Closing Bell - Closing Bell Overtime: Mega-Cap Earnings Front and Center: Alphabet, Intel, and T-Mobile Drive the Narrative 4/24/25

Episode Date: April 24, 2025

Earnings from some of the tech’s key players, with Alphabet, Intel and T-Mobile all reporting after the bell. Barbara Doran of BD8 Capital and Victoria Greene of G Squared Private Wealth on navigating the market setup. T-Mobile CEO Mike Sievert joins to break down the company’s latest numbers. Evercore’s Mark Mahaney offers insight on Alphabet, while Susquehanna’s Christopher Rolland analyzes Intel. Later, a two-guest panel featuring Rohit Kulkarni and Chris Ballard dives deeper into Alphabet’s performance and implications for big tech.

That's the end of regulation Vista equity partners ringing the closing bell the New York Stock Exchange Nasdaq Inc doing the honors at the Nasdaq well stocks going out near the highs tech leading another rally As a strong week for the major averages gains momentum S&P finishing up about 2% That's the scorecard on Wall Street, but the actions just getting started. Welcome to closing bell over time I'm working Bron Brennan along with John Ford Yeah That's another huge hour of earnings reports on the way, headlinen by the first Mag7 name to give results

that Google parent alphabet, along with Intel, Gilead, T-Mobile, and more. Plus, we will bring you an exclusive interview with T-Mobile CEO Mike Sievert. This is his first comments before talking to Wall Street analysts on the call later. And as we await those earnings, let's get straight to today's market action.

Joining us now BD8 Capital Partners CEO Barbara Duran and G Squared Private Wealth Founding Partner and CNBC contributor Victoria Green. It's great to have you both here on another day of green for the major averages. Barbara, I'm gonna start with you. We've got the S&P finishing, it looks like up 2%. The Nasdaq, Nasdaq 100, 2.8%, it looks like.

Tech is really in the driver's seat right now. Does that hold? Well, that's the question we're all asking after three days of good market action. Is this really, the market, as Mike Santelli just pointed out, was very oversold. And the most oversold names in terms of where their highs had been were really some of the mega cap techs.

And those names You know will start today in earnest and next week We have Microsoft and Meta and Apple and Amazon hold on Barb got Intel results out already Christina parts Neville is gonna give us those Christina John well Intel delivers Q1 beats on EPS of 13 cents Which is 12 cents higher than what the street ends estimated on revenues of 12.7 billion, both driven by strong data center revenues as well as PC sales. But the company issued weak Q2 gross margins and guidance, zero for Q2 EPS and a midpoint of 11.8 billion for Q2 revenues. John, you and I just spoke with the CFO Dave Zissner just about 30 minutes ago, and he

acknowledged there's likely, quote, pull ahead for purchases before tariffs hit, driving that EPS beat. The company is cutting 2025 OPEX from 17.5 billion to 17 billion. So that would include workforce reductions, though there was no specific headcount target. Despite that 20% number that was reported just a few days ago, they said that they don't have a number just yet. CEO Lip Bhutan has been in the role for about five weeks and plans to streamline management layers across the organization.

Intel CFO said they remain committed to the foundry business while planning to cut non-core products could be anywhere between 10 and 15 products, and they plan to refine their AI strategy. Shares are a little negative, down 1 percent. Yeah, fractionally interesting. The CFO also telling us for 2026, they're targeting $16 billion in OPEX. I noted that's about 10% down from where they were before. I asked if that reflected the headcount, and as you mentioned, he said they don't have a headcount number yet. So a lot to learn on the call and a lot more to learn that won't be on the call because they don't know that yet.

Yeah, meantime shares of Intel are falling right now. Now down about 3%. We're gonna bring Mike Santoli into our market conversation as well. I'd also just note that Alphabet earnings have crossed. We're going through those results. We'll bring them to you momentarily. Barb, I'm gonna go back to you and I'm gonna caveat it with,

we might be getting ready to interrupt you now for Alphabet but your thoughts on okay and never mind we're going to Deirdre Bosa first for Alphabet. Hi Dee. Hey I do have the Alphabet numbers and stock is surging after hours up nearly six and a half percent. It is a beat on both the top and bottom lines. EPS coming in at two dollars and 81 cents that is well above the two dollars.01 that was expected revenue. Also, a slight beat here, $90.23 billion, $89.1 was expected. I also just want to separate out Google search and other revenue. This is important because it's been exposed to Chinese e-commerce and the tariffs, as well as the switch to generative AI chat bots. That is coming in essentially in line at $50.7 billion, $50.5 was expected.

