Closing Bell - Closing Bell Overtime: Rubrik CEO on Earnings & John Gruber on Apple’s AI Rot 3/13/25

Episode Date: March 13, 2025

Schwab Asset Management CEO Omar Aguilar and Richard Bernstein Advisors CEO Richard Bernstein break down the latest market moves. Stifel Chief Equity Strategist Barry Bannister shares his outlook on equities and his Street-low S&P 500 target. Pangea Policy Founder Terry Haines discusses the government shutdown threat and tariff implications. Rubrik CEO Bipul Sinha joins to talk earnings and cybersecurity trends. Plus, Daring Fireball Author John Gruber on Apple’s AI struggles and what it means for the tech giant’s future.

Well that bell marks the end of regulation. EltaMD Skincare ringing the closing bell at the New York Stock Exchange. Pilgrim's Pride Corporation doing the honors at the NASDAQ. And another ugly day as the S&P 500 falls into correction territory. The Dow sinks below 41,000 as investors deal with more tariff worries. Uncertainty in Washington. That's the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime.

I'm John Fort. Morgan Brennan is off today. We got another big hour of earnings ahead with results from Rubrik, DocuSign, PagerDuty, and Ulta Beauty, plus a first on CNBC interview with Rubrik's CEO before his call with analysts. And a major red flag for Apple, noted Apple blogger John Gruber is out with a scathing post about the company's AI delays as that stock falls again today he's gonna join me live with his warning for Tim Cook as the stock paces for its worst week since

2020 now let's get straight to the market another day in the red with the Dow now pacing for its worst week since 2022 joining me is Schwab asset management CEO and CIO, Omar Aguilar and Richard Bernstein Advisors, CEO and CIO, Richard Bernstein. Guys, we could use some clarity or at least some great insights here. Omar, it's been a pretty steep drop since February 19th.

And that's despite a cool CPI, friendly PPI number. Is it time to buy? Well, this is, you know, the best thing to describe that, and it's very timely, is March Madness. I think we are in that part of the year of college basketball, but clearly the market seems to be following exactly the same recipe, that it is very hard to dissect, you know,

the noise and try to stay focused on the long term. We tend to work with our clients and not advise them to try to time the market and try to find that bottom and try to just recover from this. And still try to just focus on the discipline of stay invested, stay in the process, continue to find ways to diversify

because there's still a lot of short-term noise that seems to be driving these markets in terms of just how we ended up last year and how we started this year and the drivers of these seem to be more related to technical trading and technical de-risking as opposed to anything that has affected fundamentally just yet. The sentiment and the soft components, anything, components, anything that has, it's clearly been deteriorating. And I think we just need to figure out how that's going to translate into the hard data. Richard, I guess a question is how short-term is the noise? You say if Washington continues to alter trade geopolitical and employment policies at a

whim that this might continue. I mean, do you see any sign that that's going to stop? Do you take the president at his word that he's serious about these policies being long-term healthy for the economy? Well, John, I mean, you kind of nailed it there. You know, I mean, I think the president is sincere in his long-term goals, but the key thing

in what I just said there is long-term. These are not things that are going to change the economy in a month or a quarter or even a year. These, you know, the capital intensive projects that we need in the United States are, you know, five, 10, 15, 20 year projects. And I think what's happened, and the reason you're seeing the volatility, is that we entered the year with extraordinarily confident investors write the conference board

showed that individual investors were the most bullish they'd ever been on the stock market uh... bank of america pointed out the private client equity beta he did a whopping mind-boggling one point seven at a time now we're getting hit with total uncertainty, where even within a day, and you guys report on this all the time, even within a day we have changing policy. So you can't expect valuations to expand with all this uncertainty.

