microsoft's quarter as good as the stock pop? >> well, i think investors should just take a deep breath. we put a lot of pressure on google cloud number, the deceleration, understand that's caught people's attention from 28% to 23%, while azure had that step up from 26% to 29%, but the deep breath piece of this is just looking at the aggregate of what is in front of google over the next decade. they essentially have -- are losing share in cloud right now in part because of microsoft a optimizing openai on azure. so, they are gaining usage because of that. google's answer to openai is their new gemini platform. that is -- they were talking about it on the call here the past 35 minutes, and that's their new -- that's their answer to openai. as that gets integrated, it will start in the december quarter and further new models, they said, will be announced in 2024. microsoft will announce new models, too, but i think that this scale will tip back towards google or more level playing field between google and azure and we'll see a reac

we are somewhat neutral over the near term on microsoft despite long term bullish. >> microsoft sharesp 1% in the pre-market. jason, i want to pivot to alphabet. it is set to report this afternoon. revenue set to increase 10%. eps is expected to grow by 37%. the key part of the business is youtube advertisingeing stimateo grow. jason, you own alphabet. what are your expectations for this report? >> it is a good earnings report for alphabet. youtube seems to be tracking quite well. we think the growth in video spend is going up. benefitting from that. core growth in search and digital advertising after struggling for a few quarters last year and it looks like it is set to pick up. we will have a pretty good kcor business result. and cloud growth is profitable for google. they have more of an open lane in terms of the annual comps. if you look last year, it was mid single digits. they will be better than microsoft. valuation trading in the mid-20s. >> what do you think of a.i. when it comes to alphabet? they released a.i. products. they did not receive rave reviews. you think that micros

ed: it took microsoft to spend $70 billion to buy activision.ll be consolidation in your industry and you have lead in this industry for three decades, who do you think could buy apple, based on your -- by ea based on your experience of the last two years. bobby: i would not want to speculate. there are so many business combinations that are possible and i don't have an informed view of that sitting here today. ed: phil spencer, what task does he have to take all of the people working at activision and bring them into microsoft? do you think there is anything he can learn from your company? bobby: we have a fantastic company with an extraordinarily people are passionate, motivated, enthusiastic, excited about this merger, and phil is an extraordinary leader. i could not think of a better person to give the reins to from the business. he is a passionate gamer, he has been involved in this industry since 1989, he is incredibly technically capable, visionary leader, people love working with him, and i think it was one of the really appealing parts

microsoft down .13%.tinue to watch the stocks. >>> earnings season is kicking off with big banks reporting. jpmorgan chase and citi and wells fargo and pnc. top of mind for investors is portfolios and net interest margins as higher rates weigh on loaning growth and deposit costs and customer real estate. joining me now is stephen biggar. >> good morning, frank. >> what banks do you have a buy rating on and what is most influ influential? >> i think jpmorgan chase sets the stage for the quarterly earnings here. you have a bit of an outlier with the acquisition of first republican. they acquired that on may 1st. we had a partial quarter in the second. this will be the first full quarter. as we look at the underlining trends, diversified banks had been the place to be. they held upper than the regional banks. at the same time, they are impacted by the higher interest rate environment. you will see more slow loan growth. >> jpmorgan chase is the most influ influential. can you run down the ones with a buy rat

microsoft in the lead.them all. 38% of you said that's going to have the biggest move. amazon right behind it. up next, the earnings setup, we're breaking down what to watch when alphabet, microsoft, snap and visa all report in overtime. all that and much more when we take you insidthmaeton e e rk ze. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business. here in the bay, our cars takes and all of our stuff where we want to go. but, our cars can't take us e with unpaid tolls. vehicles with overdue, unpaid tolls may not be able to renew their registration until outstanding balances are paid. payment assistance is available. visit bayareafastrak.org/ase so go pay you

microsoft is doing a copilot.e copilot which i think is inexpensive if you think about the productivity increases they can do for many enterprises, that is changing. it will be a different type of device and that is what we are working on and that will be a bright new future. we will bring a lot of excitement and hopefully a new upgrade cycle for pc's. ed: qualcomm ceo, cristiano amann from snack dragon -- snapdragon in -- snapdragon. thank you. he's trying to outline a world where we are using a generative ai to on our phone or pc even in airplane mode and you and i play with these tools, chatgpt, bard, on our desktops and stable internet. it is hard to imagine though. caroline: it is. many have been wondering when apple gets into the sphere of ai, much has been questioned about the privacy angle, the fact he wanted within your device and how much this is intertwined with about sitting down with the arms ceo around the ipo, the listing and was all about moving into the world of pc's, the fact they are diversifyin