So perhaps a relief from some investors who were worried that its market share, its ad revenue was gonna be eaten away by this move to generative AI. Last one I wanna give you guys, cloud revenue, coming in in line, 12.3 billion. That was expected. I'll continue to dig through these numbers and just keep in mind that we do not get specific

or official guidance but we will get some color on the call which kicks off in about 25 minutes. Okay, dear Jabosa, thank you. Shares up 5% okay third time's a charm. Barb, want to get your reaction to Google? Yeah well those are great numbers because the especially on the EPS line that's a big beat and coming into it the sentiment was not great. Nobody had big expectations given the uncertainties and there's three big ones. I mean there's the antitrust, there's two lawsuits but that's sort of in the stock because appeals will probably go on until 2027. There's obviously the competition issue with AI and the search functions and how that, if that even to their search, you know, so there's a, and that's the, and also

the advertising. So this is very interesting to be, I can't wait to hear what's happening with the advertising because probably about 10% of their advertising comes from Chinese advertisers like Tamu and Xian. So it'll be in the cloud. They were cut. They were capacity constrained. People were looking for maybe 27% growth there. So that could be very encouraging. And also,

you know, we don't hear much about Waymo because that's really not contribute, but they continue to gain momentum and they're up to about 200,000 rides a week. So I'm really eager to hear about that. And also their cap spending,

which they estimated at 75 billion this year. People wanna know, is it working? Where's the ROI and are you gonna taper down? So there's a lot to hear on this call, but this is a good start with these numbers. Yeah, and for a market with skittish investors, those CapEx forecasts are gonna matter perhaps even more than usual.

Victoria, I wanna get your thoughts on this because we do have two tech names moving in two directions here. Alphabet, higher, Intel, lower, both representing and okay, hold on a second, we're going back to Deirdre for more on Alphabet's results. Deirdre. There is more. Alphabet issuing a 5 percent dividend increase to 21 cents, that's from 20 cents, and also $70 billion additional buyback.

This is key capital allocation, of course, especially as Senator Pichai reiterated just about a week and a half ago, their CapEx plans, we'll look for more color on that in the call, but positive sign that the capital returns program continues with a $70 billion additional buyback and a 5% increase in the dividend. Okay. Deirdre, thank you. Victoria, want to get your thoughts on that? with a 70 billion dollar additional buyback and a 5% increase in the dividend. Okay, Deirdre, thank you. Victoria, want to get your thoughts on that? Also want to get your thoughts on Intel, two totally different names when it comes to the tech trade. I know, I think Google, it's a sigh of relief for everyone. I'm a little more concerned. I mean,

it's great they're buying back their shares. They're down 30% from the peak, so I would have been shocked if they hadn't. So for me, but Google, it's more about what does the next year look for them? Search not growing, I think is a bad deal. I mean, they used to have about 93% of search, now they have about 89% of search. It's slowly getting eroded by chat GDP, by social media. And so we look at that and say, how secure is search, especially with the antitrust?

You know, they didn't really have some great hearings this week. We know they're under a little bit of pressure on how they're dealing with Samsung, the App Store. Gemini's been a little bit slow and glitchy. And so I look at Google and say, can you start to execute better? Q1 looks great, but we aren't in a recession.

We're not seeing the pressures in Q1, but how does advertising hold up in the rest of the quarter? So I'm happy to clear the bar. Not sure they're out of the woods yet. Intel, I think it's all about their outlook. I didn't really care about Q one, new CEO just got here. It's what is he gonna do?

Are they gonna get headcount below a hundred thousand? When is foundry gonna break even? How are they divesting? When are they gonna go to Ohio built? He is turning an aircraft carrier though, so you have to have reasonable expectations. Market though might be a little bit sad that maybe we didn't see the bottom yet

on margin pressures, on foundry losses, on making sure that we're not quite at growth yet. So I think a little disappointment that KeyOne wasn't a little stronger, and Outlook wasn't a little stronger, but let's give the new CEO a chance. He wants to bring back engineering, bring back innovation, and that's just gonna take a little bit of time

with such a large company. And to know exactly the size of those cuts that are coming as well. Mike Santoli, let's back gonna take a little bit of time with such a large company. And to know exactly the size of those cuts that are coming as well. Mike Santoli, let's back up for a moment. Look at the overall mark. The S&P knocking on the door of 5,500 again around those levels where post tariff announcement, I think the market sort of bumped its head on the ceiling.

