Closing Bell - Closing Bell Overtime: Google Earnings Instant Analysis; Chipotle Interim CEO Gives First Interview In Role 10/29/24

Episode Date: October 29, 2024

The earnings parade rolls on with Google, EA, Visa, Chipotle, Snap, AMD, Reddit and more. We have instant analysis and reaction from Evercore's Mark Mahaney, Bernstein's Stacy Rasgon and DA Davidson's Gil Luria. Plus, Chipotle interim CEO Scott Boatwright gives his first earnings interview in the role to talk his strategy for the company, the latest results and more. 

Well, that's the end of regulation. Veralto ringing the closing bell at the New York Stock Exchange. State Street Global Advisors doing the honors at the NASDAQ. And there you have it, a new record closing high for the NASDAQ. First time we've seen that since July. With tech outperforming as we get set for a wave of MAG-7 earnings. But the majority of S&P sectors, those finished lower. That's the scorecard on Wall Street, but the action's just getting started.

Welcome to Closing Bell Overtime. I'm Morgan Brennan. John Ford is on assignment today. Now, it's one of the most consequential hours of earnings season, with results coming in just moments from Alphabet, AMD, Visa, Chipotle, Snap, Reddit, and many, many more. We will bring you all of the numbers and instant analysis, plus early access you will only get on overtime. Chipotle's new interim CEO will join us ahead of his call with Wall Street as he lays out his strategy in the post-Brian Nicol era. And as we await all of those earnings, let's bring in bespoke co-founder Paul Hickey and

Czech capital management managing director Chris Ballard, who is a shareholder of Alphabet. Good afternoon to you both. Paul, I will start with you because it was a mixed session for the markets, but a new record closing high for the Nasdaq. How does that set us up as we do get hot and heavy with tech earnings here? Yeah, so I mean, we sent a report out to clients earlier this morning saying that when you have these periods, these pause periods in the Nasdaq where it hits a new high, then I mean, we sent a report out to clients earlier this morning saying that when you have these periods, these pause periods in the NASDAQ, where it hits a new high, then trades sideways for between three and 12 months without a new high, but then finally gets there, you tend to see gains going forward. You were higher by a median of 3%, 18 out of 19 times. And forward returns over the longer time periods are typically better than the long-term average. So I think in that respect, you know, this move higher after a long pause is a bullish setup for the market. And now we just need these mega caps to come through and keep the rally going. And Chris, welcome to the show. You are a shareholder of Alphabet as we do await these results. Is it increased spending on AI showing

benefits that's going to matter the most here or is it something else? Yeah, increased benefits of spending on AI is definitely going to help out. We think over the long term, this is really going to pay off. Right now, they're doing over $13 billion a quarter on spending, which is quite a bit. That's accelerated pretty significantly over last year. And we expect to see more of that again this year. There's an argument that's being made that maybe that's what they should be doing rather than even buying back some stock. But we as shareholders, long term shareholders, prefer when they are indeed buying back stock. But we do think it's a very good investment. It's just so far and still an unproven one, which we're looking forward to see how it ends up paying out. It does look like it should end up

being definitely accretive to the bottom line and free cash flow as time goes on. But right now, the jury's still out on that. But Alphabet is definitely spending a lot of money building out these storage units, yes. All right. Well, we do have those Alphabet is definitely spending a lot of money building out these storage units. Yes. All right. Well, we do have those Alphabet results and Deirdre Bosa has them for us. Hi, Dee. Hey, Morgan.

So first reaction from investors is good. Shares are popping nearly 5%. Let me give you the top and bottom line numbers. Revenue beating estimates. Q3 revenue coming in at $88.27 billion versus 86.3. A beat there, also a beat on the bottom line. Third quarter EPS coming in at $2.12. The market was looking for $1.85. We will dig into some of the other line items, including cloud, including search revenue, and we'll bring you those as soon as we have them shortly, Morgan. All right. Paul, the fact that we're seeing shares of Alphabet right now bounce about three and a half percent.

Expectations do seem to. And I realize that the stock had bounced a little bit here in regular trading session. But expectations have come down since the last earnings report. So so the reaction we're seeing right now, are you surprised? Not particularly. So you I mean, the general consensus has been that its search business is practically dying. The feds are going to break it up over its antitrust activity and the and YouTube was going to be weak. You know, that's what everybody was fearful for and talking about. But the stock is underperformed heading into this report. So it doesn't take necessarily much of good news to get the stock higher. We'd also note that this Q3 reporting period is historically the best quarter for the stock in terms of its reaction to earnings. So