microsoft, alphabet, a tale of two clouds. microsoft says there cloud offering will be outperforming and they will be growing faster than expected. alphabet saying the exact opposite. you can see the stock moving in both directions. snap inc. as well, the parent company of snapchat is higher by 0.4%. they are talking about ad revenue again, an interesting dynamic when we are questioning on the macro narrative whether or not we are seeing contractions or slowdowns. when you look at the tech space, it does not seem like it's. a quick check on the cross asset story. the bond market absolutely matters in this context. a move five basis points lower, seeing volatility but the 10 year yield is virtually unchanged at 4.8 prepared how much caution as they are baked into the long end duration risk and how many people are willing to take that risk on in light of the 16 basis point move you saw earlier this week? how much of that is spooking the bond trader? that will have a big effect on the dollar specifically which right now seems to

microsoft is seen as being able to execute. one owner said that it is run like the academic institution. >> that is nasty. there is a huge chunk of time to vote. i've got to tell you, a negative moment about the nfl sunday ticket. it's negative because there is a moment when michael nathan said and asked, how is it doing? the nfl likes it. if i pay you to billion year, i want exactly that. hey, jim, i like that time. >> i approve, to billion dollars health, i approve. will get more on what is coming up later on. moving later on in the premarket. offset by the revenue beat and kindness. philip is at the headquarters this morning, good morning, phil. >> good morning, ceo of boeing. he mentioned the guidance. stock is up. free cash flow guidance for this year and longer-term. a lot of people want to ask about the 737 max right off the bat. bring down the delivery estimate, what happened where you cannot deliver as many as you expected? >> it's great to be with you this morning. we feel good about where we finish the quarter. there

so microsoft's the leader here.he cloud underperformance, revenue did rise by # 11%. digital ad sales were strong especially on youtube. it was not a bad report card, it just didn't have the a.i. buzz that investors saw with microsoft. stuart: might expect to see a little dip buying when you're down 8% on a stock that the big. lauren: yep. stuart: you might expect it, it's not coming just yet with. lauren: what is the tone of tech today? alphabet's stock is up 67% this year. that pales in comparison to players like meta. so, yes, you buy the dip when it's only up 57% and yo it's getting an 8% haircut today. stuart: are you buying the dip? lauren: me? no. stuart: meta reports after the bell. what's expected? >> the the year year of efficiency. they are doing well, impressive considering all these regulatory headaches. i mean, look just yesterday multistate lawsuit accusing meta of designing products that are both with addictive and harmful to children. also we want to know did their ad business recover, 98% of their

microsoft cloud was the area of growth, topline growth for microsoft was the best in six quarters butopline growth, 27%, corporate cloud 24% and a big part of that is the ai story, a lot has been discussed about the investment and leveraging gpt technology in microsoft's existing software, so there are questions about how that looks. for example all of us have used microsoft office and office 365. what's coming is copilot and a lot emphasis from investors is microsoft's ability to charge more for where ai has been added to existing software. there's evidence that was good but questions about how good it can be. paul: bloomberg technology coanchor ed ludlow. tech earnings to digest ahead of the open in asia, what are we watching? >> quite a mixed bag so when you look at futures, they are pointing lower, early moments for trading but not a great signal to investors given how much anticipation there had been around these results and broadly earnings had been expected to climb more than 30% for the big tech names. but we have new zealand stocks online trading negative aussie futures still

alphabet and microsoft taking the stage after the

however, i want to start with microsoft. that is the story today or certainly one of the stories at least the positive story today as your cloud revenue growth accelerating for the first time in a couple years because of ai, you own the stock. give me your take. >> it's good we saw cloud services growth back up 28% which was the expectation i had on monday. that is where it needed to be. but overall the impact of what we expected from microsoft on the market, itself, its ability to stabilize the market, it obviously is not present and the reason it's not present is these stocks are called the magnificent 7. now we're down to the magnificent 5. we've lost tesla, lost alphabet. we'll get into the reasons why in a few seconds but just overall for the ability of microsoft to stabilize the market and obviously the reason that it's not, you needed all of the magnificent 7 to push up against a lot of very troubling signals within the market itself i think we've done at least myself i've looked toward this magnificent 7 and looked a

