Closing Bell - Closing Bell Overtime: Stocks Give Up Midday Gains, Close Negative; Lumen CEO On What’s Driving Stock Surge 8/7/24

Episode Date: August 7, 2024

Stocks couldn’t hold their early gains and averages closed at session lows. Lumen stock has surged over 500% in a month; CEO Kate Johnson on AI demand and its recent deals. Masimo CEO on the stock��s best day in 10 years. Earnings from Warner Bros Discovery, Robinhood, Dutch Bros, Bumble, Zillow, AppLovin and more. Mizuho’s Dan Dolev breaks down Robinhood’s numbers. 

Well, that bell, the intentional one, marks the end of regulation. Genesco ringing the closing bell for New York Stock Exchange twice. Viper Energy doing the honors at the Nasdaq. A big intraday downturn erasing an early rally. The Nasdaq was up 2% at the highs. The Dow was up nearly 500 points before ending the day firmly in the red. The S&P closes just about at the lows. That's a scorecard on Wall Street, but winners stay late.

Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan. Well, we've got more reads on the health of corporate America. Those are coming this hour with Warner Brothers Discovery, Robinhood, Dutch Bros, Marathon Oil, and Zillow reporting results. Those numbers are coming in just a few moments. Plus, it is the stock story of the week. Shares of Lumen Technologies, more than doubling since Monday's open after announcing big corporate deals and after a blowout free cash flow guidance in last night's earnings report. That stock is now up more than 500 percent in a month. CEO Kate Johnson

will join us for a first on CNBC interview with her reaction to the massive rally and how AI is changing her business. And now as we await earnings, let's bring in BD8 Capital Partners CEO Barbara Duran. Barbara, what about this market? I mean, given how the market closed yesterday in the last hour plus of trade and then how it fizzled today after the first 90 minutes, the end of this rotation into small caps, I got questions. I mean, why should we believe this is still a bull market? Well, I think the price action is a little disappointing, but it's understandable. And

I think we're going to be in no man's land for a while because I think the market traded so high. I mean, if you remember, the S&P has been up 38 percent to its high from October last year. So it was going to take some fright or another. And when you look at the non-payroll numbers last Friday, were very surprising. They were weak. And then suddenly you brought in ISM manufacturing, how weak that's been. Although nevermind,

it's been 19 of the last 20 quarters in contractionary mode and manufacturing is only about 11 to 12% of GDP. But really things have not changed that much. We continue to see moderation. You know, we're getting a lot of company reports. You know, there's a very high percentage beating earnings, not as many this time beating revenues. So you're starting to see, you know, corporations have to focus more on margins. So growth is slowing.

There's no question. But it is not collapsing. And I think it's very clear the Fed will ease in September. I think they've got a number of reports before that, you know, two PPIs, two CPIs. We've got the initial jobless claims and continuing claims every week. And we are going to have one more non-farm payroll report. And, you know, if they are in line, I think those will determine how much the Fed cuts for their rate cut. But, Barbara, has sentiment shifted in a decisive way? And I take, for example, NVIDIA. It was at 134 bucks a share a month ago. It's down, I think, around 25

percent to closer to 100 bucks a share. Supermicro is off 45 percent, I think, from about a month ago. If the AI trade were collapsing, how would it look different than this? Yeah, I know, John, that is the other important question. I mean, fundamentals, I don't think have changed all that much, but sentiment clearly has. And there's been a fright. It's now a growth scare. You know, recession probabilities have gone up. Most people are still not seeing any signs of recession at this moment, but now they're afraid. And will the Fed cut in time? Well, the Fed will start to cut in a month. And I think that's then probably two're afraid. And will the Fed cut in time? Well, the Fed will start to cut in a month. And I think that said, then probably two more. So I think the Fed has plenty

of ammo, you know, to save us from some horrible recession. So what I think in terms of sentiment, I think you are going to see, you know, NVIDIA will report in about three weeks. And I think that's going to help a lot because by all accounts, they are still the demand is greater than supply. But for now, all the high flyers, you've seen it with Eli Lilly, just not the, not just the tech names where anything that's run up, you know, has really been hammered. Eli Lilly down 21%, all the mag, you know, the mag seven down somewhere between, you know, 11 and 20%. So I think it's going to take some time, you know, for them to get back to their old highs, but they do have earnings support and they should

