Closing Bell - Closing Bell Overtime: Parade of Big Tech Results 7/26/22

Episode Date: July 26, 2022

Highly anticipated tech earnings officially hit the tape in Overtime. Trivariate’s Adam Parker and Virtus Investment Partners’ Joe Terranova give their instant analysis. Plus, top chips analyst Stacy Rasgon weighs in on Texas Instruments’ results and gives his broad take on the sector. And, Short Hills Capital’s Steve Weiss explains how he is positioning his portfolio this earnings season.

All right, Sarah, thank you very much. Welcome, everybody, to Overtime. I'm Scott Wapney. You just heard the bells. We're just getting started here at Post 9 at the New York Stock Exchange. We get right to our talk of the tape. The wait is over. Earnings from Microsoft and Alphabet and other key companies are imminent. Those reports, the analysis, and, of course, the stock moves all straight ahead. So much, as you know, is riding on these results. Joining me now, Trivariates' Adam Parker, Virtus Investment Partners, Joe Terranova. We wait on the results. Our reporters are waiting.

They will tell you when they are out. We will show you the stock moves. The Super Bowl, Joe, is here. It is. And I hope the Federal Reserve is paying attention so they can see what exactly is going on with the economy. Because we just had an abundance of negative news today for all of us to digest. We're going to see what happens here with Alphabet and Microsoft. These are two names within technology that are universally loved by all. When you're talking about these companies,

you've got 50 buys, no sells, maybe three or four holds and price targets over the next 12 months, which are 40% higher. You own them all that we're going to be talking about here. The key for Google Alphabet, which we do expect out momentarily here, ads, ads, and ads. Different type of ads. I think hopefully they'll see resiliency because of the exposure to search ads versus what Meta and Snap is going to give you with social media ads. So I need to see that resiliency. Hopefully, we'll find out in a few

minutes that that, in fact, has occurred. All right. Told you our guy AP, Adam Parker, is here as well. How much is literally riding on these results this week? Well, I think these names are microcosms, right? You have everything. You've got a little currency, you've got a little wage pressure, who's got pricing power, ad spend, right? So there's a lot you can sort of learn from these type of results. I mean, I think ads has been a really interesting thing. You've got the old school Omnicom IPG beating. Everyone thought that was dead. And then you've got, you know, Snap blowing up. So I think there's a lot riding on it in terms of barometers for other names to get a report in the next couple of weeks. We're going to get a reality check in some respects, too, that these are considered to

be among the greatest companies in your portfolios if you own them. The reality check being as great as the growth is, growth is slowing. Google, for example, Alphabet has expected revenue growth of 13 percent. That'd be the slowest rate in some two years. That's the reality check of kind of where we are. Yeah. I mean, good companies and good stocks can be different for six or nine month periods. I mean, I think Texas Instruments and Visa are two of the five most profitable operating margin businesses in the entire stock market. So they're obviously great businesses, but we have to see whether trends are slowing. We talked about this last week. We talked about it a lot. Are the negative revisions in the price? Not yet. The economy's missing. They're still

going down. Hold your thought here because Microsoft is out. Steve Kovac, tell me. Scott, it's a miss across the board for Microsoft EPS, $2.23. We were expecting $2.29. Revenue, $51.87 billion. That was another miss. We're expecting $52.44 billion. And then Azure cloud growth, that's also a miss, only up 40% versus CNBC's review of analysts. We were expecting about 43% on that, Scott. So disappointing across the board. But Microsoft also blaming those foreign exchange headwinds for some of this, Scott. Yeah.

And they warned us about that, Steve. Thank you very much. I know we'll see you again soon. So here it is. Cloud, I said ads, ads, ads for Alphabet. It's cloud, cloud, cloud for Microsoft. That growth of Azure. That's it.

That's all it's about. That's all I needed to know. And that's at the lowest end of what people were hoping. You're hoping for 40 to 50 in that range of growth, right? I wanted 45% at a minimum. I was hoping they would deliver closer to 50, 40%. Not good with a currency headwind. That sets up as problematic for Microsoft.

I mean, you got the currencies, Adam, that all of these companies, particularly tech, which get a large portion of their revenues from overseas. This was the precursor to what we're going to see, what they told us, what, six weeks ago? And here it comes to fruition in this report today. Yeah, it looks like, I mean, I can't do the numbers this quick, but you missed by 1% in revenue this quarter. You roll through the 23 numbers, a little decremental margin. You've got to have numbers down, what, 7%, 8% for next year or something like that. You know, I think when you take a step back, you know, Azure is a great business, plus 40,

and this tape is still growing pretty good, and they still have pricing power, but I think what people wanted was a higher number, and so the stock's not going to act well when expectations are disappointed. All right, so we've got a double miss, top and bottom for Microsoft. Google, in fact, Alphabet is out.

Dee Bosa, what do you see? Scott, I'm seeing a few minor misses, but perhaps not as bad as some were anticipating. So that is why shares are up about two and a quarter of a percent in the after hours. Revenue coming in at $69.69 billion. $69.9 was expected. So just a tiny miss there. EPS, though, a miss by about seven cents. $1.28 was expected coming in at $1.21.