No uncertainty calls for valuation contraction, and we've seen about five multiple points taken off the market. Yeah, off of an an expensive market though all are we entered the year of interest and with with high confidence and high valuation now confidence is lower valuations are still somewhat high how do you diversify here well i think you know what we we have seen is you know there has been a significant amount of discussion over the course of the last year no two or three years about the concentration in the market and how these multiples and how these things were

clearly in one part of the market that tended to be in those large mega caps. I think what we have observed just in a few weeks is that the rotation that people were starting to work that was supposed to go to cyclicals ended up going all the way to defensive stocks. And that's a very natural mechanism for people to respond when there's this level of uncertainty. You see the rallying gold, you see these consumer staples, healthcare utilities, that they tend to look at those. Now, that being said, between healthcare staples and utilities, those were the sectors that tended

to be the best or most attractive valuations.. So clearly the market has gone through that piece, probably more for technical reasons than for fundamental reasons. The way that we encourage our clients to look at is to say, well, there were areas like international investing that for the most part, U.S. investors tend to be under-invested. This is a perfect opportunity

to just try to rebalance the strategy without having to take the money out of the equity market, but to try to find for those areas that over years have been under investment for the market. So we think international has an opportunity to just now started to just, you know, provide a more diversification than what it used to be. Okay, Richard, what else? I mean, the Russell 2000 has been taking a beating. So small caps not doing so great.

And then the mega caps also have been taking a beating what what do you buy here as uh... you know market breath can come a couple different ways right so so john i'd i'd mentioned before and in you've used the word several times in the discussion here about uncertainty in a fun certainty is rampant what's the scarcity in the equity market well it's certainty is the scarcity right on mark kind of alluded to this a second ago what's very cheap and very

undervalued in the equity market is non technology stable cash flow that is the cheapest part of the market right now and we think that presents tremendous opportunity so don't think of it necessarily as i want consumer staples or i want europe or i want everything around the world right now stable cash flow is very very cheap and is actually performing reasonably well reasonably well in this downturn all type rubric earnings are out in that stock is popping right around nine ten

percent here in overtime i'll give you the numbers revenue Revenue comes in at $258 million versus $233 million for the quarter. That is a beat, the bottom line beat as well, a loss of 18 cents versus a loss of 39 cents expected. On the guide, a big beat here as well, going to Q1 revenue in a range of $259 $261 million. That's $260 at the midpoint versus $243 expected. And a Q1 adjusted loss midpoint of 32 cents versus a 40 cent loss expected. Fiscal year revenue projection at $ 1.15 billion to 1.16 billion versus 1.11 expected and the full year adjusted loss is a beat as well.

So strong numbers there. Q4 subscription revenue 244 million versus 223 million expected. We'll get more into these numbers, you know, gross margin beat at 79.7% versus 77% expected. We'll get more into this with the CEO and founder Bipple Sinha is gonna join me ahead of the analyst call to break down the quarter and the growth here in a first on CNBC interview.

DocuSign earnings now out. Steve Kovach, how do the numbers look? Yeah, it's a beat on the top and bottom lines, but look, guidance coming in a tad light. So let me break down what we're seeing here. EPS beat by a penny at 86 cents. Adjusted revenues also beat 776 million. Street wanted 761.3 million.

Guidance though for the first quarter, a little light here, 745 million to 749 million. Street was looking for a lot more than that at $756 million. And then also, billings were a little light for Q1 estimates. They're estimating between 741 and 751 million in billing. Street thought it was gonna be way higher than that

at 764 million. And then also, these estimates for margins in Q1, a little light as well, 80.5% to 81.5%. Street was looking for 81.5%. Shares were negative, but now popping up just a slight bit here, John. Yeah, right around the flat line. Going back and forth, Steve, thanks. Ulta beauty earnings are out. The stock's initial move is higher by a couple percent. Christina, parts of Nevelis, how do those numbers look?

Yeah. So it was a beat on the top and bottom line. We're getting $8.46 EPS on revenues of 3.5 billion. That was down about 1.9%, but the company says that year over year there was an extra year in 2023, so comparables aren't the greatest. You can see shares up about 2% after falling quite dramatically during today's trading day and on the year. It's down almost 50% from its 52 week high. But what we're seeing for the fiscal full year, they are anticipating revenue guide of $11.5 to $11.6 billion. And they also have just in one quote in this report saying, fiscal 2025 is going to be a pivotal year as we make purposeful investments to fuel our future growth and move quickly to optimize business.