I think, you know, these better than expected results on the top line suggest that the worst of the worst case scenario didn't pan out and that the stock is doing just fine. The company's performing just fine. Okay. And as Deirdre goes through the rest of these results, Chris, want to get your initial reaction since we did see a big beat on both the top and bottom lines. It looks like YouTube ads revenue, for example, 8.92 billion up. And we'll go back to Deirdre for more details. Hang with me here. Hey, so Morgan, I was looking most intently at ad revenue. We talked about this in the lead up. Any vulnerability in its core advertising search revenue could be seen as weakness facing all the competition and generative AI from open AI, perplexity, etc. This is in line,

probably easing investors' worst fears. Q3 search and other revenue, that was estimated at $49 billion, coming in slightly higher at $49.4 billion. YouTube also, which was a bit of a weak spot last quarter, coming in line at $8.9 billion. And cloud as well, increasingly important unit for the company, especially because it's where a lot of its AI cloud products lie coming in slightly higher, actually. 10.9 was expected coming in at $11.4 billion. So we will continue to look through this and bring you any commentary. All right. Deirdre, thank you. All right. Paul, I want to get your reaction to that. Ad revenue slightly better than expected. It looks like a strong U2 revenue number. And then, of course, cloud, $11.4 billion or just shy of $11.4 billion, which is also better than expectations. And it looks like it might potentially be a re-acceleration

from what we saw in Q2. Yeah. So, I mean, I think nothing nothing earth shattering here. It didn't blow, knock the lights off, but the results were better than expected. And that that's all it takes in this in the environment where the stock has been underperforming the market and its peer and the mega mega cap peers here today. So all in all, a decent report, it sounds like from the numbers that Deirdre was talking about. I will have to dig in a little deeper, but overall, a positive report. Okay, we have another earnings report to bring you. EA results are out. Steve Kovac has those numbers. Hi, Steve. Yeah, Morgan, and not much action here in the stock on these results. It's a top line beat, $2.08 billion. Street was looking for $2.04 billion. EPS came in at $1 and eleven cents though we're not comparing that to estimates. CFO also saying based on the strength of this quarter they will be raising

their fiscal year full year outlook just based on the strength of this quarter. And as for guidance overall it looks like basically in range for the current December quarter and full year for estimates. We see a big old unch here for electronic arts, Morgan. All right, Steve Kovach, thanks. Chris, I'm going to go back to you for reaction on Alphabet. Thank you. Appreciate that. Yeah, so the Alphabet numbers are very positive. We were actually hoping for as much. It's good to hear the numbers that were coming out. They were beating what our expectations would have been for each of the segments that were being reported there. But we're not surprised. Generative AI doesn't appear to be tapping into Google Search much at all.

Search continues to grow pretty significantly. Last quarter, it was a 15% rate. This quarter, it sounds like it's about that rate as well. Google has been using their generative AI, being Gemini, to end up. If you run a search these days, you'll see Gemini automatically populate in so these numbers look great to us youtube continues to grow significantly which is one of the main things we're looking at as well as the google cloud which we're happy it went from 10 to 10.9 and now it sounds like 11 plus they actually only became profitable for the first time about this time last year last Last quarter, they're doing

about a billion dollars in net income. It sounds like it's a little bit more this quarter. So they have a long runway ahead of them. Plus, they have a lot of great moonshots and bets, including Waymo, including Notebook LM. A lot of really interesting things going on for Google right now. We think they're in a perfect spot to be able to capitalize on much of it. OK, we have more earnings to bring you. Let's get to Julia Borson with Reddit results. Julia. Reddit reporting a surprise profit of 16 cents per share versus the loss of seven cents per share that analysts had anticipated. We see shares are now up about 17 percent on that news. The company growing its revenue 68 percent from the year ago quarter quarter to $348 million, beating estimates of $313 million.

Daily active uniques of $97.2 million were just ahead of estimates, and average revenue per user of $3.58, beating estimates of $3.24. Reddit also guiding to fourth quarter revenue in a range of $385 million to $400 million. That's ahead of the consensus estimate of $358 million. Company also guiding to continued profitability, forecasting fourth quarter adjusted EBITDA between $110 million and $125 million. Shares now up about 15%. Back over to you. All right. That's a big move for that name. Julia, thank you. Don't miss Jim Kramer's interview with Reddit CEO. That's coming up at 6 p.m. Eastern on Mad Money. We've got more earnings. Caesars. Contessa Brewer has those numbers. Yeah, Contessa. We're looking here at the stock dropping in extended trading,

Morgan. It looks like it's down about 5 percent. Earnings missed expectations. It came in with a loss of 4 cents a share, where the street was expecting $0.12 a share earnings. Revenue in line. The important earnings metric, EBITDA in line as well. Looks like a little more than a billion bucks overall. Vegas roughly in line. Regionals got hit by Hurricane Helene. The big bright spot in this report here was that the digital, sports betting, iGaming,

came in much higher than expectation. Revenue grew by 40%. EBITDA up 26 times over last year, Morgan. Again, the stock down about 3%. Okay. Contessa, thank you. Visa earnings are out. Hugh's son has those numbers. Hugh.

