Closing Bell - Burritos & the Consumer: Earnings from Alphabet, Tesla, Chipotle & More. CEO Interviews with Chipotle and T-Mobile 7/23/25

Episode Date: July 23, 2025

A huge earnings day, headlined by Tesla and Alphabet. Nuveen CIO Saira Malik breaks down these key results and what they mean for the broader market. T-Mobile CEO Mike Sievert in an exclusive interview before the earnings call. Chipotle CEO Scott Boatwright also joins before his company’s earnings call on the latest quarter and the state of the consumer. Analyst takes include Angelo Zino of CFRA on Alphabet and Craig Irwin of Roth Capital on Tesla. Other earnings include: IBM, ServiceNow, CSX, Las Vegas Sands.

That bell marks the end of regulation. Gotham FC ringing the closing bell to New York Stock Exchange. Jeffrey Allen of Beast Games, season one, doing the honors at the NASDAQ and stocks ending the day higher. The S&P hitting another all time high. The move fueled by the president announcing a trade deal with Japan and reports the US may be close to an agreement with the EU. This is the 12th closing record in 2025 for the S&P.

Health care, industrials and energy leaders, utilities and staples lagged. A volatile day in the commodity space after hitting the highest level in a month, gold ending the day lower. Silver also ending slightly tarnished after hitting its highest level since 2011. And yields ticking a bit higher today. That's a scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Ford alongside Morgan Brennan. Ahead, a long list of earnings coming your way, including the first two of the Mag-7 names,

Alphabet and Tesla. We're also gonna hear from Chipotle, IBM, ServiceNow, and T-Mobile. Well, speaking of T-Mobile, we'll have an exclusive interview with the CEO, Mike Siebert, that's the head of the company's conference call. Plus, the CEO Chipotle following its results as the stock continues to underperform. But before we get to all those earnings, let's begin with the markets as the S&P hits another

all-time high. Progress on the trade deals and better than expected earnings so far this quarter continuing to fuel optimism. Joining us now is Sarah Malek. She is Nuveen's CIO and head of equities and fixed income Sarah welcome. So I mean all-time highs Keep pushing here. The meme stock type feel has reignited though. Can you trust it? Can you keep buying here? Investors are definitely experiencing FOMO and the market supported by three drivers that's retail buying strong earnings and liberation

day news so first retail buying some of those mean stocks we've seen fifty billion come into the market over the past month from retail buyers second is the second quarter earnings set up estimates coming into this

quarter were for just less than five percent earnings worth your year over year we're already beating that I think we'll already beating that. I think we learned today that tech is going to lead the way in continuing to beat that. Then Liberation Day 2.0 due August 1st, but what's trickling in has not been a disappointment for the markets.

About 15% tariffs is within expectations, and that's why the market has just hit its 12th new high for the year. Alphabet earnings are out. We are going through them. We'll bring them to you as soon as they're ready. So speaking of, does that mean we can keep buying tech for the investors out there right now? Well, Alphabet, what we're going to be looking for

is pressure on their search results because of companies like ChatGPT and other search. But also with Alphabet though, looking at Waymo also their cloud business and YouTube that pretty much equates to the enterprise value of the stock so it is not an expensive company at this point at this point the pressures on search are probably already pricing of the stock so I think tech can continue to lead we'll see with alphabet

of course Tesla a bit of a different story. Yeah Sarah I'll probably have to cut you off here as we get those results but in the meantime shares of alphabet are trading are trading higher right now. To me, some of the big some of the most interesting things in the in the trading session today was that it was all of these power related companies. And actually, I'm going to cut myself off. Alphabet earnings were ready to go. Mackenzie Segalos has them for us. Hi, Mac. Hey, Morgan, you've got Alphabet shares surging in the after hours up about 1.3% now. Let me get you those top and bottom line numbers. For Q2 revenue, it's

coming in at $96.4 billion. That is a beat. The analyst consensus was $93.9 billion. On the bottom line, second quarter EPS was $2.31. That's also a beat. The market was looking for $2.18. We've also got another key figure, which is cloud revenue that landed above analyst expectations, coming in at $13.62 billion versus the $13.1 billion analyst consensus. I'm going to keep digging through these numbers, and I'll come back to you. But for now, shares actually now trending a little bit lower, down half a percent. Back to you guys. All right. McKenzie, we'll be back to you but for now. Shares actually now the trending a little bit lower down half a percent. All right guys Mackenzie we'll be back to you as you get more Sarah I want to

get your reaction to that with a beat on the top and bottom lines with the shares- under a little bit of pressure we know there been a little bit of a rally into this name ahead of the print. It's going to depend on the conference call what

they say about the pressure on search versus the other areas for them better growing quite quickly like. Waymo and also YouTube and their cloud business that's going to be what matters the stock. Is not extremely expensive here but

tech stocks have rallied. Quite handily going into this brand and that's what we've seen with the market recently. Momentum and growth stocks. Had actually started to roll over. Before today as people have been moving more into value stocks

