sees the vision of the future and nadella is right when he first took over microsoft, he called it.at's what spurred the growth throughout his entire tenure this is what he seeing >> steve, stay with us we want to stick with microsoft here it's been one year since the tech giant announced that $69 billion acquisition of activision blizzard, but with the ftc suing to block the deal, getting a deal done in the time frame seems pretty optimistic. joining us now is william kovacik, the former ftc commissioner william, great to have you with us lina khan made it clear when she first took over the post that the ftc would be an activist, it would be the check on big companies and how big they can actually get was this one step too far, challenging a vertical merger seems like a very ambitious sort of thing to take on. >> it is very ambitious. this is the most ambitious merger challenge that the ftc has undertaken during her chairmanship the advantage she has going for her is a process that could be called regulatory swarming in the global environment that ceo nadella referred to, you're no

where's my notes oh no. >> david, while you look for it, we do have nadella's blog post already out.nd they are eliminating 10,000 jobs through the end of fiscal '23. less than 5% of the total employee base. $1.2 billion charge related to the severance costs, and other changes, jim on a day where we got much smaller moves at companies like teledoc and unity software yesterday. >> well, look, right now, we're rejoicing in the tape -- the premarket tape i'm not so sure that's going to be the case when we sit back and say, well, we're about to get reporting. now, obviously, how's microsoft going to have an upside surprise if they're laying off all these people >> it's unlikely, one would think, but the market reacts usually positively towards companies trying to show some discipline on cost >> yes, they do, and what happens after a couple days is they peak out, because we like cost discipline, but we also like upside surprises. we like cost discipline now, but when we see the quarter, i don't know if we're going to love it when the cat's away, the mice will play. we're in a mice play mo

so if satya nadella is able to paint the picture of what microsoft is after, what it sees with that, people could get very bullish on this one. >> possibly. but i'm kind of taking a step back and looking at this particular action post earnings, vis-a-vis what happened with the tech names over the past four weeks and microsoft hasn't had that participation in the upside value that the other names do and that is without me stepping out on the risk curve and looking at the highly leveraged type of names. so to me this is a proverbial sigh of relief we were extremely concerned around azure growth. that came roughly in line with expectations, it wasn't a complete collapse. we had already expected weakness in pc demand, that was in line i'm still curious to see what they're going to say about smb's and customer base. but if you take a look at price action today, and compare it to what we've seen from other tech names, to me this is really just people saying okay, perhaps we got a bit too negative on the name but i wouldn't read as much into the positive one-day price action as a one-day po

nadella, last week, says he expects up to 10% of all data and compute to be generative a.i.azure gets even its fair share of that, that's 7, 8, $9 billion of revenue and possibly as much as 50 cents of earnings, so it's very meaningful contribution to their most important business that could come from this investment. >> that's super clever, and i missed that wrinkle. hey, we'll investment in you and you can use our computers for your massive data requirements are we turning slightly, gil, to the subject of google, are they going to end up fighting the last battle? is the battle already moving to a.i. how does that implicate search it's ad markets and all the rest of it. >> i think today was the second shoe when we heard reports about google going to code red, inviting sergei and larry page back to the fold, we knew that open a.i.'s threat, chat gpt's clet in combination with bing goes after that google search business, what we're now learning is that there's a concern now about the other part of the business. so, google is now under attack on both fronts, and it's going to

of microsoft which is the real company that's doing stuff here what they see they're doing, satya nadellaked about this extensively last earnings call and saying we're going to incorporate this technology across our technology stack. so today, it's running on azure. that's a good part of the azure business even if people want to have their own versions of chatgpt, that maybe don't use open a.i., they see it as an opportunity to run the systems on azure he bee yond that they're selling some of this technology and we're anticipating them to put it finally into consumer products, something else that nadella talked about that means in fact office 365, more extensively in bing search and into gaming and so forth there's a lot of opportunity there, and nadella talks about this as a platform shift that is something you should pay attention to he got it right with cloud, got it right with their azure business now he sees this as the next step. >> and dave, put niit into contx from the baidu side of things. what's the opportunity and how might it come into consumers' attention there? >> well, the

