customers lives better and easier every day, which is ours, and if you believe every customer experience is going to be reinvented by generative ai, which we believe, then you're going to be building a lot of generative ai apps. and if you're building a lot of apps, it means you're getting a lot of feedback from builders on what they need in the building blocks for generative ai. and then if you invest in those building blocks like we have, you know, our own chips with trainium two,

which are 30 to 40% more price performance than what's out there, our own frontier models and amazon nova, our own model building services, and sagemaker, our ai and generative ai application building services and amazon bedrock. if you're investing in those, you can get a lot of feedback. it can't help making those investments and those services much better, more quickly. and as they get better more quickly, it can't help but allow builders to more easily and quickly build generative apps, which means they can't help but build more apps on top of the platform. so there is that very unusual flywheel we have, and it impacts really all the areas of our business in a way that's unusual. >> we saw it in smartphones, really. we saw it with apple and ios and the app store built on top of it. and then if you if you get the right customers and you have the right tools and it's easier to build. et cetera. et cetera. but there's a difference between ios and android in profitability and in willingness to pay right for the customer. how do you make the

customer experience the businesses who are building their applications on top of aws, tapping into those models that you make available on bedrock so much better than what they can get on other platforms that aws excels. >> well, remember, what aws ultimately is, is it's a set of technology infrastructure services that others build applications on top of. and the more that we make companies successful, building better customer experiences and improving and growing their business, the more aws succeeds. and so really what all those i mean, if you're building generative ai applications, which every company virtually in the world is doing, and you start to get to scale, you realize really quickly that inference or the predictions at a scaled generative application get expensive. so you you know, the key to that inference is the chip that's in the compute. and so if you can save 30 to 40% in price performance on the, on the chip and on the compute like you do with trainium two over what you can do today with gpus,

that's a big deal. and that means more people will actually start using trainium and trainium to run their applications. and the more people that run trainium to remember training two r chips inside of our ec2, which is our compute service inside of that of those instances, the more people run those, the more that they drive the aws business. and aws has a reasonable profitability profile. so the more we get people, you know, using trainium to using or really any chips on top of our compute infrastructure, using our services to build models that they then deploy to applications that run on aws. the more those applications run on aws, the more it grows the aws business with a reasonable profile margin. >> i do want to talk some more about that in ai, but first i want to touch on some other things and actually first, something that that ai doesn't yet do so well, which is craft high end entertainment. recently, fair to say, the hollywood world has been rocked by the news that amazon mgm is

taking full control over the james bond enterprise it had been. let's see michael g. wilson, barbara broccoli, who sort of post their dad, were guiding that franchise. so people are concerned that amazon's going to over commercialize or something. tell me about what amazon will and won't do. how much attention are you paying to those notes that ian fleming took about what's bondian and what's not? >> well, i mean, first of all, i don't believe that ai is going to write a bond movie anytime soon. so, you know, i think that we are we're incredibly honored to have the ability to help shepherd the bond franchise for the next generation. and we have amazing filmmakers that we've hired over time. and mgm, amazon studios. and, you know, we haven't we don't have a plan yet on what the next theme is going to be. we have nobody's written

the story yet, but we will take great care. it's an amazing franchise that we care a lot about, and that we expect to develop over a long period of time. >> now let's talk about retail and the consumer a bit. give me your sense now that we're a couple months into 2025, you're talking about consumers really looking for bargains and even trade downs. i think late last year. how is it looking into 2025? as for some consumers, credit continues to be stretched. >> i think we're seeing pretty similar things, john. i think that consumers are still spending they're being careful on how much they spend on each product, where they can trade down in price. they do so where they can find deals. they continue to do so. and we spend a lot of time trying to help with our third party selling partners. customers have lower prices. we were, you know, ranked the lowest prices in us retail for the eighth year in a row by row right before the

holiday season. and so i think we see a lot of those same things. i think there are certain countries where maybe the economics or the macroeconomic factors are just more challenged, germany being an example of that. but we you know, i think what happens in times where consumers are a little bit uneasy about different economic conditions is that they customers tend to figure out who are they going to buy from. they tend to pick a smaller number of merchants they buy from. and because we have such broad selection and we have such low prices, and we get items to people so quickly and we take care of customers first and foremost. i think customers are continuing to choose amazon from where they're purchasing. >> i want to zero in on that, getting things to people quickly. that logistics piece, the stat i've seen is that amazon logistics processed 5.9 billion us delivery orders in 2023. 27% of all packages shipped in the us. it was a close second to the us postal service then, which had 31% of parcel volume. do you think