as the economy. Had remained strong so. One main question is can momentum and tech continue to lead. I think that it can. Tech right now the mag seven is over 30% of the S. and P. market cap. But the only growth driven by AI should continue to

deliver including AI investments which we should hear more about. With alphabet which is signal seventy five billion in AI investments this year. Yeah I mean speaking of these giant capex numbers from alphabet and others,

some of the biggest winners in the trading session today were these energy-related and infrastructure-related plays, whether it's GE Vernova or Baker Hughes, it came up with Baker Hughes, even some of the other HVAC type system companies as well. Is the meaningful trade here around some of these AI infrastructure names as we start to see more and more money actually go into the ground? Public and private interest for infrastructure has

been a top pick for our global investment committee for many quarters now. Not only based on AI data centers but also more building coming back to the US in terms of infrastructure. I think that's a great play to offset a continued investment

in the winners within technology stocks. AI is alive and well. It's a trend that's not going to go away. It's going to increase productivity for companies and their revenue levels. And we're going to need the infrastructure to build that. So that is a really nice derivative play that I think will continue for the infrastructure space

around AI. On the straight up AI front, we've got a couple of interesting companies reporting here in overtime today, ServiceNow and IBM. IBM long considered a old guard company, but it's been on a very interesting run lately with software comprising now a much bigger percentage of its business,

post Red Hat acquisition. Then ServiceNow, when the market's not rallying overall, had been one of the few software players at scale to continue reaching new heights stock-wise. So how should investors think about the difference between different types of software companies, you think? How they should invest in them, how they should play them, what they should watch for in these kinds of results?

I think software companies actually, we are less positive on those and more interested in semiconductor companies where inventory is finally being cleared out. I think the semiconductor cycle from a supply side is going to improve in the second half of this year, and then hopefully we'll see demand continue into 2026. Software, I think, as a trade is starting to peter out.

There's questions around how software companies are going to be able to implement AI into their business models and whether that will be a positive or a negative for them. So we're less positive on software companies, more positive on the trade into semiconductors. Yeah, I know we're waiting on some more results from Alphabet, but does it look like Google Cloud Revenue

basically came in line? 13.1 billion YouTube ads, 9.8 billion. The tech, okay. And Mackenzie is going to bring us some of the other numbers. So we're going to go back to her. Stay right there, Sarah. Mackenzie, what do you have for us? Hey Morgan, so two other numbers we're looking at

is Google search and other revenue. This is a key read on both the ad market and the shift to generative AI. That was a beat. That segment coming in at $54.2 billion. The street was looking for $52.8 billion. We also saw the company revise up its full year guidance on what it's gonna spend on CapEx to $85 billion.

And that's really big with respect to the competition as it looks to close the gap with AWS and Azure. I'm gonna keep going through these numbers and we've also got the call starting in about 20 minutes, Morgan. All right, Mackenzie, thank you. Shares are down about two and a half percent right now. Sarah, I want to get your reaction to that, especially that CapEx number that's now been boosted to 85 billion. Also, this commentary in the release that AI is positively impacting every part of the business, driving strong momentum. to see the increase in capex spending on AI that seventy five billion number I mentioned which was their prior guidance. Was up

from fifty billion before so not surprised to see that continuing to ratchet up. That is behind our thesis that the AI. Trends is an N. a- growth rate is going to only accelerate from here maybe other thing though is search for Google. Seeing them

beat on that is very positive for the company that's their core business. That's the one that we're worried about, could be under pressure because of competition from other AI companies like ChatGPT and beyond. All right, Sarah, thank you for kicking off the hour. And meantime, IBM results are out.

IBM beat on the top and bottom lines. Guidance is a raise on free cash flow. I spoke with CEO Arvind Krishna about the quarter. We'll share what he told me but first the numbers. Revenue was $16.98 billion versus $16.59 billion expected non-GAAP EPS, $2.80 versus $2.64 expected. For the guide, IBM reaffirmed constant currency revenue growth of at least 5% but said cash flow will be more than 13 and a half billion. That's a change from about 13 and a half Here's what CEO Arvind Krishna told me about the quarter on the segments that did best He said we did well in software and did really well on the mainframe

Those are probably the two standouts for the quarter now Of course because those two are both where the last dollar is much more profitable than the first, that results in then the bottom line beat and we're carrying forward some of what we beat but a bit more. So we're raising guidance on revenue for the full year and we're raising guidance on free cash flow for the full year.

Consulting was flat, better than negative, which it was in the first quarter and I think that just given where we are but also where others are, I don't expect a lot of improvement this year but I do expect next year to be better. I asked him if the days of bottom line growth and top line stagnation for IBM are officially over. He said you cannot engineer free cash okay and I said revenue growth that's what he's referring to when he set the targets for the street. You can't hide revenue growth.