remember going into the fruit, everybody was super fearful that satya nadella had shared tetra for twoears and the u.s. was going to get worse. so they brought expectations down. but they delivered what was an okay quarter. no one was going to do back flips over these numbers. technology spend is slowing. it may get worse in the back half of the year. they have another quarter of tough comps. let's not break out the champagne glasses at this point. but relative to the fear, way better than expected. ed: that interesting point. when we look at azure the business, it is 100 basis points better than guided. you think about this idea, eps dropped 6.5%. the street was looking for a 7.5% drop year on year. when we look forward to the rest of the year, what is the story for microsoft with this broader economy, will it have to rely on the cloud business? brea: it's all about the cloud. there is no other story here. as we go deeper into the year, this concept of i.t. budgets are shrinking, can microsoft do more with less? what we are hearing in a lot of the interviews is cio's are continuing to

satya nadella jack otter: i'm a clichÉ but if you put up frosty drug and fireball in front of me i willryday. jack hough: you are not saying a brand. there are 790 beers in their. they are buying all of these craft beers, not a lot of pricing power and volumes are declining. a new problem, multiple based shots, we have a report from mk am partners, the fastest growing segment and alcohol, fireball cinnamon. 50 ml shots. you see them in a gas station somewhere, the beer, the cooler, these shots at the counter and you say wait a second, they don't have a liquor license, how are they selling liquor? it is mall-based beverages and it could be the largest 2023 increment all alcohol volume gain or and it is going to take share from here. jack otter: we have great actionable ideas. andrew: the energy etf x led, given the disconnect between energy prices and stocks. if you like energy i suggest you consider the commodity etfs like natural gas which is 50%, uso for oil or the mlps. jack otter: you have a different pick for us. carleton: if you are filling up on malt beverages you might slip into

video game sales were down pc sales were down nadella and cfo amy hood said, we're back to pre-pandemic levels as far as demand for pcs. we've seen that demand faltering in that december quarter among other industries and next week, when we get the rest of the big tech earnings, apple, amazon, his what is the readthrough with those they're kind of resistant to this consumer demand is that still true >> we will leave it there. great stuff, you guys. thank you all, steve kovach, ashley gold, kim forest. five-year notes went up for auction the top of the hour. you know we'll get rick santelli in here to tell us how it went over >> yes, kelly. this is the second option. if you do recall, yesterday's 42 billion in two-year notes, that was an "a. this five-year note option, also an "a. a real solid option. 43 billion fives, below the when issued market. lower yield, higher price. some of the metrics are clearly off the charts the bid to cover 2.64. that means there was $2.64 chasing every dollar in securities available the best since august of 2020. but here's the biggy indirects, this is the

satya nadella last night addressing economic uncertainty on the earnings call >> as i meet with customersnd partners, a few things are increasingly clear just as we saw customers accelerate their digital spend during the pandemic, we are now seeing them optimize that spend. also, organizations are exercising caution given the macroeconomic uncertainty, and the next major wave of computing is being born as we turn the world's most advanced a.i. models into a new computing platform >> lot of discussion of a.i., jim, but azure, decelerates into the end of the quarter, down about 35%. >> if you want to follow the arc of a conference call, this was one of the most confusing but also negative one i've come up with satya comes up with a million things that make you want to own it then he gives you that littl negative about optimization. optimization is a code word for, like, we've had enough there's obviously, literally, a glut of enterprise software. then, amy hood comes on the call, and i have always told people, please wait for amy hood, because she's the hammer what she did was say, look, oc