but it's a very different story for microsoft. impressive cloud growth fueled by ai is sending that stock higher in the premarket. >>> plus the d.c. drama, it continues as republicans float yet another name to possibly unify that party. >>> and later what one market guru says could spark a year-end stock rally. it's wednesday, october 25th, 2023, and you're watching "worldwide exchange" right here on cnbc. >>> good morning and welcome to "worldwide exchange." i'm frankholland. we kick off the hour with a check on u.s. futures as the market had a positive day and the nasdaq had the best day of the week. the blue chips index at the tow would open up 50 points higher, however, the s&p under pressure and the nasdaq more than 50% lower in the market. also checking meta, almost a percent. we want to check the bond market, the 10-year yield hovering but low. take a look at yields right now. the benchmark at 4.86. the 2-year at 5.5%. we're also looking at energy this morning coming off its lowest close in more than two weeks. in the green

but it's a very different story for microsoft.ressive cloud growth fueled by ai is sending that stock higher in the premarket. >>> plus the d.c. drama, it continues as republicans float yet another name to possibly unify that party. >>> and later what one market

exclusive to microsoft.he cma said the restructuring deal means microsoft won't have a stranglehold on the market. that is how we got here and how the cma is satisfied. >> i wonder if it speaks to the broader issue with the regulator. the cma agreed to the deal. does this mean the cma would not just be the ones in the rights saying it needed to ensure this was competitive on a broader landscape or was this just the case of holding back in trying to hold up and ensure they got the best out of the deal for consumers overall as well? i suppose from that perspective there is one concern there. now with it finally happening, how soon do we see it actually being completed and microsoft now saying here is the money and let's take it and run? >> the deal needs to be wrapped up with the deadline of october 18th, which is next week. they will wrap this up next week. the lawyers will cross the ts and dotting the is next weekend. in terms of the cma, it is a journey for the regulator. one of the concerns with the cma is

microsoft has customers testing launch. with one customer who has been using copilot for two months now. >> what i see is the potential for breakthrough productivity. i feel like with the pace of diffusion of a.i. you wait, you will get left behind. >> one told me it allowed him to be in two places at once and catch up on meetings he missed. >> before copilot, it would have taken three hours. it took minutes to interact to bring the information current. >> the pressure is on to sell that experience we just heard about to more than 300 million users across microsoft 365 especially as companies are tightening the i.t. spending. >> we he don't say think of this as addition to the i.t. department, but revamp all of the processes and your company. most customers are interested in productivity gains. they are very interested in what it will do to create value. we will start there. >> more competition is coming. google is working on similar a.i. tools for google docs. it costs the same as copilot. but daniel newman says microsoft

microsoft is up two. we said amazon is up eight intel is up 10 amd up more than 3 tesla is up today. stocks are having to rebound how would you assess where we are? >> we were overvalued and saw things come back to earth a little bit an opportunity to regroup. the companies are a higher price and lower valuation. jenny and i are in a different world for the most part but do own microsoft and apple. microsoft was my final trade last week. i don't know that apple will be as good. from our perspective and bryn's, we've been dealing with this volatility writing covered calls. steve hasn't seen this in a while. we've been in a muted environment follows the vix, volatility is concerned. our call rating has picked up actively >> a perfect segue to you, bryn. you do employ a similar strategy to what kevin does it was a pretty turbulent week and now we have apple in front of us. where are we today as we head into the next week stocks were firmly in the driver's seat against bonds and within stocks all about tech t

the decision was immediately welcomed by microsoft's president, brad smith.sponded on social media to say he's grateful for the cma's decision and that the acquisition would benefit players and the gaming industry worldwide. david waddell, bbc news. a retreat from global free trade will put up prices for everyone — especially the world's poorest. that's the warning from the head of the world trade organisation, ngozi okonjo—iweala — who's been speaking exclusively to the bbc at the imf/world bank meetings in marakkesh, in morocco. she told our economics editor, faisal islam, that there's evidence world trade is �*fragmenting' with countries increasingly trading with friends and restricting trade with rivals. there's more trade ongoing now within politically similar blocs than between blocs that are dissimilar. so that is some indication. we also look at certain sectors and we begin to see some emerging signs of fragmentation. and we hope that this will be... this will not go too far, because we've shown that the costs of fragmentation in world trade will be v

david, alphabet and microsoft. google and microsoft, they report after the bell.ant to know if they're making money from a.i. isn't that the big concern of big tech at the moment? >> yeah, stuart, it is. but i don't think we're going to see a lot of revenue from a.i.ed today, but i think you're going to hear what is their goal in the future. but i think if you just look at google specifically, look, this is all about double-digit revenue growth. if we get 75 billion in revenue for the quarter, that's 10% growth. i think for google it's more about youtube than a.i., stuart, this is the unbelievable. 9% of all tv viewership was on youtube. that's 1% more than netflix, and so that's driving growth at google. i think we're going to see a knockout quarter for google, also moth as well. -- microsoft as well. stuart: we've got a modest, solid rally this tuesday morning. how come? we've got what's going on in israel, and we've got all kinds of other problems in the economy. why is the market rallying who? well, i think tech is driving this, right? and if you just look at

