i started asking her does , microsoft have a future in ai?there are ai programs that do things for you in a human fashion. microsoft wants them in commercial areas, but also to sell you things and provide customer service. they're not only going to make them themselves, but they were pitching at the developer conference is that they were asking people to write bots themselves. >> we've had people on this program say microsoft is quietly making a big comeback. is microsoft very relevant? >> people are paying attention again. there are lots of exciting and interesting things happening. this is a company that is more tendon to the overall state of programmers than it used to be in the world of coding than it used to be. every now and then, the old microsoft comes out and bad happened withthat tape. -- tay. >> interesting, it is so interesting that microsoft as a company dominated technology, every conversation about technology regardless of the aspect not so long ago -- 10 or 15 years ago maybe. what matters most with microsoft? >> what matters

cory: i think it is so interesting that microsoft as a --t's was a company microsoft was a company thatominated technology, every conversation about technology regardless of the aspect not so long ago -- 10 or 15 years ago , maybe. what matters most? >> what matters most is building a future. they missed the mobile revolution. steve ballmer, that is probably the one big hit on his agassi. it put microsoft in this position. for the future, it is carving out a new market. artificial intelligence seems to be a strong part of that. conversation as a platform is a strong part of that. i also think that the success of the platform. cory: the success of azure or whatever -- everyone pronounces it differently. i say azure. that is a huge success for them. you see a lot of your clients talking about this. >> i think they are part of the big two. what microsoft hopes to do is infuse intelligence into that delivery of cloud-based services. >> intelligence like a bouncing paperclip. >> hopefully it will be better than our old friend, clippy. in this instance, developers can call on these different

let start with dow component microsoft. the world's largest software company in the middle of a transition to become more of a cloud company missed on its latest earnings report. microsoft earned 62 cents a share, 2 cents shy of estimates. revenue was essentially in line at a shade over $22 billion. shares initially fell more than 3% after the release. dierdre bosa is in redmond, washington, with the thing investors should focus on. >> reporter: for microsoft it's all about the rising cloud which has helped transition the company into a new era of technology faster than many had anticipated. but while cloud business is booming, it may not be enough to

microsoft has taken advantage of that memento. there is a bill going through congress that is looking to amend the 1986 law under which the government is seeking microsoft's assistance and the gag orders. the timing lines up nicely with that bill coming out of the house judiciary committee. it is microsoft both complementing its lobbying efforts with litigation and capitalizing on these issues being at the forefront. apple set the tone for these investigations. i think the government was surprised at how much support they had in the iphone cases. now we are seeing microsoft giving it a go with their argument. emily: loretta lynch was named in the lawsuit a couple of months ago about the apple-fbi situation and the issues at play. take a listen to what she had to say. aretta lynch: we are in situation where in so many cases, frankly i think in all cases that we at doj do, we see electronic evidence becoming paramount. we still get filed the papers and documents, but electronic evidence is what we are seeing with every case. emily:

. >> and microsoft's next act. >> let's go meet the editor. i am here with the editor of "bloomberg businessweek ellen pollock. aboutonvenient truth trade, and it talked about a ton on the campaign trail. >> it is a hot topic. it is all about people losing jobs and sometimes thinking they lost jobs to people abroad. makes a point that while economists are almost , there is free trade a reality that people lose their jobs through jobs going abroad. low-wage jobs are moving to places like china where things can be produced more cheaply. things are moving out of china to vietnam where they can be produced more cheaply still. they had these programs where workers are compensated when they lose their jobs to trade but they have not been that effective. to economists, the idea is when you loose your job to trade, if the markets are efficient, you will find another through some new business coming up. >> a really incredible feature in this issue, how to hack an election. introduce us to the man at the center of that profile. >> he is in custody in co

microsoft is not alone.s was a departure from what they have been doing in the last couple of quarters, which is having really good numbers and actually showing pretty good progress. so this is a little bit of a step back. part of this is cloud and part of this is pc and what is happening with the macro softening in certain geos like in latin america and the middle east. overall, if you look at what they are managing what they're doing, they couldn't do it any better. this is a multi-year transition and we think, again, that nadel is doing the right thing in the product line and amy is doing the right thing as well. but she has typically been pretty conservative on the q4 guide, so when you look at q4 guidance, she took a hatchet to the numbers, relatively, so i think we are all going to have to -- emily: right. cory, how do we think about windows? cory: i think this is another guidance issue where we used the phrase earlier, sandbag, but they may have given some light guidance and it worked. microsoft has b

