Closing Bell - Closing Bell Overtime: Big Tech Earnings 4/26/22

Episode Date: April 26, 2022

Big tech earnings after the bell. Dan Ives from Wedbush Securities, Bryn Talkington from Requisite Capital Management, and Brian Belski from BMO Capital Markets give their instant reaction and analysis to Microsoft and Alphabet’s reports. Plus, big news out of Robinhood. The company slashing 9% of its workforce. And, Michael Santoli’s “Last Word” is “cloudy.”

Welcome to Overtime. I'm Scott Wapner. You did just hear the bells. We, of course, are just getting started here at Post 9 of the New York Stock Exchange. We do begin with our talk of the tape. The moment we've been waiting for. Earnings from some of the biggest tech companies on the planet beginning right now. Alphabet and Microsoft imminent. The pressure couldn't be higher given this very unsettled market. You saw what happened today. How much pressure the Nasdaq was under. Does this stem some of the selling. We'll see or does it keep the Nasdaq under severe pressure our experts are here to answer those critical questions. What Bush's Dan Ives is with me right here on set we're also joined today. By requisite capitals Bryn Talkington BMO's Brian Belsky joins me in just moments all

right I'm going to begin with you again I've as we wait on these numbers to break and as I said. I can't imagine a scenario in which the stakes are any higher, given what this market looks like coming into this number. I think it's the most important week for tech earnings, probably in the last seven, eight years. You know, right now, the risk off is just massive that we're seeing. You need to see strength from the likes of Alphabet, from Microsoft, especially on enterprise in terms of cloud. This leads into Apple and others that we're seeing. It's a white-knuckle period, and I think these are the key earnings here.

I mean, NASDAQ's on track for its worst month since October of 2008, down 22% from its record highs. Both of these stocks, speaking of Alphabet and Microsoft, are in bear market territory. They're both down more than 20% from their highs. So this has been like the epicenter lately of where the critical selling has been taking place. Is this going to stop it or not? Look, I believe this is going to stop it in terms of stemming for a positive trend in terms of tech. I think it comes down to work from home names and the COVID beneficiaries. Those are ones the multiples continue to compress. But in terms of the enterprise names, especially cloud, that's why Microsoft, I'd say of all of them, that's the most important. That's going to have a massive ramifications across cybersecurity, across the rest of cloud. And I think that's what leads us higher along with semis.

Belsky, what's at stake today when these numbers start breaking, which is going to happen any second? Well, I mean, listen, this has been an area that has been providing stability, these big names. And I really still believe this is a very, very key moment here for the market in terms of building credibility, building some at least some stability in overall prices. So we're bullish still on these names. And I would be surprised if the names are weak, quite frankly. Bryn, they've been weak lately for certain. Apple, in terms of mega cap tech, Apple's down for its worst month since September of 2020. Microsoft, worst month since 15. Amazon, worst month since 18.

Alphabet on pace for its worst month since 2010. Do you feel the pressure is, look, I'm looking at the Dow right now, finished down 800 points today. So we finished at the lows. That raises the stakes even more, doesn't it? Yeah, it's like to hold or not to hold. We're right back where we were on February 24th. And I think that the Google and Microsoft numbers will be really important for the NASDAQ as we're approaching 13,000. I do think these Microsoft and Google are not Facebook and Netflix. I think they will have consistent earnings. But, Scott, like we talked about yesterday, these earnings really don't matter.

What matters is what multiple the market wants to pay for these earnings on the tech side. And right now the market is clearly saying we want to pay lower multiples. I do think that continues at least for the next couple of months until we get past these first two Fed tightening cycles in May and June. Dan Ives, I come back to you. We take a look at Alphabet, which is unchanged in the overtime, but looks to me like their EPS and their revenue was light. We're still going through the numbers, but what's the most critical thing to look out for? Is it growth in the cloud? Cloud's the key. I mean, you start to be on a 20 billion plus run rate. That's ultimately, in terms of the sum of the parts, that's key to that name.

And again, when you combine that with the likes of Microsoft, that is going to be the key to this week. Do enterprise names lead us higher? Are we seeing the slowdown? That's what the street's looking at in terms of tech stocks this week. I'm also noticing, you know, when you take a look at Alphabet, their EPS beats have been getting less and less. If you go back to the quarters of last year, Q1 of last year, they beat by 67 percent. Q2, they beat by 42 percent. We're talking about bottom line EPS. Q3, they beat by 20. Q4, they beat by 12. So, I mean, EPS growth, at least in terms of the beats, has been slowing. No doubt. And look, a lot of it is what you're starting to

see expenses continue to increase. It's all about advertising, you know, in terms of what we're seeing from search. And I think right now, the street continues to view bifurcation in terms of some of the large cap tech names. I think Microsoft, Google, Apple lead us higher, continue to stay away from Netflix as well as meta. Alphabet, as we look at the stock down more than 4%, big worries about the spend. There's a spend on the cloud, right, as they try and keep up with the Amazons and Microsofts of the world, right? They're third in that ballgame. There's employee costs. How closely are you going to be paying attention to that number and whatever Ruth Porat, the CFO of Alphabet, has to say on the call,

and hopefully to us as well? That's the key. It's a cloud arms race right now. When you look at Google, they're clearly the third player. They're going to have to spend and compete more with Microsoft as well as AWS. But I do believe the street is really focused on the call to see what type of metrics that we see going forward on cloud as well as on the advertising. Our Deep Bosa has more. She's been going through these alphabet numbers. Dee, what do you see?