did, probably towards what microsoft did the i think microsoft is the better read >> i'm confused, though. you told our producers that you see an attractive risk/reward set up into the print, yet you can only tell me there's a 50/50 chance of growth for aws and that says there's a lot of risk going into this, not great risk/reward. how would you counter that >> i think you have seen this 20% pullback in the stock recently this stock has pulled back in more than any of the oregon big tech stocks have, so i think the setup is more constructive than it was for microsoft there's a greater fear factor with the stock up 20%. i would just stick with the point. they printed 11% assuming everything else i talked about would be okay but you get any whiff of deceleration this quarter or discussion next quarter, you get a material up side for the stock. >> dan greenhaus has a question for you. >> saying the retail calm in at 5%, is that sufficient enough to set off the disappointments? >> i think the expectations are so low if they print 10%, 10.5% just on this half point, you know, the stock would p

the relative, microsoft had better growth rates than google and buy microsoft and sell alphabet i think idea that the next ten years this decade we're in is a digital transformational decade i think brad gerstner would agree and that pie is going to grow. if amazon web services is 12% on the surface that's a disappointing number like 23% for google cloud services was, but we're talking about a quarter, a quarter where people are feeling a little - >> but the problem is you've been talking six straight quarters >> i'm glad you brought this up. it is six straight quarters now. give me room we haven't talked about the retail side of amazon. you mentioned it it was six quarters ago, the april earnings announcement when amazon started the last 18 months of the lousy environment when they said holiday spending season doesn't look too good going forward. that was in april. so i know we're focused on amazon web services for the report i'm looking at how is the consumer doing they're going to give us important data on that. >> the marketplace doesn't matter nearly as much to investors as the gro

if we start with microsoft, what is it getting right? microsoft, what is it getting riuht?ft, what is it getting riuht? ., , ., right? precisely, you mentioned in the outset — right? precisely, you mentioned in the outset microsoft - right? precisely, you mentioned in the outset microsoft has - in the outset microsoft has been dominating the cloud computing space and this is becoming crucial for computing space and this is becoming crucialfor all computing space and this is becoming crucial for all these companies. it is no longer aboutjust selling one piece of software, they want to lock people into their ecosystem so they are getting constant subscription fees, constant revenue and generating off that. ~ ., revenue and generating off that. ~ . ., that. will that get them into trouble? here _ that. will that get them into trouble? here in _ that. will that get them into trouble? here in the - that. will that get them into trouble? here in the uk - that. will that get them into trouble? here in the uk the | trouble? here in the uk the competition and markets authority is lo

then invited microsoft to bring back a new proposal. they have done so and the regulators in the uk are looking set to clear that in the next couple weeks as well. so clearly, the tech giant willing to work with regulators here. the key for me and whether this is going to have an impact for investors, does this investigation result in any significant business practice changes for these cloud computingen giants that really creates a slowdown in growth or impacts profitability in any way. a the this point in time, there's no signal this could be done, but clearly that's what investors will be watching for going forward as this investigation progresses. >> thank you very much. >>> coming up, closing the pay gap. one of the largest minority populations here in the u.s. new data on the latina equal pay, after this. ♪ ♪ every day, businesses everywhere are asking: is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we

so, what we see now is a major concession by microsoft. now selling the cloud streaming rights in relation to all its games content that exists now and is created over the next 15 years and putting that in the hands of an independent competitor, ubisoft. now, that's a game changer. microsoft has made assurances that games such as call of duty will be available on rival platforms like playstation for another decade. when the cma originally blocked this deal, microsoft's president, brad smith, said it was the darkest day in its four decades of operating in the uk. what did you make of that statement? so, our responsibility is to protect uk consumers and uk businesses and make sure that mergers don't go ahead if they're going to harm competition. that's what we did. in a new statement, microsoft says: we are grateful for the cma's thorough review and decision today. we've now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide. this will definitely strengthen m

a look at microsoft's co-pilot next. dow jones industrial average down 411 points just off the session lows o45f 0. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. >>> as the ai-fueled rally in tech stocks fade, investors are trying to separate hype from reality. microsoft's tool co-