you're going to pass usps in 2025 if you didn't already in 24? >> well, you know, it's funny. we don't spend any time thinking about that or talking about that, john. we have and we are unusual, probably relative to most retailers where we've built our own last mile transportation network that's, you know, at least the size of ups at this point. and, you know, so most of our shipments go through our own last mile transportation network. but we, you know, the usps is still an important partner of ours. and we do work with them. and for various geographies, and i don't it's hard for me to tell what their what their growth will be like. but we expect to continue to grow our own network. >> because they've been shrinking. at least they were heading into that last stat. how important is scale in that the actual last mile delivery piece of the business? last time you and i talked, we were talking about those local sortation centers. and when you scale up

with those, it actually gets easier to deliver faster. how is that working out with the scale that you're achieving? >> well, scale matters in almost everything you do. when you have scale, it helps with all of your various cost structures and all of your inventions. and there's so much technology. innovation in our fulfillment network gets amortized over a larger number of nodes. sometimes when you when you scale, it can create complexity. and so if you remember, you know, for the pandemic, we took a fulfillment network that we'd grown over 25 years and doubled the size of it in 18 months and then built out a last mile transportation network the size of ups in 20 months. and when we were done with that, we had a different network than we had before, and it took us time to really optimize that network and get the cost to serve right. but what it does is as you reach different elbows of the curve and scale, this is true in a fulfillment network. it's true in technology services. as you get to different elbows of the curve and scale, you have to go

back into your architecture and figure out where are the points that may not scale the way you want. and for us, in our fulfillment network, we completely re-architected where we had our big hubs, we built a regional network. we completely redid the architecture around our inbound network. and so now we're able to get items located in fulfillment buildings much closer to end users, which means shorter delivery distances, which means we get to customers more quickly at lower cost. >> now also on to talk safety when it comes to that, in about a week and a half, it'll be a year since the last amazon safety report that talked about the progress that you had made on on injuries in the warehouses. now that progress as of a year ago still had you, i think with more than twice the injury rate of walmart. i don't know if you have an update on that for the more current period or how you're hoping that's going. >> yeah. well, the first thing i would tell you is just in terms of trying to compare injury rates, different companies, if

you actually look at the detail, which i've spent quite a bit of time along with the team doing, everybody measures it differently. so it's very hard to do an apples to apples comparison. but if you look at if you look at the safety data over the last few years, or all of our key safety metrics have improved about 25 to 30%. so very significant. we will share our 2024 first look at our 2024 safety metrics. they got better again year over year. and so you know for us safety is priority zero. it's the very first thing that we care about. and if there's something amiss about it we'll stop what we're doing and re-architect and but i'm really proud of the progress we're making. >> well speaking of walmart, amazon quarterly revenue past walmart for the first time recently. and i know it was a q4. so it's a little bit different. you're talking about scale before, do those benchmarks matter at all? i think they probably matter to investors to kind of trigger a sense of how big amazon is

getting overall in terms of the amount of money that that customers are trusting you with. >> well, you know, i have a lot of respect for walmart. always have. we spend zero time talking about those benchmarks. i've never been in a meeting where we've talked about where we are size wise, or that we might have a higher amount of revenue than walmart. we just don't. you know, last time i checked, it doesn't improve the customer experience any. so it's just not a factor for us. >> something else i'm tracking and watching your advertising and subscription businesses together. i think as of the last fiscal year passed $100 billion a year in revenue. advertising now has a $12 billion lead on subscription. how much of that signifies how the business is shifting, broadening, including media, including so many third party sellers trying to get seen? >> yeah, well, you know, the first thing i would say is that

we don't think of advertising as a business per se. i mean, there would be if there was no retail marketplace, there wouldn't be any retail advertising. so, you know, advertising is something that's a part of a number of our businesses. it's part of our stores business, our retail business. it's part of our prime video business. it's a part of our grocery business. it's part of our audio businesses, you know. and then we try, you know, we spend most of our resource on the advertising side. it's most of the team are really there. scientists, particularly ai scientists who are trying to come up and refine products and algorithms that show customers relevant products so that customers are exposed to a number of new products that they otherwise might not have known about or gotten exposure to. and that's what we spend a lot of our time on. i think it's improved every single one of those experiences that way, and allowing people to learn about products they otherwise would not have, and we're constantly working at it. >> how has that changed, though? because from the earliest days i

can recall using amazon. it's well, people who bought this might also like there's always been a recommendation engine that, you know, it seemed like i at the time and it was we just have sort of talked about ai in different terms now. how is the capability different? how is the workforce that you have able to make better use of that now? >> well, it's really what we're doing. everything that we're building and trying to expose is for customers. and so we still have what you were defining, we call similarities, which is, you know, people have bought these products most often buy these products. and that's still a very important feature that customers use that's very prominently displayed. it tends to be products that have broader history over time. that's how they get enough purchases to make those algorithms. but there are so many new products all the time from sellers inside, you know, country or outside of country that just otherwise don't have a way to get above the fold and get exposure and

awareness for customers that a lot of customers value learning about. and so that's what we're trying to do with our advertising algorithms in our retail marketplace, which is give exposure in a relevant way based on what you've searched for, some of those products that don't have the history yet to naturally get into similarities. >> how are you speaking of exposure? how are you modeling amazon's exposure to this policy rift between the us and china right now? so many third party sellers are either in china or relying on product coming in from china. tariffs going up is going to affect them. how do you model that out? >> well it's hard to predict. and it's you know it's hard to know what's going to actually where we're going to net out on tariffs between china and the us or any other countries that, you know the world's been talking about. but we have you know, we have a very robust, substantial number of sellers, china sellers who sell in our marketplace. and they have done very, very well.

