Closing Bell - Closing Bell Overtime: Global Tech Rout Deepens; Roblox CEO Outlines New Strategies 9/6/24

Episode Date: September 6, 2024

The slide in tech stocks extended the Nasdaq 100 posting its worst week since July while the S&P 500 had its worst week of the year. We have you covered from every angle, including the market action with Jefferies Chief Market Strategist David Zervos, Kestra Investment Management CIO Kara Murphy and G Squared Private Wealth CEO Victoria Greene. Plus, Dan Niles on what to do with big tech stocks. Roblox CEO David Baszucki talks the company’s growth plan and Samsara CEO Sanjit Biswas on strong earnings. 

All right, an ugly end to an ugly week as stocks pull back sharply following this morning's softed jobs report. The S&P 500 wrapping up its worst week of the year. The Nasdaq, its worst since 2022. That is the scorecard on Wall Street. But the action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan with John Ford.

We're going to be all over this market sell-off throughout the hour. Also on what to do next week with a great lineup of guests, including tech investor Dan Niles on the huge pullback for technology stocks this week. It was led by a nearly 15% drawdown for NVIDIA. And Apple outperforming the rest of tech this week, and its hardware event is just a weekend away, with investors questioning whether the latest iPhone launch will drive an upgrade super cycle. We will talk about what's at stake for shareholders. But let's get straight to the sell off with our market panel. Joining us now, Kara Murphy from Kestra Investment Management, David Zervos from Jeffries and senior economics

reporter Steve Leisman. It is an all star panel. I'm going to start with our guests here on set. David, I'll go to you first. Okay, soft jobs report, a lot of Fed speak today, some scuttlebutt that perhaps wallers what spooked the market here. Your thoughts? The data wasn't that bad. I almost think, you know, we always talk about how bad data can engender a kind of good reaction in the market because then we get the faster rate cuts, but it wasn't good enough to get, or it wasn't bad enough to get us a good reaction is sort of how I'm thinking about it. I think it's

a 25 basis point move unless something really strange happens with the CPI, a big drop next week. Other than that, I don't think Waller really endorsed the 50. He said, I'll think about it. And the market kind of liked that for a little while and then didn't like it afterwards. But I just, you know, it wasn't bad data. It was kind of mediocre data. And I almost think the market might have liked bad data better in a weird way to sort of say, OK, now we can get this going. Like, let's just get these rate cuts in the system and stop dilly dallying because the Fed probably really shouldn't be at neutral here or should be at neutral. It shouldn't be 225 base points above neutral. Kara, your thoughts on this market here,

especially as we have a very defensive tone to the market. Selling's been broad-based this week, led particularly by tech. But, for example, it looks like real estate basically ended the day flat today and is actually up on the week. And we also need to factor in the fact that we've got seasonality issues at play here and you've got technical issues at play here with the S&P at its 50-day moving average. So I think those are important things to keep in mind. So number one, we've been talking for a while about anticipating this being the season of volatility. September is

the worst month of the year typically, you know, And then you layer in an election year. It tends to be even more volatile. We're also expecting a Fed pivot in a couple of weeks. That also engenders a lot of uncertainty. So there are a lot of reasons why the market might be trying to find its way here. But then you layer in on top of that where we had pretty aggressive valuations on a broad basis, like throughout the S&P 500. So expectations have gotten quite high. I think the labor market today is telling us it's just right where it should be. It's softening, but that's OK. Not too much, not too little. The Fed's going to start cutting. So I think the economic environment, the fundamental environment is still very positive, but the market is trying to digest a lot in a short period of time.

Steve, as Kara just implied there, aside from the downward revisions in the jobs report, I didn't see any total narrative changers in there, even though the market is responding almost as if there were. No. And I tried to add the jobs report to my list this week of the good, the bad and the ugly when it came to data. And I didn't know where to put it, kind of echoing what Zervos was talking about. So I created a full screen where I put parts of the jobs report in different parts of my screen there. If you could call that up, guys, I'll show you. I had a weak Beige Book. I had a weak ADP. ISM Manufacturing, which I don't care so much about anymore because it doesn't help me out. Joltz was weak. Construction Spending.

And then I put the payroll revisions in the weak part. And then I'll go through the strong stuff. Jobless claims, pretty good. Productivity could be a good untold story. Services was fine. Factory orders were strong. And then I put the payroll number and the unemployment rate both on the strong. So I divided it up. And I think it was mixed.