alphabet and microsoft. those stocks are tanking and looks similar to the bad news we saw out of net flex and intel. tech telling us the real story here in the markets as we do see the queues down? >> the real story in the market is resilience of the broader market in the things we've seen now and over the last six months. it's telling a story that we would be talking about to a large extent but i don't know if that means the broader market will get crushed on the back. yes, queues are probably down. we'll see weakness tomorrow. the resilience of the broader market trumped everything we'll talk about in the next hour. >> until tonight. i mean -- >> until tonight, right. >> for me, i like the goal of alphabet. been a long time the move down is not dispreportion for the miss and headline number and call and more story, could be up and down but so far disappointing for sure. we'll see tomorrow facebook will be down, also, i think. every tech at the moment will be looking down. >> right. >> and google was down.

microsoft is not alone.hatwas a departure from they have been doing in the last couple of quarters, which is having really good numbers and actually showing pretty good progress. so this is a little bit of a step back. part of this is cloud and part of this is pc and what is happening with the macro likening in certain geos in latin america and the middle east. overall, if you look at what they are managing a what they're doing, they couldn't do it any better. transitionulti-year and we think, again, that nadel is doing the right thing in the product line and amy is doing the right thing as well. this is a step back. this is certainly not what we are we think others would like given -- given- all of the guidance. rate is good. and the core operations were in line and the earnings were up i one cent, relative to the numbers if you look at the tax rate that she forecast, so i think wall street will look at that tax change. but she has typically been pretty conservative on the q4 guide, so when you look at q4 g

would be retaliation from the chinese government if microsoft-- scott: microsoft's business in china. joseph: right. so, yeah, google famously started doing this in 2012, but if google has to warn you about china, google search is already gone from china. so microsoft has a lot more skin in the game. microsoft does a fair amount of business in china, and if they were to warn people that the chinese government, in this case, was reading their e-mail, things might go badly for them in china, and that's what they were worried about. jon: you know what also ratchets things up is it was the chinese president was in redmond. they were hosting the part of a tech conference. joseph: right. so microsoft has, again, they've got more money at stake. it's a big deal for them. they've got a different model, but microsoft has worked hard to stay in the good graces of the chinese government. scott: google has always told them. does apple? i mean, apple's got a big business in china. does apple tell its users about state-sponsored hacking? joseph: i don't know the answer to that. i looked mainly at

from microsoft come information and , microsoft-mails should be allowed to tell their customers thaternment is asking for this information. asks now, the government them to keep this a secret, to keep the request between them. microsoft says we are under and in limited gag order here. our firsttes amendment rights, the customer's fourth amendment rights to know. microsoft's chief legal officer gave this statement saying it is very important for businesses to know when the government is accessing their file room. whether it is down the hall or nothe cloud, people should lose their rights simply because technology is in the cloud. nursing this act is unconstitutional, it was put into law three years before the world wide web even existed and decades before the copy can the cloud. -- they are saying this act is unconstitutional. i spoke to the attorney general about this very issue. increasing amount of evidence that is being filed away electronically. we are in a situation where in so many cases, in all cases, we see electronic evidence becoming paramount. get files of papers and boxes

they are now facing microsoft.y are trying to stop the authorities from taking customers e-mails without their knowledge. step the most aggressive in a two-year feud. the department of justice is not alloww to microsoft to notify customers. sell servicesto that customers can trust. critics call the law outdated. i shares falling. sources say the nomination committee will meet this afternoon to discuss personnel changes, including new directors to the board. we've been talking about retailer scrambling to fill this power vacuum after its ceo step down last week. the management of people comes as daniel loeb has called for restructuring or disbursement of less profitable units while backing iaka. loeb accused the chairman of saka so hisemove i own son could take over the company. we will continue to watch that meeting. bank of america says it is go it further cost cuts as reported first-quarter results, expenses down to $14.8 billion. that has helped an offset in revenue and net income and sent the stock higher for a