Hey, Morgan. Looks like we've got beats on both the top and bottom line for Visa. EPS of $2.71 a share versus the $2.58 estimate. Revenue of $9.62 billion also beats the $9.49 billion estimate. Payments volume grew 8%. And, you know, we'll be listening to the call in about an hour for any mention of those details around the 1,400 job cuts reported earlier today and the DOJ antitrust case. The stock, last I checked, is up less than 2%. Back to you guys.

Yeah. Hugh, thank you. It's up about 1.5% right now. We've got Chipotle earnings out as well. Kate Rogers has those numbers. Hi, Morgan. Third quarter results for Chipotle just crossed. The EPS beat.

27 cents adjusted, better than the 25 cents estimated. Revenue is a miss here. The EPS beat 27 cents adjusted better than the 25 cents estimated revenues. A miss here, 2.79 billion, a little lower than the 2.82 billion. That's a small miss. It's first since July of 2023 on revenues. Same store sales, also a slight miss at up 6 percent versus estimates of up 6.3 percent. Food, beverage and packaging costs in third quarter were 30.6 percent of total revenue. That's up from 29.7 percent in the third quarter were 30.6% of total revenue. That's up from 29.7% in the third quarter of 2023. The company noting inflation in a few ingredients, mainly avocados and dairy.

Higher usage also of ingredients as it focused on ensuring consistent and generous portions and a protein mix shift from the success, it says, of smoked brisket, which is a limited time offer. That increase partially offset by the benefit of menu price increases from the prior year. Scott Boatwright, the company's interim CEO, noting that smoked brisket did help to drive transaction growth in the quarter. As far as guidance, full year comp restaurant sales growth it expects in the mid to high single digit range, and also 285 to 315 new company operated restaurant openings with 80 percent plus having a chipotle and so they maintained their previous guidance the stock is lower by just under two percent and we will have interim ceo scott boatwright joining us for a first on cnbc interview very shortly to go over

the quarter morgan back over to you yeah in just a few moments k Kate, thank you. Shares are bouncing around down about 3.5% right now. We've got Snap earnings out. Julia is back with those numbers. Julia. Hey, Morgan. Snap's third quarter results beating expectations from the top and bottom line, reporting $0.08 in earnings per share, $0.03 ahead of estimates. Revenue of $1.37 billion, just a hair ahead of estimates of $1.36 billion. Global daily active users of 443 million was 2 million ahead of estimates. And average revenue per user of $3.10, a penny better than expected. But we see shares are down about 2.5% in after-hours trading. And that might be on the guidance here. The company guiding to fourth quarter revenue between 1.51 and 1.56 billion dollars that's mostly below the analyst

consensus estimate of 1.56 billion fourth quarter adjusted uh ebitda guidance though the outlook is ahead of estimates the company also announcing a stock repurchase program of up to 500 million dollars of its class a common stock so we'll be talking about all of this and more on money movers tomorrow morning. Be sure to tune in. I'll be speaking with Snap CEO Evan Spiegel in a CNBC exclusive that's at 1150 a.m. Eastern. Morgan. Looking forward to that. I'll be there with you, Julia. Thank you. We just went through so many earnings. Paul, I got to come back to you here and get a comment, whether it's Visa, where, again, the bar seems to have been low. Paul, I got to come back to you here and get a comment, whether it's Visa, where, again, the bar seems to have been low. Snap, which, as Julia was reporting, turned positive.

Reddit turning to profitability and apparently going to sustain that into the next quarter. I could go on down the list. Yeah. So, I mean, I think you look at Snap. The fact that it's not down a ton is a shock. You know, the last nine earnings reports, seven of them, it's declined at least 10% in reaction. Reddit numbers, oh my gosh, they were very strong. Big Beats, granted, it's a much smaller base with that respect, but it's been benefiting from the AI in two respects. It's been getting more traffic from Google on these AI-related searches, and they're licensing out all their content for the large language models. So that's an interesting story there. But overall, I think, obviously, Alphabet's the big report of the afternoon, given its size. And it was a strong report relative to lower expectations. And the stock is historically cheap relative to its peers and itself.