i'm going to take it back to microsoft. yesterday, we talked about microsoft and those great results. think about this we also talked about this co-pilot 365, that they're going to start charging for it on november 1st what if those same enterprise customers are optimizing cost in and around some of the seats in which they license this sort of stuff for? so, what i'm saying is, we're not done yet we don't know about this and a lot of these companies have also been cutting costs as it relates to head count when you have reduced head count, you have reduced seats for these licensed software and the like so, i just think this is going to be a theme we hear a lot about, so, just, if you think about the last three days that we've had of all these major, you know, companies reporting, it's like, you know, last quarter, these guys were good, this quarter, they're bad. i think it's going to keep ping-ponging until we get more visibility about the company >> what amazon is telegraphing with its guidance and the comments is that all

microsoft managed to get its huge acquisition of the video game publisher which makes kandy krush overard won approval from the regulators. and that is the good news, but microsoft might also have to pay almost $30 billion to settle a tax bill. last quarter the earnings outperformed the other tech stocks. investors like that saw the company shares jump. this time around people will look to how google cloud and google search and youtube ad revenue did, and more more detail on how the ai bot can take on chat gpt which microsoft has a huge investment in. on wednesday, the company behind facebook and whatsapp reports, facing competitions from the likes of telegram, meta announced it would roll out broadcast channels allowing users to broadcast messages on facebook and messenger. on thursday, the south korean chip giant is one of the worlds largest makers of memory chips and has had a really tough couple of quarters, like its larger rival samsung. that's because of an ongoing global over—=supply of chips has caused prices to drop but it will be interesting to hear how ai is driving demand f

amazon and microsoft offer a variety and a suite of products. if you're a business and now we're moving into this world of a.i., and you're thinking, well, i need some sort of a.i. product, maybe in the customer society, data processing, it's very difficult to build that yourself, so you need to go to a tech company to do that. now, what you're looking at what microsoft and amazon have done they've released effectively foundational models that allow companies to build a.i. products on top of it. if you're a business wanting an a.i. you can go to amazon and microsoft. i need this product. what can i build on? they have that ready-made. very few companies around will be able to compete with that. you look at the market, 80% of the market, huge, google it, a distant third. google, a distant third. so, when you look at that google as a potential competitor but when we think is there a smaller company that can compete? not many. perhaps it's about allowing companies like google and the cloud place to come in and bolster the market. >> let's go the st

among the notables, microsoft, amazon and meta and microsoft.s reporting this week especially after the news this morning. earnings is setting the stage for the week on wall street. let's get one more check of the futures. the dow looks like it will open up 225 points lower. s&p and nasdaq falling into the red. nasdaq is down .30%. joining me now to discuss this and the move in the treasuries right now with the ten-year yield crossing 5% is katrina dudley from franklin templeton. yields moving higher this morning. ten-year yield moving higher this morning above 5%. what are we dealing with? >> we are looking at yields and how people are responding to them. the zombie company is a company that cannot afford interest rates at these levels. these companies are potentially companies with good businesses and bad balance sheets and we need to fix the balance sheet or they are bad balances with bad businesses and will file bankruptcy. you want to understand if you have a good business or looking at the marks of the company and a product that people wan

microsoft with azure at 22%. google cloud with 22% of the public cloud. higher? >> google has a couple of things. results are next week. we are 2% ahead of consensus for revenue for the q2 results. that is driven by the core advertising business. we expect a 1% beat. secondly, that other business which we all talk about is youtube premium and youtube tv. we had price uncrekrees increas. we think they could beat by 10%. you have one month of the sunday ticket and then google cloud which is the enterprise cloud computing business. we expect a 2% beat there. we're 4% to 7% ahead of consensus. we see the winning share against aws and microsoft azure. >> you almost buried the lead there. i want to look at earnings season. netflix is reporting this week. netflix is a mega cap tech stock. not inn ffluenced by a.i. do you see itt having a big i infl influence? >> i don't cover netflix. for big tech earnings, numbers will be good. we continue to see demand as stable and it is not improving. it is not deteriorating. i'm not sure it is good enough. q4 is all about 2

to expedite workflows in microsoft word, excel and powerpoint.ou take users who are already used to microsoft word and the existing workflows they have and you are supercharging it. if i wanted to go to at fortune 500 company and tell them fishback ai and say it is the best word processor out there, i could not do that because i don't have that relationship. microsoft has the relationships and the trust and they will drive value for enterprise players and they can drive pricing power longer-term. caroline: do you think there is a risk that any of these really big and in many ways, companies trying to fight the monopoly name becky is being thrown at them? is there any rest they get displaced at the same time as the.com boom and bust in the same way we see this is models eroded, are they ahead of the curve? james: you are right? there is reason to be skeptical by what happened in early 2000 with the dot-com bubble. there are a couple key differences, one is valuation, the p valuations of the dot-com bubble was 52 times earnings, the average ai text