Yeah, as you said, Scott, shares are down about 4%. And that's because there's a miss on a number of fronts. In terms of revenue, it was close, but a slight miss here, $68.01 billion, $68.1 was expected. And remember that this is actually the lowest growth rate in revenue since late 2020. That was expected. EPS coming in at $24.62, $25.91 was expected. So a little bit light here. I want to pull out a few different sectors. YouTube ads, one to keep an eye on because this was expected to be hit by the war in Ukraine and the effect

on the EU. So that did come in quite a bit lighter, $6.87 billion versus $7.51 billion expected. Cloud, however, came in stronger than expected, $5.82 billion versus $5.76 expected. You see Alphabet shares, those losses increasing a little bit, but not as bad as many had feared. I'm going to continue to go through this report and I will bring you more as I get it. Scott. All right. That's Steve Bosa. Thank you.

I mean, look, the whole reason we're talking about the market being down, the magnitude of which it was today, was because fears of a slowing economy. You know, obviously what the Fed is going to do, accentuating those fears about the economy slowing even further. Digital advertising market is a place that you acutely look for something like that. No doubt. And look, and I think you're seeing on the digital ad side, but I still continue to focus. It's a bifurcated tech market. You'll see weakness or slow in there, but it all comes down to enterprise. Because, Scott, what I believe leads us higher is really the enterprise names. And that's why you look at that cloud number from Alphabet, very strong. We got to see what happens with Microsoft here. And I think that's really what investors are focused

on in terms of what I view as a have and a have not in terms of tech. All right. We're going to get more on Microsoft. Steve Kovach has that, joins us right now. What do you see? Yeah, Scott, two numbers that stick out to me. First of all is the growth rate for Azure, their cloud business. It's 46%. That's a beat. And that's probably why the stock is holding.

I guess it's on 3%. And then Office 365, that's up 17%. Now, going into this, there were a lot of concerns, Scott, about whether or not Azure would be able to keep up its growth rate. It's fallen a little bit, but it's flat quarter over quarter. Again, still growing nicely, but that growth is slowing as they are kind of hitting the end of how many customers they can gather. And it's the same story with Office 365. We know they raised prices in March and are planning to raise customers or prices on some customers again this summer, Scott. And we're still digging through it. So I'll be

back with more soon. I know you are. And I look forward to you coming back to us. This stock has been kind of in the danger zone, right? 275 was a good level of support. 270 was sort of that line in the sand. You see that trade right there, 264. I mean, if these stocks start to break down, it doesn't matter how great this report seems to be. If the market doesn't deem it to be good enough, there's the problem. No doubt. Look, that's been a rock of Gibraltar stock. You look at Microsoft, you look at Apple.

I mean, those have been two of the core names. And even though Azure hit the whisper number in terms of 46%, streets really, but Scott, the one thing I say, look, we went back a quarter ago. The knee-jerk reaction with stock was down. Everyone was yelling fire in a crowded theater. On the conference call, they gave positive guidance that ultimately lifted the tech market up. So that's why it's so key to what happens on that call in the Della. Yeah.

Actually, we're going to go to Phil LeBeau right now because General Motors numbers are out, too. Speaking of a stock that's been under pressure lately, Phil, what do we see? Scott, you have GM beating the street in terms of the bottom line, earning $2.09 a share, well above the expectation of $1.67. Revenue, about a billion dollars, light of expectations. But it's the guidance that everybody is focused on. GM is not changing its guidance for full year EBIT adjusted earnings, expecting to earn between $13 and $15 billion. The net income is going to be slightly higher for the full year, but in terms of that guidance,

it's the headwinds that they're noticing from commodity costs. This is not a surprise. They were up $2.5 billion in the first quarter. They expect that to continue through the remainder of this year. We're going to get more details about the guidance for the rest of this year tomorrow morning on Squawk Box. You don't want to miss our exclusive interview with GM Chairman and CEO Mary Barra as the company again beats the street, earning $2.09 a share in the first quarter versus the expectation of $1.67. Scott, back to you. I look forward to that interview, Phil. Thank you. We'll see you in a few moments. If you have anything more to tell us, please do. Let's bring in now on the news line, Halftime Investment Committee

member Jim Labenthal. Of course, he owns General Motors, one of its biggest supporters. What do you make of this number? You get a beat on the bottom line. You get a little bit of a miss on the top line, but it's the reaffirmation of the guidance that perhaps the market likes, Jim. Well, it likes it right now, Scott. I mean, look, I'm glad to see the beat. But the thing that troubles me, and it does trouble me, is when we're reaffirming guidance, when we just outperformed in the first quarter, that implies to me that the rest of the year isn't going to be as good as when they last reported in January. The stock market obviously likes it, which at least right now, which is, I think, their way of saying,

hey, we thought things were going to be worse. We thought that the cost pressures and the chip supplies were going to be worse. Ultimately, on this particular name, we have to listen to the conference call. You have to. You need to get insight on what's going on with the supply chain, particularly for chips, because the demand is there if they can produce the cars. Yeah, I'm going to reiterate what Josh Brown said on the Halftime Report today. For those who may have missed it, I just want your reaction to it again.