You can engineer earnings, you can do other things. So that's the reason I picked those two metrics. He's talking about free cash flow and revenue growth. So now the third part, we are very clear on our model. Software will approach double digits. So 7 to 10% is the range we're going to be in. Why do I feel comfortable about it? 80% of our software book of business is actually ARR,

our recurring revenue. On the global economy, he said, overall on the macro, I actually feel good right now. I would tell you that contrary to some of the doomsdayers that we're talking about sub 1% GDP growth, I just don't see it. I think we're gonna be around two here in the US, probably mid-twos globally.

You're at three points of inflation, so that'd mean that actual rates, everything is up by five plus on average. Pockets will be seven, eight, nine, there'll be pockets at one, two, three, and that's why I feel good about the overall macro. Are there gonna be tiny pockets of, I'll call it headwinds? Sure, the Middle East is one of those pockets right now,

not Saudi and UAE, but if I go a bit further northwest, that's certainly an area of concern. And I asked him about Brand America, which he flagged as a concern last quarter, if the US's reputation were to worsen. He said, I think back in April, there was a lot more talk about the anti-American sentiment, whether you heard it from Canadians,

you heard it from people in Western Europe, not so much the UK, and even portions of the Far East. I think that the emotion has gone away. People have realized that we need to be part of a global trading system. And so I sense that that emotion and the heat has decreased dramatically and people have said, okay, let's be pragmatic and get to an outcome that makes sense for everyone. And Morgan, the stock is down a couple percent right now after hours and we're looking ahead to the earnings call. All right. Some good color there, especially after the name has been trading at record highs recently.

We've got more earnings to bring you. Tesla results are out. Phil LaBeau has the numbers. Morgan, this is a miss on the top and the bottom line for the second quarter for Tesla. The company earning 40 cents a share. The street was expecting 43 cents a share. Revenue coming in at 22.5 billion. A little shy of the estimate of $22.736 billion. Just going through the investor report right now, we don't have a whole lot of details, but they do say that they have sufficient liquidity to fund the product roadmap that they have laid out and that the plans for a new, lower cost, more affordable vehicle, if you will, coming to production this year remain on track.

What does that mean? Well, you've only got so many months left in this year, but that's the latest in terms of what we're seeing with the Tesla report. Don't forget, we're going to have more in a little bit. We'll come back to you guys as we get more details, especially with things like the automotive gross margin, excluding zero emission vehicle credits. credits, but the conference call is really what people will be focused on in terms of what Elon Musk has to say when it comes to RoboTaxi, humanoid robots, etc. Guys, I'll send it back to you. All right. Well, shares of Tesla are up half a percent right now. Phil LeBeau, we'll see a little bit later. Speaking of earnings, we're going to continue with this train.

T-Mobile earnings are out. The company topping forecasts on both the top and bottom lines, handily beating estimates for postpaid wireless mobile additions as well the company also raising its full year customer and financial guidance shares are moving higher right now you can see up more than 4% and joining us exclusively before the conference call is T-Mobile CEO Mike Sievert Mike it's great to have you back on let's start right there it was very much a beat across the board and you raised guidance. What gives you the confidence to do it?

Well, no one should be surprised by this Morgan. I mean, this is the effect of one company able to simultaneously offer the best network in the country and the best value. So customers are moving to T-Mobile. This was an all time record Q2 for postpaid net additions and postpaid phone net additions. Huge record force. But at the same time, financials beating expectations and postpaid phone net additions. Huge record force, but at the same time, financials beating expectations and we're moving guidance up. So it really shows that the model, the durable advantages of T-Mobile are firing on all cylinders. So your guidance reflects the inclusion of Metronet. It excludes the acquisition of U.S.

Cellular. How to think about your portfolio moving forward now that you did just make this, you did just close this acquisition and also just strike a partnership with our parent company Comcast and Charter for business customers starting in 2026. Well, let's start with that cable partnership. Last night we announced that we were entering into a partnership with both of the biggest cable companies

to provide wireless services through their brands to small and medium business customers. This is just a classic win-win. T-Mobile's mostly about the very smallest of businesses where we already compete with cable and thousand line enterprises and above which are not included in this transaction. So we actually have very little exposure to this area

where the new partnership is. We think it's gonna be highly incremental and we're excited to be in the partnership. Churn, especially when we're talking about not just postpaid but also prepaid. There was some commentary from one of your rivals, AT&T, this morning about the impacts of lower immigration on that business. Well we saw a very healthy prepaid business and that's net of a healthy migration from prepaid to postpaid.

One of the advantages of our business is we have a very high quality prepaid base, some of whom actually qualify for postpaid, and we were able to see that migration happen this quarter. Yet again, it's just another source of strength for us. Our customers, Morgan, this is fascinating. T-Mobile customers are the best paying customers in this industry.

The postpaid bad debt as a percentage of total revenues is the lowest of the major benchmark competitors at T-Mobile. And finally, there's been some reports in the last couple of weeks that you might be possibly stepping down from the CEO role. Any veracity to it? A lot about those reports they got wrong. Nobody has made any decisions like that. But one thing they got right was

that I did recruit Srini Gopalan here as part of our long-term succession plan. Srini is just fantastic and people are going to be hearing from him yet again on today's report. Okay.