Cloud, this is important, coming in at $1.21. Cloud, this is important, coming in at $6.3 billion. That is shy of the 6.4 that was expected. YouTube as well, which we know has struggled broader than search advertising. That came in light as well. $7.34 billion versus $7.5 billion. Again, minor misses here, and that may be why shares are actually popping now up nearly 3.5%. We'll continue to dig through this and bring you more details as we get them. Scott. All right, D, that's the BOSA with the latest there. What you're going to get here in some respects, Joe, and we've kind of got this as earnings season got underway, not as bad as feared. Not great in many respects, but not as bad as feared. And you have to decide as a market, as an investor, which side of that boat you're on. If you're okay with not as

bad as feared, if good is good enough in the environment we're in. Especially seeing the ad revenue figure, which comes in slightly higher than expected, that sets up nicely for Alphabet. Remember one thing about both of these companies, before people out there are ready to hit the sell button, which I am not, even though Microsoft is down significantly, these are companies with very strong capital allocation strategies. They're buying back significant amounts of shares. That's critical in the environment that we're in now,

where, as you said before, growth is slowing. It makes you also think, Joe, that what Snap delivered, that bombshell when the shares got crushed, was more a Snap issue than perhaps Alphabet and Twitter. Well, Meta, well, we'll see. Right. We will see tomorrow. The fear was that Snap was the precursor to Alphabet and then to Meta. And maybe not so much for Alphabet, though it's in the early moments after the report hit. D's going through it, of course, and we'll still figure out what's in there. But at least it's not the crater cliff drop that we got the other day.

Yeah, I guess the way I look at it is these businesses are, what, $300 billion in annual revenue, another $225, $525 billion. Walmart's $500 billion. Amazon next year is supposed to be $500 billion. These businesses are so big they can't be immune from an economic slowdown. And even if they're gaining share and they're doing the right things with capital allocation, they can't hide from an economic slowdown when you have a half a trillion in revenue. Yeah, look at the meta right now. I know it's a little bit of a move.

Nonetheless, if you're a meta investor, you want to see the little move into the green rather than the little move into the red. And maybe it's a little burst of relief at the outset from what Alphabet just delivered. We got Christina Partsenevelos has Texan, Texas Instruments. Tell us. Well, 20 quarters and Texas Instruments hasn't missed its earnings per share. So earnings did come in higher than what the street anticipated at $2.45. The street was anticipating $2.12. So that's well over 1.6% growth year over year.

I should say quarter over quarter. Revenues $5.21 billion. Also a beat. If we're looking at Q3 guidance and they guided a little bit higher than what the street was anticipating with a range of about 2.23 cents for earnings to 2.51 cents so much higher than the street you also had q3 revenue guidance also higher keep in mind texas instruments is considered a bellwether for the semiconductor space because it's in absolutely everything they provide chips analog chips for everything from auto to industrials to consumer electronics. So this report was a strong report that we're

seeing in the stock is reacting right now up 2.6 percent. So again, beat on the top and bottom line. Revenue for Q3 and EPS for Q3. Also, the guidance, I should say, came in higher than anticipated. Back over to you. And maybe, Christina, you know better than me, the strength in auto and industrial able to offset some of the concerns in PC and consumer where perhaps more of the slowdown that we've been talking about is taking more of an impact. Yeah, that was a great point because we saw that yesterday with NXP, right? NXP semiconductors, they saw strength in auto. They said the demand was going to continue to outpace supply, and that helped offset. So the same thing with Texas

Instruments. I just got to break through the revenue streams just to confirm that, but we're anticipating a very similar trajectory, especially as more and more semiconductor firms focus their attention and pivot towards auto as well as AI and just more of the computing technology instead of handsets and PC units. All right, Christina, thank you so much. I'm going to get a comment in just a moment from Adam Parker, who, by the way, used to be one of the top chip analysts on the street. In the meantime, let's get Visa right now with Kate Rooney.

Hey, Scott. Visa looking like a beat on the top and bottom line for the fiscal third quarter here. Let's start with adjusted EPS. This was a beat by four cents. EPS coming in at $1.79. Revenue, $7.19 billion. That was also a beat. Payment volume was up 12%. Don't see guidance quite yet. Cross-border also pretty strong here, it looks like. Cross-border total volume up 40% in the third quarter here. Total processed transactions up 16% here. Visa CEO Al Kelly talking about the backdrop of macroeconomic uncertainty.

He talked about rate headwinds and the fact that they suspended their business in Russia. Said overall pretty strong quarter. Revenue, he points to, up 19% for the quarter. But again, business in Russia said overall pretty strong quarter revenue. He points to up 19 percent for the quarter. But again, a beat for Visa on top and bottom line. Scott, back to you. OK. Yep. K. Rooney, thank you very much. All right. Let's get back to the the chip story. First from Joe, who used to own Texas Instruments. You don't now. You wish you did. I own NVIDIA and I own AMD. And that's the first thing I did was check both of those names.