As he characterized General Motors, Jim, which he used to own, broken stock in a broken sector in a broken market. I mean, that more than anything else may weigh on where this stock ends up trading tomorrow and in the days and weeks ahead. Well, I was obviously on with Josh, and my response is what he described could describe just about any stock in the stock market right now. Broken stock in a broken sector in a broken market. Honestly, that describes every stock. It adds no value to me. Ultimately, Scott, at the end of the day, what I look for is cash flow. I'm seeing cash flow here. I'm also frankly disappointed. I don't see any share buyback

or dividend announcement. Now, I just got the release. I haven't had a chance to look at it, but I did want to see capital return to shareholders. All right. Bryn Talkington wants to get in on the conversation, too. i read the note that you gave to our producers you said that tesla is playing chess gm is playing checkers bryn yeah i mean i think that when you see tesla and gm's moving to evie that's all mary bar is talking about but yet they deliver in the first quarter i think under 500 cars versus tesla did over 300 000 300 000 cars and it's like if you want to be priced as an innovative company then you're going 500 cars versus Tesla did over three hundred thousand dollars three hundred thousand cars And it's like if you want to be priced as an innovative company Then you're gonna get tagged as one today

And I think the stock has gone from what sixty five to where is it thirty eight year to date? So almost almost cut in half and I just think they're so far behind Where Tesla is that from a valuation perspective? I think the market's going to continue to tag this name. In addition, commodity prices, I've read that EV batteries, the input costs are going to be upwards of like $6,000 per car because commodity prices are just so high. So I think both Ford and GM are really going to have a headwinds on their price as they continue to not deliver EVs even remotely in scale as Tesla. All right. We have a full court press in overtime. Obviously, Visa earnings are now out.

Our Kate Rooney has those numbers. Hi, Kate. A pretty solid beat here on the top and bottom line for this second quarter. Let's start with EPS. This is the adjusted number, $1.79. That was up 23% year over year. Revenue also beat $7.2 billion, up 25% year over year. Don't see guidance here quite yet, but they do call out a couple of bright spots. Payment volume up 17% and cross-border volume that's been hit with the restriction of

travel throughout the last couple of years. That was up 38% year over year. Comes after a big quarter for Amex. We get MasterCard as well this week. CEO Al Kelly does talk here about the global recovery. He says the Omicron variant impacts were short-lived and talks about the economic recovery continuing here. He says while geopolitical environment and the geopolitical environment remains uncertain,

we expect continued growth by a robust travel recovery through the enablement of traditional and newer ways to pay globally. Visa shares up more than 5% here after hours. Scott, back to you. All right, that's Kay Rooney with the latest there. Brian Belsky, you have a comment here? Because look, we saw American Express come out, what, it was last week. Good numbers, bad stock reaction. Yeah, I mean, I think the payment process area has really suffered, obviously. We know that, especially stock reaction. Yeah, I mean, I think the payment process area has really suffered, obviously. We know that, especially with PayPal. But I think this is one of these names that have been able to straddle the work from home and now into the reopening trade. And

we're all traveling again and start going out and see clients, not only from the business perspective, Scott, but from the personal side of things. So I think Visa's remarks make a lot of sense. And we think it's a name that you definitely want to be looking at here. All right. Kate Rogers, Chipotle earnings are out as well. What do we see there? Hey, Scott. Chipotle out with beats on the top and bottom lines for Q1. EPS coming in at $5.70 compared to estimates of $5.64 for the quarter. Revenues, $2.02 billion. That's slightly above the $2.01 billion projected. Same-store sales climbing 9%, better than the 7.9% that analysts were looking for. Restaurant operating margin a bit below estimates in the face of cost pressures,

with food, beverage, and packaging costs coming in a bit higher than anticipated. Sales helping to partially offset those higher costs, though, in the quarter. The company's in-restaurant sales increased 33.1 percent, while digital sales represented 41.9 percent of food and beverage revenue for the quarter. For Q2, the company projecting comps to increase between 10 and 12 percent. That's above the 9.3 percent estimated. As you can see, the stock is high by about 3 percent now, and CEO Brian Nickell will join Mad Money tonight, so tune in for much more on that. Back over to you. And indeed we will. He said they're going to continue to raise prices. We'll see what kind of pricing power they have. Obviously, Jim and Mr. Nicol are going to discuss that in a little

bit. Kate Rogers, I appreciate on that. Let's get back to our main story. And that, of course, is the mega cap tech earnings that started today. Bryn Talkington, you own Microsoft. You own the Q's. You worried? No, the time to be worried was, you know, at the end of last year, I actually wrote an op-ed for you guys talking about the last 10 years. The Q's have done 20 percent a year. You have to digest that. I think tech is going to continue to be under pressure. I do think this year is going to be a good year for accumulating tech names. And so I'm not adding to my position yet, but I think we'll look back a couple of years from now and say 2022 was a good accumulation year for some of these names. I think in May and June are going to be that good sweet spot. Once again, once we've gotten past some of these Fed hikes.