What's the significance of that as we continue to plod through earnings season in an environment that so far is in some cases, not as bad as some fear, but still a lot of wood to chop. There's a lot of tactical significance to this level or just this general zone of trading. It's like a 3% move up from here in the S&P to get to where we closed on April 2nd.

So it's kind of tough to imagine that we're gonna just slice right through that and never look back on the upside because, you know, obviously we have nothing like a full resolution. But I do think that the ability to refocus a little bit on some of the corporate fundamentals, we know what the starting point was. Obviously, some companies have some pretty cautionary things to say, but in general, it's not been digging the overall aggregate index at this point.

So there's plenty to prove from this rally. If we could decisively break above $5,500, you're going to find a lot of folks who are kind of starting to think that maybe this is a show of resilience and we can make a better run at those pre-tariff levels. But you don't want to over-anticipate that. Already, after three days of this very strong rally you're starting to see it maybe look a little stretched in the short term okay T-mobile earnings are out

stop dropping about five percent initially Steve Kovac has the results Steve yeah John and that's despite some beats here on the top and bottom lines let me go over the numbers and let me tell you what I think is happening EPS was a beat though by twelve cents $2.58. Revenues just a slight beat here at 20.89 billion street wanted to see 20.62 billion. Things get a little interesting here though and then net ad so as far as postpaid net ads that was a beat at 1.34 million street wanted to see 1.18 million. But phone net ads, handset net ads, that was under expectations, 495,000 versus 504,000 expected. Still, some other good stuff in here.

Service revenues largely in line and guidance, reaffirming guidance on postpaid net ads and slightly raising guidance for the core adjusted EBITDA for the full year. We see shares still, despite all this, better than 5.5%, Morgan. Okay, Steve Kovach, thank you. Joining us now ahead of the earnings call in a CNBC exclusive interview is T-Mobile CEO Mike Sievert.

Mike, it's great to have you back on overtime and let's start right there with what you saw in the quarter, including specifically those phone net ads, which do seem to be coming a bit softer than the street expected. What was just a really strong quarter overall on customer growth. I mean, as your lead in said,

1.3 million postpaid net additions was an all time record for a Q1. And those half million postpaid phone nets were pretty much in line with expectations. And we were able to reaffirm our guide. Now our guide on overall postpaid and postpaid phones the highest it's ever been at this point in a year. The fact that you're reaffirming guidance even boosting the EBITDA aspect of your guidance for the year given all the macro uncertainty we've been talking about and tariff dynamics which which some of your competitors, including AT&T, Verizon say if they see higher costs,

they're gonna pass it on to customers. Why do you feel confident reaffirming those numbers? Well, we're just firing on all cylinders as a business. And we were able to see customer revenue growth in Q1, outpace expectations. In fact, revenues per customer at both the account and the individual line level moved up past expectations, causing us to increase our guidance for the full year on both metrics. Now, revenue per account looking to be up three and a half percent year over year,

with overall service revenues probably closer to six percent up year over year. So, customers just keep coming to T-Mobile and, you. And we have the most differentiated value proposition we've ever had. And I think, Morgan, to the premise of your question, in a time where people are raising their eyebrow maybe at the economy, they're certainly interested in the brand that can save them some money while giving them the world's best 5G network.

Mike, you guys saw an increase in your total high-speed internet only accounts. What does that signify? We see some cable names out there having some trouble holding on to broadband customers, but is that a cost-saving measure where they want high-speed internet only, or is that customers who you don't think you would have gotten into other products anyway who are just coming to T-Mobile for that. Well, this number on broadband for T-Mobile was the 13th quarter in a row that we've led

the entire broadband industry, not just the fixed wireless component, but the entire broadband industry on customer growth. We signaled last fall that we see this being on its way to 12 million customers served by 2028. And we're very much on track for that. People love the service. It has the highest net promoter scores in the industry.

It has an incredible value and it really showcases the power of 5G and how it's changing what a lot of people thought about how the future would unfold. What can you tell us about the demand for value? Because I see a postpaid phone, ARPU was down a bit in part because of higher promotional activity, bundled offerings.

You also said that there was, I believe, higher promotional activity in consumer. Is there a search for value for consolidation in wallet as well as quality out there? Well, the nature of competition is constantly changing, but the extent of competition, not really. And I think this is a misunderstanding among some investors. Every quarter it plays out a little differently, but the industry overall is the healthiest it's ever been. T-Mobile is the best house in a really good neighborhood.

Overall industry cash flows last year were 50% higher than 2022, even during this period where people say it's getting too hot in the kitchen. I don't agree. The nature of the competition keeps changing, but that's what T-Mobile's good at staying in front of. How to think about the portfolio. Obviously, you have broadband. We just talked a little bit about that.

