Closing Bell - Closing Bell Overtime: Latest Stock Moves From Warren Buffett & David Tepper; JFrog CEO On A Strong Quarter 2/14/24

Episode Date: February 14, 2024

Averages bounced back today and finished near session highs and we heard from Cisco, Twilio, Applovin, Tripadvisor and more in earnings after the bell. CFRA analyst Keith Snyder dives deep into Cisco���s light guidance while Mizuho’s Siti Panigrahi analyzes Twilio’s numbers. JFrog and Informatica CEOs talk their strong quarters with Jon Fortt while CNH CEO Scott Wine discusses the global agriculture market. 13Fs from closely-followed investors including Warren Buffett and David Tepper on their latest stock positions. Plus, breaking news on Meta’s board and Elon Musk’s Tesla stake.

Well, stocks are recovering some of yesterday's big sell-off. That is the scorecard on Wall Street, but winners stay lit. Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan. Industrials and communication services, the big winners today. Energy and consumer staples, the only sectors in the red in the S&P. Investors now turning their attention to another busy hour of earnings. Coming up, we've got instant analysis of results from Cisco, Twilio, TripAdvisor, AppLevin, and Occidental Petroleum. Plus, we are watching for more 13F

filings to find out what investors like Warren Buffett, David Tepper, and David Einhorn have been buying and selling a while ago. Well, let's kick things off now, though, with our market panel. Joining us now is Barbara Duran of BD8 Capital Partners and Charlie Bobrinskoy of Ariel Investments. Guys, welcome. Happy Wednesday. Charlie, I mean, investors seem to be trying hard to shrug off yesterday's hot CPI print because we closed near the highs. We did indeed, it looks like, break above 5,000 on the S&P again. So not a great moment for value. Well, they didn't shrug it off yesterday. In fact, I would argue the market overreacted to yesterday. We had a one tenth CPI print that was one tenth too high. There are all kinds of seasonal adjustments that go into that number. And

frankly, it came from the way that the government measures inflation and they overmeasure rents based on what a person could rent their home for. So I would argue there was an overreaction yesterday. What we saw today was that many of those value stocks that you and I talk about have had some pretty good earnings. And when they do, they perform very well. So Resideo, the old Honeywell thermostat company, beat modestly and the stock was up 20 percent. We think there's a lot of that in value stocks. So, Bob, where are you looking at the possibility of making adjustments and how much of that hinges on PPI or maybe even numbers from big

bellwether stocks? I don't even know if you can call NVIDIA a bellwether at this point, but it's influential. Yeah, no, NVIDIA, I'm not quite sure is a bellwether. It's simply got its own unique characteristics in terms of the AI play. I think something like yesterday happens. People panic. There's buying opportunities. And for me, it was an opportunity to add to names, some classic names that I hold, like Costco, that was down almost 20 points for no apparent reason. And I think you

have to have a broader view. You know, if you're frightened that that does mean inflation is picking up, then you want to stay back. And that's certainly what the narrative seemed to be possibly changing to yesterday. But clearly today, it shows that's really people have in perspective because the Fed, you know, does not it looks at everything but the pce is its favored of inflation indicator and that's been at 1.9 you know plus we have the ppi on friday and that actually leads the cpi so for me i'm not making big adjustments i still continue to be stock picker here yes the tech mega cap technology they have very strong growth characteristics i think you have to stay with them and buy on any weakness you know nvidia is running earnings. And I'm also adding idiosyncratic names like I'm actually

starting to nibble at Rivian, given the risk reward there and the concerns over EV slowdown. But they have their own separate characteristics that I think make this a good risk reward, or even starting to add a little bit to Boeing, because that also, as we know, has been has been trashed. But it is an oligopoly, nine years of backlog. And I think the risk reward there is attractive. So it's things like that, that when you get these little sell offs that you begin to nibble on. Yeah. Boeing, of course, top U.S. exporter. And you could argue too big to fail, perhaps. Charlie, I want to go back to what we've seen taking place more broadly in the market. And CPI yesterday wasn't the trigger

for it, but it helped accelerate it. And it's the fact that the first time this year, we've got markets pricing in just four interest rate cuts for 2024. Six weeks ago, that was six interest rate cuts that were being priced in. And perhaps most importantly, the timing of that first rate cut is pushing out in the Fed Funds futures market to June. How much does the timing matter, especially when we are talking about value, or talking about even some of the more cyclical parts of the market that could become compelling in the midst of rate cuts? That's a great question, Morgan. And the short answer, it doesn't matter at all.