I've heard you before on other stocks, Dan, suggest, you know, such and such name is a quote unquote table pounder. I don't hear you saying that about these names today. Look, I think you have to, in the context of the broader market, as she was talking about, this is going to be ultimately valuations that I believe uptick throughout the rest of the year. I believe you look at the growth, you look at what you see from Microsoft and overall cloud. I mean, Scott, I view it still tech stocks here as oversold as I've seen in the last six years. We continue to be bullish. And I think these numbers, once we get through this Fed cycle, I do still believe they're table pounders. And I just think it's one that in a risk off

market, you know, they continue to be on the out. All right. This is a very important report that doesn't get its due the way that it used to really, or the way at least that people think about it. And maybe they should. And it's Texas Instruments, which we're showing you right now. The fact that their chips are in so many different businesses from autos to industrials, et cetera, really, et cetera, really across the spectrum. You could see that stock is down about six and a third percent. The revenues there beat. Let's take a look at the EPS, which I don't see on my screen right now, but we'll take a look there. But obviously, the street has some questions about this.

The chip space, their EPS was 235 a share. You could already know that the street was worried about the chip space as much as the chips had fallen. Lately, this was an area of concern. If you think the economy is slowing and that a number of businesses across the space are going to have their demand go down, this is an area that you should look at a stock like TXN. But also the supply chain, right? I mean, if you look at semis right now, you know, right now it continues to be probably as nervous as I've seen in terms of semis in a number of years. If you look at this number, definitely going to pour gasoline on the fire in terms of worries around the semi sector. And I think you ultimately could see over the coming days more of a sell off here because of these numbers. Brian Belsky, it's the guidance that is the issue here.

Their guidance was weak. Aren't you alarmed by that? As bullish as you are, you have one of the highest targets on the S&P for the end of the year and i can't remember is it 5300 it is 5300 so just listening to all of this just reminds me that there's four types of tech stocks right it's the secular growers the structural growers the defensive growers and then the high multiple names with not a lot of free cash flow i think those are the names are going to continue to suffer for as much as two or three more years, where the secular growers, like we're hearing from today, Microsoft in particular, Apple, Amazon,

are going to be the ones that kind of get us out of this. The structural growers have had more problems in terms of growth. More particular with respect to guidance, Scott, but Texas Instruments is a defensive grower. It pays a big dividend. I think it's being unjustly kind of thrown into the rest of the chips that have not been able to create good guides. And Dan put it best with respect to supply chains. But I think on these weakening days, this is when you want to add to

those big dividend growers in tech. And you certainly want to add to the big secular growers. So, no, we maintain our longer term bullish stance on these bigger tech stocks. But I mean, in terms of the market overall, right, if this is the demand issue, and I have to read through the exact guidance and get some of the commentary of what they're saying and then listen to the conference call, of course, but if it's a demand issue, as I mentioned at the very top, as many products and things that Texas Instruments chips are in, if they are guiding to a point where the market doesn't love it, if you have a market already worried about a slowdown, don't you have a broader issue that I feel like in some respects you're ignoring?

No, I'm not ignoring it. In fact, you know, listen, I think that we're in, I know that we're in a stock picker's market. You need to be delineating this and you can't throw all stocks into one basket. And I do think they're going to have certain chips that do very well. And, like, most of the chips are down today. And so the market was not showing any discrimination. And so they're selling everything off.

So, again, I'm not ignoring it. I think guidance is going to be defensive now because you can do the supply chain blame game. The Fed's going to raise rates twice, 50 and 50, and then we'll see. I still think the second half of the year is going to be bang on earnings, and they're going to be up a lot more than people think. Part of my problem is like if if, you know, if the overall market goes down, if it remains under pressure the way it is, everything's going down. Right. I mean, haven't we started to see that from the mega caps, which have been defensive? Bryn, if the market continues to be upset, everything is going to be upset. But that's the opportunity. That's the

opportunity, though, is that the opportunity isn't when you're having these sector rotations where the hedge funds are just going from one sector to another, but the overall market is at the same level. The opportunity to buy great companies lower is when everything gets washed out. And so that's why I think these 80 and 90 day these 90 day drawdowns are really important because you want to see the generals come down because that's when you get those opportunities to buy these, to Brian's point, these great secular growers that are going to grow long term. And that's why I think these next two months are going to set up a good opportunity to be able to buy some selective names across different sectors, but especially technology, because everything's going to start getting thrown out. And that's what happens with a good old-fashioned correction.