Yeah. Shares of Alphabet up 4.5% right now. Paul Hickey, Chris Ballard, thank you both for joining us. Chipotle is the name in red on the screen. It's down about 8% right now. First, solar earnings are out. Pippa Stevens has those numbers. Hey, Morgan, the stock is down here some 8.5% on a disappointing quarter. EPS coming in at 291. That missed by 23 cents. Revenues at 888 million. That was short of the

1.08 billion that analysts were looking for. The company lowered its full-year revenue guidance, also lowered its full- year EPS guidance. Now, they did say they're navigating against a backdrop of industry volatility and political uncertainty before saying that they can, you know, work through the outcome of the upcoming U.S. elections. Still, though, the stock here down 6 percent. Morgan. Pippa Stevens, thank you. We have AMD results as well. Our team is going through those.

We'll bring you them right after the break. Also right after the break, interim Chipotle CEO Scott Boatwright will join us in a first on CNBC interview to break down the company's quarter and his strategy in this post Brian Nickel era. And we've got much more on the rest of today's earnings movers. That's ahead, including analyst reaction to Alphabet and Snap. Don't go anywhere. Overtime is back in two. Welcome back to Overtime. AMD earnings are out. Seema Modi has the numbers. Seema. Third quarter numbers look good. AMD for third quarter EPS in line at 92 cents a share. Revenue at 6.82 billion. The street was looking for 6.7 billion.

We do have comments here from CEO Lisa Su. She talks about how they delivered strong third quarter results, led by higher sales of its EPYC and Instinct data center products and robust demand for Ryzen PC processors. We'll look for some numbers on the earnings call, which begins later this hour. She did say that we are seeing significant growth opportunities across our data center, client and embedded businesses. I would point out some breakdown of revenues here for the third quarter data center revenue of three point five billion. The estimate was for three point four eight and gross margins of fifty four percent versus the fifty three point four percent also

above. But we are watching shares down by around 6 percent. One thing I would point out is its revenue expectations for the fourth quarter of 7.5 billion. That is in line with estimates. Some analysts I know were hoping for a beat there. Morgan. All right. Seema, thank you. Shares down 6.5 percent right now. Don't miss an exclusive interview with AMD CEO Lisa Su. That's tomorrow at 9 a.m. Eastern on Squawk on the Street. Meantime, another earnings mover, Chipotle. It's under pressure after reporting a mixed quarter moments ago, beating on earnings, missing on revenue. Also, a little light on same-store sales. Joining us now for a first on CNBC interview is Chipotle

interim CEO Scott Boatwright, along with our own Kate Rogers. Kate. Morgan, thanks so much. And Scott, thank you for joining us. Great to have you. Wonderful to be here, Kate. Thanks for having us on this afternoon. I want to kick it off with the consumer. Can you talk us through what you saw this quarter with income cohorts? Are you still seeing gains across all levels of the consumer as we've seen in previous quarters? You know, it's a great question. I think the consumer for us has been extraordinarily resilient over the past several months, and we're still seeing growth

from all income cohorts at present. You know, sales were soft coming into the quarter. We talked about that on the last earnings call. We did see a really strong acceleration throughout the quarter, and really that momentum is carrying through here in October. We feel really great about the brisket promotion. It's performing exceptionally well in market. I think it's a strength of the LTO and the product, as well as the operational execution

of our restaurant teams in the field. And Scott, you also saw traffic growth again. That's rare in this environment. You refocus on those generous portion sizes, as promised last quarter, but that did weigh on costs, assuming consumers reacted well to them. But do you think the traffic growth you saw is sustainable in this economic environment, coupled with those costs for Chipotle? You know, as I said, Morgan, that we saw an acceleration in traffic coming out of the quarter, so exiting the quarter with really strong momentum. Those gains continue here in October. We're super excited about what we're seeing, especially relative to what's happening or taking place in the rest of the industry. Does it continue? We don't have a crystal ball,

but we feel really good about how we're performing today. Again, a lot of momentum in the business and feel really solid and grounded in our core strategies. We will continue to drive great results. Scott, it's great to have you on the show. And I know service times have been a big part of what's propelling the revenue growth for you guys. And that's meant investment in things like automation, but it's also meant investment in new positions, too. I'm wondering what you're seeing in the labor market right now, if you can get the folks that you need in your new restaurants. We continue to have hiring campaigns centered around at Chipotle what we call burrito season and also at the back-to-school time frame. We just launched a new AI tool that helps us onboard people in our restaurants at 75 percent of the time.

I'm sorry, that shortens the time from applicant to hire by 75%. And so that is really throttling up application flow. And we're better staffed today than we have been in many, many years. Retention is really at an all-time low, and we feel really good about where we are from an employment standpoint. I think that's on the back of what we believe to be industry-leading wages and extraordinary benefits that address both or all three of the things that we hold most true around financial, physical, and mental wellness. And as you do step into this interim CEO position, what do investors need to know about your strategy and your vision? What stays the same? What potentially shifts?