Mike Sievert from T-Mobile. Thanks for joining us. With a beat and a raise and the share is up 5.5% right now right here in overtime. All right. So there's now results are out. We'll get to those in a bit. But first Chipotle earnings are out and Kate Rogers has those numbers.

Kate. Hi, John. Chipotle earnings coming in with EPS right in line at 33 cents adjusted. Revenues just slightly below estimates, 3.06 billion for Q2. Analysts were looking for 3.11 billion. Same store sales came in lower than expected, down 4 percent. Analysts were projecting a fall of 2.9 percent. This is its second consecutive contraction and also the biggest since the second quarter

of 2020. Chipotle, though, reporting a return to positive comparable sales and transactions in the month of June. Its restaurant level margins right in line at 27.4%. The company noted inflation across several of its key ingredients, primarily steak and chicken. For the full year, it's cutting guidance to about flat for full year comp sales.

That's down from the prior guidance of low single digit growth. In a statement, CEO Scott Boatright said the company was seeing its momentum build as it rolled out its summer marketing initiatives and comparisons ease. You can see the stock is down just under 9%. And joining us now to hear more about the quarter is Scott Boatwright.

Scott, thank you so much for being here. Hi, Kate. Thanks for having us on today. Great to see you. So I do want to talk about the trend that you mentioned in June in this release. Last quarter, you said you felt the company could get back to those positive transactions in the back half of the year. You did see that trend last month.

Do you think it's sustainable? I do, Kate. We saw some real consumer softness that was really unexpected back in the May timeframe. When we saw consumer sentiment drop to an annual low, and oftentimes we trend along with consumer sentiment. So we didn't anticipate that, which has caused us to re-guide the year, unfortunately. But I'm happy to report that we've seen an acceleration in the business in conjunction with our summer campaign

around summer of extras and digital, as well as the new Adobo Ranch Dip, which we launched in the beginning of June, is driving transactions and uplift as well as the new adobo ranch dip, which we launched in the beginning of June, is driving transactions and uplift as well. And I'm wondering about varying income cohorts. How are they performing and where's the company seeing the most resistance from the consumer right now? Yeah, we saw a bit of a step down

in the low income consumer in the April, May timeframe. We think that's in large part due to really tough compares from prior year, but we've seen that rebound with our summer campaign, which gives me confidence that we can return to positive growth and positive transactions in the second half. The consumer, as we all know, is so value hungry right now. How are you seeing that turn up in your customer base and how do you plan to address it in the back half of the year as we all forecast this trend is likely to continue? plan to address it in the back half of the year as we all forecast this trend is likely to continue?

Yeah, I think the brands that are winning right now in this space are brands that are innovating and meeting the consumer where they are. You know, we think about value differently. We haven't had a brand that's competed on value as a price point. We think about value as benefit over price and delivering high quality fresh ingredients with classic culinary techniques in abundance at a speed at which you can't get anywhere else is really the core equities of our brand and really where the value proposition rests. What we can do differently is think differently about innovation in the back half and of course as we think about the 2026 calendar, whether that's LTOs, center of the plate items, dips or sides, or other interesting ideas that we have in the hopper.

We're thinking differently about group occasions for the second half of the year and how we lean into meals around four people or six people, as well as launching our catering test in the back half of the year, which is another exciting platform that we plan to lean into more meaningfully in 2026. You did note inflation in some of the key menu items, primarily chicken and steak. Wondering more broadly, have you felt any direct or indirect impact from tariff headwinds? No tariff impact today, Kate. I will tell you, we are seeing

modest inflation, so think low single digits, and both cost of goods as well as labor. That's ordinary and expected. We do believe there will be some tariff impact in the back half of the year. Could be anywhere in the range of 30 to 50 basis points. But I'm happy to report that between risk mitigation strategies with our current suppliers and vendors, as well as how we think about

margin improvements within the business, we believe we can offset those tariff impacts at the back half of the year and remain really aggressive as we think about overall restaurant-level margin and ETS for the back half. And Scott, Chipotle has long invested in its technology pipeline and things that make the back of the house run more smooth for your staff. I'm wondering if you can talk about labor costs and some of the investments that you've made to bring down costs on the labor front in your kitchens.

We have a couple of things that are in flight at present, Kate, which we're excited about. The produce slicers are now in all restaurants. The teams are still working on the training and cascade rollout for those slicers. The restaurants that have had them the longest at this point are seeing labor efficiency gains, which is exciting, obviously contributing to our bottom line.

We don't have the full fleet trained and ready and rolling yet, but we believe there'll be greater efficiencies there. We also talked last quarter about the high efficiency equipment package, which will start rolling this year. We'll get to about 160 restaurants retrofitted this year. We'll start a full retrofit of the existing fleet sometime in the back half of the year.