And the point of the line is here, while it may take some time to see the impact of these efforts, we are confident these investments will help reignite our momentum. So, and oh, also same store sales, also coming out much stronger, 1.5% for Q4. They're attributing that not necessarily to more transactions,

but to higher prices. John. However you can get it, I guess just about recovering the losses on the day at this level of four and a half percent. We'll see if it holds. Let's see. Thank you, Christina Omar. It seems like confident guidance in this period of uncertainty might go a long way. It's been a missed bag for some of these earnings reports, no? Well, I think that goes back to the environment of uncertainty, and I think guidance for now is going to continue to go down.

I think a big part of this is earnings expectations have started to just get readjusted for what may come down in terms of potential impact of tariffs down the road. We have certain industries, certain areas where there's uncertainty about what is going to be the role of consumption, consumers, how they're going to behave. If there's tariffs, how is that price going to be participating? Is it going to be affecting profit margins or is this going to go to the participating? Is it going to be affecting profit margins, or is this going to be go to the consumer? So when you put into context what guidance may be, it's a very difficult situation. What we do know is that the capital expenditure cycle is going to have to slow down. So the capex

projects and everything else that was structured to just have a probably a reign ignite, you know, during these first few months of the year is now being delayed until some of this uncertainty needs to go away. So guidance will continue to go down. I think earnings estimates will have to be readjusted down for the potential impact. And that is all also in top line, but also in the potential profit margin impact.

Well, we'll brace ourselves. Omar, Richard, thank you. Now let's get to Mike Santoli for more on the sell-off and if we're seeing any signs of a bottom, Mike. Yeah, John, all you can do is look at the kind of conditions surrounding this correction. One of the elements is, are people afraid enough yet? And a lot of times sentiment is going to reset and overshoot to the downside. Starting to see some of that.

Now this is the long-running investors intelligence polls on the bottom here. It says the number of bulls minus bears were in negative territory, so many more bears than bulls in the latest reading. This came out just yesterday. Now the shaded areas are when this spread is below normal, below 20 percent bulls versus bears spread. And so what that shows you is when the market's already had some turbulence. So we have these examples, late 2018, that's a tariff and fed tantrum, as well as of course COVID, when it was a short sharp run into the negative zone

in terms of sentiment. And it was relatively, you know, good time to say, okay, this is going to be a downside spike, but we're going to recover. Obviously it doesn't always work. This was sentiment rolling into a prolonged bull market in 22. And then this was sort of a choppy frustrating period, 2015, 2016.

So it's part of the matrix of factors that you would look for to say, okay, things are lining up to suggest that maybe folks have gone too far to the negative side of the boat, but obviously nothing works every time. Here is the equity exposure of a group of very active tactical professional investors, the National Association of Active Investment Management.

It's a weekly poll. It's very fresh, and it shows you that the exposure is down to about 68%, I think, in the latest reading from today. Now, this isn't as low as it's been a couple times in the last year and a half or so, so it's more room to the downside, but it does show you the market has obviously undergone a lot of selling. There has been some defense being played.

And so it's just one of those things you would look for as well as some technical oversold conditions and things like that that might suggest some relief is a possibility before too long. It's been a rather quick drop over the past four weeks. I mean, just looking at an S&P chart. There haven't been that many like this over the last couple of years.

No, three weeks or so and down 10% is a very sharp one. And if you look at history, there's actually a silver lining there that usually means that there's been some sort of a quick shock in an otherwise, you know, decent environment. And, you know, the fast corrections are usually like the 20, the 1998s and things like that, where basically was just sort of a quick reset.

And then you went higher as opposed to this sort of slow moving rolling descent that sometimes leads to a prolonged and deeper bear market. So I don't know, we'll see if that holds up this time, John. Okay, Mike, we'll see you again in just a little bit. Oh, by the way, just also the outsize influence of the mega caps, I think allows the index to move more quickly. Right. Yeah. When those are selling off and there's such a big share, bigger impact. Mike, thanks.

Well, PagerDuty earnings are out. Another one popping back to Steve Kovach for that, Steve. Yeah, popping up about better than 11% here, here John on beats on the top and bottom lines. EPS coming in at 22 cents adjusted. Street wanted to see 16 cents. And revenue a slight beat here, 121 million versus the 120 million expected. But I think what we're looking at here, selling shares up 150 million dollar buyback, that's new.