And perhaps just as curiously, given the fact that you did work so closely with Brian Nickel, as he takes the reins at Starbucks, whether he can right the ship there? You know, I have a lot of confidence in Brian and his leadership. I know he has a formidable challenge in front of him, and I know he'll do exceptionally well.. I'll tell you Brian, I spent a lot of time together over the last six, seven years working shoulder to shoulder either on the business or in the business and the core strategies that we have that have served our brand so well over the last five, six years are strategies that we have co-developed along with this extraordinary leadership team here at Chipotle. That said, we'll continue to lean into those strategies and ensure that we have co-developed along with this extraordinary leadership team here at Chipotle.

That said, we'll continue to lean into those strategies and ensure that we stay clearly focused on the consumer and continue to drive extraordinary value that's grounded in high-quality culinary, great ingredients at a speed and variety and abundance of what you can't get anywhere else. And Scott, it's Kate. Quick last question here. You were a big part, obviously, of the technology pipeline at Chipotle over't get anywhere else. And Scott, it's Kate. Quick last question here. You were a big part, obviously, of the technology pipeline at Chipotle over the last few years,

and you've made some enhancements and investments in that space in recent weeks. I'm just wondering if you can kind of recap learning so far and how both AI and robotics are enhancing restaurants at Chipotle in front and back of house and how you plan to use that playbook moving ahead. You know, I've talked a little bit about AI and our use of AR already, Kate, but I will tell you

we're continuing to look at ways we can leverage AI. One example of that is how do we take the CDP, the consumer data platform, our loyalty program, as well as this idea around personalization and layer over an AI model that drives a more bespoke experience for the consumer that will also drive attachment as well as frequency within our loyalty platform. Other innovations that we've been leaning into over the many years are in the stage gate process and there are short-term, mid-term, and long-range innovations that we plan to put in the market that will either drive efficiency, improve the team member experience, and or improve the guest experience.

One of those we're super excited about, I'll talk about on our earnings call this afternoon, is a new produce slicer, which removes a lot of the repetitive mundane tasks of chopping and slicing in restaurant, but also improves the culinary, which we offer by improving cut sizes, which also impacts taste of food. And so that's one example of something that's short range. Long range, you've heard us talk about the augmented make line as well as our auto-conto machine. Those are companies that we invested, co-invested with, and we're developing very bespoke and unique technologies that are more long range,

but we know will add a ton of value in the future. And Scott, one more question for you. Chipotle's obviously made a big comeback in turnaround from food safety issues it had years ago. Any advice for McDonald's and executives there as that company navigates its own outbreak of E. coli right now? You know, it's a challenge, but I have a lot of confidence in McDonald's to solve the issue quickly. You know, it's a challenge, but I have a lot of confidence in McDonald's to solve the issue quickly. You know, this never bodes well for the industry. It hurts us all. You know, here's what I will tell you, Kate, is we are clearly focused on food safety all throughout the supply chain. And that's from our farms directly to our consumer.

I believe we have best in class food safety protocols today. We're going to continue to lean into those protocols and ensure we're keeping, again, our team members safe and our guests safe. All right. Our thanks to Scott Boatwright and to our own Kate Rogers. Appreciate it. Well, up next, analyst reaction to Alphabet's print and what the results signal about the rest of the MAG-7 names still waiting in the wings to report.

You can see shares are up 3.5% right now. Also, Stacey Raskon from Bernstein gives his first take on AMD's results and what they mean for investors in NVIDIA and other chip names. Those shares are down 5%. We'll be right back. Welcome back to Overtime. Alphabet shares are higher right now after reporting a beat on the top and bottom lines just moments ago. Joining us now is Evercore ISI Head of Internet Research Mark Mahaney and DA Davidson Head of Technology Research Gil Luria. Mark has now performed on Alphabet while Gil is at a neutral rating. It's great to have you both here.

Mark, I'll start with you because, yes, we had beats on the top and bottom lines, but you also had Google Cloud accelerating and revenue coming in much stronger there, plus the search revenue, which everybody has been a little spooked about coming into this print, also better than expectations. Your takeaway? Yeah, I think you set it up right, Morgan. I think the real standout, I think the two biggest standouts are that Google Cloud growth acceleration, which should be a positive read-through for AWS and for Microsoft, too. Cloud as an industry, we think, is accelerating kind of across the board for a variety of reasons, one of which is AI workloads, Gen AI workloads. And then the other thing I thought was impressive about the the business kind of stood out with us was the mart were the margins they had sort of warned us told us that they were going to kind of step up headcount uh hiring in the september quarter but the margins were essentially