You acquired Mint. Now you're acquiring US Cellular. And then you are broadening out your partnerships too. There was that perhaps most buzzed about, if not one of the most buzzed about commercials that you put out with the Super Bowl, rolling out the beginning of your Starlink service and opening up some of that access to customers even on other networks with other wireless operators.

How are you thinking about the evolution of the portfolio and the role things like space are gonna play in it? Well, it really speaks to the moment that we're in. I feel that T-Mobile is more differentiated right now at this moment than we have ever been with the world's best 5G network, new rate plans that are speaking to exactly what people want, and T-Satellite. Look, there's nothing like T-Satellite. I mean, our competitors would love to have you believe there is, but with 550 satellites and counting in the air, our vision is that you

are always connected. You are reachable with your phone in your pocket. Our vision is that you are always connected, you are reachable with your phone in your pocket. Even if you don't know, you've left a terrestrial network. And this is so important, we've decided to throw the doors open to AT&T and Verizon customers as well, because they can't get anything like this anyplace else. All right, Mike Sievert, CEO of T-Mobile on earnings, joining us first here on Overtime, appreciate it.

Thanks guys. Meantime, Gilead earnings are out, the stock is dropping here in overtime. Angelica Peebles has the numbers, Angelica? Hey John, yeah, it's a mixed Q1 here for Gilead. The company beating adjusted EPS expectations of $1.81 a share, again adjusted, versus the $1.79 estimate.

And revenue came up short, though, at 6.67 billion versus the 6.81 billion that the street was looking for. And across the portfolio, HIV was okay. Big Tar V came up a little bit short. Discovy did come ahead. And oncology was really weak in the quarter. Tridelvy sales of 293 million,

missing the estimate of 346 million. They are reaffirming their full year adjusted EPS and sales guidance. And I talked to the company and they're saying that this forecast does include known tariffs and expected increase in input costs, but it does not include any potential pharma specific tariffs.

Of course, the president has been talking about how he wants to impose tariffs specifically on pharmaceutical imports. But the company says that they feel like they're less exposed because the majority of their manufacturing is in the US and their IP is based here. So 80% of their profits are recognized in the US.

Of course, we'll listen for more on the call. Like you said, that's docked down about three and almost a half percent right now, guys. Okay, Angelica Peebles, thank you. Thank you. We've got much more after hours action straight ahead, including analyst Mark Mahaney's first take on Alphabet's results and the read through

for the rest of tech. And we'll talk more about Intel's quarter and what to listen out for from CEO Lip Bhutan's earnings call, as first as Intel CEO kicks off at the top of the hour. Also check out Skechers, just out with earnings results, missing on revenue, withdrawing its prior 2025 guidance due to quote, macro economic uncertainties

stemming from global trade policies. Wonder which ones, you can see that's down 8.5% over time's back in two. Alphabet earnings out moments ago. Let's bring in Evercore head of internet research, Mark Mahaney. He's got an outperform rating on the Google parent. Well, it's outperforming here in Overtime.

Particularly curious how you gauge the results in advertising areas like YouTube versus your expectations. I think YouTube and Search largely came in line with pretty much everybody's expectations. I think the real star of the show here was the margins. I think we just had record high margins for the business, or at least in multiple years,

record high operating margins at the cloud business too. You know, YouTube and Search all came in kind of in line. What we don't know is what the outlook is like. I think they'll give you some loose commentary on the earnings call. I would imagine their commentary to be neutral to cautious. I think I'd be surprised if it wasn't. And the other thing that somebody already pointed out,

like they're doing the right thing with their cash. They're buying back more stock and they're upping the dividend. So I think this is what you kind of want Alphabet to do in a tough environment. You want them to manage what they can, which is expenses, and they're showing you they can do that. For investors out there wondering what's moving the stock

and what to worry about, how much does antitrust play into this at all? Can you really just watch the fundamentals and invest in this based on that? How much of it is core ads versus cloud momentum? And is a breakup potentially good, not that it's going to happen, but that as the likelihood or chance of it happening creeps up a bit, does that boost the stock to unlock shareholder value?