Five years from now, we're not going to care whether the Fed cut for the first time in April, May or June. They're going to cut in one of those three months. And it's just not going to matter in the long run. In the short run, the market does care. And the market is very efficient. It gets a lot of things right. But the one thing it does wrong is overweight the short term. So, sure, if we get a bad piece of news and the Fed decides not to cut

until June, fine. Maybe we'll be a little choppy, but that's not going to matter in the long run. The Fed, the inflation data is getting better. It's going to keep getting better. We're going to get down below 3 percent. We're not going to get to the 2 percent target that they have, but they're going to start cutting pretty soon and it's not going to matter whether it was April, May or June. Barbara, in terms of the earnings picture for 2024, how meaningful are cost cuts? And I ask that when we're expecting maybe more cost cut commentary from the likes of Cisco when we get those results here any moment and some others that will report after the bell. It's been such a big theme in this earnings season. Okay, we actually have Cisco right now, speaking of. So stay with me. Christina Bartzenevelis has the numbers for Cisco. Hi, Christina.

Hi. So for a second quarter in a row, we are seeing Cisco guide down. So they are lowering their full year expectations for the company. I'll just give you the range, 51.5. Let me pull it up because the news release. So, yeah, a range of 51.5 to 52.5 billion versus the 54.3 billion. This would be, like I said, the second quarter where they guide down reflecting weak customer demand. The company also posted a Q2 EPS and revenues beat, which is great, but that beat is already on lowered expectations from the previous quarter. Its core business, networking, did drop 12 percent year over year. And that's why you saw the share price leading into this about 6 percent lower just over the last few days or so, down about 3 percent right now. A reflection, though, of weaker times.

One more thing in this report. Cisco plans to cut 5% of its global workforce, so roughly about 4,200 people in Q3 this quarter. That will result in roughly $800 million in severance and one-time cost. The company is saying about $150 million of that will be felt in Q4, so this upcoming quarter, as well with the remaining in the next fiscal year. So you can see the major drop there. Cisco lowering guidance expectations for the full year and Q3, despite the EPS and revenues beat in Q2. And they're cutting costs and employee jobs, guys. All right. Christina, thank you. Shares are down

about 3 percent right now. And Cisco's CEO will be on later this evening on Mad Money. Barbara, this is literally what I was just asking you. And now we've got some results from Cisco sort of confirming it. And that is, if you have slowing or falling top line numbers amid softening demand, and we're seeing this with a number of companies across a number of industries, Cisco in focus today, cutting costs, how meaningful is that to help offset what you're seeing in terms of the demand picture this year yeah well you know morgan it is it is a good question and it's very important as you can see this is what cisco they've done a didn't continue to do these restructuring moves because of their revenue is they have in their main business you know there is not much growth

so in order to show good earnings and of course the stocks do respond to earnings, they have to cut costs. And you are seeing this across the board. In fact, if you remember Meta, that was a big thing they did when they were not having, you know, great revenue to report a couple of years ago. And they started cost cutting along with some other tech companies and it really got the ball rolling. And of course, though, their revenue has come up. So yeah, cost cutting is extremely important if you're going to try to maintain your margins and earnings. Meanwhile, yeah, just pause right there for a moment. TripAdvisor earnings are out. Kate Rogers has those numbers. Kate? Hi, John. Yeah, and that stock is climbing by more than 5% here in the after-hours trade. This is a beat on the top and bottom lines for TripAdvisor.

Revenue is $390 million for the quarter. That's a beat better than the $374 million analysts were looking for. $0.38 adjusted EPS, also higher than the $0.22 expected by the street. Branded hotels revenue for TripAdvisor for Q4 was $135 million. That actually reflects a year-over-year decline of 4%. But its experiences and dining revenue in the same quarter, 38 million. That actually grew by 12 percent year-on-year. And as you can see, once again, the stock higher by more than 5 percent now.