not just to microsoft products.arol: the man responsible for the art on the cover is the creative direct to your of the magazine. how did you come up with it? >> we had an early discussion to representd how this new generation of artificial intelligent bots. it does not have a body, it sort of exists in space so there is real way to represent this accurately. we thought of something that was not quite ai. -- clippy.ipping hastorious figure that persisted as a symbol for this thing microsoft tried out the did not work so well. we took him as a character. he is clearly recognizable. he has a paperclip body and large, bulging eyes. toave him to an illustrator set up how he might look in the future. a large brain. and kind of hearing aid large, powerful legs. a larger, smarter clippy. largerthey own skype, so , right? that, butt think of yes. [laughter] out whatw do you find to make on the covers? >> is sometimes we talk to the artist and see what we can do. we make sure there is no problems with it and if there are not

microsoft backed apple. what is microsoft's track record with these issues?ave done this before, particularly since snowden. a number of companies have done a lot more to raise this issue and notify customers about encroachments on their privacy. they sued the justice department to report requests like these, secret requests, and a national security context and pushing back national security letters. emily: we know the government dropped their case against apple in san bernardino, but there are other iphones in other parts of the country in question. what is microsoft doing in filing this lawsuit now? they will hit 20 government is down, essentially? that is an interesting point. we saw the tech community rallied around apple. five this he questions are at the forefront of what the tech immunity is concerned about. microsoft has taken advantage. there is a bill going through congress that is looking to amend the 1986 law under which the government is seeking microsoft's assistance and the gag orders. it lines up nicely with that bill coming out of the house j

just last week, cohen carter said microsoft was about to hit a new high. take a listen. >> big beat. we're going to make the bet that it will do this again. and get back to the all-time high. >> i think the way to do this is to look at the june 57.5, 60 call spread. pay a buck for the 57.5. sell the 60s for 35 cents. >> as you all know by now, microsoft fell more than 7% today. >> if you make a trade and you have a premise, the premise is we're going to break out, and it's going to be earnings related. a gap up the last time. gap up the prior time. got the exact opposite outcome. a gap down. if the reason is gone, the trade is gone. it's over. walk away. it didn't do what it was supposed to do. >> as far as the options trade is concerned, you can't walk away. it walked away from you. it doesn't have any value left. you're basically stuck with a worthless call. the good news is, we only spent a little over 1% of the stock price, and that's the reason you do this in the first place. there we are. >> you're out. okay. dan's turn. also last week you said qualc

microsoft was its own story. two, big players. amazon and microsoft.was supposed to be a growth area. and the growth rate just was quite disappointing. and the earnings call had a negative tenor to it. you put those two things together, and people had bought into it on the expectations that this thing in particular was going to be good. it wasn't. it had to sell off as a result. >> carter mentioned the xlk. it's an actively traded thing. it's concentrated. the top ten holdings make up about 65%. six of the holdings have reported. all six have missed expectations. we had ibm, intel. there was visa in there and verizon, which had a sharp move. that's interesting to me. one reason i've stayed away from trading the xlk because at&t and verizon are thought to be investive. now, i think the timing is really interesting to look at the xlk. next week, we have two stocks that make up 25% of the weight of this thing. if they disappoint expectations and trade lower -- they don't have to trade as badly as microsoft and google did. the trend is probably broken. xlk

let start with dow component microsoft. the world's largest software company in the middle of a transition to become more of a cloud company missed on its latest earnings report. microsoft earned 62 cents a share, 2 cents shy of estimates. revenue was essentially in line at a shade over $22 billion. shares initially fell more than 3% after the release. dierdre bosa is in redmond, washington, with the thing investors should focus on. >> reporter: for microsoft it's all about the rising cloud which has helped transition the company into a new era of technology faster than many had anticipated. but while cloud business is booming, it may not be enough to make up for a declining pc market which hit microsoft's bottom line in the previous quarter through sales of its windows operating system. as for devices, diverging fortunes. surface sales were up sharply while phone sales continue to free fall. for "nightly business report" i'm dierdre bosa at microsoft headquarters. >>> google's parent, alphabit, the company's profit and rev