John, I think there are three overhangs here on Google. One is DOJ, one is whether JNI disrupts the search business, and the third is whether the company can really manage its expenses and act fiduciarily responsible when it comes to all that capital that they've accrued. I think they're giving you evidence on the third one. I think that's kind of why the stock's up. On the JNI risk, it's just if they keep going and don't show quarter after quarter with consistent search revenue growth, it kind of over time will deflate the bear argument,

but it's going to take a while for that to happen. On the DOJ I don't think we're going to know until August that's when the judge in the core search case is sort of suggested indicated and he's been true to his word in the past that he's going to deliver his remedies. I think the worst case remedy is probably off the table so my guess is that that's going to be a relief event but we're not going to really know until until that day that judge in the initial ruling kept his cards very close to his chest I expect the same this time. I know they recently reiterated their full year capex do you expect that to hold steady and if so is that a good thing? I think it's a good thing I think

they're gonna hold steady I don't think Amazon, Meta or Google the three companies I look at that are spending the most on this I don't think think they're going to back away. I think if you read the Amazon shareholder letter, the Jassy shareholder letter, I know you had them on two weeks ago, they see something in here. They've invested heavily. They feel like they've already gotten a good ROAI. And my guess, I'd be really surprised if they backed away from their AI spend. Okay, in a real macro downturn, which we haven't seen, in a real macro downturn, maybe fiscal 26 capex gets cut. But I don't think you'll see that this year.

I'd be very surprised. I think they're leaning in. These are pretty smart, sober, cutthroat capitalist companies. And so my guess is that they're making the right move. And I've seen good evidence of return on AI spend already. I think these companies have too. I would be shocked if they cut it. Okay.

And of course the meaningful impact and ripple effects of that maintained spending to the AI infrastructure trade as well as one to watch. Mark Mahaney, thank you. Great to speak with you about Alphabet. Up next, we'll talk about Intel's results. The first report under the company's new CEO and the outlook for the stock,

which has handily outperformed the market so far this year, but is down right now. Yeah. Plus, we just heard from T-Mobile CEO, and ahead on the show, we will talk to Nokia's CEO about its new multi-year contract extension with T-Mobile, as well as the impact of tariffs and potentially AI. That stock got hit today down about 8.5% on results. Overtime, we'll be right back.

Welcome back to Overtime. Boston Beer Earnings are out. The company discussing the impact of tariffs and Brandon Gomez has the results. Hi, Brandon. Hey, Morgan. Yeah, look, a massive beat on EPS. You can see that number there coming in on the top line.

Bottom line, also a beat. Revenue coming in 453 million ahead of the 434 that was expected by the street. Now the company did reaffirm its full year guidance though it did disclose that that does not include the impact of tariffs. It did say tariffs will have unfavorable impact on fiscal year 25 about 20 million to 30 million or about a dollar 25 to a dollar 90 per diluted share. I will say a lot of this comes through the aluminum and steel impact. Obviously this company has a lot of exposure in terms of the cans that they do sell to their consumers.

Some estimates by Piper Sandler have that at about 93% of Sam's products going through aluminum cans. So again, we'll see how that impacts results going forward, but we'll be waiting to hear more on the conference call. Guys. Okay, Brandon Gomez. Thank you. We're share as a Boston beer popping 7% right now. We also have a news alert on Apple and Steve Kovac has those details for us. Steve. Hey Morgan, this is coming out of a Bloomberg report that just came out.

John Gina Andrea, who's the head of artificial intelligence at Apple. Apple is reportedly stripping away this robotics group that he was previously running. Very early days for robotics at Apple, we haven't seen any products or even tons of hints at what they're working on, but this would be the second group that Gianna Andrea has lost this year.

Earlier this year, you might remember, Apple was supposed to issue that big AI Siri update, and since that failed to launch, Gianna Andrea reportedly lost access to the Siri group as well, which is now being run by other executives. So it seems like he's losing more and more responsibility as this theme around Apple that it's falling behind

in artificial intelligence and taking away now responsibility from the head of AI more and more as he focuses on what's called machine learning, which is the stuff that happens behind the scenes on your devices. So we see Apple shares, they're not really reacting to this up about, not even, just barely flat, let's call it. John Olsen, I have it back over to you.

Steve Kovac, thank you. Well, Intel shares are sinking here in overtime after reporting Q1 earnings results moments ago. You see it's down 7%. Let's bring in Susquehanna Senior Analyst, Christopher Rolland. Christopher, thanks for joining us. How much of this reaction you think is because of the guide? How much perhaps has to do with the questions remaining over cuts, cutting the OPEX target for

2026 down to 16 billion, but not clarity yet on what that means on a headcount and structure, though we do expect that's coming in a few weeks or months? Yeah, I think the rumors are a 20% workforce reduction. This wouldn't quite be 20, we will see. But in terms of the after hours reaction, I think there are a couple of things here. Everything you mentioned around head force reduction. In addition, the two queue guide was light.