Guys, back over to you. All right. Kate, thanks. Charlie, it's not all demand pressure here. Some of these names are beating on the top line as well. And I guess that indicates continued strength, at least in some corners of the economy. Yeah, outlook is more important than beat or miss here, especially this time of year. I think in the case of TripAdvisor, I think it was probably an OK number for the quarter, but outlook may be a little soft. So that's what we've got to emphasize

here is what are people saying about how the current year looks? We're obviously almost two months into this year. And so people are starting to have a view of what this year is going to look like. Some people were nervous that expectations were too high for some of these names. But so far, people's outlooks have been coming in reasonably, I would say. All right. Charlie, Barbara, thanks for kicking off the hour with us. Now we're going to get to today's market dashboard. CNBC senior markets commentator Mike Santoli is with us. Mike. Yeah, John, pretty good performance today in terms of the market regaining more than half of yesterday's drop. Yesterday's drop was

pretty sharp. It was pretty broad. It doesn't look like much on a two-year, almost two-year chart here. And I wanted to actually point this out because when we got to the highs recently, it did get to this point where it was headed, right? I keep pointing this out. Everyone's looking at this bear market low in October of 2022, and it's bumped up against the upper end of this rally trend line. Now, we backed off a little bit. As I said, regained some

of it. What would mean a more meaningful pullback? Well, anything 4,800-ish right there, that's a few percent down. Again, would also not look like a trend break. It would just be a sort of a reset. So if you go range bound for a while here and chop around, that would be fine as well. Take a look here at internally within the S&P 500, the stocks that are overbought versus oversold. Bespoke puts this together every day. Overbought stocks in orange. You can see this is why I and everybody else was saying, you know, we're probably poised to cool off a little bit here because so many stocks were very stretched to the upside relative to their own trend. That's what this means. Where we are now, I would say is more neutral. It's not necessarily one of these points where like here, where it looks as if you've got a washed out market because you've been going down in a big correction.

But for a two percent drop off the highs, you had a decent setup. Now we're neutral. Some of the pressure has been taken off. We'll see if we need something deeper from there. But for now, kind of equilibrium has been restored to a degree, John. OK, Mike, but is this a market that's still a bit embarrassed of its bad breath? I mean, look at the Russell 2000 today. It was up two and a half percent, but that doesn't make up for yesterday's losses. And you can't draw a nice upward line on that one over the past, you know, few quarters.

Right now, the Russell is basically bumping up against the top end of a long term range. I mean, the breath has not been stellar on this way up. But I also don't think it's been as poor as has been portrayed. Essentially, if you didn't have, you know, the stupendous performance of NVIDIA and really just a couple of other stocks. I know that's a big if. But the point is the equal weighted S&P and the general average stock looks like it's not doing much compared to those things. But it's hanging in there fine. You know, it's up 15, 20 percent from the lows. It's not really giving back much of that in this.

So I think it's OK for now. Of course, you did notice the Russell managed to pop back above that 2000 level today. We'll see if that's the start of something. All right. And we know you'll be watching it closely. We'll see you a little bit later in the show, Mike. Thanks. Twilio earnings are out.

Kate Rogers has the numbers. Hi again, Maureen. Yes, and that stock is under pressure. So Twilio did beat on the top and bottom lines for Q4. EPS a beat, sorry, 86 cents adjusted versus the 58 cents that analysts were looking for. Revenue 1.08 billion versus estimates of 1.04 billion for the quarter. It did issue some guidance for Q1. Revenue guidance a bit light.

EPS guidance a little bit better than expected. But the active customer count that Twilio reported for this quarter was below estimates at $305,000, a bit lower than the $311,000 that analysts were projecting. And as you can see, that stock is down by around 10% now, guys. Back over to you. All right. Kate, as you can see, that stock is down by around 10 percent now, guys. Back over to you. All right. Kate, thank you. Meantime, we also have a couple of other movers after hours.

JFrog is up 10 and a half percent on beats, both on the top and bottom lines and on the guide. Revenue came in at ninety seven million dollars versus an expectation of 93.1. Non-gap gross margin came in at 84.6 percent versus 83.1 expected. EPS was expected to be around 12 cents, came in at 19 cents. For Q1, the company's guiding to 98 to 99 million dollars in revenue. That's above 97.3 that the street was expecting into an EPS range of 13 to 15 cents versus 11 cents expected. And then let's have a look at Informatica, what that's doing after hours as well. That is up 7 percentats here as well. The revenue comes in at $445.2 million versus an expectation of $432.2. Cloud annualized recurring revenue. This is a closely watched number and percentage. It was up 39 percent. The street was hoping for better than 35, and they did indeed do better than 35, better than 37 even for their guide for Q1.

That's coming in at a range of three hundred seventy five to three hundred ninety five million dollars. So call that just about in line with the streets expectation, hoping for a consensus wise three eighty eight point six where they are strong. And this is, again, the important number is that annualized recurring revenue guiding and subscription to a range of 1.135 to 1.155 billion versus the 1.13 expectation. And the full year revenue outlook is 1.695 at the midpoint versus 1.679. And that cloud annualized recurring revenue, they're promising to grow it 35.1% at the midpoint. And a lot of the street had seen that as being ambitious, but they're sticking to that even after this quarter. All right, don't go anywhere.