microsoft is down big today. are the tech giants losing their edge? and, willie cap on wall street bonuses make the financial industry less ricky? that is what regulators are -- risky? that is what regulars are banking on. you'll discuss the new pozo and what it means for investing. last to come here on bloomberg markets. ♪ you are watching bloomberg markets on this friday. i am carol massar. let's get a quick check on the markets. we are about 45 minutes away from the closing bell. we are off our highs of the session, our lows of the session. a mixed market. sadly higher on the dow jones industrial average. 17,999. nasdaq dragged down by tagger earnings -- microsoft, most notably. 4903. s&p 500, 2090, down just merely a point. the japanese yen dropping the most against the dollar in 17 months. we see some pressure there in terms of that trait. time for the bloomberg business business flash --bloomberg business flash. ub has hit the brakeser on a threat by settling with california drivers. the new deal calls for bet $100 million to drivers in californ

microsoft shares are up 33% in the past year.ut a cable box. the company offering tv watching apps as the federal government works on new rules that would force the tv industry to lend tech companies like tivo or google to sell cable boxes, consumers usually pay extra fees for these. lauren: more big names, releasing earnings reports, verizon communication is expected to report high results from a year ago, the dow component is the lead contender to acquire yahoo. verizon is unlikely to comment on a personal deal but reportedly will talk about its digital service business. analysts are looking for improved results when starbucks report after the bell today. growth and use of starbucks mobile pay apps. nicole: a critical meeting in the national committee, will they change delegate rules? >> we don't want to put our hand on the scale. we want a fair and open nomination process. we want to take the rules out of the equation and make this about the vote on the floor. nicole: peter barnes reports from florida. abolitionist harriet tub

alphabet and microsoft are the big games.e'll tell you what analysts are expecting. >> and coming up, we'll talk to black entertainment television founder robert johnson about the passing of music legend prince. man, i'm glad aflac pays cash. aflac! isn't major medical enough? no! who's gonna' help cover the holes in their plans? aflac! like rising co-pays and deductibles... aflac! or help pay the mortgage? or child care? aflaaac! and everyday expenses? aflac! learn about one day pay at aflac.com/boat blurlbrlblrlbr!!! the call just came in. she's about to arrive. and with her, a flood of potential patients. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t. >>> welcome back. dow down 117 points today. we'll keep an eye on things. the low on the session was minus 131, but pretty much we're steadily lower throughout the

microsoft and alphabetic reporting earnings. here to discuss is cory johnson.rosoft when it comes to its bottom line and top line, coming in as anticipated. the bottom-line missing a little bit, no change from a year ago. refocusing the ,ompany on the cloud competitive in the area with amazon and others. this cloud business is getting to be a two horse race. , but not making moves anywhere near microsoft's effort. abouthat are we learning the incumbent cloud business today. >> they are doing well, and microsoft is making money at it. selling something for more than a cost and doing a lot of it is a good thing to do. amazon and microsoft are probably making 25% margins in in a businesses, and business where you expect to see price carding, costs coming down and margins remain strong. revenue of almost $9.5 billion, that is deteriorating, right? >> microsoft has an active sales staff, and it is also the way they recognize revenue over time. it is a positive sign for them. >> should we look at google for a second? >> we have actually seen a bit of a this is driven

and as our eamon javers reports microsoft no longer wants to keep those searches secret. >> microsoft filed a lawsuit against the u.s. department of justice in a federal court in washington state today. the company's challenging the government's ability to examine data held by microsoft while blocking microsoft from telling customers that the government has accessed that information. we believe that with rare exceptions, consumers and businesses have a right to know when the government accesses their e-mails or records, wrote microsoft's president and chief legal officer bratt submit in a blog post. he wrote, yet it's becoming routine tort u.s. government to issue orders that require e-mail provoviders to keep these typesf legal demands secret. microsoft said it received 5,624 federal demands for customer data over the past 18 months and 2,576 of those came with bag orders that blocked the company from telling the customers in question. the department of justice had no immediate reaction to the suit. a u.s. government source said the feds only learned of the legal action through media