See, like look at NVIDIA, for example, Bryn. That stock has been thought to be by some, the next general, if you will, to go down on the battlefield. And I wonder if now we need to worry more about that name. You see it selling off in sympathy with Texan and some of those other names are too, and they have been lately. Yeah, well, I think I was just looking at NVIDIA when you were talking about Texas Instruments. I own NVIDIA and got the opportunity to buy NVIDIA, I think it was in 2018 when there was a crypto slowdown. And I think once again, if I'm going to own one semiconductor, it's going to be NVIDIA because they're across data centers, cloud, AI, the whole platform of semis. And I think Jensen Huang is just a great innovator. But definitely, I mean, it's down 50 percent from its highs and it can go lower. But to me, it's getting closer over the next few months to be a stock that

people are going to want to own long term and have another opportunity to buy it a heck of a lot lower than it was just six months ago. See, Brian, it's like I got General Motors out and I'm wondering if I deal with peak autos. And then there are home builders that are going to come out and I wonder about peak housing. And then the chips are warning and I wonder about peak demand on top of what is already a supply chain issue. And then I've got coming out of a pandemic, and I'm wondering if people are going to be using products and services and cloud companies in the same magnitude at which they did, or if all of that was pulled forward too. You look past all that?

No, I mean, you're worried, but let's have some faith. We have the best companies in the world. I think you have to own kind of both the direct-to-consumer and the reopening trade. And the homebuilders, we have new supply coming on. If you talk to anybody in the New York metropolitan area, you know that you can't buy a house. There's a bidding war. That's happening across the country, let alone North America. And from a real estate perspective and where rates are, from a long-term perspective, they're still low, Scott.

And so, again, we need to kind of take a deep breath. They've taken the generals. They've taken most of the four-star generals out. And I don't think they're going to get to the kernels in tech because I think by then, the market's already told you what's going to happen with respect to the Fed and the growth. Now, I think the market is starting to bottom out here. We're not going to see. I'm going to make the call. We're not going to see this massive capitulation that everybody's calling for. When everyone's looking for capitulation, it doesn't happen. So this rolling correction on the stock by stock and sector by sector basis is going to continue. I think that's quite healthy. Why don't you think we're going to see it? What's going to keep us from seeing it? Because on a day like, let's say, Friday, and yes,

we had a nice reversal yesterday that got us feeling that, OK, maybe that's the start of something. And today was a smack across the head saying, no, the market still has issues. We're concerned about a global slowdown. We're we're concerned about whether the Fed can get it all right. And then we have a day like we did today selling off into the close. As I said, the Dow finished down eight hundred nine points. Those lows are not that far away from late February. Two parts. Number one, when everyone's looking for something, one rarely happens. Number one. Number two, to Bryn's point, some great companies are on sale. This is when you're a stock picker. And again, the market has

been indiscriminate, then discriminant, now indiscriminate again with respect to selling up all semiconductor chips. She's spot on on NVIDIA versus if you're going to pick one. And I think what we're going to be doing in our portfolios, quite frankly, is owning less stocks, not more stocks. This is the time to make the bets. This is when you get paid to make that alpha in your portfolios. It's back to alpha again. It's not about managing risk. We've already seen the risk. Now it's about managing growth and being in the right stock. Yeah. So speaking of growth, Dan Ives, interesting note today from Wolf Research, and I want to get your opinion on that. I mean, they declare FANG, which everybody loves, including you, a bubble. Our sense is that similar

to the TMT bubble implosion, tech media telecom, the broader FANG plus NDX bubble is likely to burst when fundamentals start to meaningfully deteriorate as the overall economy slows. That's the environment that we're talking about. We look at Microsoft, we look at Alphabet, and we wonder if we're approaching that point. I couldn't disagree more. I think when it comes to Netflix, when it comes to Facebook, fine. But when it comes to Microsoft, look at those Alphabet numbers relative to that. Because, Scott, and what Brian's talking about as well, you're going to have many right now yelling fire in a crowded theater. It's easy to do that right now.

If you look, and I believe in terms of tech, this digital transformation of fourth industrial revolution, names like Microsoft, Alphabet, Amazon, cybersecurity, to me, right now, if I look out the next two to three years, these are names I want to own, not sell. It still doesn't mean that their valuations in this kind of market as they're being reset in real time makes sense where they are now. Certainly, if you're a longer term investor, and I'm sure that's the way you're thinking and the kind of person that you're trying to speak to,

maybe if your time horizon is five years per se, sure. But that doesn't mean that in the near term, over the next 12 to 18 months, if you inch closer towards a recession, that valuations of those stocks are not going to come down further. Yeah, but I believe, and it's a great point. I just think right now, relative to what these stocks are trading at, relative to the growth, to me, there's so much bad news baked in. And the fear that I hear from investors is, I think, unparalleled to what I'd say maybe in the early days of pandemic. We'd have to go back 2012, 2013. That's why, to me, given these numbers, I believe, as Brian's saying, I think it's setting up for a second half of the most oversold tech stocks that I've seen in the last six years. There are earnings alerts.

There are news alerts. And we do have one of those right now regarding Robinhood. I'll go back to Kate Rooney for those details. Kate. Hey there, Scott. Robinhood just announcing in a blog post that the company is cutting 9% of its workforce, of its full-time employees here. CEO Vlad Tenev lining this up in a blog post here. He walks through some of the reasoning. He says they went through hyper growth accelerated by pandemic lockdowns low interest rates and fiscal stimulus and he says to meet customer demand they grew headcount almost 6x from 700 to nearly 3,800 people during that time period he said the headcount added to some duplicate roles and job functions and as a result

they are cutting employees here. And this comes after the company IPO. The stock is down more than 80 percent from the high. And again, Robinhood cutting, slashing nine percent of its full time employees. Scott, back to you. All right. That's Kate Rooney with the update there. Brian Belsky, you know, here's another one that you could make the argument peak pandemic stock. You had a whole new cohort of people investing in stocks. OK, now we're coming out of the pandemic and you wonder if there's all these other things to do. And the market is upset in the magnitude at which it is that you have that cohort leave. The business is affected. I'm not describing Netflix.