But I'm going to allow Adam to answer the question and the statement that I'm going to make. What are we seeing here? Guidance is strong from Texas Instruments. That follows NXPI yesterday. Are we finally seeing confidence in the semi-industry that the end is in sight, that the inventory outlook is improving? You know, it's funny. My initial reaction is something you and I talked about before we got on the air, which is I don't want to buy stocks at the beginning of the bad news. I want to buy them at the end of the bad news.

Do I believe Texas Instruments that it's all clear signal, or am I actually buying the end of the good news? I'm not sure because I still think they're probably overproducing consumption six months from now. I worry about that if the economy slows. What side would you come down on for the viewer who's maybe wondering what to do? I don't want to disagree with Joe, but I think the businesses that have more perishable inventory have more downside. So AMD and NVIDIA, when they overproduce, and Micron, we saw it, they tend to have more pricing pressure when they produce too much. Texas Instruments, they make a converter that's $2. If they make too many, they put it in a factory that can still sell it for $2 six months from now.

That's not the case for Micron and parts of NVIDIA and parts of AMD. So it really depends on it. So I probably would rather own these higher-quality businesses at this point in the cycle. But I'm a little worried that you may not see them guide up next quarter again. I'm a little worried about that. Well, see, I would say, OK, you know, if I am in the stock, am I happy that they're in auto and industrial rather than overexposed and consumer? Yes. But your point also is, well, if those businesses and industries are peaking at a time where the economy is slowing, it doesn't matter what space you're in. Plus, if you have

too many chips, if you went from shortage to glut. Right. The good news is that, I mean, at least from my opinion, amazing management team knows what they're doing. Probably the best in the industry over the last 15 years. So I trust them more than other businesses that they can rein it in when things slow. I think they have a pretty good read on things. So, you know, I have less trust for other management teams. All right. Kate Rogers has CMG. That's Chipotle, of course. I see a rev miss. You can give us the details, though.

What's going on? Yeah. Hey, Scott. So here's what we're looking at for Chipotle. Slightly lighter than expected revenues, as you said, at $2.2 billion versus estimates of $2.24 billion. Comps increasing 10.1%, very high, but also a bit lower than expected. EPS coming in at $9.30 for the quarter. Analysts were looking for $9.04. The EPS figure excludes a few items in addition to

a $10 million investment gain, so it's unclear if that number is comparable. It's in restaurant sales up 35.9 percent. Digital sales were 39 percent of its food and beverage revenue, so still a very high number. In terms of guidance, it sees Q3 comps up mid to high single digits. That compares to 7% gain estimated by analysts. CEO Brian Nicol will join us tomorrow in the 10 a.m. hour of Squawk on the Street for much more. That's first on CNBC. And as you can see, the stock is higher, just under 7% right now.

Back over to you. All right, good stuff. Kate Rogers, thank you very much. Look forward to that interview. We've got a guy who owns the stock right next to me, and Joe bought it back recently. So many places we could go right here. Sustaining margins was important for Chipotle. That's exactly what they've been able to execute on here, even though some of the numbers look light.

I think that's some of the reasoning why you're seeing the response that you are. Clearly, they've had pressure as it relates to labor costs, ingredients. That's been a challenge, but they've been able to offset it. They've raised prices. They've raised prices significantly, but yet they're still cheaper than a Shake Shack, a Kodoba, or Moe's. So it's digital that's benefiting. It's marketing that's benefiting in all of them.

And management really is executing better than anyone else in the industry that's why i own the name got to be in the right place as it relates to the consumer haven't we learned our lesson that over the last 24 hours yeah i think there's gonna be a lot of dispersion in the consumer you know i think people were short this thing into the print too so maybe you're getting some quick covering here on you know getting the squeeze out you know up seven percent but i i i think you know you're going to see more dispersion going forward in these consumer names. Look, part of the issue is what you have relative to what people want. But the fact of the matter is execution counts for a lot, too.

And if you're able to execute in an environment where everybody, no matter what business you're in, is dealing with exorbitant inflation, you're going to do better. Yeah. I bring that up because if you try and do too much of a read-through, say, from a Walmart to an X, a Snap to an X, you better be careful because they're not apples-to-apples comparisons. Everybody has inflation. Some are dealing with it better than others. Sure, the mix of product you have or a Chipotle relative to another fast food or fast casual restaurant may be different.

But it's hard to do a straight read through in this kind of market, Joe. It really is with this environment. It is. But yet the market did a lot of that today, certainly in the case of Amazon, which right now there's just negativity prevailing throughout. So we'll see what Amazon ultimately is going to deliver. I'm not that encouraged by it at all. But it's too many hundreds of billions of revenue for them not to be impacted at some level. There are idiosyncratic stories right now that you could find within the market. And I'll tell you, reported visa earnings, that's absolutely an idiosyncratic story when you're talking about payments for both Visa and MasterCard. It's compelling and it's something that's investable in terms of ownership. You see the board here in overtime of the one stock that's in the red after delivering earnings.