microsoft and alphabet set to report earnings.tching. ♪ ♪ emily: mexican billionaire carlos slim maybe giving up on kpn. he is considering selling a stake in kpn less than three years after trying to take over the company. he has been gradually decreasing holdings after withdrawing a 7 billion euro bid for the company in 2013. the breakdown was a major setback to plans to expand beyond latin america. microsoft and alphabet are out with earnings thursday. they have talked estimates in the past. here to see if they continue the trend is jack clark and ramy inocencio. what are you watching? >> looking at microsoft, the share prices are down 1.5% in after-hours trading before we get the data tomorrow. the story we are talking about, like ibm or intel, which reported this week, is out with the old and in with the new. from the reliance on personal computers to the internet of things. at least with microsoft, the cloud. the pc market in the first quarter fell 9.6%. if you are putting your chips in one sector, you do not want to put it i

emily: the microsoft case is very different from the apple cases, but what you see as the role of microsoftpple in defining the next decade of cyber law? hillery: very good question. i think in some ways, they are pushing congress to move forward. that is what needs to happen. this law that microsoft is challenging came out in 1986. this will disclose my age. i recall 1986, getting music cds and disposable cameras, and that was the extent of technology. whenever you got outdated laws and emerging technologies, you are going to get some sort of result that is not what the original drafters of the legislation intended and not something that can be sustained if we are going to keep our rights under the constitution, balance them with predictability in technology space, and also have relationships with consumers that makes sense. 1986, decades before the cloud. hillery nye, alex webb, and shira ovide is sticking with me. coming up, arianna huffington opens up about how the ceo built his uber empire and how it is hurting donald trump. our interview, next. ♪ emily: in this week's edition of studi

at microsoft headquarters and 11:00 a.m. on "squawk street" and we are live. ♪ >>> our little tribute to "game of thrones" with the new season starting sunday. jon fortt is at the nasdaq where secureworks the first ipo of the year is going to go public and that company is trading to the upside of 28 cents or so, and we will have the ceo on later on. and at post nine, kayla and joining us is kara, and a lot to talk about this morning. microsoft after missing the earnings, we heard about the pc we weakness and the cloud business and shares on for the worst day now since january of 2015, and even though kara, the pc business and everything that pcs have been through not terrible, would you agree? >> well, it is not terrible, but one of the things is that the ceo has been enjoying a honeymoon period with the investors, because he is turning it around. there is tax implications, and it is a kind of the messy quarter essentially with a lot of numbers that are confusing wall street. he has been turning in great improvements around

microsoft, $20 billion.he microsoft move, i've got to tell you, is probably a bit high when you look at the muted reaction that intel had today, and maybe qualcomm in the aftermarket. i would expect probably the stock to consolidate in and around 56 bucks. alphabet, on the other hand, who knows. good luck with that one. >> all right. dan, thanks for that. what is the best place in tech to put your money ahead of these reports? a five-star fund manager manages more than $2.7 billion in assets, josh, great to speak with you. >> thanks for having me. >> so in your view, it's all about the cloud. and yet the cloud means a lot of different things to a lot of different people and a lot of different players. i'm wondering what area of the cloud do you like? it seems like there are some areas where there is pricing pressure, more of a commoditized product. >> there's two big areas of the cloud. the first is infrastructure, and that's like amazon web services as well as microsoft's azure division, which has really be

lisa: out the best and microsoft two of the close today.t and microsoft two the companies reporting after the close today. ♪ david: this is "bloomberg markets." time now for the bloomberg business flash. disnetwork and by a calm have reached an agreement on new payment terms that will keep icon channels on the satellite-tv service. the agreement picks up where the last contract left off. walgreens will pay $500,000 to settle accusations it deceived -- an undercover investigation found instances where walgreens used misleading advertising in its stores. that is your business flash update. donald trump's campaign is planning big changes. lisa: trump is pulling out all the stops to try to secure the 1237 delegates needed to avoid a contested convention. he is just under four delegates short heading into tuesday's contest. joining us now is mark halperin. bird aald trump really a contested convention -- avert a contested convention? mark: he can. some say it is done. said less than a 50-50 chance right now. to the extent he gets that done throu

another microsoft partner -- toyota.r says the microsoft cloud service will free our customers from the tyranny of technology and help us return our own humanity. wow. the toyota executive, zack cakes cks yous -- zack hike cannot, on a tech show and talk about technology goal here any -- technological tear in the. [laughter] icks: we just wanted to be easier. you should be able to get in a car and say i am hungry, and the car should know enough about you and you want mexican opentable can see there is an open table for you. cory: i want in and out rigors coming out of my glove box. you are partnering with a company that gave us control, alt, delete. how much lines of reliability do ferry that would be acceptable on a desktop that you could not have in a vehicle -- failure they would be on a desktop, that would not be in a vehicle? hicks: toyota connected is a toyota start up in partnership with microsoft very much focused on data analytics, management, and creating new data services for our cars, and also throughout our