And all new restaurant openings in Q4 will have the new high efficiency equipment package, which will have several gains, none of which are more important than the culinary gains that we expect to see on taste of food and quality and consistency of cut size, but there'll also be efficiency gains in labor as well. Well, Scott Boatwright, we will have to leave it there,

but we thank you so much for joining us before the call to tell us all about the quarter and look forward to hearing how those innovation rollouts take place and take hold at the restaurants. Thank you for being here. Thanks so much, Kate. All right. John, back over to you.

Thanks to you as well. Our Kate Rogers with Chipotle CEO Scott Boat right now. ServiceNow earnings are out, as I mentioned. The stock's up better than 6.5%. Q2 beat on the top and bottom line. The company is raising guidance. I spoke with CEO Bill McDermott about the results as well. First the quarter revenue was $3.22 billion versus $3.12 expected. Non-GAAP

EPS $4.09 versus $3.57. On the guide, ServiceNow promising Q3 subscription revenue of $3.26 billion to $3.27 billion, so that's $3.275 at the midpoint versus expectations of 3.21 billion. Operating margin and backlog both beat as well. CEO Bill McDermott told me about the quarter. On AI demand, he said, the AI control tower, which is that control tower that governs, monitors and optimizes the agentic workforce on one platform, achieved its full year operating plan in 60 days. The silos and the industrial software complex

of the 20th century is collapsing into a cross-functional way of working. These organization charts are going to get busted up in these enterprises and AI is gonna turn them upside down. On industries where ServiceNow's outperformance came from, he said, unbelievable growth in transportation and logistics, they've got to deal with a lot of things in real time, technology, media, and telecom.

So these two respectively were up, one was 100%, the other was 70% year over year, and retail, hospitality, energy, and utilities were all up 50% year on year. So what you're seeing is the AI ability to take OPEX down is driving all these companies to act. And on the backlog we just mentioned, he said we're now up to almost 24 billion in RPO.

As you saw, our CRPO and our sub-revenue is full up more than two points above expectation. And both of them were at 21.5%, which is pretty amazing. And incidentally, that's just a record at this point in the year for us. And our operating margins and our free cash flow were up 2.5 and 3% year on year respectively. So we have lots of RPO coming,

and a lot of CRPO coming in the back end of the year, because especially in Q4, that's our biggest renewal cohort, and it's always our biggest part of the year. And Morgan, as I was mentioning, this is a stock that had tended to be up on AI enthusiasm, even when others in kind of sub-megacap were not. And it's responding here to these results so far.

Yeah, continues. All right, we've got breaking news on Bank of America. Leslie Picker has the details. Hi, Leslie. Hey, Morgan, Bank of America announcing that it has authorized a $40 billion stock repurchase program. You can see those shares up about half a percent. On this news, the company says the current program as of

June 30th has about $9.1 billion remaining. And this program, the new one, the $40 billion repurchase program is effective August 1st, and it will replace the current program. So again, you can see shares of about half a percent on this $40 billion buyback announcement. Guys? All right, Leslie Picker, thank you. Well, Alphabet's earnings call is just moments away, and up next, we've got an analyst with a buy rating

on the stock telling us what he wants to hear from the company's management. And we'll have even more overtime earnings action when we get more reaction to results from IBM and Tesla. Overtime will be right back. Welcome back to Overtime. We've got more earnings to bring you. CSX results are out.

The railroad beating by two cents on EPS at 44 cents per share. Missing ever so slightly if you want to call it that on revenue with 3.57 billion dollars for Q2. Operating ratio, this is a key rail metric lowers better. That came in at 64.1 percent. That's versus estimates at 65.9 percent. Volume was flat. That was expected. Revenue per unit, that was down four percent. A little worse than anticipated. Merchandise revenue was in line though, intermodal, perhaps a little softer than expected, but you can see shares up more than 1% right now,

in part because of those cost efficiencies and network fluidity that the CEO Joe Henrichs talks about in the report. Speaking of Henrichs, I'll be sitting down with CSX's CEO tomorrow for an exclusive interview in the 10 a.m. hour Eastern. So you don't want to miss that, especially with all the M&A chatter afoot for the rail industry.

For sure. And now let's get another check on Alphabet. Those shares falling down about a percent and a half despite reporting a top and bottom line beat for second quarter earnings. Joining us now is Angelo Zeno from CFRA. Angelo, high expectations here? Yeah, I mean, listen, it was the second best performing

MAG-7 name over the last month, so yeah, to your point, maybe expectations were a little bit high. I think also, might be selling off a bit because of the hike in terms of the CapEx number, increasing it to 85 billion from seventy five billion for twenty twenty five uh... but that's that i mean listen if they had a hold the key is the key segments right now they're looking at search for the twelve percent uh... you to about thirteen percent growth the verse our expectations of

high single digit growth and then i think the real be there were on this side of things was on the cloud side and that was uh... you know growing thirty two percent was our expectation of about twenty percent so uh... we think that the higher cap expensives actually wanted because of on the cloud side, and that was growing 32% versus our expectation of about 28%. So we think that the higher cap expend is actually warranted because of what you're seeing in terms of the top line growth. How important, Angelo, is YouTube,

especially in this environment, where investors are, in some cases, getting a little nervous about the impact of potential rivals like OpenAI with ChatGPT on straight up text-based search. It doesn't seem like there's anything AI-wise that really threatens the core business of advertising and YouTube.