And I think the idea that it was not definitive. You look at the two-year trade early this morning. It went up. It went down. The market didn't know what to do with it. I think stocks proceeded to do what they were maybe going to do anyway. And I was just trying to figure something out, guys, which is whether or not there was much change at all in the Fed outlook. We went in with a slight bias to a quarter. We ended up with more of a bias toward a quarter

when it comes to September. and certainly the idea that you're going to get to a 50 because I think the market is priced that way because they expect the economy to weaken. But I do not think that for a number that everybody was pinning their hopes on to go into the weekend with absolute clarity about the future, I think maybe we all should probably go for a drink. Well, that regardless, Steve. But David, how much of this might be just the market not being able to find an excuse in these numbers to stay expensive? Not find an excuse. I think, you know, that sort of echoes what Steve was just saying. It just it wasn't a number that really gave you a lot

of confidence in one direction or the other. It was just very mediocre. And the market's looking to grab on to, are we really slowing down? And we're going to get a whole bunch of Fed rate cuts. And we're going back to three, three and a quarter pretty quickly. Or is this going to be one of those periods where the Fed gets tricked into thinking that everything's OK? It's like a soft landing is not enough. It's like the numbers sort of point that way. Yeah, the numbers are kind of telling you

and have been telling you for a while that we are landing softer. And the market's done great this year. Let's look at the big picture. The big picture is we're up double digits in stocks. You know, the rate market has come down dramatically. You've had some mortgage rate numbers that are some of the best we've seen in a while.

As you pointed out, the home builders are doing great. It was a great week for the short end of the yield curve. We had 25 basis points in rate moves in the expected funds rate, you know, two to three years out. So the market is, I think the market wants to grab onto something and it just didn't get it today. It didn't get that today. And it's not going to get anything, David. That's the other problem is that when I look out at the uh at the calendar we have no fed speak which some people think that's great except for at this moment when we don't have clarity we don't have that i got a retail sales report on the day of the fed meeting i a couple jobless claims numbers but i don't have anything to hang my hat on here to make a decision and say even the cI, when I asked Goolsbee today about it,

he said, there's some tolerance for it to go up. You're right. I think what you said earlier is right. A big downdraft in the CPI could be definitive. So, Kara, I want to get your thoughts on how you position yourself then through the rest of the year, especially because we have had this rally in the bond market. I mean, 10-year treasury yield now, 3719%.

It's been, we can talk about technicals in the stock market. We can talk about technicals in the bond market, too. For sure. And let me just say, like, I know it never feels good to have a down market, but I don't think this is unhealthy, right? We've had an extraordinarily concentrated equity market so far this year, and it feels great to have those numbers going up, but that can't stay forever. So I think this is all about kind of sharing the love a little bit. There are other areas of the market that I think have a great opportunity to do well. And fixed

income is one of those areas where suddenly you have yield. You haven't had yield in over a decade. Now you have the short end of the curve likely coming down, potentially the short end as well. I think there are a lot of opportunities in the fixed income market. One area where we're a little bit more cautious is on the high yield side. As we start to see a little bit more corporate bankruptcies kind of picking up, you have corporate credit spreads that are at near historic lows. That's an area where I think you get paid a little bit less to take that risk. But I think there are a lot of opportunities out there. It's like we're right back to where we were when school was ending. It's like summer never happened in the market. We're high, we're low, and now we're right back.

Kara, David Zervos, thank you. Well, now let's bring in our senior markets commentator, Mike Santoli, for a look at the damage done in the market this week. Mike. Yeah, John, pretty significant, although not evenly distributed. You guys are talking about how this conviction sort of leaking out of the soft landing premise, but definitely not being eliminated. Well, conviction has also been draining away from the mega cap tech leadership. What do we want at mid-year? Well, we wanted a broader market. We wanted a market less reliant on just a handful of mega cap growth stocks. Well, we're getting that. The Nasdaq 100 right here is still outperforming the average S&P company, the equal weighted S&P 500, but not by much.

If you take a look at the level we're at right here for the equal weight S&P, it goes back to July. Look at this big performance gap there, how high NASDAQ 100 was relative to it. And you see that it's it's closed the gap now, obviously not as much heft in the median stock. So the overall S&P is, you know, 4% or 5% below its high. It's down for the quarter, but still kind of chopping around this multi-month range. Another factor I do think you might want to highlight at this point is the Japanese yen. This was a feature of the sell-off into the August 5th low, as we talked about, the unwind of this yen character when the yen started to strengthen. So this is dollar-yen.

This is basically, as this goes up, dollar is strengthening against the yen. Here was that huge kind of bounce in the yen, decline in the dollar versus the Japanese yen, back when we had this mismatch of policy, Bank of Japan hiking and Fed looking to ease and all the rest of it, and a big liquidation of positions. And then we bounce, right, with the stock market bounce. Well, we've rolled over again. It's definitely not as dramatic. It's not as steep a drop in the dollar against the yen. But it's something to keep in mind as we look at the September features of an unsettled market, John. Mike, that first chart you showed seemed to me to be suggesting that the market is broadening on the way down, which might not be the way people wanted to, despite the fact that on a day like today, the Russell 2000 was down more than the S&P and the Dow, more like the Nasdaq was.