well, ithink, obviously, amazon and microsoft in particular have first mover advantage.rly doors and monster customers are in, they can't out. 0fcom has already identified key practices including anti—competitive licensing on the part of microsoft, which artificially inflates the cost of rival cloud services by inflating the cost of microsoft's ubiquitous licensing on rival platforms. all of these make it extremely difficult for new companies and new market entrants to break in and even those, what i would describe it as established a smaller cloud companies are struggling in the face of this. let's face it, this is a market which is going to grow and grow. it is powering ai. it is the future and it is also the uk's feature so it's really important that we have diversity, choice and competitive tension in this market, or we try and get that and hopefully that's what the cma will achieve. that's what we will have to keep an eye on. thank you for that insight, good to have you with us. watch this space, certainly. in other news.... metro bank's shares have plunged after re

market as the dow is down about a third of a percent really, the dow is being helped by travelers and microsoft the nasdaq is down 2.3%, and in danger of falling below the 200-day average. >>> we had a five-year bond auction that didn't go so well, and that changed the market tone, a start contrast to microsoft, which is still up 3%, down -- 10% at the moment. >>> let's start with the house vote emily wilkins has the details. >> reporter: hey, kelly, after 22 days, the house finally has a speaker. congressman mike johnson of louisiana. he got all republicans to unite around him, all 220 were voting today, one absent, they voted for johnson, now officially becoming the speaker they're in the process of swearing him in. as soon as they do, he'll have to get right to work the house has wanted a shod of support for israel, but there's also the upcoming government deadline, johnson has laid out a very aggressive plan to pass the eight remaining appropriation bills before that point. johnson will be a bit different from kevin mccarthy. he's much more conservative, and a little further to the right. o

it feels like the reaction was quite extreme to google and microsoft. ed: there is the google cloud a specific situation and then the comparison to the rest of the market. customer cost optimization, which is cloud speak or cutting back a little bit. that can manifest itself in different ways. data centers can move you onto server designs that have lower spec chips, or more cost efficient. even though it missed estimates, topline growth of 11%. compared with microsoft, azure grew 29%, accelerating quarter over quarter. corporate cloud, 24%. how much of this is about the growth story overall? a lot of people look at google cloud and see it as the future growth prospect for that business. but we ended up having was a clear growth story for microsoft and not for google cloud. why can microsoft grow at that pace and be the clear number two but google cannot catch up? mandeep: google is taking a different approach. that google cloud number, you also have workspace revenues. gcp revenue, the infrastructure part did quite well when you parse through the number

today microsoft gets nothing.icrosoft can pay twice the amount that alphabet pays to be the default search provider and it would be incremental to the business. the challenges being does not have the creek -- bing does not get the same advertising revenues. there are a lot of things to think about but it's all upside for microsoft. it could be downside for apple and clearly would be downside for alphabet if it was the most onerous outcome. caroline: it's interesting about the timing about the all of this. alphabet searches having a run from for its money from generative ai and people wondered whether bing would come to the fore. of the names you put your attention on, when you have such a large exposure to microsoft, you've also got nvidia in their andasml. these companies have an ai uplift here but is it priced in yet? >> with the market, it's interesting, coming into this year, nothing was priced into these stocks as it related to ai. then we got a lot that was priced in. if we actually look at the estimates and

microsoft's show testifying against google. those details in tech neck next. >>> plus, thinking outside the box. e-commerce is essential to our economy but all that packages isn't environmentally friendly. we'll have a look and the kellogg cereal business recently renamed. we'll have more on that and on the downside discover is financial after agreeing with the fdic to approve consumer compliance. those shares are up 6%. to earn me more cash back in my top eligible category... suddenly life's feeling a little more automatic. like doors opening wherever i go... [sound of airplane overhead] even the ground is moving for me! y'all seeing this? wild! and i don't even have to activate anything. oooooohhh... automatic sashimi! earn cash back that automatically adjusts to how you spend with the citi custom cash® card. [mind blown explosion noise] >>> welcome back to "power lunch." microsoft show satya nadella testifying why it's so hard to compete against google. let's bring in our guests. eamon, can you update on what nadella said? >

microsoft up by more than 4%.y different story for alphabet, concerns over the cloud, which we will discuss in a moment. we will hear from meta-tomorrow, amazon in a couple of days. joining us to discuss these big tech earnings is the vice president and senior equity analyst at cfra research. thanks for joining us. i want to start off with microsoft, revenue growth 30%, beating expectations. the cloud front and center in this result as well. what are the key takeaways here? >> it be on both the top and bottom line. the biggest take away and you alluded to it, it's all about the cloud, accelerating 29% on azure. the last quarter about 26%. above are expectation of 27%. that was the big takeaway. it looks even more impressive when you look at it versus alphabet, the acceleration pre-between you look at the rest of the business, they are performing extremely well. on the more personal computing side of things, the return to positive growth on that side of things. you also have the activation contribution. all said an