That's Microsoft after a miss on the top and the bottom. Steve Kovach has more for us right now. Steve. Yeah, Scott, let's unpack that. So Microsoft giving a whole bunch of reasons here for why they had this miss and that's sending the stock down about a percent now. What's sticking out to me besides the obvious foreign exchange stuff, we have extended production shutdowns in China that continued through May, they say in their release. And this is the important one, Scott, a deteriorating PC market in June. That's a sign PC demand is falling. And this is a really good hint or a whiff of what we're going to hear from Apple here on Thursday about what they went through in China and their supply chain.

So hearing this from obviously not the exact same supply chain from Microsoft, but hearing their China problems, this can kind of color and inform what we can expect to hear from Apple, Scott. You want to comment real quick, too, before I let you run, and I do have to let you go in a minute about this 40% growth in Azure and why on the surface you're saying, hey, I mean, 40% growth? Yeah. How could that be an issue in any way, shape, or form? The street was just looking for more. That's exactly it. And when it comes to Azure Cloud Growth, Scott, they got to really knock it out of the park or they're going to get punished.

We've seen that the last several quarters. It's been mostly flat, that growth rate, and now it's a little bit down and missing expectations. So that's part of the punishment here. Yeah, Steve, thank you very much. Joe, the punishment, why? Because the stock's deemed expensive. What did we say it was, 26, 27 times earnings?

27 times earnings? Yep, 27 times earnings down from 35 terms earnings at the beginning of the year. You're paying a premium for it. I watch the halftime show. I listen to Jim and Steph and Josh talk about the rich valuation. I'll respectfully disagree. I'll pay the premium for this company if they're going to deliver me the growth, and I'm going to bear with them here as they go through a higher dollar. The whole point is that you're willing to pay up for a certain level of growth in their key growth industry, which is cloud, Azure. Maybe you're not willing to pay 27 times for

a part of the business that's slowing. Well, I think when our friends at the Federal Reserve are done with what they're doing, you're going to see a significant reset and a recovery in a lot of the growth areas that Microsoft excels in, and that's why I'll stay with this stock. Look, they do have pricing power. I mean, we use them for everything at Trivariate, Compute, Storage, Azure. The only reason we'll stop using them is if we go out of business. So I think the way they're heard is a broad economic.

That's why I said it's $225 billion. It's a big business, so they can't hide if small and medium businesses fail. But short of that, they're going to raise pricing on everyone next year. And you're not switching from Azure to Google Cloud or AWS if you've already committed. That was awesome, guys. Thank you for being here. That was fun. Always good to see you guys. That's the way we wanted it right off the start of what I said was the Super Bowl this week. The next three days are really going to be crazy. It's good to have all of you with us today. Let's get to our Twitter question of the day. We want to know, how are you feeling about Apple, Meta, and Amazon now that you heard from Alphabet and Microsoft? Are you more bullish, less bullish about the same?

You can head to at CNBC Overtime. Please cast your vote. We'll share those results later on in the show. Up next, more on that move from Texas Instruments in the OT. There's the stock up nearly 4% after reporting just moments ago. I said we had the top-ranked chip analyst right now, Stacey Raskin. He's standing by with his instant reaction. We're back right here in overtime in two minutes.

We're back in overtime. Another check on shares of Texas Instruments. You see them there up nearly 4%. That's higher after reporting just moments ago. The company's call kicking off in just minutes. Stacey Raskin is the top rank chip analyst. He'll be on the call, of course, of Bernstein Research. Before that, he's with me right now. What's your read here?

Looks pretty good. That's a strong print, absolutely. Yeah, it's looking, they were quite a bit above in the quarter. You have to remember, last quarter, they were one of the few companies that actually saw meaningful impact from COVID shutdowns. And they took a $500 million whack to their outlook, and they just beat their outlook by more than $500 million.

So obviously, whatever's going on in Shanghai, they were able to overcome it. And the forward guidance into Q3 is pretty strong, too. It's decently above the street on the top line. So at this point, I guess things look pretty good, and we'll get more of their commentary on what's going on on the call, like you said, in a few minutes. Is this just having the right mix of product for the right businesses that are hot right now? Are they doing something that others aren't? It's hard to know. And to be clear, they're not the only ones. Like NXP reported, they look pretty good too. So I would say TI in general tends to be a little closer to what's going on. They don't sell as much through distribution. There's less of a buffer

between them and the customer. And so it's more on them to sort of figure out what to do and how to do it. But they seem to be succeeding. You have to remember, in terms of products, they sell everything to everybody also, everywhere. So they seem to be doing okay at this point. Yeah. PCs, as we hear from Microsoft, weak in June. Not that that's a shock to anybody if you've been following the business, but it's one of the reasons why you remain negative on an Intel, for example, and maybe some others who have a lot of exposure there. Yeah. Intel, yes. You're right. PCs are not a surprise. They are weak. If you want to shift over to Intel for a minute, they report on Thursday. They've already sort of been qualitatively talking the numbers down anyway, so I don't

think it would be a surprise. But I think they're at risk not only just from a weak PC market, which is likely weaker than they've been suggesting, but I also think that Intel was overshipping by a good amount last year. And so that is now normalizing and they may actually have to pay for that even more as we go forward as that whole channel normalizes. How are you looking at how are you looking at the issue these days of shortages versus a glut in chips? Double ordering. Who's most impacted by that and who may skate by? Yeah, you bet. And so there's no there's always double ordering when shortages happen. It's just a natural reaction of it's a toilet paper situation that we all went through. It's the a natural reaction. It's a toilet paper situation that we all went through. It's the same thing here. I think in the consumer space, we've already seen things go from