Yes. I mean, I do think that the average, I would say large cap stocks equally weighted, which is what that S&P is, is a different animal than small caps. OK, the Russell 2000 is still very much a Fed needs to be cutting into a strong economy type of asset to work, whereas I would say the typical non-tech stock can start to do fine because earnings estimates are going up and you have other factors working in favor. We'll say even within the broader S&P, it has been defensive stuff that has recently taken the lead. So it's not as if everybody's embracing a super strong economy by moving away from mega cap tech. It's kind of a mixed picture, Morgan.

All right. Mike Santoli, we'll see you later this hour. And to your point, semi ETF SMH down more than 11.5% this week. When we come back, tech investor Dan Niles weighs in on a brutal week for the technology space with names like NVIDIA, Broadcom, Zscaler and Intel all down significantly from Tuesday's open. And later, G Squared's Victoria Green on what she's watching at Monday's opening. She thinks the worst is over for the Bulls. Overtime's back in two. Welcome back to Overtime.

The global tech route deepening today. The semiconductor ETS, SMH, posting its worst week since March 2020. The NASDAQ 100 having its worst week in two years. Names like Broadcom, Tesla, NVIDIA, and Alphabet all taking a beating today and this week. Our next guest sounded the alarm on some of the big tech stocks back in July. And joining us now is Dan Niles, Niles Investment Management founder and portfolio manager. Dan, happy Friday. So on the S&P, we're back to where we were in mid-June, right before you issued that warning, where at the time we had been led higher and we

were being led higher by technology. Only this time we're led lower by technology. Aside from that, what's different? Why might we not reverse course and go higher again? Because I think it's becoming clear to investors that you're spending a ton of money on AI. And despite what people say, the facts are that even though spending on AI is going up, your revenue forecasts are going down. And what I mean by that is if you look at the three biggest hyperscalers and three of the biggest stocks in the S&P 500, which is Microsoft, Google, and Amazon, all three of those companies, when they reported their quarters, even though they upped the amount

that they were going to be spending on AI infrastructure, the Ford revenue figures for all three of those went down. So at a certain point, John, you're spending a lot of money, but you're going to want to see a return. And by the way, we saw this already post-COVID, where if you remember during COVID, and NVIDIA is going to come up, so I might as well bring it up. NVIDIA went from negative year-over-year revenue growth before COVID. COVID hit. Revenue growth then in early 2022 went to up over 80% year-over-year. Then, as you probably remember, there was this COVID hangover. Demand started to slow down. Those three big hyperscalers started to slow their spending. And NVIDIA's revenues by the end

of 2022 went from up over 80% to down over 20%. And the stock went down 66% as you went through that digestion phase. But Dan, pushing back on some of what you're saying, okay, early 2000s, 20 years ago, Amazon got punished during that period because all this logistics spend wasn't translating into revenue like some people hoped, right? But if you had been patient,

let's separate the investors from the traders here, Amazon's investments really did pay off. Why is AI any different? Well, you got to remember there's the short term and the long term. And what you're failing to bring up to investors is that Amazon stock went down about 95 percent from peak to trough. So if you want to suffer through that, I personally don't. That's fine. But you have to remember, when I got negative on tech stocks in 2000, I would have never in a million years thought the NASDAQ would have gone down 78% from peak to trough over two and a half years. And so if you look at this AI spend, it's been much more rapid than what we saw during the internet infrastructure build-out in the sense that if you take the launch of Netscape Navigator at the end of 94, and you look at Cisco

and where their revenues were seven quarters out, their revenues were up 3x in seven quarters. NVIDIA's revenues since the launch of ChatGPT at the end of 2022, their revenues aren't up 3x, they're up 5x. So this build-out has been a lot faster. And now you're starting to see, much like post-COVID, when things started to slow down at the big internet companies that were spending on all that infrastructure, you're starting to see the same thing, where the forward numbers are starting to come lower. And so, you know, you're bringing up Amazon, but you're not bringing up the same thing where the forward numbers are starting to come lower.