here's google and microsoft, the yellow line is google and the orange line is microsoft.in, are these blue-chip stocks masquerading as tech companies? >> i think these are still very much tech companies. there is a lot of innovation that has to happen for them to become big. apple called the mobile revolution correct the. it built the iphone and capitalized. microsoft very much missed it. didle played defensive and the android business and has been trying to catch up. it is a winner take all market in this world and apple got first mover advantage. tom: but what is microsoft's new plan besides xbox? where do you see microsoft in three years or five years? >> microsoft, they've replaced their ceo. what he's trying hard to do is shift the market over to cloud oriented business. that has been the business. that is the future of the business. the mobile business has been a disaster. the nokia action wasn't good. lumia sales are down. the pc market is going down. you've seen the battle that intel is facing because intel also made the wrong call on that. microsoft is trying to

emily: what about microsoft? we sell revenue from the cloud is going strong.is the main area of growth, and is supposed to be the future of microsoft. but is it enough to be the entire future of microsoft? paul: well, here's the thing. it's enough to be the entire future, but it is nowhere like the margins microsoft investors historically enjoyed. it is a platform business. in some sense, it is equivalent to the old windows business, but it will never have the margins the old windows business did, given competitive pressure against ibm, amazon, apple, google. there's an awful lot of people seeing cloud as a platform business, which is microsoft's central focus in terms of growth. it will be a great topline, but margins will be under continuous pressure as far as you look. emily: netflix also. all three companies took a big hit this week, with subscribers in the united states not growing as fast as people would like. at what point does netflix have to worry about the bottom line, making sure that these billions of dollars they are investing in original programm

last is microsoft looking at a 5% move in either direction.igher than its average of under 4.5% and, melissa, if all these moves were to pan out, that would represent a nearly $40 billion move in market company so some big moves potentially next week. melissa? >> thank you, seema and the chart master says one of those stocks could be poised to break out. what are you looking at? >> it's microsoft. the last two quarters it's moved that much. it's been about 5% and they have both been up so we'll look at that in a little bit. wanted to look at the long-term chart of microsoft just to set up the story here. so, you know, this is pretty clear stuff. the all time peak and the nasdaq bubble and now we've recovered to it. here's the line, right. so we're going to play for a move to the prior peak. close at 55 and change, and we think that's the way forward. let's drill down into the here and now. so this is the chart and actually watch what was just happening. this line right here is the breakout point, and when you pivot back to the point from which

upbeat potential earnings forecasts for microsoft.e will see we have 24 hours from now. emily: alphabet as well. we were talking about the android investigation out of europe. are we expecting any more information from google about the case? >> it is unlikely we will get more information on the case. in many senses, it was priced in. people expected her to the regulatory action. at this stage, it is not specific enough to move. the story will be about advertising, the cost of alphabet, fiber, health care, nest, and core businesses like youtube. emily: what are the expectations for alphabet? >> a 21% increase in earnings up $3.5.4 billion from billion in the same period last year. earnings per share, $6.30 or so. you're just was saying -- your guest was saying that search will be fine at 38% of the global search market. it is things out of its control or peripheral to its main business, which is what happened with the european commission charging google. they are also getting bad press in britain about taxes. issues, google backing app

cory: i think it is so interesting that microsoft as a that's was a company -- microsoft was a company that dominated technology, every conversation about technology regardless of the aspect not so long ago -- 10 or 15 years ago , maybe. what matters most? >> what matters most is building a future. they missed the mobile revolution. steve ballmer, that is probably the one big hit on his agassi. it put microsoft in this position. for the future, it is carving out a new market. artificial intelligence seems to be a strong part of that. conversation as a platform is a strong part of that. i also think that the success of the platform. cory: the success of azure or whatever -- everyone pronounces it differently. i say azure. that is a huge success for them. you see a lot of your clients talking about this. >> i think they are part of the big two. what microsoft hopes to do is infuse intelligence into that delivery of cloud-based services. >> intelligence like a bouncing paperclip. >> hopefully it will be better than our old friend, clippy. in this instance, developers can call on these dif