and they they work really hard to have great product, to deliver on time, to make people aware of their products. you know, if there end up being tariffs, my suspicion is they'll still sell in our marketplace. some of the prices may be higher, but that will be true for everybody who has sellers or merchants or partners in china. >> okay. you and i have a tradition going back now, probably at least 7 or 8 years, where i ask you whether you're going to spin out aws, and you always give me the same answer, but i want to ask it with this framing. now, given that we're so deep in the ai conversation and we've just been talking about advertising and data and how closely that is tied in to the retail conversation, how does that factor in to the answer you're going to give me when i ask you, are you going to spin out aws? >> well, john, if you've been listening all these years, that has always factored into the answer. and so oftentimes i start with explaining that usually companies spin out business units that they don't want them on their financial statements, or if they can't

afford to fund the new, new business. neither of those are true for us. you know, in the aws business, we have so many customers and partners who want to have a partnership with us, not only in aws, but sometimes in our retail business or sometimes in our entertainment business, or sometimes in our devices business, or sometimes in our advertising capabilities, where the companies with whom aws competes have the same sorts of strategic relationships. so it's very useful to be part of the same company. but on your data piece, i think i presents kind of another good example of how it's useful for us to be part of the same company. it's it comes back to this, what i think is a very unusual and compelling ai flywheel that we have at amazon, which is if your mission is to make customers lives better and easier every day, which is our mission. and if you believe that virtually every customer experience is going to be reinvented by generative ai, which we believe, then you're going to be building a lot of generative ai apps. and

if you're building a lot of generative ai apps, it means you're going to be getting a lot of feedback on the components that can make those generative ai apps better and easier to build. and if you're willing to invest in those components, which we are, as you know, we talked about chips with amazon nova and our own frontier models, i'm sorry, chips with amazon, with trainium and trainium to our own models, frontier models with amazon nova model building services like sagemaker ai or generative ai, app building services like bedrock. if you're willing to invest in those services like we are and you get all that feedback, you can't help but improve those building blocks for generative ai much more quickly. and as we improve those building blocks more quickly, you can't help but make it easier for first party and third party application builders to build generative ai apps. and when you make it easier and quicker for them to build, you end up with more of those generative ai apps on top of your platform. and that flywheel is very unusual given the nature

of both of what we do in aws, and then the breadth of businesses that amazon pursues, and having those connected, as you can see, drive each other in a very powerful way for customers and for our business. >> so no, you're not. >> spending a dollar. >> i don't know if you've heard, though. sometimes companies spin out gems. comcast is spinning out cnbc. that's anyway deep seek. let's talk about that. it was up in your presentation this morning. among the menu of options on top of bedrock that customers have to choose from. there's been a lot of talk about jevons paradox and this idea that when something gets cheaper in the technology world, you know, more efficient, it's going to drive up the usage of it. have you seen that even since the emergence of deep sea, even since your collection of nova models, what have you seen happen with usage? >> well, i would say that first of all, i'm a huge believer that the less expensive you're able

to make technology, people really appreciate having a lower cost per unit of that infrastructure, but they don't tend to spend less. it tends to open up the floodgates to all the other things they want to do, and they end up in absolute spending more. so the more cost effective that we can make inference, whether it's through our own models and amazon nova or models like deep seek or any of the models we provide, the easier and more cost effective it's going to be for customers to be successful with generative ai. and the more that they're going to build and run on top of aws, and that will be good for customers and it will be good for our business, you know, deep seek. it's early. you know, we got the deep sea models into bedrock within a week. we have real usage there. you know, it remains to be seen how many western companies will choose to run applications with sensitive data on top of an open source chinese model company. i don't know if they are. if people are comfortable with that, great.