And so, you know, you're bringing up Amazon, but you're not bringing up the 5,000 Internet companies that went to zero. Also, during that period, it's not 5,000, sorry, 1,000 or so Internet companies that went to zero during that meltdown. And there's been a ton of AI-related companies that have been formed by the VC community. And there's going to be an Amazon among them. Yeah. But there's also going to be a lot of train wreckage as well. Yeah. And arguably, particularly on the private side and where venture capital investments are concerned, I know some of the longstanding investors in that world have been ringing some of the alarm bells about it. I mean, what you're talking about is what Gartner calls the trough of disillusionment,

which is when early excitement about a new technology wanes. You can make that argument about investors and how they're thinking about AI right now. So if you're not looking to invest there yourself and you're steering clear or taking some profit, where are you putting money to work right now, especially as we do have these conversations about rotation and other parts of the market amid the Fed cutting looking more attractive? Well, two things, Morgan, and I want to be clear about this, is that I still believe you have a lot of room to spend. And so going back to the Cisco analogy, seven quarters in, their revenues were up 3x. By the time it finished,

six years after the end of 1994, their revenues peaked at up 15 and a half times. And the stock was up 4,000% over that period of time. So what I'm saying is that in the short term, I think you've got a digestion phase that you just have to go through. I firmly believe in the next several years that NVIDIA's revenues will again be able to double from current levels and the stock will be able to double as well. But I'm also, I lived through 01, 02. These things can go on longer than you ever imagined possible. So you want to think through that. Now to answer your other question, I've also been saying since early July, I'm trying to look at areas outside of tech to put money in and areas that

are going to benefit from rate cuts. And so what is that? That's consumer staples. It's areas like utilities, telecom services. And so we own a basket of S&P 500 equal weighted type names in there. And if you look at since July 16th, when the S&P peaked out, the S&P is down about 5% or so. The equal weighted S&P, though, is down about 70 basis points. And that compares against the Magnificent 7 that's down, I think it's like 11% or so since then. And so I think investors need to think, well, where's the wind at my sails? We're definitely getting rate cuts. The question now is, is it three or four between now and the end of the year? We're going to get more next year.

And I personally don't think we're going into a recession, by the way, because you've still got more job openings than people unemployed. And in a services-led economy, it's hard to see how you end up with a recession in that environment. Yeah. And so that's kind of where I'm looking. And I did cover some of my AI-related shorts at the end of the day today because some of them were getting oversold. It's never a straight line down.

You're going to get some rallies. And so I took some of those, you know, those positions off. Yeah. I think that's sort of the big overarching question here in coming months, coming years is the impact of AI on the labor market. I don't think anybody knows yet. Dan Niles, thanks for joining us. My pleasure. We've got much more on the sell-off straight ahead. And up next, the CEO of Roblox joins us exclusively to break down his company's new plan. This was just announced today to capture 10% of the global gaming market. And later, the CEO of Samsara, rare winner in today's down market,

up 13.5%, joins us with his read post-earnings on enterprise tech spending. We'll be right back. Welcome back to Overtime. Roblox making news at its developers conference in San Jose this afternoon, setting its sights on grabbing 10% of all global gaming revenue. Our own Steve Kovac joins us now live from the conference,

along with Roblox CEO David Bazooki. Steve, take it away. Hey there, Morgan. Yeah, Dave, thank you so much for joining us on this day. Roblox's 10th annual developers conference, I believe, here in San Jose. We got a lot of your fans here behind us. Yeah, absolutely. I want to start off with this big declaration you made just a few hours ago on stage here.

You want to capture 10% of global gaming revenue. And let me put that in perspective for the audience here who might not understand what that actually means. You guys are pegging that number at $180 billion, meaning you'd want 10% of that. And let me put that in even deeper perspective for folks. The box office last year only did about $34 billion in sales. So you guys are going after a much larger entertainment market. You say you can get there when you have 300 million daily users. You're at about 79.5 million right now.

How long is this going to take and how do you actually get there? Yeah, so first, thank you for coming out. We're at our 10th Annual Developer Conference, arguably some of the most creative people in the world coming together right now. You know, Roblox is coming off amazing growth numbers and our over 13 segment is growing very very rapidly we do see a future where we've shared our current bookings guidance for this year's north of 4 billion so we already have about 2% of that market we shared today with these amazing creators some of the things we're going to support we're going to support them connecting with their their customers we're going to

support them scaling their properties we're going to support them connecting with their customers. We're going to support them scaling their properties. We're going to support better economics. So we shared today a lot of the technology that we think these creators will use to, with us, get to 10% of that gaming market. And part of that is e-commerce and selling physical goods in virtual worlds. How does that look? Is there an appetite for people to go into a game or experience on Roblox to buy physical things? How does that work? Yeah, it's already happening.

So some of our brand partners like Fandango recently did an integration with us where for the movie Beetlejuice that is actually live today, many of our Roblox users bought their tickets in Roblox and are now going to go see the movie tonight. So we have people buying shoes. We have beauty products with e.l.f., with Walmart. We think there's a huge opportunity. And we announced a partnership with Shopify.