the microsoft ceo satya nadella said there was a need for caution as parts of the world goes into recession. no details have yet been given of where the redundancies will be made. in the united states, authorities have seized the crypto currency exchange bitzlato and arrested its russian co—founder anatoly legkodymov. in a press conference, the justice department accused the firm of fuelling a "high—tech axis of crypto crime" and says it has processed more than $700 million in illicit funds. i asked our reporter azadeh moshiri what we knew about this crypto exchange, and why it had interested us law enforcement. well, the words "high—tech access of crypto crime" pack quite a punch, even if it's really wordy. what the justice department has said is that this particular crypto exchange allegedly catered to criminals. they even said during their press conference that the co—founder, anatoly legkodymov, called his users �*crooks'. now, they said that it processed these hundreds of millions of illicit funds by breaking a lot of rules that are in place to stop money laundering, so that means, for

microsoft ceo, satya nadella, spoke of the need for caution as parts of the world go into recession.cements by amazon and meta. to other news now — and the nobel prize winning journalist maria ressa has been acquitted of tax evasion charges by a court in manila. her news site, rappler, was also cleared of tax evasion. ms ressa, who was awarded the nobel prize alongside a russian journalist in 2021, is head of rappler, which earned a reputation for its in—depth reporting and tough scrutiny of former president rodrigo duterte. she was convicted in 2020 of libel and does face several other charges, which she says are politically motivated. i've been speaking to maria ressa about her relief. this is the very first legal win that rappler has ever had since president duterte took office, and the kind of social media manipulation, the harassment online, and then the weaponisation of the law happened. so this is a day that we had hoped would happen sooner. this case was... we went to trial for more than four years to get to this point, but we are here. and, you know, it went down to these th

microsoft ceo satya nadella spoke of the need for caution as parts of the world go into recession. and the most senior un delegation to visit the country since the taliban swept to power in 2021, has flown into kabul to raise concerns about restrictions on women working for aid agencies. the visit by the un deputy secretary general, amina mohammad, comes as some international aid organisations have partially resumed work in afghanistan, after receiving assurances that women can work in the health sector. our chief international correspondent lyse doucet reports from kabul. winters are always harsh in afghanistan, but this is the winter of all winters, not only the temperatures below freezing, but this is a country where electricity is erratic or absent and heating is hard to find, especially in remote areas of afghanistan, which are all but cut off by snow. but on top of that, this year, the taliban have decided that afghan women can no longer work for the international aid agencies who are desperately trying to get this urgently needed aid to millions of people who need it. so jus

brent: i think we continue to want to hear about guidance, and nadella said that things may get worse inside the u.s., what is happening in the u.s. market and the rest of the world? ultimately can they commit to double digit growth with margin improvement? can they hold that? overall everyone is all eyes on what is going to happen with overall growth for the rest of the year. caroline: brent, pleased to say you we -- to say you will be sticking with us. the justice department, eight states all suing google over the search giant's ad dominance. emily ndc has the details -- in d.c. has the details. what is the argument coming from the united states against google? emily: today the justice department and eight u.s. states announced their long-awaited case against google. they are alleging that google has abused its dominance in online marketing, that for every one dollar that advertisers spend on its litany of online advertising tools, google takes $.30. essentially they have hardened competition online. they have made life harder and more expensive for advertisers. this is the second c

. >> that's nadella on cnbc india saying the world of tech should brace itself for two more years ofuggle before we return to growth, jim. >> i saw that interview. i said to myself, look, microsoft is a great stock we've owned it forever for my trust, but that was not a preannouncement, so to speak, but it was a recognition, as it is with all major tech, they're just not set up for two years of downturn, including his own company. and i think that when we see numbers from mega tech, we will be surprised to the downside come back to salesforce, it took a lot for marc benioff to hack a lot of people and to certainly close some buildings is easier no, these companies aren't ready for it they're just not ready for it. they're not ready for the downturn you said something so important, which is that do you really just make a small cut or the big whack? these companies don't know how to fire. we're not talking about an auto company or a tool and die company where they've had to fire - >> with the stroke of a pen. >> i'm not saying they're too soft to do it. i'm saying they don't know how t