a shortage to a glut, and it can happen very quickly. I think in some of these automotive and industrial end markets, we have not seen that shift yet, although I do remain concerned that there is apparent overship. And again, you can look at sort of the magnitude, for example, of auto semiconductors relative to auto unit shipments, and there is still a very wide gap, and it's been there for quite a while. That's why, by the way, as good as these results are from TI and as good as NXP was, that broader question of sustainability is always going to be there. It's hard to get rid of it as long as you have that much of an apparent gap in what's

actually shipping into the market. But that is where we are. We've got gluts in consumer. We've got shortages elsewhere. And we've got supply incrementally coming online. And so hopefully that can kind of ease as we go through the rest of the year and into 2023. What should it read to our viewers that you've got a market perform on Texas Instruments and 150 as the price target? Does it appear that that needs to change or no? Don't read too much into the ratings. I like TI.

Forget the stock for a minute. It's hard not to fall in love with how they run the place. They don't run the company for the purposes of the numbers or for the purposes of Wall Street. They do what they think is the right thing to do. The reason we're neutral on it, beyond the cyclical risk, which is there for a lot of folks, TI is embarking on a capital investment strategy

at the potential peak of the cycle. Their capex is going up. I do think gross margins as we go into next year are, at least on the sell side numbers, are probably too high because of that excess capex and depreciation that has to roll through the model. And TI has been incredibly clear about what to expect. It's just the sell side is always behind probably where it should be. But because of those reasons, that's kept us neutral. And it doesn't mean that I don't like them as a company. It's a great company. And you're going to tell me the same thing about Intel where you have an underperformed. I'm just kidding. We'll talk to you soon.

I know you got to get on the call. I'll see you soon, Stace. Thanks. That's Stacey Raskin. You bet I will. You bet I will. All right. We're all over this busy earnings session in overtime. Up next, halftime committee member Steve Weiss is breaking down the biggest movers, how he is now positioning for the rest of earnings season. We're back in overtime right after this. We're back in overtime. It's time for a CNBC News Update with Shepard Smith.

Hey, Shep. Hi, Scott. From the news on CNBC, here's what's happening now. The Attorney General Merrick Garland is not ruling out the possibility that former President Trump could be prosecuted for his role in the January 6th insurrection. Today, he tells NBC's Lester Holt that prosecutors will pursue justice without fear or favor. And when asked whether his timetable on potential indictments would change if Mr. Trump were to run for president again,

the Attorney General would say only, we still hold accountable anyone who is criminally responsible. The Russians say they are leaving the International Space Station. The Russian Space Agency announced today it'll leave the ISS after 2024 and focus on building its own space station. If that happens,

it would be the end of a 25-year space partnership with NASA and set the stage for a potential joint effort with China's space program. And nearly 40 million people under heat alerts across the country today, the worst of it in the southern plains and Pacific Northwest. But now there's a new tool to track the heat in real time. Heat.gov. The Biden administration rolled it out today. It has interactive maps, forecasts, and tips on how to keep cool. Tonight, Andrew Ross Sorkin on what earnings today mean for the economy. We're live in St. Louis tracking historic rains and the flooding that followed. And the mysterious holes appearing lined up on the ocean floor on the news.

Right after Jim Cramer, 7 Eastern, CNBC. Scott, back to you. I appreciate that, Chef. Thank you. Look forward to that. Shepard Smith. All right, it's been a mixed earnings picture here in overtime. As you know, top and bottom line misses from Microsoft and Alphabet. But a top and bottom line beat from Texas Instruments.

Joining me on set right now for more reactions, Short Hills Capital, Steve Weiss. So it's good to see you. Thanks for being here. Maybe Alphabet better than feared, I think, is maybe the way to say it. Would you look at it that way? You don't own the stock, but after what Snap reported, there was a lot of fear that the rollover was going to be affecting it too.

Yeah, I think that's true. And Snap has always been sort of like a follow on. They had a last good quarter, but it's never been sustained since they've been in business. And if you're going to cut back on your dollars, you're going to go where they're going to bring you the most eyeballs and the broadest viewership. And that, of course, is Alphabet. So, yeah, so the bar was set very low. I'd say they exceeded a low bar. It's encouraging. Stock's basically flat. I mean, that is flat. bar was set very low. I'd say they exceeded a low bar. It's encouraging.

The stock's basically flat. I mean, that is flat, so that's pretty positive. Better than the reverse. And then there's Microsoft, right? You have a miss. You have a sort of panoply of events here. You've got Azure growth slowing, right? That's the real growth engine, maybe why you want to pay a premium valuation for Microsoft.