So anyone selling on Shopify right now can start to sell physical items within their Roblox experience. And presumably you guys get a percentage of their sales as well. And the creators do as well. So it's another way for these creators to grow their business on our platform. Okay, so one of the announcements today

is paid experiences, meaning only on desktop, meaning if someone wants to pay 50 or even $100 to access one of these experiences, obviously the creators get a cut, obviously you guys get a cut. You are able to circumvent the app stores that way by doing it on PC. Is this ever gonna make its way,

that idea of paying 50 bucks for a Roblox experience, is that ever gonna make its way onto mobile? I'm optimistic, and this is all based on the infrastructure we built in 27 data centers that lets us, you know, we've gotten to where we are primarily through freemium. Most people play Roblox for free. We use virtual currency. We have a lovely economy. What we said today is for games starting at $9.99, we'll share 50, 60 or even 70% of that

revenue with the creators, primarily because our interest has been so scalable and so performant for cost. But I am optimistic over time we'll have similar offerings on other partners. In that same vein, in Europe that kind of thing is becoming easier because there's the Digital Markets Act, we've already seen Epic Games create their own gaming store. How are you thinking about taking advantage of those new regulations out there in Europe? Will we see a Roblox gaming store? Will we see you join Epic or one of these alternative stores or are you sticking with Apple?

Yeah, we continuously share how good our partnership is with everyone. Apple, Google, Microsoft, Sony, Amazon, up and down the stack. We are optimistic that our economy is getting so rich. We're starting to offer subscription, we're talking about paid access, advertising is getting bigger on our platform, and of course our freemium works very well. So there's a rich set of things that will support our growth to 10% of that global gaming marketplace with them as great partners. Great. Thank you, Dave. We're going to leave it right there.

Dave Pazucchi, CEO of Roblox, on a day announcing huge bet. Thank you for hanging out with us today. I think they're excited, too. John Morgan, I'll send it back over to you. Steve, thanks. Yeah, seems like it's hopping over there. Time for a CNBC News Update now with Julia Boorstin. Julia.

John, the White House is reportedly working on a sovereign wealth fund that would let the U.S. invest in industries that concern national security. That's according to Bloomberg, which says the fund would invest in interests including technology, energy, and the supply chain. The proposal, which the report says has been in the works for months, is similar to one mentioned by former President Trump at the Economic Club of New York yesterday. Hedge fund Starboard Value has reportedly filed a shareholder resolution to do away with a dual-class structure at News Corp. Reuters reports the resolution would strip Rupert Murdoch of his

ability to control the company, but it is non-binding. Murdoch is currently involved in a legal battle with some family members over the choice to have his son Lachlan Murdoch control Fox and News Corp after the elder's death. And it appears we now know who Dick Cheney will be voting for in November. According to his daughter, Liz Cheney, the lifelong Republican will vote for Kamala Harris in November. Liz Cheney made those comments after the fierce Trump critic announced her own intention to vote for Vice President Harris earlier this week. Back over to you. All right, Julia Borson, thank you. Still to come, G Squared's Victoria Green looks ahead to Monday's open and what she's recommending for investors who are looking to buy the dip. And after the break, Apple's much anticipated hardware event, the iPhones, coming Monday.

Big question for shareholders is whether the latest iPhone will drive an upgrade super cycle. We'll outline what to expect next. Welcome back. Apple are performing the rest of tech today and for the week ahead of its hardware event Monday, where it's expected to announce the latest iPhone model. Mike Santoli joins us now with a closer look at the stock. Mike, we talk about it all the time with Apple, the fact that it's considered more defensive in big tech. Yeah, there's no doubt it is right now. It's managing to hold a premium valuation was not always the case. This goes back a dozen years. It's the forward P.E. on Apple as well as Apple relative to the S&P 500. What's fascinating is this was

really the hyper growth years of iPhone, but profits were growing far faster than the market's willingness to put a premium valuation on the stock. In part, I've always thought it's because the market needed to be really convinced that it wasn't going to be a boom bust hardware cycle, that it was flowering into a real kind of perpetual ecosystem services revenue, obviously going up. That's been part of the story. And then before and then mostly during the pandemic, it gets re-rated as one of these mega multi-trillion dollar platform companies goes to a premium valuation where so far it's held. And in fact, it's now more expensive, not just than the S&P, but also the Nasdaq 100. Another part of the story, of course, very well understood, but interesting to see graphically is just how dramatically and steadily Apple has bought back its own stock and reduced the share count outstanding.