which is in the low 20s this is a 20-year look i did want to point out right in here is where satya nadella took over microsoft at a discount to the nasdaq 100 through this decade then the boom in the cloud, the m&a strategy, it went to a premium. right now, still having to decide whether, in fact, big tech has kind of got enough payback and is sort of more reasonably valued or not i think in general, the cyclical areas of the market continue to show strength. consumer finance today, like capital one, teledyne, some industrials as well. >> hence the financials at the top of the market and consumer discretionary. i feel like one of the most important things to happen today came from our neighbors up north, the bank of canada. they raised interest rates as expected but then they signaled a pause they said even though economic activity remains robust, we'll pause and see the tightening effect i pointed out because they were early on tightening, early on this notion of front-loading, big tightening moves to calm inflation down, then ahead of the fed in october when they came out and scaled it b

struck at davos just feels so remarkably different than what we hear from some others, like sa satya nadella. he was asked as a recession in i.t. spending, he said, not a chance layoffs, they're hiring. he said the cycle looks nothing like 2008 or the dot com bubble burst. what's so different than a huge company or ceo leading microsoft? >> well, i mean, optimism and bill mcdermott, don't expect to see bill mcdermott singing a woe is me tune he's going to find a silver lining everywhere. we're going to have to go line by line in this report to figure out not just what's happening for service now, but what's happening, more intelligence on what's happening for the whole software industry, you know, expectations are out there we see what's happening with misso microsoft so far today. >> he's optimistic but he's a straight shooter last year, he was the guy that came out and said, listen, we're going to face weakness what he says tomorrow is going to be so fascinating we'll see. >>> verizon rallying after posting results this morning at&t doing the same ahead of t-mobile next week the sector bri

charles: you can argue nadella is best ceo in 20 years.wagon with apple. what are they missing. >> things happening in the app store are frankly pretty anti-competitive that being said, they're really digging in on india and you know that i like india right now. i think that they're opening their first first party stores, not selling through third-party retailers. they're ramping up factory production there because china is getting to be a difficult place to run a factory. they're also taking business from samsung because they're going to start producing more of their own screens. they just announced today they will start producing more of their own chips. they are getting a little bit isolated. i think that is going to be a question for them the next five years but in the next year or so i think that they're going to do really well. charles: real quick, speaking of tech, and regulations and these kinds of things, president biden has an op-ed in the journal today saying we must fundamentally reform section 230, communications decency act.

but ceo satya nadella love arishing praise -- lavishing praise, telling the "wall street journal" thatrosoft's investment in open a.i. has huge potential. the technology is by artificial intelligence, and it creates content in a way that's amazingly similar to human response. a new york rabbi pulled a fast one on his congregation to underscore the stunning ability and potentially worrisome power of chat gp pt. a couple weeks ago rabbi josh franklin told his audience he was going to do something new. listen. ing. >> maybe something you're going to say at first is unethical, but i'm going to do it anyways. i'm going to plagiarize the sermon. but it's a game. i'm going to play you the sermon and read you someone else's sermon, and you have to tell me who wrote it. liz: okay. after reading the sermon which interpreted a torah portion of por to giveness, he asked the congregation to guess who wrote it. here's what they thought. >> my father did not write them. >> larry hoffman. >> larry hoffman did not write them. the answer is going to be surprising. artificial intelligence. liz: in a fox

that is nadella's mantra, i guess you would say, during this whole thing. more with less 10,000 people less going to cost $1.2 billion this quarter to fire all these people and consolidate office space and so forth, but what they're facing, analysts expecting the slowest revenue growth in several years. just 2.7%, and on top of that, slowing cloud growth, foreign exchange head winds. this whole mess of headwinds facing them. but at the same time as they're trying to cut costs, they're investing billions in chat gpt, open a.i., and if regulators say so, another $70 billion on activision >> i feel like saluting when i hear $1.8 billion. i'm sorry, trillion, $1.8 trillion did you ever see if bill gates had not diversified, maybe he should not have taken warren buffett's advice on diversifying he would be worth a trillion dollars now. as a result, he has to live on $250 billion what a juggernaut. and year after year, people have windows by now >> that's the problem, is pc sales are just tanking right now because everyone bought computers in the pandemic for two