microsoft.under pressure after falling short of estimates for the first time in nearly two years. the cloud business couldn't make up for a slowing pc market. still satya nadella sounding upbeat. >> the cloud is being built to optimize and grow. with our results this quarter it remains clear we are one of the two leaders in this market. >> microsoft shares have gained 31% over the past year. they are up 16% from their february lows. a big move here for a tech giant. >> and alphabet shares also under pressure after the google parent posted an earnings miss. lappeden dowdy joins us more with that move. >> google reported under $7.50 a share on revenue of $20.2 billion. google is capitalizing on the global shift to mobile. and this should translate over to cost per clicks. but the operating loss widened to $802 million from 633 million dollars. while the payoff could justify the cost some argue that google is a little behind the curve. take a listen. >> google should have absolutely been the public

>> go with google and microsoft, play them both. >> mike?i like call spreads in both of those stocks into earnings. >> oh, such love on the desk here in san francisco. dan, what do you say? >> i miss you, mike. no. i think back to the bank trade real quickly. i think if they run out of steam next week, you look to let them out. >> looks like our time has expired. thanks so much for watching. i'm melissa lee. for more "options action" check out the website at cnbc.com/optionsaction. we'll see you back here next monday for "fast money" at 5:00. "mad money" starts now. >> announcer: the following is a paid presentation for the worx air, brought to you by worx. prepare to be blown away. [ whirring ] you're not looking at an ordinary blower. there's no cord. there's no gas. it goes where no other tool could ever go, does things no other tool could ever do. it finds every kind of dirt in every kind of space... and makes your whole home cleaner in just minutes so you get to spend more time enjoying it. the incredible worx air -- so versatile, you'l

and that is good news for microsoft's cloud business. you may remember just at the end of last week microsoft's first quarter results actually shed some concerns when it comes to growth in cloud specifically. it wasn't enough to offset some sluggishness in other areas. i had a chance to speak with the head of cloud telling exactly where where the growth was, why investors shouldn't be concerned and also talking to him about competition. this of course we use to talk about cloud being a two horse race here between microsoft and amazon. but now google taking a big investment, really stepping up gains against those two players. so i spoke to jason xander from microsoft and asked how concerned he was about the decision. >> there are only a few pler pl ers that have worked that hard to get there. our business not is designed to help people from where they are to where they want to get with the cloud and they get to pick what pace they want to move. >> talking about cars you said you will continue to provide technology technologies but

, and google's parent company alphabet reporting after the the bell, and henry, microsoft is out with% of reclaiming the december '99 highs, and the value that intel wishes. >> yes, the stock was in the tank for a decade, but a new ceo reinvigorated everything, and the cloud business is growing, and it is clear that they can make the transition with some of the products and maybe not all of them, but the question is how fast can they grow from here. >> and we were asking if the honeymoon period could extend itself with the new ceo, and the same with google? >> well, everybody wants to know about how much growth is left in the core business a and this is a tremendously huge business, and a huge percentage of the advertising dollars are disappearing into it, and it is going to slow into the low rate, and the question is what replaces it, and youtube is a big opportunity, and growing rapidly, and the tv money could flow in there, but other than that, basically, don't blow too much money on the little bets on the side. >> and that question was a nice slider that you threw at him, and you

shares of google and microsoft under pressure ahead of "the opening bell".icole: a no-hitter in the second of his career as the cubs pound the reds. lauren: without the injured stefan curry the golden state warriors lose by one point to the houston rockets. we have the highlights. it is 5:01 in new york, it is friday, we made it, april 22nd, welcome to "fbn a.m." for the latest breaking news and what to expect for the day ahead. nicole: prince's that and that sparks an outpouring of grief from fans, hundreds of people gathering outside the studio in downtown minneapolis. an autopsy is scheduled for today. tmc is reporting days before his death he was treated for a drug overdose after he made an emergency landing in illinois. rick leventhal has more. ♪ >> reporter: he was an innovative singer and songwriter, incredibly talented guitarist. a musical icon rewrote the rulebook according to the rock and roll hall of fame which described him as a trailblazer that may dance music that rocks and rock music that had a brisk backbone. >> the word genius gets thrown ar