And that's been going on for, again, more than a dozen years. They basically bought back 40 percent of the outstanding shares since 2012. This is billions of shares outstanding. It's continuing, you know, a hundred billion dollar buyback or so right now. It's a huge number in absolute terms. It's not big relative to the market cap of Apple, but the steadiness of the share float reduction has also managed to allow earnings per share to grow an awful lot faster than net income has. Yeah, it's per share. So why not mess with the denominator if you got all that money? Mike, stay with us because we're going to keep talking about this

big news coming from Apple Monday when we get a first look at what's probably going to be the new iPhone 16. So how can you tell as an investor if it'll spark the kind of super cycle of higher sales that investors have been dreaming of? Well, I looked at history and numbers to find out. So these are Apple's iPhone revenues by fiscal year from 2012 through 2023. I've identified the four most important years here, 2012, 15, 18, 21, right? In 2012, $79 billion in iPhone revenue after a year of iPhone 4S sales. 2015, $155 billion after the iPhone 6 played out. 2018 and 21, $164 and $192 billion for the iPhone 10 and iPhone 12 cycles.

These are what I'm and iPhone 12 cycles. These are what I'm calling the super cycles. So what drove those super cycles? I've identified three main factors. Network upgrades combined with features like Siri and video, right? So network upgrades and the carriers had incentives to try to finance those. Bigger screens with bigger camera performance and a bigger battery life. Also, that geographic expansion, more people in more areas buying the phone.

So in 2012, the 4S was on the 3.5G networks, early online video on a phone. 4S was the first iPhone with Siri, the first to do 1080p video, and one of the first to allow FaceTime calls, although just over Wi-Fi. In 2015, the iPhone 6 goosed sales in large part because of China. Massive ramp there. The 6 also had a massively improved front-facing camera for social media selfies as Instagram rose,

and it was also a bigger phone, which leads us to 2018 and 2021. The iPhone 10 and 12, including the 12 Pro Max. Home button went away to make room for more screen. 10 brought Face ID, OLED, brighter screen, wireless fast charging. The 12 Pro Max brought a new frontier in huge scale and camera features. Apple also stretched price points both higher and lower, charging a premium for those big pro phones and offering a revamped discount iPhone SE, more at that $450 level, Morgan. And that's how revenues keep growing. I love this breakdown. I love the fact that you've just identified the super cycles we've seen over the last, call it, decade plus.

I mean, coming into this, we've got a fiscal 2023 year for Apple that accounted 52% of the total revenue was iPhones. That's expected to decline again this year, maybe pick up in 2025. The key here, I guess, is going to be how much it picks up in 2025. And perhaps most importantly, how much of that is driven by Apple intelligence and people being excited to adopt those capabilities on their phones. Right, John? Yeah, that's it. And Mike, I think we're in a situation where China hasn't been doing well. So does that economy pick up in 25, add that geographic expansion capability back, or does it come from someplace like India? Those are probably only two economies big enough that haven't been totally saturated. And then does Apple intelligence do what Siri did early on for them and sort of add

that capability boost? because it's not clear that there's a big enough network change for the carriers to provide massive financial incentive for people to buy new phones. Right. And you wonder if this current release is going to be a little bit early in terms of fully capitalizing on whatever excitement there might be that AI is going to be something that you interact with principally through your phone in that way. I won't say the bull case for Apple has largely been, hey, the install base is huge. A huge percentage of the phones are due for upgrade and they're kind of, but that reminds me of what people have been saying about cars for a decade plus, you know, hey, the average age of car on the road is higher than it's ever been. Guess what? The cars are

better. They don't wear out. Same thing with the phone. So I do think it'll take a little bit of a catalyst to get step function growth in terms of getting into a supercell. It does seem to work that way, Morgan, because if you notice the cycles I picked, 12, 15, 18, 21, we would be due for one in 24. We can see we clearly aren't getting one. The question is if it comes a year late in 25. Of course, we'll all be watching and see what details we get on Monday. Gentlemen, it's also worth noting we have seen the carriers quietly pushing out more incentives for these phones in the last, I'll call it, couple of years as well. When we come back, should you buy the dip? A top wealth manager on how she is playing this week's big sell off and the stocks she thinks are attractive right now. Stay with us. Welcome back. S&P 500 wrapping up its worst week of the year.

Broadcom and Nvidia among the biggest decliners of the week. Well, joining us now on what investors should do at Monday's open is G-squared private wealth's Victoria Green. She is also a CNBC contributor. Victoria, let's start right there. What do you do after the week we've had in the markets? How do you position yourself either ahead of the open or when you start calling your your broker, whoever else to position yourself once it starts trading on Monday? So first off, I think everybody needs to go home and have a beer after this week because September is doing what September usually does, which is be pretty terrible. Come Monday, don't panic.