And I think that's part of the reason we're seeing shares up and margins doing way better than expecting. Non-GAAP operating margin coming in at 18.3% Street had expected 13.2%. We see shares going even higher now up nearly 13%, John. Alright, Steve, thanks. Well, after the break, Steve will chief equity strategist Barry Bannister, who's been warning of a market pullback. He's got the lowest year end target on the street.

He's going to join us with his take on how much farther stocks could fall and much more on today's after hours action including an interview with Rubrik's CEO with that stock up around 10%. Be right back in two. I'm not concerned about the a little bit of volatility over three weeks because if you look over the long term, the reason stocks are a safe and great investment is because you're looking over the long term. If you start looking at micro horizons,

stocks become very risky. That was Treasury Secretary Scott Bessen earlier on CNBC, saying he's not concerned about a little volatility in the short term, but some might say it's more than a little volatility. S&P 500 is down 4% this week, just entered correction territory. Our next guest saw this downturn coming, setting his year-end S&P 500 price target at $5,500. It's the lowest on the street. Joining us now is Stiefel Chief Equity Strategist Barry Bannister. Barry, you expect things to

go any lower stay any lower now that we're about 17 points on the S&P away from your target hey John yeah you know I think that at 5505 at 1 48 p.m. today we we made a tradeable low we're gonna we're gonna bounce I don't see any reason to change our target at this time. We had a slowdown. We had a 10% correction to discount that slowdown. The slowdown will occur with a lag, but we don't see imminent recession. What we see is a slowdown.

The market is going to react first. It's to sound like Forrest Gump but slowdown sell-offs are like pre-recessions you never know what you're gonna get and people sell first and ask questions later they did the 10% is done and I don't see an imminent recession so I think that was a low what's the most important macro metric to watch from here? Well, clearly it's going to be accommodation of inflation in the Fed. The Fed is very keyed on inflation.

I don't expect big numbers for the middle part of the year. More likely you'll see the numbers in the back part of the year pick up, and that's when we'll go back down. In other words, it's a tradeable move. I do think that year end we'll be at 5,500, so we will sell off again. But the Fed's reaction to those inflation numbers as it makes a U-shaped year could have a big impact on the market as you would expect.

How do you think tariffs are gonna affect the Fed's willingness to cut? Some tariffs will be absorbed by the exporter, some through currency movement, some through margin compression, as I said. One of the things that we have to consider though is that if wages slow and inflation proves sticky, then real wages come down and by the end of the year you'd have compression of real wages and consumption. Consum the end of the year, you'd have compression of real wages and consumption. Consumption just follows wage income in real terms. So that plus,

there is a partisan aspect to the economy. And I think a lot of people and a lot of people who have a lot of money are going to pull back. I think they're going to buy less. And as a consequence, you'll see more of that in the latter part of the year middle to latter and that would cause the economy to slow so the markets forward-looking and they saw this slow down coming I don't think it's a recession yet so I don't think we need to worry too much in the very short term okay you the very short term how short term is very short term

into first into second quarter. Okay, that's pretty short since it's March. We're all traders. Yes, indeed. A lot of folks investing at home, but point taken. Barry Bannister, thank you. Thank you, good to see you, John. Good to see you.

We got a news alert on Compass, the largest US real estate brokerage by volume in 2023 is in advanced talks to acquire Warren Buffett's real estate brokerage business. That's according to the Wall Street Journal, citing people familiar with the matter. According to the report, the deal could come together soon, would represent further consolidation among real estate brokerage businesses after rocket companies acquired Redfin earlier this week for $1.75 billion. Shares of Compass ticked higher in the regular session

after the news was out, ending the day roughly flat after being down earlier. Well, time is running out for Congress to avert a government shutdown with a deadline looming at midnight tomorrow. We're gonna talk about what's at stake for investors. And noted Apple blogger John Gruber says says something is rotten in Cupertino. He's going to join me with his harsh words for Tim Cook and the company following the

delay of Apple's AI features. That's when we come back. Welcome back to Overtime. A government shutdown is looming with a deadline set for tomorrow at midnight. Senate Democrats still holding firm against following a vote, allowing, I should say, a vote on a short-term continuing resolution. Joining me now is Terry Haynes, Pangea Policy founder and former Evercore ISI head of U.S. policy and political analysis.