And even though one queue beat, there's a couple of things here to note in the presentation. So number one, they said better volumes on PC. We think that's PC related polling because of tariffs. Secondly, they called out more competition. We think AMD is taking a share here, even in the first quarter. And then lastly, data center, which also beat in one queue, they noted that this was related to AI head nodes. What that means is for every four GPUs that Nvidia sells, Intel sells one CPU for DGX. And so this was really where data center B, which really isn't a standalone Intel product.

So we think all of those things have the stock down in after hours. Do we yet have a sense of how Liputan is going to be different from Pat Gelsinger? We hear about cutting back some areas that are non-core, but we're not sure what those non-core areas are yet. There are rumors out there about the extent of headcount reduction, and we know about their intent to flatten the organization, but exactly how that affects partners, how that affects velocity, do you have a sense yet?

Do you have a timeline on what you need to know? Yeah, he did put out a statement, so it does appear to look flatter. He's going to get rid of layers of management, and he thinks that this will overall increase response time overall for the company. So it looks like it's going to be a smaller,

leaner Intel versus Pat and predecessors. You have a neutral rating, Christopher, on the stock. Is this, as one of our guests earlier in the show put it, dead money, and at what point does that change? Yeah, I do think it's dead money in its current strategic form I would love to see this company broken up into manufacturing on one side and product on the other I think particularly with you know Trump's pro USA stance manufacturing might even have a chance here. There's also rumors out today of increased interest

in their 18A foundry operation. And I would love to see large hyperscalers building out in America using Intel. And so I do think that that could be a viable way forward, path forward to unlock value for the company. Okay. Christopher Rolland, thanks for joining us with shares of Intel down 6% right now. It's time for CNBC News Update with Bertha Coombs. Hi Bertha. Hi Morgan. A federal judge today partially stopped the Trump administration's effort

to overhaul elections. The judge blocking parts of President Trump's executive order, including a provision that would require proof of citizenship in order to register to vote in federal elections. The judge ruled the president does not have the power to regulate that. American liquor exports hit a record high last year, driven by tariff concerns and global trade disputes. In a report published by the Trade Association Distilled Spirits Council of the U.S., exports hit $2.4 billion.

Exports to the EU rose 39 percent, though they dropped nearly 10 percent for the rest of the world. And pro football hall of famer and first take panelist Shannon Sharp announcing he's stepping away from ESPN in the wake of a $50 million sexual assault and battery lawsuit. In a statement, Sharp said he plans to return for the NFL preseason and that the relationship at the center of the allegations was, quote, 100% consensual. ESPN said it agrees with Sharp's decision back over you John Bertha. Thank you Well Alphabet's earnings call just getting underway and we're gonna bring you any headlines as we get them and to get a shareholders first

Reaction to the move after the break our US stocks Exceptional or expensive Mike Santoli returns with a look at the shifting global appetite for American equities. Overtime will be right back. Welcome back to Overtime. Let's bring back senior markets commentator Mike Santoli for a look at how tariff uncertainty is hitting American companies versus the rest of the world. Mike? Yeah John, or at least how it might hit companies differently. So this is the profit margins on average between the S&P 500 in the US and the rest of the world.

Deutsche Bank broke this down. The rest of the world is Europe, Japan, and emerging markets, the vast majority of the equity markets outside the US. So persistently US companies are more profitable. This suggests that there's not quite as much room among foreign companies to absorb whatever the ultimate tariff levels are. They can do some, but probably not all, even if it's a 10% across the board. That's what Deutsche Bank's arguing. Now, a lot of this difference, and we can also see it in the valuations, relative valuations of U.S. versus the rest of the world,

is attributable to sector mix. Because we have these massive growth platforms, these tech companies that are not really matched outside the country, we do tend to have higher profit margins and higher PEs. Whether in fact we're gonna see some convergence on that, that is the question. So that's one of the explanations for why U.S. markets have been persistently more expensive.

But even on that score, if you look at the rest of the world, you know, you go all the way back, and this is a kind of a P PE level that you've seen all the way back in the 2010s where it's still here we're working at elevated levels. So maybe room for some meme reversion there but the exceptionalism trait so to speak is actually partly or at least largely for decent reasons which is these uniquely profitable big companies that we have here, John. Makes a lot of sense sense Mike Santoli. Thank you So cue the QR code because that leads in nicely to the latest installment of my on the other hand newsletter this week's debate

Should you bet on the sell America trade? We've been seeing in the market. You can scan the QR code They're on your screen now to join the conversation All right We'll up next an alphabet shareholder and an analyst who recently cut his price target on the stock and what they're listening for on the call, which is currently underway. And later, the CEO of Nokia on how the trade war is taking a toll on his company's guidance. Stay with us. Welcome back, Alphabet's call is underway.