I think it's a little early to go all in. I don't think the bottom's in yet. We're not buying this dip, but we are nibbling it. So for a lot of people with cash on the sidelines, we've been saying, hey, look, we loved NVIDIA when it was up 20% ago. We start dollar-cost averaging our way in. But absolutely, semis under pressure, tech sector worst performing this week. And so there are opportunities out there, but you need to be patient.

Don't go all in. Realize there may be further downside left in this market. September is historically ugly. October, we may have an October surprise. So I'm gently nibbling. I'm making sure I have my cash ready. But the number one thing also investors need to be aware of is understand your liquidity. Liquidity always trumps investment strategy. Make sure you have enough cash flow to get you through any of your operating expenses over the

next 60 to 90 days. Then you can pounce on opportunities. We're not panic selling. I don't think this is the end of the bull market. We have wonderful uptrend technicals still supporting this market. This is just a typical September. We're doing what it usually does in September and it hurts. But what if you didn't have quite enough dry powder? I guess that's the question. If you are positioned kind of fully, you've been mostly invested up to this point, maybe you even took a little off three months ago, then you're fine right now. But if you're one of those people who just bought into the market closer to the highs and then this happens, how much dry powder do you really need so that you aren't tempted to sell too much?

Yeah, I think you've got to be careful to not fall into the, well, it's going to keep going down and I'm going to know where the bottom is because the bottom is always really hard to catch. I think we can a lot of times spot, hey, we're hitting a rocky period. We got overbought. We got stretched. This market uptrend has been struggling. But for those that don't have enough dry powder, you do need to understand, do I maybe need cash?

If I need cash, then you absolutely need to sell and have it on hand. Without a doubt, there's risk this could push lower. But if you don't have dry powder, we're really in the grin and bear it. We're not getting rid of our tech trade. I don't think AI is dead. I know this is terrible, but Apple's got their event coming up. Remember how this felt the first week in August? Everybody was saying, oh my God, they need an emergency meeting. Fifty basis points right now. The end of the world is coming. And then we found our footing. So if you don't have dry powder, I think you're a little bit stuck. Grin and bear it, because right now, historically, it's in your best bet to not sell out after a five percent down week. And when we still have these really nice, strong uptrend technical patterns. What do you think changes the narrative that we're seeing in the market? What's the next catalyst? What would it be that would propel it a leg higher? One would be the Fed, obviously, on the 18th.

We've got CPI next Wednesday on the 11th. That'll be a market mover, always is. You know, everybody's waiting on the Fed. I don't think we're getting 50 basis points. Actually, as an investor, I think you should be rooting 25, because if the Fed's cutting 50, that's going to spook the market saying, oh, the Fed's seeing something we don't see. But right now we're in a dead period.

We don't have a ton of earnings coming out. So we're kind of until we hit Q3 here in October, we're very dependent on economic data. And so we're going to have chop and macro movement and we're going to be hanging on every single Fed governor's word. We're going to be parsing every single statement. We're going to be looking at every piece of data because there's not as much coming to the market on the earnings front. So I do expect it to be a pretty volatile month. All right. We'll be here with you, Victoria Green of G Squared Private Wealth. Thank you.

It's also worth noting that we'd go into a Fed speaker blackout period next week ahead of the meeting as well. Yeah. Speaking of the void. Yeah, not quite blind. We'll have some earnings and things, too. Well, here, speaking of one stock avoiding the tech wreck today, Samsara, that name surging on an earnings beat better than expected. Guidance up 13.5% today.

The company's CEO is going to join us next in an exclusive. One of the few bright spots in the market today was Samsara, closing sharply higher, hitting an all-time high after the cloud-based fleet management company posted Q2 results, beating on both lines, raising its fiscal year revenue and profitability guidance. Joining us now in an exclusive interview, Samsara's CEO and co-founder Sanjit Biswas. Good to see you again, Sanjit. So we talked before about how customers are using your hardware and software together to drive efficiency, control costs in energy and insurance, etc. You talked on the call about strength in Europe. So in the interest of time, I want to drill down and get examples. Why in Europe in particular are

you experiencing this level of stronger growth and what products are those customers over there really latching on to? Well, Prashant, thanks for having me on. I think across the board, whether it's in Europe or even here in North America, what we're seeing are large physical operations enterprises digitizing. So they're trying to figure out how to be more efficient. I think a lot of the sort of economic conditions that you talked about earlier in the show are global issues. And so they're trying to figure out, OK, how do we be safer on the roads, which ultimately will save them money on insurance payouts? How can we be more efficient with fuel and energy consumption? How can we actually be more efficient with our labor workforce on the front lines? So whether that's in the UK or in Mexico or here in the US,