microsoft moved up strongly from being a plain old personal computer software company, microsoft word, windows 10, to being a cloud-based company that still has that legacy business. you know what happened tonight? we got the continued transformation of the legacy business to the cloud business. frankly again, in an environment where the worst performing companies are starting to get better, microsoft's numbers just weren't good enough to please those who owned it for ages. you know what they are doing? enmass they are ringing the register. visa reported a terrific set of numbers. this quarter was dynamite. so why is it plummeting in after-hours? i think it's because the company was overly cautious. not just cautious but overly cautious about its guidance. people thought that the company had much more to crow about. i am very encouraged by the quarter, but the reduced forecast -- and it was. it was a reduced forecast. >> house of pain! >> will play havoc with a stock that's run so far, so fast. big dow stock will take your breath away tomorrow. i don't like what happened with traveler

margin pressure weighs on microsoft. while alphabet posted biggest earnings related drop in four years. ♪ ♪ purple rain ♪ purple rain >> tributes are flooding in for the music legend. that's prince of course, who has died at his minnesota home at the age of 57. ♪ >> incredibly sad story with prince. we'll bring you the details on that in just a little while. but here we are the last day of the trading week. the pmi data. a final reading, first the composite pmi at 53.1. just slightly lower. and the services flash estimate was 53.2 and compared to a forecast of 53.3. so we're bringing the preliminary estimates. so just slightly under forecast there but as you can see the euro-dollar still range bound after volatility. right now the euro is holding about 1.127 against the green back. a view of the equities here. what's been a strong week for european markets now moving to the downside but nevertheless the 600 was still up overall about 2%. here overall we are off half . percent. let's get a view on individual indices. and

i'm looking at a potential trade to get long microsoft.: microsoft does report earnings thursday, april 21. do you think anything is going to sideswipe what they will report next week? what are you expecting for them? revenues from $22 billion. i'm looking at a call spread in microsoft to get long that stock. have some downside risk reduction. but ultimately, i'm looking to play for that pop in the stock post earnings announcement. ramy: thank you. more "bloomberg markets" coming up. ♪ carol: from bloomberg world headquarters in midtown manhattan, you are watching "bloomberg markets" on this friday. i am carol massar. let's start with a check on the headlines. mark crumpton has more from our news desk. mark: barely 24 hours after an earthquake killed nine people in southern japan, the region has been hit by a more powerful quake. the latest quake had a preliminary magnitude of 7.1. there is no word yet on damage or casualties. japan's meteorological agency lifted the advisory for a tsunami up to three feet east of the epicenter. the news a

as it relates to the new business of microsoft.t selling a box of software every year when it is upgrading time. also, through your role as a marketing guy, try to convince people that microsoft stays relevant, announcements stay relevant, product development s more minor in nature is still relevant. >> we have moved to a world where people expect things to be up to date and they want , constant innovation, but they don't want those big disruptive moments of having to do a major upgrade. that's a wonderful thing about the cloud. we just spent the entire company, really, on our cloud platform, this thing called microsoft azure, as a way for companies to build applications that they will do great things. cory: that was the microsoft cmo chris cap a sele. a year after buying title, jay-z may be having buyers are more -- remorse. was jay-z defrauded in the deal? ♪ cory: the daily fantasy sports operators draft draftkings and , fan duel suspending all of their college contests. suspension is indefinite in all deals as a part of the with

microsoft up 24% in the last year, google up over 30%. when you look at intel's numbers, this stock was trading in the very low, towards 30, actually right after earnings, then flipped around by the time we opened the following day after earnings. stocks moving into positive territory and holding on to some of the gains. that was a name that was beaten down. it was well off of its $34, $35 high. it seems like right now, the appetite is hey, look, we are going down for the beaten down names and the names, unless they absolutely crush it, we are going to sell some of that off, take some of the money off the table and start to reallocate somewhere else. >> is there a difference between enterprise tech and retail tech? >> consumer technology, yeah, i think there clearly is that distinction. i think what's happening right now is technology is having a lousy month, down 2% for the month and it is not contributing to the s&p 500's ability to extend through last may's high. there's two different worlds when you look at this. you look at the short