Cisco's earnings call kicks off in just a few minutes. Up next, a top analyst is going to tell us what he'll be listening for from management. Plus, CNH Industries getting a nice pop after beating revenue estimates, finishing the day up 6%. The agriculture and construction equipment maker's CEO is going to break down the quarter. Overtime is back in two. Applevin earnings are out. Stock is up, looks like 7% in overtime. Kate Rogers has the numbers.

Kate. Hi, John. That's right. That stock is on the move higher. Another beat on the top and bottom lines here for Applevin. Q4 earnings, 49 cents per share. That is higher than the 35 cents per share analysts were looking for. Q4 revenues, 953 million for the quarter, also better than the 928 million analysts were looking

for. It also issued here some strong Q1 revenue guidance. It sees between 955 to 975 million for Q1 revenue. That is higher, much higher than $924 million that analysts had been projecting. And as you can see, the stock is higher by nearly 8% now. Back over to you. Investors loving ticker app. All right. Love in it. Kate Rogers, thanks. Cisco shares are down 5% right now in overtime. After giving lighter than expected guidance, the earnings call is kicking off shortly. But joining us now, in the meantime, CFRA research Senior Equity Analyst Keith Snyder. Keith, I want to get your thoughts on this because they guided down for the full year.

It seems like there's some weak customer demand afoot, at least in their core business, but they also announced a pretty extensive restructuring plan where they're going to cut 5% of the global workforce. Your takeaway? Yeah, I mean, so yeah, I mean, guidance was very soft, you know, three and a half billion cut, more or less for the full year guidance was pretty disappointing, especially where we see backlog levels. And, you know, obviously that restructuring is happening. So I'm going to be looking for some more color on that on the call. But, you know, from a demand perspective, you know, the cut to guidance is very concerning. They did come out last quarter and say, given how much stocking there has been from service provider customers,

cloud Titan customers, that there was about one to two quarters of product in their inventory that was going to affect demand going forward. So we kind of knew going into this quarter that demand was going to be weaker, but we had hoped that that backlog level was really going to support the revenue guidance that they gave last quarter. And so on the call, it's going to be interesting to hear what they have to say about demand from the service providers and the cloud customers, whether it is actually a lot weaker than we had first thought, and that maybe enterprise customers aren't able to fill that gap for them as they did in the last two quarters.

Yeah. I mean, looking at the results here, total software revenue was flat year over year. Software subscription revenue was up 5% year over year. And total annualized recurring revenue was also up 6% year over year. How's the progress going in terms of this transition to software? I mean, so yeah, that was actually the bright spot that, you know, from their print that we saw. Software is becoming a much bigger part of their overall revenue mix. It's going to provide a lot more stability. You know, recurring revenue in general is valuable. And so that is still progressing very well. But, you know, the problem that we see going forward is that these software packages are tied to hardware in a lot of ways.

So if we see a drop in hardware demand, you know, it's kind of a leading indicator from our perspective as the company might struggle in the future to get, you know, that software attach rate with the new hardware sales. And so while it's growing, you know, it's not growing as well as we would hope it would be. So, Keith, how much danger is Cisco in from competition? You look at Arista's chart, it's doing remarkably well, up over $80 billion in market cap right now, while Cisco's at $200 billion and apparently going down. Meanwhile, Juniper's getting bought by HP Enterprise to try to make an AI-fueled push into this networking space, right? Yeah, I mean, Arista and Juniper have always been kind of biting at Cisco's heels and taking off small bites of market share here and there.

But actually, the commentary we heard from Arista last week was, while AI is the buzzword right now, they only see about a $750 million opportunity over the next year and a half to two years for them within AI. And a lot of these customers are still testing new hardware. And so I would imagine Cisco is in the same boat where the network deployments are still in their infancy. And the big spending isn't actually going to occur until 2025, maybe even 2026. And so Arista did do very well. And we do think they probably captured a little bit of market share. But it's a really difficult time for all of these companies. You know, their biggest clients pulled forward so much demand over the last few quarters as supply chain issues were working themselves out that everyone has so much inventory on hand. The new limiting factor is how fast can these customers deploy before they're going to be willing to make new orders?