it's microsoft, i think, and i have trouble saying that i'm not -- i'm really not long microsoft. i believe they have more leverage to pull i believe the strengths that they showed were the ones the market wanted to see and at least rewarding here and there are multiple divisions in microsoft where they're showing they have the pricing power and will push people around. i don't think you have to love any of them here and i think, you know, that company here -- >> you don't dr. to. i mean, meta is the exact same price it was two years ago, literally two years ago in the last weeks of october, 315, sdwrops to 8, loses 77% of its value now back to where it was two years ago. why do it? would you rather have cash i'd rather have cash than google, sure >> and google? >> or microsoft. >> or microsoft or meta. >> between now and tomorrow. >> or meta. >> how about now and next friday or to the end of the year, pick your time frame. >> he's playing games. >> i was just going to say. >> would you rather? >> i make an exception for carter. >> of course you do. let's get some instant analysis

>> it depends on which one, microsoft for sure, microsoft is not recession proof but of the large-cap tech the business with the best annuity revenue base. to me that is when the people should own they should not be trading it there is others if you look later in the week with amazon you will see that what is more of a trade, i think amazon might use the a.i. productivity gains and feedthrough to earnings in a lesser rate than it would be like a company like microsoft getting ready to release product sets like copilot. you will see the impacts of the different price points and things like that and i think tech earnings will power forward i don't think were anywhere near close to a peak because to me there is so much more that can be done on the revenue side but not only that the productivity side will accrue to the bottom line, the cost that will be running out for these companies using a.i. themselves will be something that people need to pay attention to, we talk about revenue growth and the ability for sales increase and we don't talk about the effective a.i. and the bottom line is

nvidia, microsoft.re asked on the call yesterday, how are you guys monetizing? they go back to search saying it will enhance search. have you ever used bard on search? >> no. >> and the answers it gives you? >> it should be a lot better in two months. >> sure. >> in two months, we're supposed to see genesis. >> again, the question to me long term for all of these guys is, is there any real economics in this, or is it basically holding your share? >> right. >> protecting what you already have. >> can you ask ai who the beneficiaries will be? >> i'm sure you can. we have to ask chatgpt. >> nvidia and microsoft, will they come up with others, do you think? it's too weird. >> giving it away for free. they have all that data too. other players will be able to benefit from that, as well. facebook doesn't plan to make money on it. they think it will increase engagement like google. >> it's a share story. >> protecting what share you already have, maybe growing your share a bit. >> it's not working for microsof

microsoft was like a charm. if -- this is exactly what we were to see, microsoft is on target. lisa: the fact that you had two but he lives comprising 10% of the entire s&p index coming out and you had microsoft blown out of the water, google disappointing on the same metrics which is cloud computing. microsoft winning and google losing and it shows the dispersion we haven't seen before and everything was in line and suddenly you can have one winner and one loser and it balances itself out in the overall index and you have a consolidation of market shares in specific sectors. tom: we have to get it out of the way, her agent said we had to. what happened? katie: there is a lot of optimism and maybe we are finally going to get the u.s. but an bitcoin etf seems to be the primary driver between what we have seen over the past two weeks. i will note from a traditional etf industry standpoint, we are potentially far away. tom: i have to stop the short because this is about global wall street, they want to sell bitcoin. why cannot they? katie: you can offer in private funds. to get in

microsoft cloud.e is also in the space very active. there's a lot of things racing to get to the market and that is in order to catch up with what openai has been demonstrating. how those will be paying off, we don't know. there will be some clarity hopefully if you are an investor, at least, in these updates. they have been spending the money. that is why qualcomm -- i mean nvidia has seen a surge in revenue. they go into the data centers that will in theory fueled the ai revolution but you need the cloud capacity from google and microsoft for that investment to pay off. alix: before you go, when i look at google stock it is doing well compared to other tech names selling off in the past few weeks. our expectations too high on the stock now? alex: i don't know about that. i have optimism around that market peace. you have two potentials for google, and it is the ai thing and spending as we head into christmas. google is different from its competitors because it is the place where everybody does need