I'm not describing Netflix. I'm describing Robin Hood. Right. But the story takes another chapter. It does never own the stock, never will, never really interest us. I thought it was more fluff than anything. Forget the stock story. Forget the stock story. Speak to me about the bigger story, what this may tell. The bigger story is this. We're going to stop playing all our video games. We're going to go out and play catch and go back to work and be outside and go see clients and go see our friends. It's time to live again. We're not in our four walls. And I think that the market's having a hard time deciphering what stock to be in.

And, you know, for instance, I'm not a big bear on Netflix. Netflix needed to have a bit of a correction. But I think Netflix is one of those names that's going to be able to survive this. Robin, in our view, is not. You know, I'm thinking about other areas of the stocks you like, Dan Ives, like Microsoft and Office and things like Teams, right? Which became one of those ubiquitous things during the pandemic, right? There was Zoom, there was Skype, there was Teams, and some of us, a lot of us probably still use these services.

The question is, will they and can they experience the same level of growth as they did during the pandemic? How can we possibly expect them to? And that's why you don't know names like Zoom in terms of pandemic plays. In terms of Teams from Microsoft, that's table stakes. I mean, this is an Azure Office 365 digital transformation story. And I think that's what continues to be the focus. That will be the focus of the call when the Dell are talking about what they're seeing from customers on Azure.

Bryn, what stabilizes the market? Are these earnings going to be good enough to do that? These are the first ones of many. We still need to hear from maybe the most important of all, which is the biggest of all. And that, of course, is Apple later in the week. You're going to get Amazon and you're going to get Facebook, which has had its own issues. But can you can you at least speak to what you think is going to stabilize things? Time is going to take time. Unfortunately, we're all impatient. We have to get through at least two Fed hikes. And then I think also then the Fed can chill and slow their roll on being so hawkish, be more data dependent. And then that lets the market breathe, digest, look at the earnings.

We'll see where everything falls. And then once again, going back to tech, there are some wonderful companies across sectors, but especially within tech, that are just going to get thrown out here. We've talked about quite a few of them. So I think it's like get your buying list out, wait for this volatility to calm down, and then start nibbling along the way. But it's going to take time. It's a good place to leave it. Bryn Talkington, thank you. Brian Belsky, my thanks to you. Dan Ives sitting next to me, my thanks to you as well.

Our stellar reporters breaking these numbers as they move, and we digest the stock moves, which we're going to continue to do. It is time for a CNBC news update, though, with Shepard Smith. Hi, Shep. Scott, we're exhausted from the news on CNBC. Here's what's happening outside the markets. Vice President Harris has COVID. Her office says positive rapid tests yesterday, positive PCR today. No symptoms, though. They say she'll isolate at a residence until she tests negative. The White House says the vice president has not been in close contact with President Biden since the White House Easter roll on Easter Monday. The head of the International Atomic Energy Agency making his first trip to the Chernobyl

nuclear disaster site since Russian troops abandoned that area north of Kiev. He says that while radiation levels there are currently normal, the situation is not stable and that nuclear authorities need to keep on close alert. And a new report from the United Nations on the global pace of climate change. It notes ignoring massive risks that we face is setting humanity on a spiral of self-destruction. It says by 2030, the planet will experience on average more than one climate disaster every day of the year. Tonight, the story of that brand new house on a golf course that led to broken windows and then a $5 million payday. On the news, right after Jim Cramer, 7 Eastern, CNBC. Scott, back to you. I've never been known to spray a golf ball anywhere.

I swear. Oh, I believe you, Judge. Yeah, yeah. We'll see you at 7 o'clock tonight. All right, that's Jeffery Smith. Up next, instant reaction to Alphabet and Microsoft. We have a shareholder on deck. We're talking to the money.

Those two big names, his biggest positions. We'll get his take on those quarters, what he thinks happens with the stocks next. We're all over the action in Chipotle and Texan as well. That's Texas Instruments. Their earnings calls kicking off as we speak. We're dialed in, of course, ready to bring you all the big headlines. We're back in two in OT. We are back in overtime.

Let's get a check on Microsoft and Alphabet. You can see them trading in opposite directions after hours because their earnings were in very different directions as well. You see Alphabet missing there, Microsoft beating there, and their stocks are representative of that. Let's bring in Larry Cordisco now, portfolio manager of the Osterweiss Growth and Income Fund. Microsoft and Alphabet are among his fund's top holdings. I'm going to make you feel the pain first

before I let you enjoy at least what Microsoft delivered. Alphabet, your takeaway? Well, it is a little bit more of a cyclical company than Microsoft. It's exposed to advertising, and I think we saw the weakness in exactly where we thought we might see weakness, which is in the YouTube part of the business. So, you know, does it really change the story long-term? No, but this was, I think, something people were bracing for and anticipating.