So that's the commentary we're looking for Cisco. We will listen for that. Keith, thank you. In the meantime, we've got 13F filing from Warren Buffett's Berkshire Hathaway. Leslie Picker has some details. Leslie? Hey, John. Yeah, perhaps the most revealing part of this is what we still don't already know, which is that there has still been confidential information that's omitted from this filing, from this 13F report, filed separately with the U.S. Securities and Exchange Commission. So still in the dark on that position, at least one position here held by Berkshire that we are still not aware of. However, some other interesting moves during the quarter. The firm upped its stake in Chevron by 14% to hold $18.8 million.

HP Inc. down 78%, pretty sizable pair back there, to hold $688 million at quarter end. Also, Berkshire pairing back Paramount Global by about a third, 32% to hold under a million there, sold 10 million shares of Apple, but that's just 1% of Berkshire Hathaway's stake, which was worth $174 billion at year end. Of course, these positions are all as of the end of 4Q. They may have changed in the six weeks since then. But these, again, are the snapshots we get from the 13F filings due today. So we're expecting to see a lot more between now, really within the next hour until the SEC window

closes, Morgan. Yeah, we know you'll bring those to us. And of course, we pay attention to them because as you see right there, Apple trading down half a percent on this report. Leslie Picker, thank you. We have a news alert on Meta as well. Julia Borson has more. Hi, Julia. Hi, that's right. Meta announcing the election of two new board members effective immediately. Hock Tan, formerly Broadcom's president and CEO and member of the board since 2006.

He was also chairman of the board of Integrated Device Technology. Also joining the board, John Arnold, co-founder and co-chair of Arnold Ventures. They say they seek to apply evidence-based solutions to improve outcomes in public systems, including healthcare, education, infrastructure, and public finance. He was also co-founder and chairman of Grid United, developer of high voltage transmission projects, and before that was CEO of Centaurus Energy, which was a multi-billion dollar energy commodity hedge fund. Now, Mark Zuckerberg saying here, quote, as we focus on building AG1, having directors with deep expertise in silicon and energy infrastructure will help us execute our long-term vision.

So really beefing up the technology there as they focus on artificial intelligence. Back over to you. Real quickly, I think Hoctan is still the CEO of Broadcom, if I'm not mistaken. But just the comments from Zuckerberg in this release about AGI, has he been this forthright about that plan and that push to develop that specifically before now? Yes, that's absolutely right. Yes, he, excuse me, you are right. Hochtan has been member of the board and president and CEO of Broadcom since March 2006. So he is currently in that role. And yes, this is part of what Mark Zuckerberg is saying. They're going to need to really have the resources, whether it's chips or engineers, to be able to focus on artificial intelligence,

which Zuckerberg has said is essential not just for chatbots, but also for partnering those AI tools with what they're doing in this more metaverse virtual reality realm. All right, Julia, thank you. Julia Borsten. And now Twilio shares, as we mentioned, still under pressure after reporting light sales guidance. Up next, an analyst with a hold rating tells us what he wants to hear from the company when the call begins at the top of the hour. You can see it down there more than 6%. Be right back. Welcome back. We have a news alert on Elon Musk. Philip Oh has the details. Hi, Phil. Hey, Morgan. Remember when there was some discussion about Elon Musk after he said,

look, he would like to have a greater say in the future of Tesla through voting shares and having 25 percent stake in the company, while a filing from Tesla shows that Musk now has a 20.2 percent passive stake in the ownership of Tesla shares. Comes out to 715 million shares of the 3.18 billion outstanding Tesla shares. We should also point out that he also holds options for another 303 million Tesla shares that he has the option to exercise and to convert into stock that he can do by March 2nd. So as of right now, it is a 20.2 percent passive stake in Tesla that is controlled by Elon Musk, the CEO of the company. Guys, we'll send it back to you. Phil, thank you.

Now, Twilio shares sinking after reporting a lower active customer count than analysts were expecting. Joining us now is Mizuho's Citi Panagrahi. Good to have you. So these results, I mean, we had already gotten a bit of a pre-announcement from them at the beginning of the year around leadership changes, but this is still a big reaction. Yes, indeed. Look, I think they reported Q4 ahead of consensus expectation that they already pre-announced, like you said. But I think what is disappointing is their March quarter guidance. Revenue is kind of light of expectation. Their expectation was $1.5 billion, but they are $1.25 billion to $1.35 billion. That's a little light on the revenue side. Because remember the key question for Twilio is can they accelerate revenue growth? But I think what is impressive is the margin. They continue to deliver margin, 12.8 percent for the year from flat in 2022. That's definitely good.