we're seeing the same themes across the board. And this is especially pronounced in large organizations. So we actually, in earnings, talked a lot about our million-dollar-plus customer ads. We had a record quarter. And we see that really around the world at this point. Sanjay, the way I translate this in my head, we talked to some other companies in more traditional IT about how digital transformation paves the way for the use of AI for physical operations. These sensors and measurement, the IoT, creates the digital pipeline for data that can then be used for AI. Now, how far off is that AI stage? How far into the data gathering and digitization have these companies gotten? Yeah, I would say in general, it's much earlier in the world of physical operations because we're talking about construction equipment.

We're talking about trucks on the road. We're talking about tens of thousands of field service technicians out in the world. And so what we're doing is helping enable that digital transformation. We provide the sensors, we provide the connectivity. And then to your point around AI, we provide all that in the cloud as well, which gives them these insights so they can go take action. That's how they're getting return on investment from this technology. It's not just for the sake of implementing AI. They're really seeing real-world results. And we're talking about multimillion-dollar savings on accident costs or fuel consumption, those sorts of things. So, Sandra, just a more macro question here, and that is from your key vantage point,

especially since you were more tied into the operational budgets, perhaps, than some of the IT budgets we've seen in this macroeconomic environment. What do you see looking across the different end user industries that you operate in? And what do you see in terms of how willing companies are to spend on these different areas? Well, we serve over a dozen different industry segments, and that ranges from field service to construction to transportation logistics. I think everyone is being cautious as they're thinking about the back half of the year and next year's investments. three segments, and that ranges from field service to construction to transportation logistics. I think everyone is being cautious as they're thinking about the back half of the year and next year's investments. But our customers tend to be larger. They operate on a multi-year time scale. Some of them have been around 50, 100 years. And so they are all investing for the

long term, and they're always trying to be more efficient with their dollars. So that's just a general theme we've seen across the board. Many of them are on that digital transformation journey where they see the promise of this technology in terms of very clear ROI. And so they want to get started. They want to start seeing that impact. And I would say their front lines and their back office employees are asking for this technology. They want to operate in a much smarter way. So it's a tailwind effect for us. But I think broadly speaking, what's going on is digitization across all these industries.

Great for checking in with us after a quarter that still broke through despite an uncooperative broader market. Sanjit Biswas, CEO of Samsara. Thank you. Thank you. Up next, we've got your Wall Street look ahead, including the pair of inflation reports that could be market catalysts next week. And Boeing is one of the biggest drags on the Dow today as it prepares to bring home its Starliner astronaut capsule without people on it. The astronauts that are brought to the International Space Station. You can find out much more about that and other things relating to space by scanning the QR code on your screen and subscribing to my Manifest Space podcast. We'll be right back.

Welcome back. The S&P 500 just wrapping up its worst week of the year. Here's a look at some of the catalysts coming next week. Study up for Oracle and Rubric earnings out on Monday. Tuesday's plays, GameStop, Dave & Buster's and Petco. And Adobe, Signet and Kroger have designs on reporting Thursday. And on the economic calendar, we will get consumer credit and wholesale trade on Monday. The small business survey is out on Tuesday.

We will get key inflation readings on Wednesday and Thursday with the Consumer Price Index and the Producer Price Index. And Friday brings the latest consumer sentiment data. What we don't get, and we talked about this earlier in the show, is Fed speak, although we did get a lot of it today ahead of that blackout period, ahead of the FOMC meeting. John, I just want to talk about the fact that NVIDIA really took it on the chin this week, lost more than $400 billion in market cap, or the equivalent of an Oracle or Costco or four Bo's just this week? It's nice to be able to lose that much and be like, well, you know, it's a rough week. Well, over two weeks, a fifth of its value for NVIDIA. But it had gained that much value in just a few weeks because that's the sort of year that we have had.

I mean, really, I've been talking about it like when school was out, at least here in New Jersey, in early, mid-June for a lot of kids, the market was at about, the S&P was about at the level where we are now. If we look at a six-month or a year-to-date chart, you kind of see it goes from there, way up, and then way down, and then right back into this middle area where we are now. Yeah, and of course, we've seen Treasury yields come off pretty aggressively here, too. Worst week for the S&P and the Dow of the year. Worst week for the Nasdaq since 2022. What happens to yields from here as investors look at the appropriate balance now between equities and bonds? That is one of the questions you have to continue to tackle.

As we see this un-inversion of the 2.10 spread in the yield curve as well. That's going to do it for us here at Overtime. Have a great weekend as you watch Fast Money, which begins right now.