PCs are weak, as the company said itself. Currency is a problem, as the company warned us would be the case, and that comes to fruition today. Yeah, you know, it's interesting. I talk to chief technology people at big companies, and there are options aside from Microsoft and aside from Amazon. As a matter of fact, there's a private company out there called Wasabi and they cut prices by 80 percent. Now you'll use it for backup data but that's meaningful. So I think you will see pricing come to that group and sure you can say 40 percent growth still phenomenal. It is but the trend is down. So it's enough to sustain them going forward but I think you really want to be careful about betting on that as the engine just going forward uninterrupted. I just don't believe that'll be the case. Good

for now, though. Be careful reading too much into an early stock move, too, I think is part of the message here. The stock is down a one and a quarter percent, which if it was so disappointing, it would not be down just one and a quarter percent. I should also let all of you know, too, that what happens after earnings is not necessarily the case after the call, which is at 530 Eastern Time. Fast money, obviously, will have the details there. But the stock has a tendency to reverse itself once Nadella, Satya Nadella, of course, the CEO, gets on there and talks about what the real state of the business is. For somebody who is negative, by and large, on the market itself. Earnings, you'd have to admit, are not nearly as bad as feared going in. What does it mean to somebody like you who has a predisposition here to be negative to the market

because of your view on the environment? That it's early, that the Fed impact really hasn't started to be impactful yet. So your early days, it takes a while for rate hikes as as it does for rate decreases to go through the market, to go through the economy. We're not seeing that yet. Plus, keep in mind, seasonally, you're coming up in September, October, which are notoriously tough months for the market and will be for the economy. So, yeah, so bulls will be heartened by this. Bears, like myself, will say, you know what? The story's not done being told here.

And you can see how nervous the market was in front of it. Look, I think the market could possibly bounce tomorrow, or it could be cautious, because don't forget, we got the Fed, and that's a whole different story. Yeah, we got the Fed. We got Gundlach here, by the way, tomorrow in an exclusive to react to the Fed and all of that on top of Meta's earnings, too. What does Texas Instruments tell you about the way, tomorrow in an exclusive to react to the Fed and all of that on top of Meta's earnings, too. What does Texas Instruments tell you about the chips, which you spend a lot of time looking at? Yeah, look, Texas Instruments is an incredibly well-run company.

And as we know, when companies report, it's a function of how they've guided the street in the past. Texas Instruments has been able to consistently guide to a level where they can surpass it. And that consistency is so much more important than your actual growth, in my view, as an investor, when you can rely on it. Microsoft, on the other hand, they just pre-announce. There's no excuse, even though it's a small miss, no excuse from their missing whatsoever. When you can give yourself some room on a pre-announcement, do it. Why pay the price twice? Environment changes quickly. We've learned that from granted it's a different business. But in retail, the environment changes quickly. Thank you so much for being here. It's good to have you here.

Thanks for having me. That's Steve Weiss, Short Hills Capital, being with us. We do have an update on Visa now. Kate Rooney has that for us. Hi, Kate. Hey there, Scott. We want to make a quick correction here on the numbers we reported earlier for Visa. A quick correction regarding adjusted EPS. Looks like still a beat across the board, but adjusted EPS was $1.98. That was a 23-cent beat. Revenue for the quarter, $7.28 billion. This is for the fiscal third quarter. Payment volume still up 12 percent. Cross-border volume really the highlight here,y percent. That tends to be the higher margin part of the business comes after a very strong quarter for Amex as well. But a beat here for Visa on the top and bottom line stock and a little bit of a boost here after hours as well. Back to you. All right. That's Kay Rooney. Thank you. I think at one point you probably owned Visa and MasterCard.

What do you think? Well, I sold Visa, I think probably a year or two ago. And it's where it is right here. So I haven't missed much, but it's held up well. Look, my view is that with inflation, you're going to see inflated bills. So what you want to watch, and there's no indication of it now, and candidly, I didn't go through every part of the release. Yeah, of course. But I don't know what the consumer payments are. Are they extending payments like we saw with AT&T? That's telling. But right now, you would expect them to report good numbers when everything's gone up 10 percent, at least in pricing. So let's see what that translates into the bottom line and if it's sustainable. But I can tell you definitively the economy is haves and have-nots. And the haves are actually spending

more money and feeling great despite the market action, while the have-nots are spending more, not because they want to, but because they have to, and cutting elsewhere. All right. I appreciate it again. Again, Steve Weiss, everybody, we'll see you soon. We'll have much more on this busy overtime earnings session. Up next, instant reaction to Microsoft and Visa from a shareholder. We'll find out how he's playing those results next. And don't forget, you can catch us on the go by following the Closing Bell podcast on your favorite podcast app. We're back in overtime next. All right, take a look at shares of Alphabet after reporting their earnings. It was a miss,

perhaps better than feared. And the stock is up 3%. Deirdre Bosa just got off the phone with the company's CFO. Ruth Porat, has the details for us, Dee. Hey, Scott. Well, like the other mega cap companies, Alphabet is being hit by Forex and that strong dollar. Porat said that Forex was a 3.7 percentage point headwind in Q2, and she expects that to be even worse in the third quarter. She said it's going to be much greater in the third quarter, despite their hedging program. On search, she said that growth was actually driven by travel and retail verticals. I asked her about the last few weeks, which may be more relevant. She declined to say. She did say, though, that there was uncertainty. That is the best way to describe the macro environment. She says that their data remains

complicated. And Scott, remember that memo that Sundar Pichai sent to Google employees a few weeks ago? He essentially said that they would be more choosy, more careful about investments. So I asked Port what that meant. And she said that the priority is still long-term things like deep computer science, AI, and cloud. And she also mentioned YouTube Shorts is an area that they're going to continue to invest in because the data that they're seeing shows, guess what? Consumers want those short-form videos.