we'll make it really easy and very performant on bedrock. and if they don't, they'll use other models. >> but is it actually opening up the conversation about nova because you've got an efficiency story and different sizes and different levels of capability of nova based on how heavy duty the task is? >> yeah, i would say deep sea doesn't open up that conversation, but the fact nova has a lot of buzz and a lot of early usage in bedrock because it not only has comparable intelligence to the leading frontier models in the world, but it's meaningfully lower latency and cost effective. you know, in bedrock, it's about 75% less than the other bedrock models. and so, you know, the dirty little secret when you actually have generative ai applications at scale, which we have several, is the inference gets expensive. and so if you can find ways to make the cost meaningfully less, that's very compelling. and by the way, you it's great to be intelligent and to be able to ask an application

intelligence things. if it takes 20s, it takes 10s to come back with an answer in something that typically takes less than a second or less than two seconds, it doesn't work. so you need the right ballpark of intelligence. but then low latency and low cost are huge, huge considerations, and nova is leading on those. >> i know you said this morning that nvidia continues to be an important partner, and you expect that for the foreseeable future. how much has your demand for ai chips, for gpus, for accelerators shifted as you've rolled out these more efficient models? in nova. >> we have we have a lot of demand for ai right now and a lot of demand for our instances that have trainium chips. if invidia chips, amd chips. and i would tell you that at this stage you could change. but at this stage, if we had more capacity than we already have

and we have a lot, but if we had more capacity, we could monetize it. >> for nvidia, you're. >> saying for everything. >> for everything. >> yeah. i mean, you know, i think remember i mean there's really predominantly been one chip that people have used the first couple years of this revolution around generative ai. i think over time people are going to use lots of different chips and how that mix changes. we'll have to see. but i, i have high confidence that that training will be a chip that a lot of people use on top of our platform, in addition to nvidia. >> is this potentially like the logistics network, where, i mean, it used to be, oh, everybody uses the postal service or ups and fedex. and now look here's amazon right about to it looks like be the biggest out there. >> i think the thing that's similar about it, john, is that if you think about the engine inside of amazon, everything we do, if you were there in the heartbeat, in all the meetings, what's driving all the conversations is what do we think will help customers? how can we make customers lives better every day? and in this case, if people that use ai,

they desperately want better price, performance and same thing. by the way, when in our in our retail business, we spent all this time figuring out how can we get items to people more quickly and more cost effectively, and people don't want to pay for shipping and they want it fast. and so over time and the pandemic accelerated this because of how demand changed in the early part of the pandemic. we just realized that our third party partners, while they're still partners and will be they just didn't want to expand to the degree that we needed at the cost structure we needed to serve customers the way i just mentioned. and i think the same thing, you know, you're seeing in chips, which is that we'll have customers who use nvidia chips as part of ec2 instances forever. but increasingly, as more companies are trying to do generative ai at scale, they want better price performance to be able to afford it. and that's what's driving our investment in uranium two. and the trainium series is that we want to

provide leading performance, but at lower prices. and for us, we have a little bit different business model, maybe some other people. for us, the more people are successful in using these chips and compute, we're able to drive, you know, better customer experiences, growth in their business. but also we have a different business model because we have a because it seemed like, especially right up until the election in the us, there was a lot of reticence around spending. but then at the same time, post inauguration, there were some consumers who were ticked off about ceos they saw showing up at the inauguration. some people also very happy about it. have you seen any shift in amazon consumer patterns kind of post-election post inauguration, or if things pretty much evened out, normalized? >> now we haven't seen a shift. you know, look i'm customer what customers care most about. and we've learned this over a long

period of time. what consumers care most about in a retail business is really broad selection, low prices and getting items to them quickly and a company they can trust that's going to take care of them. and i think we're unusual along those dimensions. and i think it's why people continue to choose us. we have been a business now across six administrations in every single one of those administrations. our primary focus has been trying to take care of customers. we always try to have a productive relationship with the administration here in the us. some have been more receptive to that than others, but we will always try to have a productive relationship because we're headquartered here in the us and we want to help the country. >> and there are always frustrations between business and administrations. how's this going so far, this relationship with the second trump administration? >> well, i mean, it's early, obviously. it's been a month or so. a lot's happened in a month, but it's been a month. and, you know, i would say so far i'm optimistic about it. you know, i think that this administration

seems to want to partner with businesses, seems to want to hear what what's working for businesses and what's not working for businesses. i have never understood how governments in any country believe they're going to get to the best answer decisis without closelyng partnering and hearing what would work and what wouldn't work with the private sector. and so to me, the most productive countries is always a partnership between the public and the private sector. and this administration seems to want to partner with businesses and hear what they have to say. >> all right. andy jassy, ceo of amazon. with me here in new york, i appreciate the time. >> thanks for having. >> me, kelly. >> thanks to amazon ceo andy jassy and jon fortt. thank you as well for bringing that to us. really appreciate we won't blame that interview for tanking the market, which has taken a move lower here, and we'll get more on that more broadly in a moment. but let's get some quick reaction to what we just heard from our next guest, who's bullish on amazon with a 30% higher price target from here at