I don't understand what's broken here. I mean, back in the day, Uber was to Twilio sort of what Shopify and Peloton became to affirm. It was sort of like, if this was doing well, then that would do well. Clearly, that relationship is broken down because people are out buying things. You know, commerce seems generally strong, but Twilio's results, 90 percent of their business is connected to that commerce piece, don't seem to be picking up. Why is that? There are a few things here. I agree with you.

Twilio is one of the—we call that CPaaS, communication platform, or the service. They're the pioneer in that space. But even C-Lounge, it's expanding beyond just SMS to multi-channel. Now you can connect your consumer, your customer, through WhatsApp, Facebook, Google. There are so many ways you can connect that, email marketing as well. And then also you're seeing the volume part of it, like communication business itself was growing at 40% plus. Now we are down to single digit growth. So there are a lot of

competitions coming out. There are cheaper alternatives as well in the market right now. OK, Siti, thank you. Shares of Twilio down 9 percent right now. Shares of Lockheed Martin falling today in the regular trading session as well, down 2 percent after Reuters reported the Biden administration plans to slash F-35 fighter jet orders in its upcoming budget request. The Pentagon would seek to order fewer than 70 of the stealthy strike fighters in fiscal 2025, down from the currently expected 83. No comment from prime contractor Lockheed'm waiting response from the Defense Department. But a few things to keep in mind. Number one, with a cap on the size of the upcoming defense budget, thanks to Congress, a cut to big ticket F-35s wouldn't necessarily be that surprising, even to Lockheed. Number two, we don't even have 2024's budget in place.

This seems to be a leaked document tied to the president's annual budget proposal. That's expected as of now, March 11th. It's a wish list that then goes to Congress. So we're talking early days. And lastly, F-35 production rate, it's 156 per year. That's despite delivery delays that are tied to a software update. Lockheed is still selling dozens of these stealthy fighters to allies. So the number is actually larger in terms of total annual production output. Nonetheless, shares reacted and fell 2 percent on this report today. Now let's get to Bertha Coombs, who has details of a developing story out of Kansas City. Bertha. Morgan, just moments after the Kansas City chief vowed to win a third straight Super Bowl title at a victory parade,

shots rang out from the parade route. According to the Kansas City Fire Department, one person was killed and at least nine others suffered gunshot wounds, three of whom are in critical condition. Police say two people are in custody and sources tell NBC News that at this point, the shooting does not appear to be tied to terrorism. Police are expected to provide an update momentarily. Back to you. Tragic. Bertha Coombs, thank you. Up next, Mike Santoli is going to look at what the recent strength and resilience by industrial stocks could mean for the market and the economy. We'll be right back. Welcome back to Overtime. Senior markets commentator Mike Santoli is back.

He's taking a look at one sector notching an intraday all-time high today, and it is not tech. Mike. Exactly, Morgan. Industrials. S&P 500 industrial sector took back yesterday's losses, did click to a new record high today, and here you see how that looks. Maybe it's getting a little steep on the other end of it, but how that looks. Maybe it's, you know, a little getting a little steep on the other end of it. But what I like about the industrial sector, of course, the macroeconomic message is good when this performs well. It's also not a very concentrated

sector. There's no stock that's at least five percent. It's Caterpillar. It's GE. Uber is a big holding here as well. So it's not always smokestack companies. Take a look here, too. It's related. The recent outperformance in the past several months of buyback achievers, the heavy buyback stocks out there. Industrials are the most overweighted sector in this buyback ETF. It's like 19 percent of the fund. It's only like 8 percent of the S&P. It's industrials outperforming dividend stocks as well as the equal weighted S&P 500. The market likes that form of shareholder return. It has a message that you have free cash

flow to spare. And so for now, that's working as one of the more bullish factors. All right, Mike. Thank you. Mike Santoli. Meanwhile, JFrog, we mentioned earlier, up, let's see, nearly more than 14 percent right now in overtime. I spoke with CEO Shlomi Benhaim earlier today before the call about what fueled outperformance in DevOps and security to close out 2023. At the end of the year, we scored 95% growth of customers over a million dollar ARR spending, like a yearly spending with JFrog. The adoption of DevOps and security tools under one platform became the standard in the market. And JFrog, the adoption of DevOps and security tools under one platform became the standard in the market.