Certainly something Meta knows something about. Back to you. All right. Great insight, Deebo. So thank you very much. because the data that they're seeing shows, guess what? Consumers want those short-form videos. Certainly something Meta knows something about. Back to you. All right, great insight, Dee Bosa. Thank you very much for that. Let's get another check now on Microsoft and Visa in overtime. You see the stocks there. Microsoft is down just a fraction here after its miss. Visa is up a fraction after its beat.

Let's bring in Kevin Simpson, Capital Wealth Planning founder and CIO. He's a shareholder in both of those names. It's good to see you, as always. So Microsoft first, what's your reaction here? And I should also note just once again, before you answer the fact that the stock is trying to come back and look maybe partly because I'm seeing a headline here. The CFO says that the company Microsoft is not seeing weakening in big corporate deals. So maybe the enterprise spend is still holding up, Kev. But what's your initial reaction to what you got, at least from the headline numbers and some of the commentary in color you've heard thus far? Yeah, I mean, so far it's disappointing. And the reason, and Steve Weiss gave you a good teaser on it, I mean, they had a chance to tell us how bad the report was going to be,

and it was pretty bad. They missed on the top and the bottom. But the fact that the Azure number came in at 40%, which sounds great, like, hey, we've got a 40% growth rate, the street was expecting 45 or 50. And if you want to carry a higher growth multiple, you need to be a growth stock. So PC sales were down, hardware was down.

They'll have their earnings call at 530. So we'll learn a little bit more. You know, they're trying to do some damage control, I guess, right now to let us know that the corporate client is still there and still strong. It's not a reason to sell the stock by any means. We're not going to. But it's definitely a very disappointing report from our perspective. And on any bounces that we're going to get here, Scott, I'm going to be writing calls against it. But I guess what I'm suggesting is maybe those headlines and others that will come out are reasons. Forget about reasons to sell reasons not to sell and figure that, OK, we knew that currency was an issue. Check. Right. You told us that we knew that PCs were weak. Check. You told us that we knew that Azure's growth, you know, was maybe it

couldn't do 45 to 50 percent, 40 percent, not that bad. And the enterprise, maybe it's holding up. And you have a strong dividend, you have strong dividend growth, and you've got the Activision play, which broadens the field. Yeah, this isn't a reason to just run for the hills. But definitely when you're looking at a stock like this, you don't want to see disappointment. You don't want to see a miss. You want to see growth. And if we just listen to what Google Alphabet said right before I came on, the CEO was talking about the FX, the currency is having a bigger effect because of the strong dollar, a more negative effect in Q3 and Q4. So we've got to kind of take that across the whole landscape, not just with Alphabet or Microsoft, but with all the big tech. And that was an important data point that we just got.

OK, let's take it to fintech if you want to do that. Visa, which you own as well. What's your read through here? Yeah, the tale of two earnings reports. And I don't think we should be as surprised because we're also shareholders of Amex. We got some good numbers and some strong numbers out of American Express. Visa beat 198 versus 174. That's a strong beat. I was expecting $7 billion in revenue. They did 7.28. So also very impressive. But the big thing was 20% revenue growth was our target. It came in at 19%. So I'm very, very, very excited about that. We have to listen to the call because what do we want to know. We want to know about the health of the consumer. We want to know about the recession talk. We want to know about travel. Higher interest rates are certainly good for credit cards. The idea of the consumer having to lean more on that credit card over the holiday

season also bodes well for the stock. Now eventually that can become a problem as we saw with AT&T in terms of people defaulting on their bills or paying things late. But for the short to intermediate term, all systems look go for Visa. Yeah, I mean, we know the consumer at the lower end is obviously struggling. You don't need more evidence than Walmart to get that picture and perhaps from some others, too. Elsewhere, consumer seems to be holding up relatively well, given the headwinds in the face. Yeah, and I think they'll continue to do so throughout the end of the year. But it's econ 101. The more we raise prices, the more sales are going to go down. And to your point about Walmart, it's the lower end of the consumer spectrum that's most affected by inflation. It's most

infected by higher interest rates. So we know the Fed's going to give us 75 basis points tomorrow. They should do a lot more, but, you know, that's still going to help for sure. But this is a long road to recovery. And the consumer will suffer because these prices are just too darn high. I got you. Kev, appreciate the time as always. That's Kevin Simpson, Capital Wealth, joining us today. Up next, we're tracking some of the other big movers in OT.

Christina Parts and Novela standing by with that. Christina. The maker of Oreos and Clif Bars raising its full year guidance thanks to higher prices. And the president of a large retail chain is out. I'll have those details and more after this short break. Welcome back to Overtime. Give you another quick check on the big earnings action. Chipotle shares the outperformer despite a slight miss on revenue and same-store sales in the second quarter. Christina Partsenevelos is tracking some other movers for us right now. Christina.