you mentioned the divergence of performance between alphabet and microsoft. it's actually -- [inaudible] when you look at a microsoft, alphabet and amazon, as it stands they're actually all three up 42 year to date, so performing quite well, but met that -- meta has been the standout. it's been a very popular trade this year, probably still quite popular: so a lot of people are invested there. that's one to watch. they typically do give guidance for next year at this stage, so i think that's really what the market's going to be focused on. 2024 is becoming the discussion point, are we going ore accelerate -- to the reaccelerate further or decelerate? liz: that is the question. i don't know, shelby, can you answer that? your notes indicate that you've got to be the really cautious on the magnificent seven, and yet they still continue to grab the spotlight. >> that's right. i mean, they continue to be magnificent, but we can still go ahead and exercise caution. and i think we have seen some of that thus far. to the require point, you know, google -- prior point

that's why i own microsoft and why i prefer to be cheaper. i was talking to carrie firestone over the weekend and she said, what are you going to do next week? i'm hoping the market gets crushed so i can buy more microsoft and meta as big positions as they are, i would add to it. >> okay. >> all right. >> you want to take a break? we'll take a quick break. nelson peltz coming up taking aim at disney again. the activist investor increasing his stake in the company is another proxy fight looming there? we'll find out how the committee is navigating that trade next. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot. >>> we're back. so is nelson peltz. he's upped his stake in disney. we made its our chart of the day. stock up 1.5%. said to now have 30 million shares worth $2.5 billion. >> lot of money. >> might seek multiple board seats including one for himself. probably looks at the shares being down 17% in the past six months, more dramatic over a longer period of time, of

and microsoft and activision.ins right now. >>> good morning and welcome back to "squawk box" right here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin. joe is out today. it's friday, last hour of the show for us. so far u.s. equity futures are hanging in there. you're going to see dow futures have turned around after starting out by about 45, 50 points. that comes after strong earnings reports we've seen this morning. just about every report we've seen has beat expectations, including unh, which is a do you component. s&p futures have improved, down by only about 2 points and treasury yields are a little bit lower. the 2 year is just before 5% at 5.03. >> leslie picker, what you got? >> you can add citi to that list of company beating expectations. city reporting 1.52. including divestitures, it would be 1.63. generated $20 billion and analysts had it pegged at 19.3. they mentioned organizational changes the firm announced a few weeks ago. she said

with microsoft, amazon and alphabet all reporting earnings next week, we have a shareholder that ownsll three and he's waving the caution flag ahead of those results. he'll make his case next. ♪ explore endless design possibilities. to find your personal style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™. >>> s&p 500 down three-quarters of a percent. tesla sliding 10% today, a big part of that after the company missed analysts expectations on earnings. could the rest of the magnificent seven stocks be headed for a similar fate? let's bring in malcolm etheridge to weigh in. good to see you. now, tesla is kind of its own beast in terms of its business and the things it feeds off of. but i wonder how you think it fits into the outlook for some of the other secular growers that have been carrying this market. >> i think now is when tesla gets called an automotive company, an auto manufacturer and no longer a tech company. all of a sudden it became a tech company. i think it goes back. i think it's a big difference between tesla, the manufacturer,

the doj uses microsoft in this instance to make its argument, microsoft got onto the stand and said,. what is happening is google could accelerate its lead in ai by buying all sorts of access to search and to large language models and it becomes a self-fulfilling prophecy if it has all of these resources. by default it becomes better as ai power tools. this was not the argument that nadella was making the argument in february when the microsoft engine -- search engine did better in an ai situation that google. -- than google. the point was it is a misnomer to suggest that people search by choice. search happens by default, just like when you get up in the morning and brush her teeth. at this point, you search google, not the internet. apple in part has made that happen. apple has been the kingmaker. is a direct quote from his testimony, whomever they choose, apple, they king make. paul: google has become a verb, to your point. nadella has tried very hard to dethrone alphabet. but he is biased, right? vonnie: exactly. he has tried hard. we're learning more details about how hard he ha

that narrows it down to microsoft. i think the pressure is on microsoft here, because if it can't give you the cloud growth above 20%, then i think you could see a potential tesla. >> yeah, you were just starting to see it stabilize last quarter. >> we hoped you would see it stabilize. >> right. >> that's why i think microsoft is so critically important because of what tesla did last week. i also think meta is incredibly important. if meta will go back to spending, and if meta is going to guide to spending on ai and all these other investments, and it goes back to what liz said at the top of the show, you are not getting rewarded for good -- >> netflix held their pop, right? >> that's one stock from the s&p that is reporting. >> how many have reported? big cap techs? one. >> okay. what do you think there is more of a market impact on, the positive report from netflix or the negative impact from tesla? without question i think it's the negative impact from tesla. >> i would say it's a moment in time, so whether it's a d