flattish so i think that's a sign but we want to get into it in the earnings call of newfound efficiencies and cost savings in the business model and i think there's probably a lot more if you get a new cfo c there who really wants to dig into it. The search in the YouTube results were a little bit better than expected. That's good. There's no negative inflection in those results. And it should be a modestly positive read-through for the rest of the ad names. Gil, in the comments we've gotten so far, management saying, in cloud, our AI solutions are helping drive deeper product adoption with existing customers,

attract new customers, and win larger deals. And we know this is one of four companies, one of four AI hyperscalers that are spending tens of billions of dollars to build out their AI infrastructure. Are we starting to see that return on investment materialize here? Well, for Google, this is definitely a great level of success. To Mark's point, their margins in the Google Cloud business improved from 11% to 17% as their revenue growth accelerated from 29% to 35%. But the actual return on investment depends more on their customers. Are their customers going to build valuable products that justify the continued build out of the data center?

Now Google has a big advantage in the build out of the data center for two reasons. One is they can leverage those capabilities for the rest of their business. And two is their TPUs, their in-house chips are second only to Nvidia, which gives them a big cost advantage, especially over Azure in terms of

this growth, which is part of the reason they are now the fastest growing of the three hyperscalers. So I want to shift gears here, Mark, and I want to ask you about Snap, which is up two and a half percent right now. This tends to be a very big mover post earnings. And typically, at least in recent quarters, it's been a big mover to the downside. The fact that we had some better numbers than expected and better metrics than expected with Snap. Can we say that we've hit a pivot point and a turn toward recovery for this name as they have rolled out a new app design and new features? I don't think so yet, Morgan. And, you know, it's a big question mark for me. I'm on the sidelines on Snap, the stock. They need a lot of product innovation, especially on the advertiser side. Now whether I assume that'll work, but this is going to take a couple more quarters to roll out. We were sort of hoping to see it in the back half of this year. That's fine. I'd rather them get it right.

I don't think you're yet at an inflection point in Snap. And I think that kind of showed up a little bit in the revenue results and in their revenue set us up for Microsoft and others later in the week, especially when we are talking about cloud penetration? Is this a zero-sum game? Not at this point. At this point, we would expect that Azure will have acceleration and growth as well. And more importantly, that Amazon will have a further acceleration growth than AWS. Let's not forget, AWS is the biggest hyperscaler, so for them the acceleration is more meaningful as the market leader, and they also have their own chip, so they can also scale this business at increased profitability. That's a very good read-through. And then we're gonna listen to all three of them

in terms of commentary on CapEx, which will bode well if they continue to insist that CapEx is yielding results. That'll bode well for NVIDIA next month. All right. Well, shares of Alphabet are up four and a half, almost five percent right now. Gil and Mark, thank you both for joining us. We have a news alert on Chewy. Keith Gill, also known as Rory and Kitty, has dissolved his passive stake in the online pet supply retailer. That's as of September 30th. That's according to an SEC filing. Chewy has been seen as a meme stock in the past, as recently as July, when Gill disclosed his stake.

Shares are currently taking a leg lower. You can see down about 1.5% right now. Well, after the break, cloudy with a chance of gains. Mike Santoli takes a look at why a record number of Americans are forecasting the market will keep on rising. Stay with us. Welcome back. The Nasdaq ending the session with a record close for the first time since July. And the S&P 500 is less than 1 percent from its own all time highs. Mike Santoli is digging into two critical corners of the market to put this stock rally into perspective.

Mike. Yeah, Morgan, homebuilders and semiconductors were really powerful leaders in the market in most of this period since the end of 2022. It's about 22 months where they've doubled. But you see here that they both kind of struggled to gain momentum in the last few months. Both of them see this blue line is homebuilders after today is playing with areas first reach back in the spring. Similar to the semiconductor index. That's a market cap weighted version. NVIDIA, huge weight in there. So you wouldn't necessarily say that they're breaking down or that it's it's sort of time to exit these groups or decide that their long term stories are are no longer intact. But their their outperformance has flagged a little bit. The markets had to go elsewhere. Other parts of cyclicals to get things done and actually kind of stay supported near record

highs. But obviously, you see the huge outperformance still relative to the S&P 500. Now, how are people feeling about the stock market right now? Well, this is one measure of sentiment from the Consumer Confidence Survey that the conference board does. It was released today. It was actually an uptick in overall confidence. Things like recession risk was lower. That's positive. Things like, you know, jobs, job availability was an upside surprise. So that's a generally positive view. But what you see here is do people expect stock prices to be higher in the next few months or not? You have a record from the entire history of this survey going back to 1987. Never been a higher percentage of people expecting that stock prices are going to gain from here. Where have we seen this something like this before? Well, that's about the beginning of 2018. That was after a year-long one-way rally we got in 2017.