I think it'll be very interesting to see how the stock trades tomorrow. Management obviously doesn't give a lot of commentary on the press release. We'll hear a lot more on the call. And, you know, we're going to get a sense for how much of the bad news is priced in. I mean, EPS and revenue growth has been slowing. How concerning is that to you? It's concerning. But if you look at the comparisons from last year, I mean, the rebound out of COVID was extremely strong.

So, of course, it's going to slow. It's mathematically almost impossible, especially for a company of this size, not to slow. The question is, you know, what is an appropriate multiple and valuation? And around 20, 21 times and take cash out if you want, it's even cheaper. You know, you get to a point where a lot of this is priced in. So, you know, from a growth perspective, it's more about hitting expectations and the ability to predict and provide a good visibility to what the business trends look like over the medium term. And, you know, a little bit of a miss in YouTube that that raises some fears that maybe that's a canary in the coal mine that we'll see more weakness as the year progresses. You know, again, we don't know until we hear management's commentary on the call. You underscore what is the biggest question, not just for this stock, but arguably the entire market. What is the appropriate multiple? I think those were your

exact words. And what makes it so difficult is we just don't know what the environment is going to end up being. That's right. I mean, we could paint a picture of inflation being runaway and the Fed hiking, you know, seven or eight times or whatever the market's expecting from here. The 10 year goes to 4 percent and none of you 20 times doesn't look like an appropriate multiple. And just as easily we could have a bit of a slowdown, whether it's a recession or a mid cycle slowdown. Inflation cracks, the Fed backs off and all of a sudden these secular growers look a lot more attractive. So this is what the market this is the tension that the market's dealing with is trying to predict which one of these paths we're going down. And that's at least our view. So let's take a look at Microsoft shares.

I did mention a beat across the board. One thing that stands out to me, if you look at the stock, it's not an overwhelming response, if you will. Azure, right? That's the critical point of growth for Microsoft as it tries to compete with Amazon. And you can see that the stock now in overtime is actually lower. Last quarter, Azure's growth rate was slightly under 50 percent, and it was again this time. What do you make of that?

And is that concerning as well to you, as I said, in what is a critical area of growth for Microsoft? Yeah, I mean, you nailed it. This is the biggest thing we look at when we look at Microsoft's earnings are Azure's growth rate and the gross margins of the company, right? These are big metrics. So Azure is something that a lot of investors focus on, and rightly so. Is 49% good enough? I think hitting numbers are pretty good. And we're now getting to the point where this is about a $45-plus billion run rate business. To continue to grow in the mid-40s is an extremely robust growth rate. I think it'll be important to see how Amazon Web Services grows as a comparison.

But I find this number to be pretty good. In fact, I was a little nervous about foreign exchange maybe rippling through Microsoft's operations or results. That's happened a number of times in the past. It doesn't look like it's been that big a hit. So I'm actually pretty happy with these numbers I'm seeing out of Microsoft. If you didn't have such large positions in both of these names, as I said at the outset, would you add on these pullbacks? Well, you know, it's interesting. We've had this conversation about Google because when you start getting into the low 20s multiple

for a company that should be able to grow earnings mid-teens plus over a sustainable period of time, that's exactly the conversation. Microsoft's a little harder because it's about a 25 multiple. If you look at next year's earnings, you know, a fiscal 23, which are June. So basically the next 12 months or so. It's a little harder because, again, we get back to this debate. What's the proper discount rate for equities? It's been very low for a number of years. And what we're dealing with in the market right now is a repricing of that discount rate. That repricing is happening so fast and with such, you know, violence at times

that, you know, it's hard to really know the right price to pay. But certainly, if we have an extended period of weakness in these names, I can't imagine, you know, the conversation is not intensifying on our side about where we should be at. Yeah, I understand that. I can't get my eyes as we're scrolling through the numbers, one of which is on the screen right now at the bottom right. And that's the Nasdaq down 500 some odd points today. And I just wonder what these results are going to mean tomorrow to the way that these stocks trade. Larry, I appreciate your time. That's Larry Cordisco joining us on the backside of Microsoft and Alphabet reporting their numbers. We do have a fresh batch of earnings coming in. We're breaking down those numbers when overtime

returns. We're back in OT. We do have a fresh batch of earnings to hit. Let's get to Courtney Reagan. Court. Hi, Scott. You've hit a lot of them, but we still have lots of other movers in overtime today. Let's start with Enphase Energy. Shares popping after beating the street on both the top and the bottom lines. The solar and battery systems maker reported record revenue for the quarter on margins of 40 percent, shares higher by 5.6 percent now. NCR earnings coming up well short of consensus on weaker than expected revenues for its fiscal first quarter. It's also cutting guidance. And while the company says it had, quote, strong execution across strategic initiatives with double digit revenue growth and payments, digital banking and hospitality,

it's blaming the Omicron variant, interest rates, the war in Eastern Europe and inflation for the disappointing quarter. Shares down sharply, 20 percent now for NCR. And Skechers beating on both earnings and revenue. But it does note that higher freight costs impacted gross margins. Those did come in light. The forward maker's second quarter revenue guidance is above estimates, but its earnings forecast is well below consensus. Shares have bounced around. You can see here higher, though, by about 4.2% in the after hours. Scott. All right.