Terry, you say investors shouldn't worry about this because it's probably not going to be prolonged. What gives you that confidence? Well, they're never, fundamentally, John, it's because they're never prolonged. We have to go back a very long way, about 30 years, before we get to anything longer than a few days. And markets have become a nerd to this.

They've learned to ignore it. And my advice fundamentally is they should continue to ignore it. But I also think there's a lot of opportunity here for markets looking past the shutdown drama. There are a variety of things they can learn about the direction of travel from the temporary spending bill. Not only that there isn't going to be any immediate huge downsizing of the federal government, but also that defense spending increases and

that the spending end game is to get back to pre-pandemic levels. We've heard this potential shutdown framed as a bit of a power struggle. What is the power of Congress under this administration? Do you agree or disagree with that? And how does the emergence of Doge and the president trying to cut money from places where Congress has already appropriated it, how does that fit in? Well, let's put it this way. One part of Democrats' end game here is to try to shake markets' confidence in the ability

of Trump and congressional Republicans to finish out the rest of the economic agenda, the tax cuts, manufacturing, unleashing energy, all of those things. So there's a lot of leitmotif there. I think Congress is actually very much on the upswing. I understand that the conventional wisdom is to think it's the Trump show and Congress are supplicants. But the fact that alone, that any Doge cuts won't be included for many months to come in any spending bills is a sign that Congress is actually taking care of its own priorities much better than most people think. Treasury Secretary made the case earlier today that if a shutdown happens, Democrats will

get the blame. Does that weigh into how long this lasts, who appears to get the blame for the shutdown impacts? Well, two things. The conventional wisdom always has been that whoever is in favor of a shutdown get the blame. That's always been Republicans for the last 30 or 40 years.

Now we're kind of in a bizarre world where the Republicans don't want to shut the government down and the Democrats do. So Democrats will take a little bit of a hit on this. And it highlights that Democrats don't really have any solutions. The Republicans want to, for example, cut government spending. Democrats say, well, we can talk about how, as opposed to let's actually deal with the problem. There's a massive inpatienceience problem both in the markets and in the public and one reason why I think this is a short shutdown if at all is that it's not something that Democrats want to brand themselves with. How will the

contours of this shutdown assuming that we get one, the length of it, et cetera, influence the movement on tax policy? Well, what it does fundamentally is if you get a world where shutdown is resolved, what Trump and Republicans hope it signals to markets, and I think markets do take this signal a little bit, is we're concerned about the ability of Trump and the rest of these guys to actually deliver on the real positives that we expect from Trump on the economic agenda, primarily tax cuts.

So there's a bit of a signal here that if this goes to plan for the Republicans, that actually helps their standing in the markets, gives markets a little bit more confidence. We'll see how it goes. Terry Haynes, thank you. Ben Gia, policy founder. Well, time for CNBC News Update with Bertha Coombs. Bertha.

John, President Trump is taking the fight to end birthright citizenship to the Supreme Court. The Justice Department is asking the nation's top court to allow parts of President Trump's executive order on birthright citizenship to take effect while the legal fight plays out. So far three appeals court judges have blocked that executive order. Egg prices have fallen quickly so far this month according to the Department of Agriculture. The cost of a dozen eggs declined to $6.85 on average, down $1.20 per dozen from the USDA's last update

at the end of February. USDA said there have not been any new major outbreaks of bird flu in nearly two weeks, giving egg producers time to try to make progress in reducing the shortage. And our parent company Comcast has extended its U.S. media rights for the Olympics through 2036.