280, expects the company to be a big winner in ai, also expects them to hit the trillion dollar revenue mark by 2028. brian nowak is senior internet equity research analyst at morgan stanley. brian, welcome to you. listen, so a big move here. albeit alexa's revamp had been delayed for quite some time, it was promised back in 2023. a lot of the features they're showing off do involve, you know, the usage of other apps or video elements that people might not have access to right away. so a few bumps here as they look to roll this out next month. >> yeah. thanks for having me. good afternoon. i think this is this is quite exciting because what we're seeing out of amazon is sort of now the next phase of what could be more agentic capabilities to come out of amazon and really come out of alexa. i thought that andy jassy did a great job at explaining new sources of consumer utility, new use cases for customers that ultimately could drive more utility, more engagement, more

consumer spend, and ultimately more monetization for amazon. to me, the thing to watch here is, number one, it's very notable that if you're if you're a prime member, you're going to get access to the alexa plus capabilities, including your prime membership. that was better than expected. and then, number two, the fact that all of the current echo devices are going to be backward forward compatible with this does sort of really open up the available number of people who could use these new capabilities pretty quickly, right. >> so you see those as as kind of incremental wins. but the stakes are high, right? i mean, there's so 400 million people are using chatgpt. you know, those are their active weekly users. and this use product is a little different. you know, it's an audio product. it's in the home. and they've been advantaged by the fact that apple's not doing a whole lot on that front right now. google's been a little bit quiet in that space. i mean, the runway is there for the taking. >> i think it's a it's a great point because the runway is there, because it is so early in the build out of these agentic

offerings, these agentic capabilities. what i would say is i sort of bucket the opportunities for amazon into into two separate categories. one is within e-commerce and the second one is sort of extra tertiary new use cases. so within the e-commerce use case, one of the killer next generation applications that i'm still looking for is going to be the next gen grocery shopping agent. >> amen. >> which company is going to say on saturday morning? good morning brian. here are your ten items you order every week for grocery. i found some dip that goes well with these chips. here's a coupon and we're going to bring it to you on monday morning. is that what you like? and i will say yes amazon with the leading technology, with their logistics network and with all of their first party information, arguably they and walmart are the two companies that are best positioned to capitalize on that. >> right. and so here's what's interesting about that. just to jump in and a subject near and dear to my heart. so i was i

used to be a frequent whole foods shopper. i'd go there all the time. it's a little hard to get there these days. it's the only now i use doordash all the time. i find it very elegant, very convenient. but whole foods isn't on there, right? so if they're not going to be part of the leading app, which if doordash adds an audio feature, integrates ai, it's going to be able to deliver exactly what you're talking about, very short order. if amazon doesn't do that, then the whole point of owning whole foods is going to be a giant missed opportunity. >> well, it's sort of a. >> situation where the in order to really have that great user experience, where you're going to have your grocery agent every weekend, you need to have superior first party inventory information. so you need to know what inventory you have and what you don't have for the grocery order. so doordash and uber eats is they're trying to build this out as well. one of their challenges, they don't have perfect inventory information for all the inventory in their stores. amazon and walmart do. the second thing that amazon has arguably even better than walmart, i would argue, is a leading logistics and shipping network. they have the leading warehouse network. they have a

superior shipping network where they can actually get the items faster to you. so in those three factors of inventory, availability and breadth, technology and user base, and then just the logistics, amazon has all three. but i would totally agree with you that dash, uber eats, and walmart should all be sort of pursuing this next generation shopping agent. >> absolutely. and they're almost there. and amazon, ironically, whole foods is the hardest thing for me to get delivery because it's a separate technology. it's not on the amazon platform. so those challenges are there. but nevertheless the stock is still near all time highs. definitely to be sure. let's bring in deirdre bosa brian if you'll stay with us. deirdre one twist as we talked about amazon is going to charge for this alexa plus 20 bucks a month if you're not a prime member. obviously a lot of people are. and it comes as most of their rivals, most of the big ai firms are cutting prices or making their models free. >> yeah, that's absolutely true. it's kind of been this race to the bottom. so much in ai has been put on sale or made free

from openai's three mini model copilot, google's ai coding assistant. these are only some of the things that have been reduced or put on for free over the last few weeks, so you can't help but wonder if that pressure jassy to give a revamped alexa to at least prime members for free. because back in may of last year, our kate rooney reported that in the early stages of planning, they were considering charging even prime members for it. and if you figure there's what, some 200,000 prime members globally, that is a lot of ai for free. that's actually half of open ai users. so that gives them a good head start. back then, though, many of the most advanced features and models, they were only accessible with a paid subscription. you basically had open ai, anthropic and google. they had larger moats so they could charge. but if you look at the field now, there's so much competition and it's really a land grab as the space very quickly becomes commodified. alexa plus now enters this screen. finally, some might argue too late, and offering it for free, at least to prime members does give it a chance at

adoption when there is so much out there already. kelly andy jassy talked a lot about pricing in that interview. he is a believer in jevons paradox. he said that cheaper, more efficient ai opens up the floodgates for a bunch of other stuff that customers want to do with ai. so the more cost effective amazon can make inference, jassy says, the more their customers will use and build it. he also said that amazon's custom chips that will continue to help lower prices for them. so in that sense, kellling prices across the ai landscape that may simply lead to quicker adoption as intended. as satya nadella said. now, as andy jassy has said, it's still a turf war, though, and the best capitalized or the most vertically integrated players, they may be able to last longer if this trend continues. >> i don't know if you're an alexa user, but would you? how would you rank kind of the importance of using voice alexa with its, you know, new device and all of that versus, you know, the apps that we that we dabble with, with with ai. i mean, is there a space for all