continue to report good earnings over the coming next few years. Yeah. And of course, we get Lilly results tomorrow morning, Novo Nordisk today, some disappointing results, which sent shares of both of those lower. We also had a not so great 10-year note auction today. And you have the yields on the 10-year Treasury climbing back up to 3995. How much is that hampering this rally or creating a sell-the-rally dynamic in the market today? Well, I think in the yields, I think you saw a little bit overreaction, just as we did in stocks, you know, in the Monday sell-off where yields, you know, the world was coming to an end. And so everything went a little overboard, as we have seen can happen. And markets, I think the same happened with yields. Yields are overall down. And I think that they are

incorporating a slower growth scenario. And I think yields are going to go lower as the Fed cuts. But I don't think if you look at the credit spreads, they have widened, but they are now in line with their historical average. So we don't see evidence, you know, and even the strong dollar is a guess before this was saying we don't see much evidence of calamity just around the corner. OK, we've got Warner Brothers discovery results out. We're going through those right now. You can see shares are down about eight, almost nine percent in overtime. In the meantime, Barb, what are you looking for from some of these names we are going to get here after the bell? Because, I mean, 24 hours ago, look no further than Airbnb and some of the other consumer-focused travel names that we got results from.

And disappointing. Yeah. No, it's interesting. When you're looking at all the travel-related consumers, whether it's Airbnb, the Hilton's of the world, booking, you know, anything, or the airlines. You know, we're really the first to report and say, hey, we're a little bit over capacity for domestic travel. And I think what you're seeing clearly we're seeing in other areas, the economy, the consumer is pulling back. They're still spending. The question is, are we getting back to just normal? Obviously, we had a huge spring back, you know, people locked up in their places for, you know, that time in 20. And so

now we may just get into normal. So that's going to take some adjustment in terms of earnings and revenue. But does it mean things are grinding to a halt? I don't think so. But I do think you have to, you know, look at these names and, you know, and trim where you need to. And they may have seen their highs in the interim, but I don't think they're falling apart. So but I think the consumer and as we've seen this in retail as well, it really often depends on the name. You know, like we're going to have, you know, the Dutch Brothers reporting soon, and that should be a good earnings report, and that they have a good, strong, fundamental story. So as opposed to Starbucks, you know, which was not a great, great report. Right.

How closely are you watching Klaviyo and Applovin, sort of on the digital side of things, both the kinds of digital, hold on, We do have some results to report. Warner Brothers Discovery, Julia Boorstin has those. Julia. John, Warner Brothers Discovery missing on the top and bottom lines. Revenues of $9.71 billion, lower than the $10.07 billion estimated. The company's EPS number is not comparable, but the company-wide adjusted EBITDA of $1.8 billion is lower than the street account estimate of $2.05 billion. Usually we use an EPS number here, but looking at the adjusted EBITDA, which is what we have from a comparable standpoint

here, so that is lower than estimated. In terms of direct-to-consumer subscribers, the company did add a better-than-expected 3.6 million DTC subscribers, ending the quarter with 103.3 million. Analysts have been expecting around 101 million. But the DTC adjusted earnings loss, adjusted EBITDA loss of 107 million was larger than anticipated. Just want to point out one quick thing here in the note from David Zaslav, given all the pressures on the company, and you see the stock is down 8%. He said they're pleased with the momentum they're seeing in their direct-to-consumer business, fueled by their ongoing international expansion. He says in light of industry headwinds, we have and will continue

taking bold steps like re-existing linear partnerships and pursuing new bundling opportunities. I'm sure we'll hear more on the call that starts at 4.30 Eastern. Back over to you. All right, Julia, thank you. We've got Robinhood results out as well. Kate Rooney has those numbers. Kate. Hey, Morgan. So it was a beat across the board for Robinhood. Also saw record deposits in the quarter. EPS, let's start with that number, a beat by 6 cents, 21 cents adjusted. That was on revenue of $682 million. Also a beat. And then customer accounts, basically in line. Average revenue per user came in stronger than expected. That was 11 revenue of $682 million, also a beat. And then customer accounts, basically in line. Average revenue per user came in stronger than expected.