people >> just a tiny $2 trillion company reporting after the bell so kelly, the mantra from satya nadella and company is do more with less. and that is exactly what microsoft is going to be having to do itself 10,000 employees got the axe last week. we know that already we also know they're investing billions of dollars in activision and chat gtt. now, things we're going to have to look for on the left side is cloud growth cloud growth is slowing down before, you know, in quarters past, we would see high 40 percentage points or and 50 percentage points in azure growth that's going to go all the way down to about 36 to 37%, according to the wall street estimates. and look, that is because of so many headwinds facing the cloud business you have foreign exchange and reduced spend among small and medium businesses. that's what's hurting cloud growth, and we've got to talk about consumer demand, kelly, windows, people are just not buying pcs the way they were during the pandemic and that hurts the more personal computing businesses that hurts licenses as well. >> the bread and butter. about 24

multiple like for proctor and gamble, i'm going to take microsoft all day long and i think satia nadellace on the heels of laying off about 10,000 people, i'm pretty convinced they will beat that going forward. charles: folks, constant currency, if the dollar wasn't so strong the number would have been 29% and since the dollar came down since then that'd as to nancy's point. tesla has been a beast. what do you think about it here? >> i think i got really lucky on that. charles: i'd rather be lucky than good. [laughter] >> i think the report was pretty good. i mean, they are seeing demand, the orders in january were their highest level ever for a month- to-date period. padding prices can have an advantage. it does drive demand and the margins came down but there's still four or five times better than ford, so i think you've got a company that a management who continues to be underestimated. that's a good thing if you're a shareholder. i would not chase it. i'd let it settle down. if he finds a ceo for twitter though i think we're off to the races again. charles: all right, so services now

satya nadella has been open about this lasting more than just a quarter, more than just 12 months.ng is tough right now, and we know ad revenue is cyclical. depending on the duration of this downturn -- and no one has a crystal ball in terms of how long this is going to be -- add pricing is set by the advertisers. it is a bidding mechanism. it is not software where you get to set your price and you can raise prices because it is a sticky. add pricing is eating-based, and i don't think it is going to come back until the economy rebounds. you will see pressure on google search revenue, youtube ad revenue, but i think they still have kind of the timeshare when it comes to people spending time in their products, and eventually the cyclical rebound will happen. it is just a matter of controlling costs right now. jonathan: the labor force at these companies over the last couple of years have grown exponentially. get amazon. it basically double to 1.5 6 million. the question i keep asking -- and i would love your insight on it -- some of the excess in the last decade, i do you think about

. >> if you were satya nadella, how would you prepare for the future where would you be investing whatw would you be positioning microsoft -- >> i think they're doing all the right things the company has done extraordinarily well under satya nadella. i do think one of the highlights, joe, is this big investment, actually their third round in open ai i don't know what's going to app at facebook with the metaverse but open ai is going to be a big deal the other thing that will be helpful to microsoft going forward is they were hurt badly by the strength in the u.s. dollar and now that's going another way. there are a couple of reasons to be a little bit more optimistic, but your question about when to buy it, i would buy this thing at 220 a share it looks like it's going to open 235 or so. and last night during the conference call, at one point it was up to 245. like you says in the lead-in, people were relieved that the quarter weren't so bad but they were disappointed in the guidance. >> gaming is a metaverse play, isn't it >> yeah, i think that will be interesting and they continue to