of it? >> you know, we are i hate to admit this. we are a huge alexa power user family. from my kids to myself, everyone. and we're frustrated with that. i mean, we use it like most people for timers and to play music, so this will be really interesting. i like the examples that jassy gave. those are some of the ones that i could see us using as well. what's the song name and when was it played, etc, etc. so i do think that there is room for this because it's so natural to, if you are an alexa household to speak to it. it feels overdue though, but still. i mean, openai has the voice. chatgpt is great, but you don't have a device that you can just talk to in your home. it's not as integrated as intuitive yet. >> that can immediately kind of jump in and act on those prompts. brian, i'll give you the last word. >> i think. >> i think there is some some very good points, and i think that the, the fact that the, the fact that alexa plus is going to be available for free to prime members, that is an important

step, because even as we sort of think about the premium versus free offerings on agenda capabilities this year, we're still waiting to hear from what are we going to see out of alphabet and gemini? are they going to make more of that's free? how is openai going to expand its free capabilities? what is meta and lama going to show us over the course of the rest of the year on the free front? so the step from amazon and saying, if you are a prime member, you're now going to get more capabilities with our large language models, it is sort of the next step in trying to drive more agentic opportunities for consumers overall. >> all right. thank you both. brian nowak of morgan stanley, deirdre bosa for techcheck today. let's move along to today's big earnings report, which of course is nvidia. after the bell. the shares are rallying ahead of the print though. they're off the highs as the broader market dips a little bit lower. and amazon ceo andy jassy just told john ford he's seeing a lot of ai demand right now. you think that would bolster including instances of using nvidia chips? let's get some thoughts from my next guest, aaron rakers, a senior research analyst for it hardware

and semis at wells fargo. and jeff kilburg is ceo of financial and a cnbc contributor. jeff, how important is this report? >> i think it's wildly important. kelly. it's amazing. nvidia has been the backbone of the tech sector for the last two years. so right now you're seeing nvidia up about $4 with some anticipation that yesterday was an oversold condition. so we're really looking forward i think the market though and investors are going to strip out the enthusiasm, the insane demand comment which will probably come out of the ceo mouth. but what we're looking for is the rubber meets the road. what actually happened with deep sea. but nvidia will absolutely be the tip of the spear to see if this selling pressure which we've incurred. we just saw the s&p 500 go negative as we're talking. we'll see if that's extended due to nvidia. >> yeah four day losing streak i think we're coming off of. so this could make it five depending on what the next few hours bring. and jeff let's not forget we're going to be hearing from the ceo with a busy day for john ford. my goodness. tonight 7 p.m. so we might get that

color. the market has really often seized on those colorful remarks about demand that he's made in the past. >> well, and that's the question because deep sea, we don't actually believe that deep sea can create the same model for 2% of the cost using lesser chips. but we're going to find out tonight if that was real or not. in the event it is, you will see further pullback. but what's interesting about nvidia here it's actually from a price to earnings valuation. it's pretty cheap. so there is more room to run i think the ai conversation i think investors have been very patient. i've been very enthusiastic. but now investors want to see actual revenue return on investment. kelly, the capex for the mag seven names are over $400 billion just for 2025. so now investors are scrutinizing this. we talked a lot about this on the exchange the last couple of months. when will investors shift to scrutinizing that capex? i think today with the conference call on nvidia, that will be interesting. and that'll be the takeaway. >> all right, erin, you know, we've got we want revenue. we want earnings. we want margins in what the high 70s. what else do we want tonight. >> yeah i think you touched on

it there a little bit i think it's all about, you know demand visibility durability and then also diversification. right. extension into the enterprise market, sovereign ai, etc. and then i think, you know, the key focus, as jeff mentioned, right, is hitting on the deep seat narrative. so i think jensen would lean in right on what he talked about at ces. actually did an interview last week where he said, basically, you know, investors mental mindset around this has been wrong, right? that it's all about the scaling of inferencing, what he calls test time scaling post-training. and i think we would expect the company to lean in on that narrative, which i believe is a positive. >> so, you know, the sort of bigger one of the biggest concerns hanging over the stock is about u.s. export controls, is it not? i mean, we're going to get the china number. there's still a lot of questions. and you have to wonder about that white house conversation around the singapore number and how much of that is really china. what do you need to hear from the company? >> yeah, i think there i think, you know, china has not disclosed exactly as a percentage of the data center