I mean, I guess you could make an argument about Facebook Reels, but it's a very different product. Yeah, no, I would agree with you. And to be honest with you, listen, I think the combination of YouTube and cloud, really, which is, you know, call it about a quarter of their revenue is something that investors are keeping a close eye on. And it's really important in terms of trying to diversify, I think, away from that search

business, right? I mean, search will continue to be an important part of Alphabet. You want to see stability at a search. You want to see it to continue to grow. We don't think it will continue to grow at the pace of digital ad spend forever because of the new competitive pressures out there. But we do think it continues to grow.

But to your point, the combination of YouTube and cloud, I think is going to be extremely important. We do think cloud potentially grows, doubles here over the next three to four years. And when you actually look at the cloud numbers, the operating margins, right? Went to 21% from 18% last quarter. It's a new all time high. And you combine that with the improving metrics you're also seeing on YouTube. Again, I think it's critical

for investors to see that diversification play out. Angela, when you see Alphabet go from 75 to 85 billion dollars in CapEx for the year, how does it set the stage for all of the other hyperscalers and mega cap tech players that are pouring money into AI to come out with their own forecasts? Yeah, I mean, listen, I thought, Morgan, I thought our, you know, our bigger fear was what was the OpEx number going to look like because everyone is spending so aggressively on these Aqua hires, right?

But also, you know, you got to keep a close eye on the CapEx side, but listen, when you think about Alphabet, especially when you look at the cloud numbers here, you think about Microsoft and the accelerating growth I think you're going to see on their cloud business next week, and then also from Amazon, I think that's important because if you're seeing accelerating growth, you're seeing improving metrics and improving ROI, I think that justifies higher cap-ex spending. And I think, hopefully that's how the street ends up looking at it.

But as long as you see those metrics continue to improve, there is kind of this upward bias to that cap-ex spending. Okay, Angelo Zeno, thanks for joining us. All right, thanks for having me. Up next, an analyst who thinks Tesla shares can rally roughly 20% from here, reacts to the earnings and what he wants to hear from Elon Musk on the upcoming call.

Plus, a top asset manager on whether Intel's earnings tomorrow after the battle are going to help it keep outperforming the tech sector. Be right back. Welcome back. Let's get to some of our big overtime movers. Welcome back. Let's get to some of our big overtime movers. Chipotle shares sinking on results. EPS met estimates, but revenue missed.

Same store sales coming in lower than expected, falling 2.9%. And this is Chipotle's second consecutive contraction, biggest since the second quarter of 2020. Mattel moving lower, beating on EPS, but missing on revenue. Adjusted EPS was the same as last year, despite global trade turbulence and timing shifts in retail ordering. Mattel is lowering its full revenue growth guidance

to one to 3% versus prior estimates of two to three. And ServiceNow is higher, the company beating on EPS and revenue, you can see it's still up more than 6%, as well as raising guidance. Operating margin and backlog both beat as well. Well, now let's look at another check or get another check I should say on Tesla because that stock is now moving lower. It sounds fractionally here in overtime after missing on the top and bottom lines a few

moments ago. Total revenue decreased 12% year over year. That was impacted by a decline in vehicle deliveries, lower regulatory credit revenue and reduced vehicle average selling price. Roth Capital Senior Research Analyst, Craig Erwin, is joining us. He has a buy rating on the stock, a price target of $395. I mean, there's always a lot in this report, Craig.

So I know one of the other key metrics, gap gross margin X regulatory credits came in at 15%. It looks like that was a little bit better than expectations. Yeah. RoboTaxi, CyberCab. It looks like scheduled to volume production starting in 2026.

A lot of commentary here on AI, trade uncertainty. What were the big takeaways to you? So you hit the first one, adjusted automotive gross margins. 15 versus 13.6, that changes the direction of margins. That's one of the two big things on the P&L that's been going the wrong way. The other thing is delivery. So I think the reason the stocks may be not performing better right now is there are three

shots on goal for deliveries to take back up before the end of the year. The first is the pre-buy. So with the $7,500 federal credit expiring at the end of September, you've got people that will look to capture that in the third quarter. Second thing is the Model YL in China. I've heard that's going to be less expensive vehicle and it's potentially something that could lift volumes and then they are confirming in the presentation that the less expensive variant in North America is going to be on track for the presentation that the less expensive variant in North America is

going to be on track for the end of the year. So we could actually see some volume acceleration, but I think people are hopefully looking for a little bit more detail in print. We'll see what they say on the call. So how much now hinges on the call and what Elon Musk has to say? And given the fact that they're reaffirming some of this guidance for some of these big upcoming initiatives and projects, how much also hinges on that pipeline where we know a number of executives have departed? Yeah, the call is always, always important.