Courtney Reagan, appreciate that very much. Thank you. Up next, we are watching shares of Alphabet in the OT. Our own Deirdre Bosa just spoke with the company's CFO, Ruth Porat. She's going to join us in moments with those critical details you need to know in the OT. We're back in two.

All of the FANG names moving lower on the back of Alphabet and Microsoft's earnings. Meta reporting tomorrow after the bell in the OT. So let's bring in MarketRebellion.com co-founder Pete Najarian joins us on the news line. So your first reaction to Microsoft, which you own shares and calls of, Pete, is what? Well, I actually think that they came through with a pretty impressive quarter. I know you just had Larry on talking about the same thing, Scott. But I'll tell you what, as the growth continues, yeah, has it slowed down a little bit? Just a little bit, not a lot, but it slowed down.

Still up there north of 46%, so that's something to be expected. I like what they put up. I think the intelligent cloud just continues to be something very important. And when I hear people talk about valuation, my one pushback to people would say this. They say, well, you know, it trades at 25 PE or something close to that, 27 PE. Let's think about this. This is a cloud company. I know they've got a lot of different areas, different pockets where they get revenue from. But we focus on the cloud. It is a cloud company. I think it's inexpensive and it's still in a position now where I think it's well worth looking at again. And I think that's what we heard from your previous guest as well. Well worth looking at again, meaning looking at buying the stock again down here?

Yes. Actually, adding to it, I haven't done anything in the after hours right now, and who knows what will happen overnight. But it seems like the market direction is still pressing pretty hard to the downside. So no need to run in front of this thing. But I do think that this is a stock that probably deserves taking a look at again because I think it's getting pretty cheap. Speaking of taking a look at, take a look at Meta for me. Now look ahead. What do you glean from what happened tonight for what may happen tomorrow? Again, you have Meta shares.

Yeah, they're going to absolutely have to crush it, Scott. There's no ifs, ands, or buts about it. I think last quarter, everybody's big disappointment was the focus on Meta. And the fact that not only the name change, but actually the focus, the spend, all the money that was going in that direction. Now, I think people can have a little bit potentially could have a sigh of relief if the focus is back on the true businesses that are working now. And maybe the meta for the future will be something that people will be less worried about. Yeah, you see these big sell offs. I can only imagine. I really want to see what the

futures look like during Kramer's show tonight, Pete. I appreciateoffs. I really want to see what the futures look like during Kramer's show tonight, Pete. I appreciate it. I'll see you. That's Pete Najarian on the news line reacting to the numbers tonight, looking ahead to the ones tomorrow that matter most. Up next, fresh news out of Alphabet. As I mentioned, our own Deirdre Bosa just got off the phone with

Alphabet CFO Ruth Porat. She's going to join us next with those details. We're back right after this. All right, back in the OT. Shares of Alphabet right now down 6%. Let's get to Deirdre Bosa just off the phone with Alphabet CFO Ruth Porat. Dee, what'd she tell you? She had some interesting comments on YouTube, revenue of which came up short. She brushed off that miss and she told me that, yes, it is primarily an ad-supported model, but she made sure to say that its subscription business is growing. She called out TV music premium. She said that was

up substantially, which is interesting. We often call YouTube TV one of the most underrated or overlooked streaming services on the planned Mandian acquisition. She says that they're investing in cybersecurity across the company, across Alphabet. So perhaps more there. I did ask her if that current market volatility was making her rethink investment plans. She said it's always steady as they go. That's one of the interesting things, too, is, right, that going in, we're wondering about the big spending on the cloud and staff as well. So we'll keep our eyes there.

Debo, so thank you very much for the update there. Up next is Santoli's last word. Time for Santoli's last word. Mike Santoli here. I was looking through my stack of my earnings mess over here to see if I could find anything. For your last word, what do you got? If there's a theme, well, I'm going to say cloudy, right? Obviously, Microsoft and Google Cloud, still big sources of top line growth, but the overall outlook, of course, and what to pay for these earnings, still very cloudy. Microsoft and Alphabet over the last year basically traded as one stock. What I'd love to see, what I think a bull would want to see is some downgrades.

Microsoft, 95% buy ratings. Alphabet, 98% buy ratings. So essentially, people still think the long-term story is in time. And maybe it is. But you'd really like to see a little bit of capitulation on that front. Give me your insight. What's the take for tomorrow after what happened tonight? Broke some support.

We're very close to the closing lows. Still not really super washed out. It's probably getting close on that level. But it's very difficult to call right here. I do think the earnings are OK. It's not really what's driving things. China overnight has been a real big source of confusion. OK, maybe that's the last word. Is there just OK? Yeah. And that's sort of sums it up. They're not giving you anything

extra to be too concerned about. I think that's a bit what you can kind of maybe grasp on. Yeah. Well, you got some big earnings coming in the nights ahead. I know I'm going to see it back here for those in your last word. That's Mike Santoli. That does it for us.