revenue, but it's been maybe 10 to 15%. i think they just need to hit that. is there any risk around the age 20? and, you know, if that ship gets some imposed restrictions and i think he'll hit the singapore discussion head on. i know there's some bloomberg articles out recently about, you know, that that demand is really not in singapore. and i think they would expect to kind of hit on that that key topic which which again, i think is a positive i think it's more about, again, demand generation visibility and really also leading into the gtc event, as we look out a couple of weeks from now is a positive as well. >> true. i know a lot of people are looking ahead to that. and you've got an overweight rating. think it's one of still one of the most attractive secular growth stories out there? jeff, just a final word on the broader markets. i don't know, maybe you can tell us why they've dipped lower here and we're all hoping maybe this was the end of the momentum unwind. maybe it's not. >> yeah. and i think, kelly, we've been conditioned for the last couple of years to have an unwind in a day or two. we have to go back when we see mag seven

revaluation reset. it doesn't happen de-leveraging over 2 or 3 days. so with the vix up nearly 20, we are seeing more and more hedge funds, institutional investors reduce exposure to that mag seven. i think it's really healthy for the broader market. and one of the cushions or possibly one of the shock absorbers here, kelly, is the ten year note. the ten year note is at four and a quarter. so once we kind of work through this devaluation and we can all agree that it was way over the top ten holdings, the s&p 500 became too much globally. so this revaluation i think is quite healthy. and if nvidia does slip a little bit here, i think it's a buying opportunity. but you have to be considerate of the fact that we want more broad, and we want the other 493 stocks to participate in q1. >> the ten year is just, you know, dipping like a stone. today we saw the twos, fives, curves, invert. i think they said the ten and three months. so the market doesn't like those i know. and we'll try to circle back to that in a moment gentlemen. for now. thanks. aaron rakers jeff kilburg appreciate it. coming up, the president holding his first cabinet meeting today with elon musk in attendance. we'll get the headlines, plus details on

trump's $5 billion gold card proposal for wealthy immigrants as we head to break. the dow is near session lows. the s&p has turned negative for what could be the fifth straight day. it, along with the nasdaq, are trying to snap a four day losing streak as we await those nvidia results. after the bell, that stock is still higher. all the major averages, though, are on track to end the month lower. and there you see four and a quarter on the ten year. we're back after this. >> this is the exchange on cnbc. techcheck is sponsored by techcheck is sponsored by comcast at ameriprise financial we know our clients are so much more than clients. they're go-getters and legacy-leavers, and what matters most to them matters most to us. it's no wonder we have a 4.9 out of five client satisfaction rating. ameriprise financial. it's a smart move to get a second opinion. you do it when you're looking for a contractor. you definitely do it with medical advice.

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powering five years of savings. powering possibilities. comcast business. >> welcome back. the s&p and nasdaq were trying to snap a four day losing streak until very recently. we just saw the s&p tip negative. same with the dow which is down 2.32. and bitcoin is below 85,000 for the first time since november. we have unwound a lot of what's happened in the market since election day. this is one example down 12% in a week now. robin hood nevertheless trying to rebound and snap a six day losing streak, which was its worst stretch in over a year, fell as much as 28% during that timeframe before bouncing back. it's still up 6% today. remember, shares are up threefold over the past year. the company posted record profit in its latest quarter. transaction based revenue tripled, with half of those gains coming from an eight fold

rise in crypto trading revenue. elsewhere, meta trying to snap a six day losing streak, which it hasn't seen since 2023, down as much as 10% before rebounding during that stretch before rebounding. today, it's still up 2%. this immediately followed that record 20 day long winning streak, where it did climb 20% in that time. coming up, last night's passing of the budget resolution gets us a step closer to trump's big, beautiful bill. but with big cuts to medicaid likely part of that process and those stocks under pressure today. we'll dig into the other today. we'll dig into the other options to reach their spend when emergency strikes, first responders rely on the latest technology. that's why t-mobile created t-priority built for the 5g era. only t-priority dynamically dedicates more capacity for first responders. more, all backed by our 100%

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sale and make your dream office a reality. >> president trump holding the first cabinet meeting of his second term today and pushing back the timeline for mexico and canada tariffs. interestingly, he says they'll now go into effect on april 2nd. that's nearly a month later than the original date. but don't look to the market for any positive reaction. it's been weakening. for more here, let's bring in tobin marcus. he's head of u.s. policy and politics at wolfe research. tobin, what were the headlines for you? welcome. >> thanks for having me. i would say he arguably pushed back the applicability date of the mexico and canada tariffs to april 2nd. april 2nd is a date where he's intending to do a big tariff rollout. that's why they pegged for the reciprocal tariff. policy that they've proposed