The company is making headlines. Let's get back to Deirdre Boser for more. Hey Morgan, so Senator Pichai giving an update on AI overviews. This is what people get. It's kind of experimental when they go to search, but they get kind of a search AI hybrid answer. He says it now has 1.5 billion users per month. That would represent really strong growth.

The last number that they released was a billion users and that was just in October of 2024, so only a few months ago. This really means that Google's getting a scaled down version of its AI to a wider group of users that aren't necessarily seeking out chat bots. So potential here to capture those users before they go to a chat GBT or something else. AI mode is the next iteration of this

and Senator Pichar saying that those queries are two times longer than traditional queries. What we don't know yet though is exactly how they are monetizing this. That is going to be a key question but focusing on adoption and usage growth. Back to you. Okay, dear Trebosa, thank you. Well joining us now to talk more about Alphabet which is up four and a half percent right now is Rahit Kulkarni, senior research analyst at Roth MKM Partners, along with Chris Ballard, managing partner at Czech Capital Management and an Alphabet shareholder. Great to have you both here.

Chris, as a shareholder, I'm going to start with you. Your takeaways from what we've gotten from Alphabet today, including this color regarding growth and engagement, growth in users around its AI-enabled search. Great. Thanks for having me, Morgan. growth in users around its AI enabled search. Great. Thanks for having me, Morgan. Yes, I haven't been able to go into all the details now as their call is live right now, but we're not, as long-term shareholders, we're not surprised that they're going to continue

to gain momentum with regards to their AI and their user base. On something like their YouTube, they have 2.5 billion users per month on YouTube, which is the most streamed video in the world. So yeah, they have a lot of benefit to being in this AI generation and the changes that are going on right now.

We're really pleased with the position that they're in right now. We know that they have the likes of chat chibity and perplexity kind of nipping at their heels, but they still retain the number one dominance by far and that's for a reason. We all love using Google. That's why we're shareholders.

We use it every day. I know I do, whether to find small businesses or to find my way somewhere on a map. They have tons of data that they continue to collect, billions and billions of data every single day from all the searches that are done through their search as well as through YouTube and through their devices as well. So yeah, with their Gemini rollout that they put out last year, it's been really delivering well. If you do a search right now, you'll see that Gemini search populating now, which looks

a little different. And it makes sense that people are staying on there a little longer these days with that. Rohit, wanna get your thoughts on what we've gotten from Alphabet, from the call so far, and in terms of the numbers, we had a hiked dividend, we had a boosted buyback, cloud was in line, YouTube was in line, search though,

perhaps outsized focus there, including on margins. Yeah, I think exactly what you said, Morgan. Inline quarter. And I think the biggest question mark is always, when do we start to see cracks in search? People have been waiting for that and we haven't seen any cracks in search develop in the last 12 months or even since chat GPT was launched. So that's Google on the other hand is probably one of the biggest show me stories of our generation where they're undergoing a dramatic change in technology, how internet search is going to evolve and yet we are not seeing any changes to how the gatekeeper

of internet that is Google has changed its economics. So I think what we are seeing so far is a big positive and Google continues to trade at a discount to all of the mega caps, no matter which mega cap you look at. Google is the cheapest mega cap right now, and we are not yet seeing any cracks through search, YouTube, cloud. And hey, they also got quantum, they got Waymo.

There are so many things going on. So yeah. Chris, going back to cloud, we talk about AI as a threat to search, but the cloud business and Google's position as a hyperscaler used to get a lot more attention before we got used to talking about AI all the time. How important is Google Cloud's growth rate

to your expectations for the value of Google, and how do you feel about how they've been doing on that score lately? Yeah, Google Cloud is basically number one or number two for us of what we're looking at at all times. We want that to continue to execute on an ongoing basis here, and they are. So it looks like last quarter,

it was about 12.3 billion or so in revenue. They're generating over $2 billion of earnings off that business. And what we really want to see, what we continue to see is the margin expansion. So I don't know what that number is today, but it was 18% with their margins last quarter. And the likes of Apple and Amazon,

their cloud business and Microsoft tends to have margins more like 30%. So as they continue to get scale, we believe that they will not only continue to grow revenues at the pace that they've been growing them, as well as earnings, but that that margin will also expand creating cash at the bottom line for shareholders. Okay, and Rohit, how much does the TikTok outcome matter

to YouTube? In our opinion, a little bit. I think in the near term, probably it's a good tailwind for YouTube with engagement, not so much with the monetization. So it's a small positive. I think a bigger positive is just the macro and what we can hear from management about April and any trends post-tariff liberation day as such. We'll see how that works out.