And JFrog is in the center of this change. I also spoke with Informatica CEO Amit Walia about results before the call, which is coming up. That stock, by the way, up 11% right now in overtime. The shift to cloud, he said, is on track. We end the year with cloud ARR growing 37%, which was above the guide of 35%. And cloud ARR, by the way, is the biggest component of our total ARR now. 38% of the total ARR is cloud, which a couple of years ago was the tiniest component. And I kept saying that our strategy,

we firmly believe in that, building the best products, the only platform driven by AI in a hybrid world, and that's played out. We feel extremely good about it. Of course, that's what is driving our overall growth. In fact, our net retention rate for cloud was 119%. If you look at the way a lot of companies tabulate, it would be 125%. You know, there's different ways you can calculate that. So, well in the top quartile of net retention rates. Well, with stocks moving that much, you want to know more. You can catch the full interviews with the CEOs of JFrog and Informatica on Overtime's LinkedIn page.

Just scan that QR code right there on your screen. You can watch those and more exclusive content from us. Yeah, a growing treasure trove of exclusive content. We have a 13F filing from Appaloosa's David Tepper. Leslie Picker is back. Leslie. Hey, Morgan. Yeah, as of the end of the fourth quarter, some pretty sizable reductions in exposure to large tech, pairing back stakes in Intel, Micron, Meta, NVIDIA. That one was reduced by about 23% for the firm to hold $391 million worth as of quarter end. Qualcomm also reduced by 23%, that stake about $145 million at quarter end. Also saw reductions in Taiwan Semiconductor, Uber, AMD, and Alphabet. But there were some increases as well here at Appaloosa.

They increased their stake in Amazon slightly to hold $600 million at quarter end and also increased a stake in Alibaba, but sold out of JD.com. So kind of an idiosyncratic play there with the Chinese e-commerce companies. Also wanted to flag, they bought, Appaloosa bought calls tied to the ARK Innovation ETF, kind of noteworthy given just the snapshot we saw with a reduction in long equity holdings of big tech and a 48% increase in Caesars to hold $100 million as of quarter end. Now, as we always say, these are snapshots as of the end of the year in this case, as of the fourth quarter. So the end of December here. So the positions may have changed in the six weeks since, but at least what we know

from these 13F filings is a pretty broad-based reduction in big tech with a few increases in certain companies and calls tied to the ARK Innovation ETF at David Tepper's Appaloosa. Morgan, I'll send it back to you. All right, Leslie, thank you. Up next, the CEO of CNH Industrial on the outlook for agriculture and construction equipment, demand following better than expected quarterly sales. Stay with us. Welcome back to Overtime. Shares of C&H Industrial rose 6% today after reporting earnings earlier.

Revenue for the quarter beat analyst expectations. The company did issue guidance that retail sales will be lower in both the agriculture and construction equipment markets, though, in 2024. Joining us now exclusively to discuss all of it and more is CNH Industrial CEO Scott Wine. Scott, it's great to have you back on the show. Welcome. Thanks, Morgan. Always good to be on with you.

Thank you. So it was your second, 2023 was your second year as a pure play ag and construction company. Record revenue, net income. But I do want to hone in on what you're expecting here in 2024 globally, as you noted that retail sales are going to be lower in both the agriculture and construction equipment markets. Why? You know, we've seen, we had a couple of just incredible years in agriculture, and we expected that to slow down at some point. You know, what we seeing in twenty four is soft commodity prices are really

drifting down as you and your record for crop production in brazil last year and you're really good debt crops are in the united states so uh... that that does weigh on on prices a little bit and you know what we've seen is a good report out this week that uh... farm income is going to be down almost to the twenty year low uh... this year. So we're seeing, you know, just a lot of pressure on farmers, and we're expecting that to drive lower equipment purchases from them. But, you know, overall, we feel good about our competitive

position. The South American market was especially weak last year. We're expecting that to be weak again this year, but not quite as bad. But overall, you know, around the globe, you know, we think demand is just going to be a little bit lower. Sentiment in Europe especially is down. Right now you've seen some of the foreign protests over there. And really, we just, we feel like it's going to be a more difficult year. And that's why we took early action to get ahead of that with our cost programs. And, you know, it's allowing us to have better earnings, even though sales are down a little bit. i mean here domestically does a fed beginning to cut interest rates change the outlook uh for for agriculture in this country or too soon to tell

you know i don't think interest rates are um are almost a de minimis input for farmers because, you know, they, we will finance for them most of their vehicles and we try to make sure that that's an affordable rate for them. But really, I don't think interest rates are nearly as important as soft commodity prices, which are really weighing on farm income right now. And, you know, really after the reports this week, I'm not sure how much we can count on the lower interest rates throughout the year anyway yeah I mean you have been you have been implementing cost-cutting for a while

now and despite maybe some softness in some of these markets you just laid out across the globe you have been taking market share how do you continue to do that you know we've really been investing heavily in innovation I'm incredibly sharp execution from our team, and really partnering with our dealers to make sure that we're bringing the best value we can.

