steve kovach following this for us. do you want to just take off on where josh left off on the bar being high and this is the moment of truth, perhaps the most moment of truth this company has ever faced? >> reporter: let's talk about where the bar is. the thing i think most people need to watch is this azure growth number. i know you were expecting me to talk about co-pilot and ai, but i promise i'm going somewhere with this. we learned all that activity openai has been seeing is directly benefiting microsoft's cloud business. openai runs its systems on the azure cloud and that's part of microsoft's massive stake in the startup. that's what you have to remember, so any headlines you see about business deals, some of that will flow over to microsoft. the first quarter report was three months ago. azure cloud growth beat expectations by about three percentage points. microsoft credited openai for some of that unexpected growth we're seeing and a re-acceleration after so many years of cost cutting over there. the street e

cnbc's steve kovach joins us now. hey, steve. >> hey there, ellison, tesla is recalling close to 200,000 cars in the u.s. due to an issue of what the back-up camera malfunctioning when it goes in reverse. auto maks said while the cars are in reverse, the software can glitch to prevent the camera from showing images which regulators say can increase the risk of a crash. the recall affects the 2023 models y, s and x. also, levi strauss will begin laying off 10% of its global workforce in the first half of the year. the closing retailer said today that the layoffs are in an attempt to restructure itself as it faces weaker sales. layoffs are said to affect up to 15% of its corporate employees. >>> and t-mobile may slow home internet speeds for some users during times of what it calls congestion, if you use more than 1.2 terabytes of data a month, you have have to speed slowdown when there's a lot of traffic on the network. t-mobile said these users will be prioritized last and it will notify them when they pass that data t

steve kovaches has more on the results. steve? >> yeah, mel, you want to talk about monetizing a.i., that's microsoft. microsoft doing it with the beat on the top andbottom lines, but the other numbers are telling us about the a.i. story here, you have azure growth, that is a beat. 30% versus expectations of 27.5%. and here's the real kicker here. microsoft says six points of that is coming from a.i. services. that's stuff like openai running on the cloud, on the azure cloud, specifically. and it's a second beat in a row, showing growth is reaccelerating for azure cloud. next, take a look at office 365 growth, on the commercial side, well, that's up 17%. the big question, how much of that is due to sales of co-pilot? that's the a.i. assistant, they started selling to big businesses last fall and opened it up to even more folks here in january. guys, wait for the call at 5:30, especially for any color or commentary about the co-pilot sales, how much of that contributed to 365, plus guidance for the current quarter. we usually get t

and steve kovach, thank you. >> speaking of apple, our next guest just increase its stake in it, eveneryone else has been backing away, and says he will keep buying it if the selling continues. let's talk to kate fitzgerald, fitzgerald group -- it's good to see you, welcome. >> thank you so much for having me back, it's a pleasure. >> unbridled enthusiasm for apple here. >> i think this is a golden opportunity. both of your former guests are obviously extremely intelligent guys. they know their stuff. i respect their opinions. i don't think we are living on the same planet here. we are looking at apple and we are seeing a golden opportunity. you've got 200 -- a sensor platform, you've got a billion paid subscribers. you've got a business that is going 30, 40, 50%. and the services are censoring network, worldwide at this point. they are getting into finance, this is the year they will hear a.i. and apple in the same sentence. i frankly don't get it. i'm perfectly happy to buy more shares here. >> and when we talk about buying more shares, give us the case, keith, that this isn't the m

steve kovach berry joins with new details on a possible antitrust lawsuit against apple.n morning on guidance, christina partsinevelos it's back, although we knew she would. be why wall street is doubled on nvidia. mike, we begin with. you looks like gonna make a run back to 4700 here on the s&p before we close it. out it >> has been a little bit of a sticky number, a few days this year, so far. relatively, i guess, the nine response to conflicting data today. it still continues to look like this sort of low energy, profit taking, flash, we already own enough of the stuff type of reaction. you didn't seem to have a type of reaction with the great expectations so. much of most of the data, as much as they were a little bit noisy, confirm in general terms. we can argue all we want about the market, what they are gonna, get what they're not gonna get. i don't think it matters that much i think we stay clear of infinite recession and the inflation doesn't flare up and we could probably do the cpi. >> that is the big test. there is a ton of conviction that inflation is still g