Rohit Kulkarni, Chris Ballard, thank you. Thank you. Up next, new color on Intel's quarter and path forward from the company's new CEO. We're gonna bring you those fresh details next. Welcome back to Overtime. Got some more color from Intel this hour as those shares move lower in overtime

in an email posted on Intel's website, new CEO Lip Booth Tan, outlining some more color behind changes that are happening. We talked about Intel cutting the OPEX guidance for 2026 to $16 billion. It had been 17 and a half from this year. The CFO telling me and Christina Parts-Nebelis ahead of the earnings release that the cuts of 16 actually bigger than it looks

when you figure in inflation. Liputan saying that that OPEX cut in part to put more of a focus, more resources toward engineering. Liputan also saying that a flatter organization is necessary as some teams at Intel are eight or more layers deep. He also plans to cut meetings and cut some formal reflections, administrative work on

goal setting. Also, when it comes to time in the office, he says they're going to go from a hybrid office policy that's loosely enforced of three days a week in the office to four days required as of September 1st. More details, he says, in this note also are coming on these cuts that will play out over the coming months. Okay, well shares of Intel are still down about 6% right now, but starting to get a little more meat

on the bone for the vision of this new CEO. Up next, Nokia's CEO on the networking equipment giants Ernie Smith and the impact tariffs are having on his company. Welcome back to overtime. T-Mobile shares lower here by about five and a half percent here in overtime despite a beat on earnings and revenue. Postpaid phone net ads, missing expectations.

Meantime, Nokia shares were down about eight percent after the European networking equipment giant reported revenue and earnings below street expectations. I spoke with new CEO Justin Hotard, who's been there in the role just three weeks. He said that the uneven results were from a tough comp to an unusual payment last year. He also talked about tariffs, which he said would squeeze Nokia's profits in Q2, but he said the optical networking business for data centers might help provide some relief. That's a place where we actually have some US manufacturing presence. Some of that came through the acquisition of Infanera,

which I was really pleased we were able to close at the end of February. And we got some of that benefit in Q1. And I think the signals there that are encouraging are not only do we have really strong growth 15% year over year in that business, but also a positive book to bill, a book to bill over one. Nokia also announcing a multi-year contract extension with T-Mobile to build out 5G coverage. If you look at T-Mobile in the US,

they're one of the, really the most innovative players in our industry in mobile. And so not only is this a great deal for us, but it also demonstrates that our technology is at the forefront of delivering the kinds of services and capabilities that they need to continue to innovate for their customers. I also asked about the impact of AI on equipment demand.

And while it's early, if you can see how the type of demand might be different in the future. I think some of the early indications are that areas like augmented reality, virtual reality, you know autonomous vehicles, robotics, some of the places where we're seeing some early vertical applications. The big shift is that the data bandwidth in the uplink is far more balanced so if you think the data coming down in my handset today or my mobile phone is much richer than what I'm sending up with video streaming and others,

this, I think AI looks like it may balance the traffic. Well, Hotak stepped into the CEO role at about the same time President Trump was announcing tariffs at the beginning of this month. Investors can expect him to lay out more of his long-term vision for Nokia in the next earnings report in three months, he said, and at a capital markets day in November.

All right. We just took that full circle here. And tomorrow we get Charter, so those will be results to watch too when it comes to the telecommunications space, and Michigan Sentiment Survey, and the inflation expectations we get there too. Big questions about the impact on the rest of the mag seven of Google Alphabet's results as well. And tomorrow is just a big day because, well because, because it's your birthday. It is and I'm playing hooky and I,

come here girls, it's also take your child to work day here today. And so we have our two overtime queens. We have Lexi, our executive producer, Lisa Villalobos' daughter, and my daughter Remy here as well. And we've got eight cupcakes, and you got 15 seconds to eat them.

Yeah, and a big appetite. So I hope you brought it, girls. Happy birthday, happy birthday to my partner here on overtime. I'll miss you tomorrow, but you know, it's an important day. You gotta take some time to celebrate. Thank you. And girls, thanks for being here today.

You made this workday extra special. All right, guys, thank you. That does it for us here at overtime.