Ultimately, my firm belief is this whole game we play is about productivity and yield, and the investments that we're making in precision and autonomy in our vehicles are really giving farmers the opportunity to get more productivity and yield. And really, what Derek Nielielsen his team have done on product innovation i think that uh... the c r eleven combine that we we had launched uh... last year and and agri technica it's just an example of the types of innovation we can bring

to drive demand from our farmers because it gives them so much more productivity and yield so that that's the type of thing we need to continue to do uh... really dealer inventories, I think we did a reasonably good job in 23 of managing that, but we've got a little bit of work to do in 24. And I think as we partner with our dealers to make this a game where we win and they win, ultimately that allows them to be able to do more for our end customers. And then that's been a winning formula for us. Okay. Scott Wine of C&H Industrial, thanks for joining me. All right. Thanks, Morgan.

Still ahead, we've got news from Cisco's earnings call currently underway. You can see the stock down more than 5% at the moment. Those details next. Let's get those headlines from cisco's earnings call christina parts neveless has them christina yeah cisco see a warning that they have to adjust investments and expenses because of three main reasons first overall higher caution and scrutiny of deals secondly customers are slower at deploying products that have already been shipped to them. And lastly, a bigger impact on total guidance. They're seeing weak demand from telco and cable service providers. They didn't name names, but think AT&T, Verizon, et cetera. Separately, Cisco management more positive, though,

on its $28 billion acquisition of cybersecurity firm Splunk. They believe this acquisition will close in either Q1 or Q2 of this year. Shares still down over 5 percent. Morgan. All right, Christina, thank you. Up next, we will hear from the CEO of the company trying to become the first to land a commercial spacecraft on the moon. Stay with us. Overnight, if all goes according to plan,

SpaceX will launch the M1 mission in the latest attempt to make history. Headed to space, Intuitive Machines' NovaSea lunar lander, which aims to attempt a soft landing on the moon next week. If successful, the lander, named Odysseus, would become the first commercial vehicle ever to touch down on the lunar surface and the first spacecraft hailing from the U.S. in more than five decades since Apollo 17 in 1972, which, as you can see right here, photo from that mission, would be a moment. So ahead of that, NASA contracts with Intuitive Machines, which is publicly traded, with a market cap of about half a billion dollars. You can see shares

are actually up 4 percent right now in overtime ahead of this launch. The lander will be transporting both government and commercial payloads. Intuitive Machines CEO Steve Altomus says four years of development and testing went into this mission, which is being done for $118 million. What's at stake is, you know, I think, you know, ultimately we have to knock that barrier back to where we as a commercial businesses can actually achieve something like reliably landing on the surface of the moon. We've done it in a way that is pushing the boundaries of cost or access to space, pushing the price down. And hopefully we haven't pushed it too low to where we've taken undue risk.

It's tough to land, as intended, on the moon, though, what's called a soft landing. The historical success rate for robotic landers is less than 50 percent. Intuitive Machines is the latest in a string of both countries and companies that have attempted this historic feat, including startup Astrobotic, which, due to a fuel leak, suffered a failed attempt last month under the same NASA program. Now, for Intuitive Machines, it's the first of three missions already on the manifest, as the company looks to become a transportation and infrastructure player in this emerging lunar economy. Altamist says right now NASA and the U.S. government represent about 80 percent of Intuitive

Machines' business. Twenty percent is commercial. He expects that mix to shift, though, over the next few years to 60-40, but you got to get there first. So be watching this tonight for the full interview and more. Listen to the Manifest Space podcast. You can get it wherever you get your podcasts. Indeed. You know, it might be tricky, but you know who intuitive machines should call for help on this? Jay Powell, because he seems to be pulling off a soft landing even now. Wow.

I don't even know how to respond to that other than to say to the moon. Just tie it all together. We tie it all together here on Overtime. Yeah, well, we got plenty of earnings coming up. And even though Cisco was in a rough spot in the data center, some of these startups, JFrog, Informatica, performing strongly. So, you know, place your bets in the data center post-networking era as AI takes over as well. Yeah, we get retail sales in the morning. We also get more earnings, including on this hour,

and quite a number of executives joining us before their calls in this hour. So that's going to do it for us here at Overtime. Fast money starts now.