So there are some contrarian implications here. Maybe people are a little bit too overconfident. But it's also happened at the beginning of some bull markets. And, in fact, the 2016 election is one of the other high points here. There is a political inflection to some of these confidence surveys that we've had isolated recently. So maybe some kind of enthusiasm about an election outcome is making its way in here. But it's worth noting that this is not a hated stock market rally, whatever other virtues it might have, Morgan. This is fascinating to me because we're having this conversation, even as we've seen treasury yields move higher.

And I realize that they came off their highs of the day, the 10-year treasury yield. But the fact that they're even still testing highs from a couple of months ago and the stock market is moving higher. And oh, by the way, Bitcoin as well, breaking above 73,000, which we know sometimes tends to move in tandem with the Nasdaq as a liquidity gauge. What does that tell us? It's a pretty noisy setup. I think there are some dissonant factors here. Now, the overall stock market has held up fine with this moving yields,

but it's made no net progress since early October when yields first crossed above 4% on the 10-year. So there has been a little bit of a slowing down, a wait and see. I think the other takeaway is that 4.25% on the 10-year in itself is not a punitive level of rates. It's all about how fast it's going up and where it's going to get to from here, as opposed to it being somehow something that the economy, for example, can't handle. Yeah. And of course, you have a yield curve that's maybe beginning to normalize here as well. So there's some volatility associated with that. Mike, thank you. AMD shares are getting hit after gaming revenue came in below analyst expectations. Up next, a top chip analyst on what he wants to hear from management when that call begins in just a few minutes. And check out Bitcoin related stocks. Speaking of, they're outperforming the broader

market today. The cryptocurrency briefly topping 73,000 for the first time since March. It's creeping closer to an all time high. And those proxy stocks are reflecting that as well. Stay with us. Welcome back. AMD shares are sinking in overtime. They're down about 7% right now. The chipmaker matching Wall Street's profit estimates and beating on the top line, but disappointing gaming revenues are weighing on the stock. Let's bring in Bernstein Research Senior Analyst Stacey Raskon.

Stacey, it's great to have you on. The stock is down 7% right now. I mean, they beat in data center. They came in in everything but gaming. And I realize that the gaming segment collapsed in terms of the financial metrics. Is that really what's driving the losses here? No, I don't think so. I don't think that's why the stock's down.

I don't think anybody really cares about gaming. We knew gaming was going to be bad. It's worse than we thought, but we knew it was going to be bad. No, I think the issue is the bulk of the revenue. Data center beat a little bit. The bulk of the beat was on client, on PCs. And the issue, I think, the actual guide for Q4 was actually in line to even slightly below. So if that PC strength continues into Q4, it

leaves less and less room for data center to beat. People are really hoping for upside to the AI guidance. And you're just given this guide, like there's not a lot of room for tons of upside relative to expectations that I think we're also climbing markedly into the print. So I think that's what's going on. I don't think it's really about the gaming number. Okay. I mean, Lisa Su in the release does talk about the quote unquote insatiable demand for more compute and the significant growth opportunities they're seeing due to that. Is it just a matter of you need to give time time here to see that trickle down to results? Well, I don't I don't know. I think that is the question. You know,

a number of their markets have been have been weak. I mean, I mean, look, you know, the data center like like industry, the server chips like the market has been weak. At least they're taking share, which has been helpful. They're embedded business, which is primarily the Xilinx FPGA business that they bought a couple years ago, that's been cyclically weak. It does look like it's recovering, although it's slow. The thing that people mostly care about, though, is that AI business that is within that data center segment. The prior guidance for this for the year is more than $4.5 billion. I think street expectations are already 5+.

So that is going to be one of the key things we're listening for is like, where do they see that number this year? And then more importantly, it's really going to shift to next year. Like, what's the growth prospect for that AI business? That's why people are really owning the stock. And again, just given the Q4 guidance, I don't know what kind of an exit rate that is going to leave for that AI business to really grow into next year. So these are the things that people are going to be drilling into on the call, but just given where the expectations have been and everything else, this wasn't the time to guide light, and I mean, they clearly did, and just where the

strength in the business is coming from, like PCs, it's not really parts of the business that people really want to see strong. They'd rather see that strength coming from other areas that are just not showing it relative to where those expectations were. Okay. Earlier this month, Lisa Su joined us here on Overtime as she unveiled this latest data center AI chip and the next gen GPU series that's going to begin to roll out at least the first iteration in the second half of next year. So it raises the question, we know there's a huge moat around NVIDIA, but what happens when these chips start to come onto the market? And is that when you potentially buy into the stock as you see that traction? I don't know, because again, you can sort of look at what they've shown for the