. >> nadella -- >> right he executed well to his core he removed the phone, moved to the cloud. that's 30 times earnings which makes it the most expensive of the megacaps, other than amazon, because we can't really ferret out -- alphabet is the con conundrum. sells at a market multiple. >> has for quite some time everybody's refrain is alphabet's so cheap. >> you mentioned the biggest mistake that money managers make in 2022, they missed saint merck. you told me over and over again that the merck -- basically their innovation. >> i was focused on their antiviral. i've reported so much which has done very well, but not in our country. the. >> that's right. >> paxlovid is the antiviral over the world they have sold a lot of that but there are other things as well. >> if you are in a slowdown world, people because it and i think that was the letter. that was the one everybody should have had and it was non nonstop. >> listening to you as i do, going into this year you're still very bullish on lily the obesity drug or what will be fully approved >> still not being approved. prescrip

would never sell for the travel trust microsoft is the ultimate buy and hold stock but i listened to nadella talk about how it's going to be two tough years. i said, is he really saying buy the stock? i think he's saying hunker down. if i'm going to hunker down, i'm not going to hunker down in the stock of microsoft that's not where you hunker. >> where are we on a multiple of microsoft? >> 25, 26. we're at a lower multiple than what we've seen in quite some time. >> very true. >> but your opinion would be that the numbers have not yet come threw. >> when someone cuts numbers, the stock goes down, unless it's a situation like a nucor which sells at four or five times earnings even after the cut, stocks remain cheap look, i'm not bear or bull i'm just saying that on friday, for instance, we get the -- we get the bank numbers i think they're going to be okay because the banks have not seen these distielinquencies that pee keep talking about. >> we did get jeffries after the bell last night. i think carl was going to go there too which sometimes can be a bit of a road map. capital markets activ

back to microsoft for a mbt, not the downgrade, but they're going to be incorporating ai, sauch yeah nadellarview, in azure, all of their different offices. we haven't been talking too much about the chat gbt and what that really means obviously, there are efforts under way at other companies such as alphabet, one would imagine, when it comes to a.i., about things we're not really as aware of but are perhaps equal to or exceeding what has din done >> this is not alexa, they can't -- >> microsoft, this is an important relationship, and the journal reporting about the possibility of them investing -- maybe it was other reporting, $10 billion. >> have you used it? >> i tried yesterday and it was busy said sorry, whatever it was. >> i thought it was like emerson throw cramer it was insane. you can be smart this is kind of like when i spoke to myself when i was at nvidia and it asked me what was my feeling on the market i mean, there's a lot going on that i think is rivaling china, by the way, where you basically can be somebody else and, i mean, i painted like picasso at nvidia, i did a seascape

microsoft ceo satya nadella spoke of the need for caution as parts of the world go into recession..7% in november. that drop was due to lower fuel prices, but it's offset by rising costs of food, transport and hospitality. let's talk about food because you see that energy prices, since we have been talking about energy, are coming down and that has helped bring the top level of inflation downwards a little that it is food is it not. looking at basic staples like milk, eggs, cheese, sliced white bread, they are well over 10.5%. in white bread, they are well over io.5%. in fact you are paying almost double for to pints of milk of the moment. can you hear me? sorry. it is true that— moment. can you hear me? sorry. it is true that we — moment. can you hear me? sorry. it is true that we have _ moment. can you hear me? sorry. it is true that we have seen _ moment. can you hear me? sorry. it is true that we have seen inflation i is true that we have seen inflation io is true that we have seen inflation go up _ is true that we have seen inflation go up in _ is true that we have seen inflat

the first time in the charity trust in ages and the reason that we did is amazing interview, that nadella long time. >> maybe an upbeat note, coinbase cutting about 1,000 jobs this morning? >> look, i think that when you read that the -- there are people from sam bankman-fried's outfit trying to talk, whoever can get in line to speak to the u.s. attorney. i'm not saying coinbase is involved with them i'm saying -- i like mike very much, but this whole thing is a house of cards the nft, does anyone -- i don't know -- what do you do with a nonfungible token? >> $37.15. is there a bottom here for you >> look, it bounced yesterday, but we're in a different kind of world now. and i think people realize that perhaps the whole thing was manipulated. i read john stark. he's a great follow. he's saying you got to get out of everything involved with this there isn't anything that's not going to be manipulated and investigated and the s.e.c. is going to come in and sweep everything gary gensler has had it. there were a lot of republicans who were urging him to say, listen, fintech is here to stay. i