The International Olympic Committee said today it signed a, quote, historic $3 billion deal that also elevates Comcast from a media rights partner to a strategic partner which will allow Comcast to collaborate on projects including broadcast infrastructure and U.S. digital advertising. Advertising she tried to say. A lock for NBC. All right, Bertha, thank you. Well, another brutal day for most of the magnificent seven stocks with the collective group now down

20% from its highs we're gonna talk about the changing sentiment toward mega cap tech next Plus we'll talk to the CEO of rubric fresh off earnings results and before his call with analysts that stock up nearly 12% Overtime will be right back Welcome back to overtime magnificent seven stocks mostly underperforming the market again today adding to big losses for the year Mike Santoli is back Mike you

alluded to this earlier so how does it change expectations for big tech. Yeah it's really important probably as you're looking at overall earnings estimates for the S. and P. five hundred to distinguish between what we're looking for for mag seven for the S&P 500 to distinguish between

what we're looking for for MAG 7 and everything else. Well here's how it's holding up so far. This is according to Citi. So the 20-year median rate of decline in earnings forecast, this is full year 2025 earnings forecast, so the year ahead or year and a half ahead forecast is pretty steep and we're doing better. This is the S&P 500 on top here than we did before it's a year and a half worth of earnings revisions for the current year We're in and it's just barely down 2% over time, you know estimates tend to be revised down and then companies come in and beat However, excluding the mag-7 we're actually trailing the historical average and you're looking at a pretty steep drop Inexpected earnings and yet if you look at the performance of the stocks, so far this year, everything aside from the MAG-7 is way outperforming the MAG-7 itself.

So here's an ETF that does just own those 493 S&P companies. I think what explains here is the sequencing matter. MAG-7 was so expensive and was given so much credit for having predictable and growing earnings coming into this year that it's where the premium was immediately taken out of it was very crowded trade everyone said we should broaden out and earnings growth is going to be more common among the 493 that's all true although even the outright growth levels there are not so great I think you can't get away from the idea that we had pretty rich multiples on top of peak-ish earnings, and a lot of that is just being reckoned with

right now in the market. And what you're showing there on that chart is the often less favored way of broadening out, right? I mean, people like to think about, oh, the smaller stuff goes up faster. Well, maybe it just goes down less. Well, that's right. This is it. I mean, I've kind

of been been on this point for a while, which is it's not so much be careful what you risk wish for, but just acknowledge that very rarely do you have a smooth handing of the of the baton. Even mathematically, it's hard for that to happen when a third of the index was was mag seven. And when you look at these prior periods, when small caps started to really outperform large or value overgrowth or any of those things, you know, you go back to the early 2000s, it looks like value and small cap and the average stock were doing great. Really, they were just going down a lot less

than big cap growth. Okay, here we are. Mike Santoli, thanks. Up next, our first on CNBC interview with the CEO of Rubrik, as that stock pops on results. He's going to be with us ahead of his call with analysts. And Apple's now down about 10% since Friday when it announced a delay to its Siri AI improvements. Influential blogger John Gruber from Daring Fireball says something is rotten in Cupertino.

He's going to join me to explain. Welcome back. Let's get another check on Rubrik here in overtime. Those shares are up now more than 14% after fourth quarter results topped expectations. Joining me now before the earnings call is Rubrik CEO Bipple Sinha. Bipple, you know, beat on the quarter and the guide is strong here. How much of this outperformance is just replacing legacy technology versus opening up new areas within cybersecurity? John, great to be back with you once again.

As I told you a few quarters ago, I'm a capitalist and I love cash generation and profitability. And this quarter was all about that. We are an equal opportunity replacer of all legacy technology as well as the new gen solutions, because we are delivering cyber resilience, which is the number one priority in cyber recovery. And that's what is driving the performance of our company. If you just look at the last quarter, our subscription revenue grew 39% year over year,

and we generated $75 million in free cash flow in Q4, and we are cash flow positive for the full year. And on top of it, we are also contribution margin positive for the full year by improving 1,400 basis points, our contribution margin. So Rubrik is firing in all cylinders, and customers are understanding that keeping their business up and running

is the number one priority and we have a unique platform to deliver that. We've been seeing a lot of, maybe you could call it, conservative guidance out of companies, software companies. Lately, you seem very confident in the continuing demand for what Rubrik is offering. What's driving that confidence in an environment where a lot of people

feel like things are unstable? I love to meet customers and last fiscal year, I did more than 400 customers meeting around the world, meeting CIOs and CSOs to understand what they're thinking about and how is their priorities. And what is clear to me is that cyber resilience is the number one priority as they prepare for AI as they do cloud transformation.