So the two things that I think will have the greatest alpha are CyberCab and Optimus. So there's a lot of photos out there of the Tesla diner and Optimus doing things like serving popcorn. Obviously, Elon's really focused on the brand right now, which is smart. CyberCab, I think maybe it's a little early for us to see the RoboTaxi progress in Austin. They are working on a bunch of new cities. Maybe we'll get more details on that or some details on the permitting discussions with the different regulatory authorities. These are the things that

I think can serve as near-term catalyst, short-term catalyst. The biggest question right now is, what's it going to take to get the driver out of the car, first step? Then what are your thoughts really on these teleoperation engineers, you know, how many do you expect to have? If Waymo's used two to three, are you gonna have one? Yeah, good question. And also how exposed is Tesla stock here to missed deadlines? Elon Musk is known to miss deadlines

and he's saying these things are happening, you know, late this year or next year. What happens if they don't? Yeah, I mean, listen, I'm a skeptic on this semi, right? But I will say the Wadi V guys really liked it. I mean, I saw one of their early customers that loves this vehicle just a couple of months ago. Yeah, we know Elon's almost always late. And it's one of the reasons I think everybody cheered when he went back to Tesla

full-time. Probably, we will see some things maybe drag on late or, you know, completed at the very last minute. But, you know, he's going to be really focused on keeping a schedule now. And starting a schedule now. And starting a political party. Yeah. How important is it that this vehicle sales plunge,

as some are calling it right now, stop? Is this temporary, does it need to be, or is this the sort of thing that you expect new product to fix either way? So here's the thing, I mean if you step back and you look at Optimus for example, you know I'm hearing that the supply chain, the conversation that's being had is about 30 million units.

People are talking about pricing 30 million units over the next many years. I don't know how many years, but imagine 10, 15, 20 years. If we start to get data points that show that that's actually in the realm of feasible or reasonable, something that could actually materialize, you could see sales of EBs cut in half and the market could go bonkers on that. It'll all come down to the actual functionality of these robots, how successful are they in

getting them out. So there are some big shots on goal. Where they stand now though, I really would like to see the EV sales reaccelerate. I think there's opportunities for that. And I think for the stock to work right now, you know, flatish is really where we need expectations to stay. All right. We'll keep watching it.

Craig Erwin, thank you. Well, IBM's earnings call kicks off in just a few minutes and up next an asset manager will tell us how she says investors should be trading the stock right now. And shares of GE Vernova keep powering higher after beating Wall Street earnings estimates and raising full your guidance thanks to strong demand

from all its power businesses and also lower than expected impact from tariffs. The stock quadrupling since being spun off from GE back in April 2024 and today finishing up 14.5%. Stay with us. Welcome back. We've got a news alert on American Express. The company has elected two new directors to its board that's effective today. Randall Quarles, the former Federal Reserve vice chair for supervision, and Noel Wallace, the chairman and CEO of Colgate Palm Olive. Shares of American Express are up fractionally right now after hours. But what's not up? Well, shares of IBM, that stock's moving lower

in overtime despite topping estimates overall. That issue might be the software segment, infrastructure which is very cyclical, contributed a lot to the beat versus expectations for software. IBM did raise the full year free cash flow guide. It has been a nice run into the stock, into today's print though.

Let's bring in BD8 Capital Partners CEO, Barbara Duran. Barb, always good to see you. Interesting tale of two stock movements in overtime right now in the software space between IBM and ServiceNow. What's your take on IBM? It's been a strong performer lately. It seems to be out of the revenue rut.

Is this a sign that expectations are actually higher now for IBM? Well, I think expectations have been high, but I think people are really looking for what's the upside catalyst here? Because it is trading at historically high multiple for IBM, 24, 25 times. And of course, that's a combination of their hybrid cloud efforts and Red Hat. It's the software, the AI. There's a nice tailwind there, but their consulting is not growing robustly. And of course, that is the time when companies

wanna know how to use AI. So I think it's really a question of the stock is really fully valued. And I think it's because of great execution, free cash flow is increasing, and it's got its defensive nature. So I think it's it's time for a bit of a rest here and again really what are the upside catalysts

here. So is this a warning sign for another well-known technology name experienced technology name Intel reporting tomorrow still caught in the midst of a turnaround but has been performing well off of a low base so far this year. Yeah I think Intel is Tulsa, as a case of, the stock was dirt cheap, the prospects are very muddy, I don't think there's a buy on the street because the turnaround's gonna be very long, it's very risky.