globally, which could lead to very, very high rates in line with the 25% that he talked about on the eu. if ■they're throwing in value added taxes, along with actual reciprocal tariffs on the question of canada and mexico, it is still the case that the executive orders he signed snap back into effect after this 30 day delay. next week on on march 4th. if he doesn't do something in the meantime, you know, it kind of jumped in after he said april 2nd to say, you know, they do need to satisfy the president that they've made progress. and trump said that it won't be easy to satisfy him. so even though he's focused on the second, it's not totally obvious to me that he's going to be willing to say next week. actually, you know, they've done enough for me to give them another delay. >> well, okay, that's interesting because, you know, we watch some of the most sensitive stocks. do you i mean, i don't see a lot of movement. i think everyone's kind of in a holding pattern. >> yeah. in general, i have been finding in conversations with institutional investors that people are kind of throwing their hands up on, on tariffs. there has been so much noise, so many conflicting signals in different overlapping threats,

both sectoral and country by country, that i think a lot of investors are in wait and see mode, and they're just going to have to react when they actually see him do something firm. >> yeah. aptiv down, you know, 1% today. they have big supply base in mexico, although they're well off the 52 week high. more broadly, tobin, the house actually managed to pass the budget bill last night, which surprised a lot of people. i mean, they have a very, very thin margin. they only lost massie on it. what does that tell you? and do you think the senate will go along? >> so i think the senate is going to have to take a lot of the house parameters. i certainly don't think that they are going to just pick up the house budget resolution and pass it totally unchanged. they've been clear that they want to make changes, but my view has always been the house is the biggest bottleneck here given those narrow margins you mentioned. whatever they can agree on, it's going to be hard to get that far away from that, because that's the thing that sort of shows that conservatives and moderates can align. but, you know, i think punted a lot of the tough questions into the future. there's a ton of focus on this $880 billion number for medicaid. conservatives have been very focused on that.

they're pushing hard to get a high number. moderates very concerned. i think they're clearly hoping that will be bargained down later in the process. so i don't think that there's been a complete meeting of the minds about what the actual final bill is going to look like. >> yeah. still a more positive step for those, you know, and the negative reaction is in the medicaid space today. i mean, those exposed stocks are down 56% this morning. >> yeah i mean, look, i have always believed that they would need to do significant cuts to a variety of programs. but with medicaid being one of the biggest sources of money to make this bill happen, i thought that conservatives would be able to push for that, given the leverage they have in this narrowly divided house. so, you know, we figure that the house process would probably kind of succeed because it had to, you know, that they would vote for something because that's the alternative. is unacceptable. and, you know, i mean, they they got moderates for now to go along with the very high numbers. so i think that that some level of negative reaction, based on how much skepticism there was from some other commentators about the likelihood that they get this bill voted on at all, does make

sense. >> trump and the cabinet meeting again ruled out medicaid cuts, which i thought was interesting. i might, you know, email list for local health care groups. and there there's medicaid rallies already being formed. it's a hugely galvanizing issue. quickly, a new topic giving people a gold card. take a listen to what trump said about that. >> these companies can go and buy a gold card, and they can use it as a matter of recruitment. at the same time, the company is using that money to pay down debt. we're going to we're going to pay down a lot of debt with that. >> $5 million. maybe corporate america foots the bill. tobin, what do you think? >> so, you know, i think that a traditional understanding would suggest that congress needs to take action on this, that it's not something the president can do through executive fiat, although he seems to be proposing to do unilaterally. we'll see what what ends up happening there. conceivably, they could try and put this into the reconciliation bill, although it's an open question whether or not the budgetary effects are merely incidental, which is the threshold for whether or not policy steps can be done through reconciliation.

you know, it's an idea that makes a lot of sense for trump. he's always been much more favorable to high skilled immigration than than to low skilled immigration and to immigration from, you know, better off countries than worse off countries. so, you know, i think very much in line with his thinking, you know, there are some international analogs. it is not a totally unprecedented or or off the wall idea, but it's certainly a new one. so i think it remains to be seen how congress reacts. >> and we'll see if we get reaction from some of the big employers as well, if they'd be open and interested in participating. tobin, for now. thanks. appreciate it. tobin marcus of wolfe research today, before we go, as i mentioned earlier, we have a very special cnbc report tonight at seven eastern with jon fortt sitting down with nvidia ceo jensen huang after their earnings after the bell. you can catch that at 7 p.m. eastern. that's it for us. and i'll catch you for power lunch right after this break as the market is selling off. don't go anywhere. >> we empower those who act,

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where breathtaking natural wonders meet unmatched service from the heart. with one chef for every ten guests, indulge in gourmet dining on an ultra-premium small ship. scenic days, endless memories. call now for amazing savings. book now at oceaniacruises.com >> welcome to power lunch. i'm kelly evans and we're seeing a big midday reversal here in the markets. we'll talk about why speculate. see if we can figure out which of the recent events might have been contributing. we were trying to break a four day losing stretch for the s&p and the nasdaq. but we're not looking that way right now. we're at pretty much session lows with the dow down 288 points two thirds of a percent. the s&p down 18 points a third of a percent. right now even the nasdaq has tipped lower. what's interesting about that nvidia was one of the b