Because as you know, AI is all about data. And if the data don't have integrity and if data is not secure, is garbage in garbage out for AI. And that's what is driving Rubik's demand. It's all about cyber resilience and making sure that their business is up and running

and their data is secure. Are you constrained at all even on sales and marketing? Are you having to add resources in order to reach these targets you're setting? We always make sure that we are aligned to the market demand we are experiencing and then we are opportunistic if we see a high ROI opportunity

to invest more in go-to-market. If we see a high ROI opportunity to invest more in go-to-market, obviously as a company, we wanna maximize our opportunity at the same time, create highly profitable growth. What about M&A? Are you on the lookout for that? Always, I mean, our strategy is to do both organic and organic.

Obviously, at this stage, we look for team technology product to do tuck to tuck in to actually accelerate the roadmap for our rubric security cloud, and we are always looking for great team, great technology. How does the landscape look for that? I mean, you were a venture capitalist for quite a while, an investor. Valuations have certainly come in in the public market. In private, as you look across that landscape,

are things more attractive? It seems like some M&A within software has been picking up, particularly when it pertains to AI. Private market, particularly around software, is a tale of two cities. On one hand, you have AI and AI-driven high valuation. On the other side, the rest of the software ecosystem is a little bit depressed or slow.

And it all depends upon which market has this alpha that can accelerate larger companies across these vectors. We find this market to be very attractive in the sense that there's a lot of innovation, there's a lot of excitement, there's a lot of AI innovation. A lot of these products and technology will eventually be part of a larger company's product and roadmap. And so we are always on a lookout and if you see great team and great technology will jump. What is going to differentiate Rubrik throughout the course of 2025 product wise? I hear a lot of CEOs talking about picking up the pace of product releases and showing customers that innovation is afoot.

What do you have coming? We are the only cybersecurity company at the intersection of data, security, and AI. And we continue to innovate around cyber resilience. We'll continue to innovate around cloud and SaaS protection. We continue to kind to build data security stack on top of the data that we are securing. On top of it, we have this unique opportunity to use the data link that we have naturally generating and

all the security and governance that we have built onto it, through Annapurna to power the Gen.AI applications. We are not opportunity constrained. In fact, we are looking at where we can generate the fastest return and what would be the growth vector for us three to five years down the line as we continue to build this generational company. Well, now you got a call with analysts starting in about 15 minutes. So I'll let you go Bipul Sinha, the CEO of Rubrik, as that stock is up 14.5% in overtime. Thanks for joining me.

Thanks, John. of rubric as that stock is up 14.5% in overtime. Thanks for joining me. Thanks, John. Well, still to come, we're gonna talk about Apple's AI delay and the stock's rapid downturn with noted Apple blogger, John Gruber, who's out with a sharply worded warning for the company. And much more on all today's earnings movers when overtime comes right back.

Welcome back. Let's check on some overtime earnings movers. Ulta Beauty is jumping right now after earnings and revenue topped estimates with a beat on same store sales, gross margins as well nearly 70% higher. PagerDuty also moving higher by better than 12.5% after a beat on the top and bottom lines. Also a new $150 million buyback. Semtech also popping double digits, almost 12% after earnings revenue and EPS guidance, all beat estimates.

Well, is something rotten in Cupertino? Apple blogger John Gruber from Daring Fireball thinks so. He's gonna join me next to explain. And don't forget, you can catch Overtime on the go by following the Closing Bell Overtime podcast on your favorite podcast app. We'll be right back. Welcome back to Overtime.

Apple shares on pace for their worst week in five years. Closely followed Apple blogger John Gruber of Daring Fireball is out with a broadside this week against the company after features of its AI rollout, Apple Intelligence, really the meat of it, gonna be delayed. Writing something is rotten in the state of Cupertino. And John Gruber joins me now.

John, it's been a while, it's good to see you. I mean, it's been a long time since Apple promised something, and this isn't just a little edge promise. It was a big core reason to buy new iPhones, that it just doesn't seem anywhere near ready to deliver. What do you think happened? I don't know. I think that maybe they second-guess themselves about what their core strengths were.