performance of those parts. And again, you have to be a little careful with these sort of first-party benchmarks, but they believe that they will compete well versus a subset of NVIDIA's parts. But the issue is those parts that they're competing against with NVIDIA are already here, right? Whereas we're waiting, you know, I don't know, 6, 9, 12 months for the relevant AMD parts. By then, NVIDIA will have their next generation stuff. And if you sort of look on a timeline, the relative dates of introduction of the competing parts, NVIDIA's still got their parts in the market at least a year in advance in many cases. Couple that with the other

areas where NVIDIA's strung around software and services and hardware and systems and ecosystem. These are things that AMD is trying their best to construct. But it's very difficult. So I don't really see the moat around NVIDIA's parts flagging. And look, it's very clear from these results. Again, I've said this before, I don't want to knock AMD in the sense that,

you know, like the AI business they have was zero a year ago. So, I mean, it's growing off of that. But I can clearly see where the dollars are really flowing in this space. It's not really AMD. It clearly is N is Nvidia. That's where the dollars are going. OK, Stacey Raskin, thank you for joining me. We've got shares of not only AMD, but other semi stocks down in sympathy as well. Well, up next, all of the overtime earnings movers that you need to know about as we count down to more analyst calls that are set to kick off the top of the hour. And we are just a week away from the presidential election. And CNBC will have live coverage throughout the night with some of the biggest names in business. It all begins next

Tuesday at 7 p.m. Eastern from the New York Stock Exchange. Welcome back to a very busy hour of earnings. here's a look at some more movers corvo is sinking despite a beat on earnings and revenue but the guidance was soft for both revenue and adjusted earnings those shares are down almost 15 right now cheesecake factory is higher after a mixed print earnings topped estimates but revenue came in a bit light shares are up five percent snap shares those are turning higher after initial dip on results, where revenue guidance was soft. And Reddit, it's the big winner, jumping double digits after a surprise profit. Guidance and daily active unique users were

strong as well. You can see those shares are up 18%. And if you thought today's calendar was packed, just wait. Microsoft and Meta headline a barrage of earnings right here on Overtime tomorrow. Up next, all of the other key names that need to be on your radar. And as we head to break, check out one of the biggest winners in the regular session. Data protection company Commvault surging to a record high on strong earnings and revenue. John talked to the company's CEO earlier today about what drove that beat. We had a great expansion quarter, so existing customers buying more volume and buying more workloads. So looking at both, we and if you looked at some of the, you know, we said we had over 10,000 subscription customers now, of which about 6,000 are SaaS customers.

And a year ago, when we talked, we had about 4,000 SaaS customers. Welcome back. This is Peak Earnings Week, and tomorrow will be another massive day for Q3 results, including Lilly, GlaxoSmithKline, Biogen, Caterpillar, and Humana, all before the bell. But then in overtime, we will break down results from Microsoft, Meta, Amgen, Starbucks, Roku, Booking Holdings, eBay, DoorDash, Robinhood, and Coinbase. Don't miss our exclusive interview with Coinbase CEO and co-founder Brian Armstrong. That's tomorrow at 4 p.m. Eastern before he dials into the analyst's call. If that's not enough, we will also hear from DoorDash's CFO in a first on CNBC interview.

Going to bring Mike Santoli back. And Mike, I just want to get your thoughts on everything we've heard in this busy, busy hour with shares of Alphabet popping, coming into this print. They're trading at 19.5 times earnings, which really, in the world of mega-cap tech, makes it a value play. Yeah, pretty significant discount, even to the S&P 500 and to its history. So, yeah, do have a little bit of a relief trade there. I do think it's notable that Meta and Amazon, after hours, have traded positively off of those alphabet results,

which I think, you know, in terms of index impact, that's what's going to matter most going into tomorrow. You mentioned the Nasdaq Composite hitting a new record. The Nasdaq 100 is about a half percent below. You probably have a chance to make a run at that old record. And the QQQ, which, of course, tracks the Nasdaq 100, finishing right around 500. Its all-time high is 503 from July. So you have these tactical indicators of maybe potential rediscovered momentum in that part of the market. And then obviously going to be looking at GDP report and things like that as well.

Meta's core business, it's been solid. So it's really whether this AI spend microscope much more than Alphabet, Microsoft and Amazon. I do wonder how much Alphabet now sets the stage for some of these other players. Yeah. And the big question, of course, is Met has been such a strong stock. And so it is a little more extended. We'll see if it can justify that recent run when we do hear from from that company. Yeah. Earnings, election and economic data. The three E's are really what's moving this market right now, as we did get a record close for the Nasdaq today.

Mike Santoli, thank you. That does it for us at Overtime.