They put a new CEO in place in March, he's got big plans, we haven't yet seen the detail on the strategic plan, we know there's been a lot of cost cutting, announcing layoffs, maybe up to 20% of the workforce. And he's trying to figure out separating the foundry business, you know, from the chip design business, and trying to get, you know, in a position

they can compete with Taiwan Semi. And that remains to be seen. There's a lot to do here. It could be some years getting there. So I think the stock, you know, was really just finding, it was in the down and dirty camp, and looking at the risk reward,

investors said, okay, there's probably not much downside, and we'll get in and we'll see what his plans are. So the earnings report in the call tomorrow is going to be pretty important to see if he fleshes out a little bit more in the strategic plan but whatever it is I think it's going to take a lot of time. Barb I've got to get your thoughts on Chipotle. Stocks down 10 percent right now in overtime. It was a beat. The CEO just joined us a little while ago to outline and detail more of his strategy and what he's seeing in terms of the health of the consumer. What is it going to take to turn this name around? Well, the Chipotle is interesting because it had been on such a run under the past CEO. And of course, this is the second quarter where they've disappointed. In fact, the same store sales were expected to be just down under 3 percent. They're down under 4. And the company had been positive about the second half that they could turn that

around. So it seems to be a combination I think of a note we're seeing in the broader economy. You know people are still spending consumer spending jobs are intact but we're seeing much more pressure and that's been

happening for the last year on the lower income consumer. So I think that is really part of this is a macro call because you're certainly seen in peers and other names like in Kava or some of the other competitors. So I think there's a bit of that going on

because they're certainly putting in place the initiatives that should help, whether it's digital mobile ordering, you know, internal doing more equipment, doing all the things that really can goose things up. But I think there's a big macro issue here. Yeah, and we're seeing Kava and Sweet Green Trade lowering sympathy with Chipotle today.

Really quickly, Intel tomorrow, what are you watching? For Intel, it's really gonna be the CEO and what plan he's gonna lay out. Because I think, you know, he's gonna talk about cost cutting. We're gonna get work on that. And we see he already got rid of his 51% share in Altera. So not sure there's a lot more divestiture of non-core assets to go, but it's really we want to know what's the plan, what's

the time frame, so you can game out how long it will take. Could be like a night. How long is that turnaround going to take since there was real damage to the brand? So that's the main thing for me. OK, Barbara Duran, great to get your thoughts. We covered a lot. Still ahead, we're gonna get you tomorrow's trade today and the key earnings on the calendar

that could move the market. Meanwhile, check out shares of Southwest Air. Moving lower here in overtime is EPS and revenue misestimates. The company announcing a $2 billion buyback, saying industry demand shows signs of improvement off of the pressed second quarter levels. Be right back. Welcome back to overtime. Las Vegas Sands earnings are out and Contessa Brewer

has those numbers for us. Hi Contessa. Hi there Morgan. Yeah, Las Vegas Sands reporting second quarter revenue coming in at 3.18 billion against the streets expectation of 2.83 billion a big beat earnings per share 79 cents against connect consensus of 53 cents a share Revenue and property adjusted EBITDA come in better than expectations in Macau But I really want to highlight the Singapore numbers here. Marina Bay Sands pulled in one point four billion dollars in revenue in a quarter and 768 million in EBITDA. The street was expecting five hundred twenty nine million.

I'm all but certain this sets an all time record for any property anywhere in the world ever. And yes, the house got lucky. But the company says it was a hundred million dollar benefit from high holder how much it won versus what it pays out CEO Rob Goldstein just back from groundbreaking on a new eight billion dollar property in Singapore he'll join me for an exclusive on fast money next hour they're also on the call right now guys talking about a switch in strategy and Macau. We'll have all of that up next hour. Well, somebody knows when to hold them

and when to fold them. Contessa, thank you. Sure. Up next, all the earnings you need to know about before tomorrow's trade and the two big CEO interviews you can only see here on Overtime. And don't forget, you can catch us on the go

by following the Closing Bell Overtime podcast on your favorite podcast app. We'll be right back. us on the go by following the Closing Bell Overtime podcast on your favorite podcast app. We'll be right back. Welcome back. Let's get you set up for tomorrow's trade today. Jobless claims and new home sales are the only data on the economic calendar, but it'll be another huge day of earnings.

Dow component Honeywell, American Airlines, Dow Chemical, Union Pacific, Keurig, Dr. Pepper, L3Harris, Valero, Mobileye and IMAX all report before the bell. And as we talked about it before, Intel will be the highlight after the bell. Plus, we will hear exclusively from the CEOs of both Mobileye and IMAX right here during overtime. It is quite an overtime session as usual. I will mention Broadcom is up better than 3%, did not report here in overtime. We're seeing some guesses that this might be related

to Alphabet's projection that they're gonna spend more on cloud and Broadcom is a big potential beneficiary of that. You also have Nvidia up slightly and pure storage, for example. Yeah. And of course, we've got the Alphabet call underway right now. So we monitor that Tesla as well under pressure. Last night I checked, but it was a miss on the top and bottom lines. There is the seventh EPS revenue miss for Tesla in eight quarters. So we'll have to see how the rest of the tech trade carries out here over the next couple

of sessions. Meantime record for the Nasdaq record for the S&P that does it for us here at overtime. Fast money starts now.