our shareholders on the desk are reaping the rewards on the desk that is why, rob, everything steve kovach says justified why the valuation deserves to be where it is. this isn't a pipe dream or a deep look into the future, they're already doing it both through enterprise and from regular consumer customers >> and it is the single largest position at new edge across all our portfolios although it's a neutral. what i would say is, yes, it's expensive and is all about the earnings and what portion can you directly tie to ai they are a huge ai beneficiary there's no way you can't own it. the question is, how do you own it relative to the portfolio sizing and that's what we're thinking about. the momentum is 31 times it traded at 35 in the covid level, right we can get there and that's why we're staying the course at current weight >> the other question, kari, it tops 400, now it's at 404.50 today reiterated by citi 470 is the price target we might as well bump it up to 470 >> it could go to 500. this isn't a stock that has to stop because it hit a certain price. the major markets, cloud, ai a

steve kovach, diving into that apple downgrade. leslie, getting more bullish.move toward the positive during close, thank you healthcare? >> yes, you have been talking about it all day. it seems a little too pat for that to be defining, but, i guess everyone sort of sees the market is overbought. is that good, showing momentum, and that a soft ending looks plausible? or is it kind of overbought, meaning that we have had some selling, we are going to have pull back, what will you do with the good back? it does not leave us immune to these little jarring moves. anything that strays from soft landing numbers, whether it is the jobs report or something else, it is probably not going to be overlooked. >> the pullback, mega-cap is where that is going to be most acute. apple, down today almost 4%. i have the downgrade in my hand from barclays. i have another note, talking about sellthrough of iphone in november. >> that is the big one, scott wapner. this is what we have been talking about with apple, this demand environment is uncertain, and the sellthrough, it is als

steve kovach. >>> coming up, today's moves are threatening to make gains in the last five trading days2023. and don't believe the recent melt-up. the number one fed signal he's watching, and it's not the dodds. he joins us next. you're probably not easily persuaded to switch mobile providers for your business. but what if we told you it's possible that comcast business mobile can save you up to 75% a year on your wireless bill versus the big three carriers? did we peak your interest? you can get two unlimited lines for just $30 each a month. there are no term contracts or line activation fees. and you can bring your own device. oh, and all on the most reliable 5g mobile network nationwide. wireless that works for you. it's not just possible, it's happening. >>> welcome back to "the exchange." stocks closed out to a win streak. wolf research chris doesn't believe in the melt-up. he laid out numerous warning signs in his latest note. topping the watch list is what he calls a huge and underappreciated catalyst, fed liquidity he expects to decline. next up, performance chasing for 2023 top

it steve kovach. >> let's go to bertha combs now for cnbc news update. >> i bertha. >> hi tyler. headlines of the new york attorney general today. first, down trump's civil trial could cause $370 million. the a.g. laetitia james argue today that he should pay that price in penalties for decades of financial fraud. the filing came out less than a week when closing arguments are expected to be given that fraud trial. the former president has repeatedly denied any wrongdoing. just days before the york several trial involving the ceo of the national rifle association it set to begin, chief wayne lapierre announced that he is resigning. new york attorney general letitia james was seeking his ouster in the trial as well as financial penalties for alleged corruption. lapierre, who 74, cited his health as the reason for stepping down. and you won't see any ads from jeep, chrysler, or ram trucks during this year's super bowl broadcast. parent company stellantis said today that they won't take out any sports, any spots on the big game as it focuses on cutting costs. the automaker has also

steve kovach. we are just getting started. up next, trading key levels. top technician chris verrone is highlighting where he sees the s&p heading from here. two sectors he's been ignored breakout. he will make his case after the break. we are live from the new york stock exchange. you are watching closing bell on cnbc. ♪ ♪ ♪ ♪ ♪ ♪ >>> we are back with the s&p 500 on track for a record close for the second trading day in a row. also pacing now for a third straight up day for the first time in this young year. -- head of technical and macro research. -- good to see you again. >> good to be here. >> you were with me at the last trading day of 2023. here we are with some new record highs. now what? >> what's interesting over that two or three weeks, it was a market that really chopped for about two weeks. yet our big call was there was no meaningful selling pressure under the surface. when you are looking for a change in the character of the market, you look for a really strong down days, where decliners over one advancers. there was none of that. it looked