I think fundamentally, AI is a big deal. Everybody knows it, right? But the best platforms to be using AI, no matter who it's from, are Apple's platforms. If you're a user using ChatGPT or Perplexity or even Google Gemini, you get a fantastic first-class experience on iPhone. And at the high end for developers and professionals and people who are actually making AI, the Mac is a great place to be. The Mac Studio with the M3 Ultra that Apple announced just last week,

unprecedented performance for technical reasons, but really unlike anything anybody else offers, it's fantastic. It doesn't matter who's making the AI. And I think Apple got too caught up worrying that they need to make the AI that is making people say, wow, rather than just worrying about making the platform where people are using AI.

What strikes me about this is how un-Apple a position this is for Apple to be in. They have since, before the comeback, that stretches into early 2000s, late 90s, not wanted to announce or show off hardware at all until it's ready and software maybe just before it's ready to get developers on board but they haven't been in the vaporware business and it seems like that's what this is. Yeah, it's an age old adage, but under promise, over deliver. And that's been Apple's path to success.

Keep their mouths shut, say as little as possible until they're ready to boom, here it is, or here it is very, very soon, and then wow, over deliver. And this is a case with the Apple Intelligence features that were announced at WWDC, their developer conference last June, where they over promised and now had to admit last week that they're under delivering this first year

for Apple Intelligence. So how do they recover? This is important for investors because now, I guess there's gonna have to be a new promise made of some sort at WWDC coming up this summer and then Apple's gonna have to gradually regain credibility by hitting its marks here. What does Apple have to do now

in order to get on whatever track it's supposed to be? I think the number one thing is to have stuff ready to demo. Show people what they have that's working. Even if it's not ready to ship to consumers, be willing to show people in the media, people from the outside, here it is, it's working. You can go out there and vouch for what you've seen. Here it is and it's coming soon. Number two, I think they really need to focus on the actual platforms, the iPhone, the Mac,

the actual hardware and sell a story and make it a story with APIs so that no matter who's making the AI, that it's best on Apple devices. And it's sort of a heads they win, tails somebody else loses. They come out ahead. If their AI ends up leading the, if their own AI ends up being the leading AI, that's

fantastic for Apple and it's fantastic for Apple investors. But if some other companies are leading in AI, but the best place to use them or to develop them is on Apple devices, Apple still wins. Well, that's it, isn't it? I mean, if I'm an Apple platform competitor right now, I'm smelling blood in the water, right? I mean, Amazon just came out with Alexa Plus that actually does some of the types of things

that Apple Intelligence is supposed to, you know, kind of taking this agentic approach of doing a series of things online across different websites on your behalf. Google's got Google I.O., its developer conference coming up where it often talks about Android and AI features. They've got a chance to get way out ahead of Apple here, but I guess there's also risk if they get too far out ahead and what they announced doesn't work, right? Really, that's the problem when you over promise and under deliver, right? Apple's demo from WWDC could be summarized, but very short statement.

It was somebody in a purported demo saying, hey, Siri, when does my mom's flight arrive? And the idea is that Siri could go into this person's email, find an email from their mom with the flight information, then take the flight information, go online, get the flight information and say, your mom's flight is arriving at SFO at 11.30 in the morning. Well, Apple showed the demo, and here we are a year later and they haven't been able to ship it.

What happens if Google and Google I.O. can ship the exact same demo but it actually works on an actual production device using Apple's demo? Hey, Mom, when's my flight arrive? Your mom's flight arrives at 1130 at SFO. Yeah. I mean, we can guarantee that there will be some snide jokes and remarks about that at these other conferences for sure, but do those other companies really have the ability to monetize it and get it

entrenched given how strong Apple's presence is in the premium end of the market that's likely to adopt AI first? Well, and the monetization question is the big one in this whole industry, right? Is there actual money to be made given the cost of generating the AI or training it? And that's where Apple is in such a strong position traditionally by just making the platforms where people use it, develop it, create it, because we know those things are profitable.

It's profitable to sell iPhones. It's very profitable to sell the high-end professional developer Workstation Macs. Yeah, for sure. And they're doing a better job at it than ever before. Indeed. Sell that. Big company, big stakes. John Gruber, thank you from Daring Fireball. Well, that's going to do it for overtime.