Let's start with shares of Enphase Energy jumping over 5% on a big revenue and earnings beat. The company is a supplier of solar and battery systems, and it posted higher Q3 guidance as well. The company also hopes to build its own EV chargers by the end of this year. And so you can see shares up almost 6.5% right now. The maker of Oreos and Trident gum, Mondelez International posted Q2 earnings and revenues that beat the street and contributed to the company raising its full-year revenue growth outlook thanks to higher pricing. Mondelez also announced it would increase its dividend by 10%. Stock was moving, now unchanged. Shares of Juniper Network, which sells artificial intelligent networks, falling. Look at that, almost 4% right now. It posted a

Q2 revenue beat, but earnings fell short. Q3 earnings guidance was lower. The CFO saying they faced an extremely challenging supply chain environment in the June quarter. And lastly, shares of Williams-Sonoma are moving lower, down about 2% right now in the OT, after the president of Williams-Sonoma brand, Ryan Ross, will be resigning today, effective today. So Ross will be replaced by the company's chief marketing officer, Felix Carbulito. Back over to you, Scott. All right, Christina, thank you. That's Christina Partsenevelis for us there. Up next, we're counting down to the calls with a big tech shareholder, what every investor needs to be listening for on the conference calls ahead. Overtime, be right back.

We're back in overtime to the results now of our Twitter question. We asked, how are you feeling now about Apple, Meta, and Amazon after today's results from Alphabet and Microsoft? their neck and neck? The results are 35 percent of you saying you're more bullish, 33 percent saying less bullish. Up next, Alphabet and Microsoft calls about to kick off. We thought we'd show them to you because they have turned around positive, albeit slightly, but nonetheless, where they were right after that earnings report, which was in fact a miss, is not reflected where the stock is now. And maybe part of that is due to the fact the CFO, as I told you

that headline of a few moments ago, no slowdown in big corporate deals thus far. Azure growth at 40 percent, still strong, maybe below some of the highest expectations of 45 to 50 percent. We knew that PCs were weak. And obviously, the company itself told us about the currency issues that it was facing. I got a text from a portfolio manager who said nothing wrong, exclamation point, currency's noise. So maybe the street is coming around to the point of view that there's really not much to hate on in this report from Microsoft, despite some of the issues like currency and PCs, et cetera. That call, by the way, begins at 530 p.m. That's Alphabet call kickoff top of the

hour, too. Let's bring in Crossmarks. Victoria Fernandez has a stake in both of those names. Since I was talking, Victoria, about Microsoft, give me your read here first for a stock that's turned around. Yeah, I actually agree with the person that sent you the text, too. I don't see that there's a tremendous amount wrong here in this report. One of the things that we really wanted to hear was what that corporate business was looking like. And as you mentioned in the headline, the CFO was saying that that's still strong. I think that's extremely important. We're going to be listening for CapEx across the board on these companies and see if corporations are still spending. We saw it in the Dallas Fed. We saw it in the Richmond Fed reports this morning

that CapEx is still up. So these are the things we think will be important for these companies. Obviously, Azure is important, over 40 percent there. We want to hear about gaming with Activision Blizzard. Does that help them compete a little better with Sony? But all in all, I think pretty well, which is why we've seen the stock rebound here. How about Alphabet? Again, a miss there. Is that a better than feared scenario showing up in the results? Of course, we need to hear the call. But what are your first reactions here? I think that's part of it, Scott. I also think I mean, the stock has taken such a beating up until now that I think a lot of the negative news around the advertising and around cloud was already priced in. We're actually underweight, this name versus

our benchmark. So we don't have an extremely positive outlook. Obviously, over the longer term, you want some exposure to the name because it's such a heavyweight in the benchmark. But for us, we'd rather do Microsoft than we would Alphabet. Okay. How about Texas Instruments? You own that too. We're so lucky to have you. You own all of the biggies that are out in overtime here. How about that one? Yeah, we do. And it's been a pretty good afternoon, I'd have to say. So, Texas Instruments, yeah, being on the top and bottom line. I mean, look, this is a company that is increasing within their industrial and their automotive components, which you think is extremely strong, especially with PC business weakening. They have good balance sheets.

Their cash position is good. So we like this space. We like Intel as well. We have exposure to Intel. They're reporting later this week. And you were having conversations earlier on the show with the guys about whether semis were going to be coming back a little bit. So maybe if we continue to get good numbers from other companies like Intel, then perhaps we see a little trend starting to form here. All right. I'm going to I'm going to leave it there, even though you own CMG and Visa. I got to run. I'll talk to you

again soon. That's Victoria Fernandez joining us here to wrap up our earnings. I should remind you as well, we have a huge interview coming up tomorrow right here in overtime. Double Lines, Jeffrey Gundlach will join us exclusively. His instant reaction to the Fed. I look forward to seeing all of you then. The calls from Microsoft and Alphabet are about to get underway. Fast Money is going to pick up that story. That show beginning right now.