That was $113 versus $105 expected. They're only giving, let's see, operating expense guidance, no EPS or revenue guidance. Transaction-based revenue was up 69% year-over-year, driven primarily by options revenue, 43% jump there. Crypto revenue, this looks like a big number, up 161% from last year, percent year over year driven primarily by options revenue 43 percent jump there crypto revenue this looks like a big number up 161 percent from last year but it was flat sequentially or from the prior quarter equities making up the smallest piece of the pie for robin hood 40 million that was up about 60 percent and then deposits this is key hit a record of 13.2 billion and then annualized growth there 41 percent i did speak to cFO Jason Warnock, who said, quote,

we are continuing to take assets, he says, from every major brokerage firm. He says customers are continuing to respond to the value proposition at Robinhood. Companies saw $3 billion or so in asset transfers, so averaging $130,000 per customer, so that bigger number indicates higher net worth customers. Also talked about rising rates being what he called a, quote, natural hedge, meaning that as asset valuations go up, it tends to mean more trading activity,

despite what we're seeing in the rate environment. Also asked about some of the trading outages we saw this week. He said he would not signal any type of impact on revenue. Guys, back to you. All right, Kate, thanks. That stock moving around a lot between red and green so far in overtime. Now, Zillow earnings are out as well. Our Diana Olick has those numbers. Diana. Well, John, a beat on the top and bottom lines for Zillow. EPS

came in at 39 cents a share adjusted versus estimates of 27 cents. Revenue of 572 million versus estimates of 538 million. That revenue up 13% year over year. Residential revenue up 8%. And well above the street estimates as well as above company guidance. Rental revenue up 29%. And mortgage revenue, the big winner, up 42%. Adjusted EBITDA of $134 million versus estimates of $99 million. Also well above guidance.

Now, in addition to earnings, Zillow announced that Chief Operating Officer Jeremy Waxman has been promoted to CEO, succeeding co-founder Rich Barton, who will remain on Zillow Group's board and become co-executive chair alongside Zillow co-founder Lloyd Frank. Despite the strong Q2 guidance, though, back to the earnings was a bit of a letdown. Q3 revenue expected between 545 million and 560 million versus estimates of 553. Now, that was right at the midline. But given the huge beat in Q2, you might have expected better. Now, guidance on EBITDA of 95 to 110 million was well below estimates of 120 million. Back to you guys. All right. Diane Olick, thank you. Shares are up about 5% right now. was well below estimates of 120 million. Back to you guys.

All right. Diane Olick, thank you. Shares are up about 5% right now. We've got Klaviyo earnings out as well. Seema Modi has those numbers. Seema. Morgan, a 5-cent beat for the software company Klaviyo, a 15-cent adjusted versus a 10-cent estimate.

Revenue was up 35% year over year, which is much higher than what Wall Street was anticipating. The company talking about leading AI technology to give marketing an edge and how that's paying off. The company also seeing an increase in customers, 151,000 using Klaviyo to drive their revenue growth compared to the 130,000 customers same time last year, stock up 8%. Morgan. All right. I'll take it, Seema. Thank you. Barb was just about to ask you about Klaviyo in particular, along with AppLovin, which we don't have yet, but they're still rolling in. So why not start there? We just saw Klaviyo up about 8%. We know that during the holiday season last year, they were really using this digital marketing strategy to help companies get repeat

customers using AI to drive that kind of emotion. It appears to be working. What does that say about the digital ecosystem in this environment, perhaps a consumer weakness? Well, I think it's showing the power, excuse me, the power of AI that it really is making because they're really helping with emails and marketing and timing and how to really mine customer information to really do things in a targeted way. So I think it's really more about the power of AI and how it's really helping their business because they really are in a way a niche company focusing on automating marketing tools. So I think that's it's going to be interesting to hear on the call because it sounds like you know they should be

gaining share and actually creating helping to create a market here i should mention shopify is a big part of their business and that was up about 18 percent yeah that was a big move for shopify as well all right barbara duran thanks for joining us hey thanks for having me now let's bring in cnbc senior markets commentator mike santoli with a look at consumer stocks as concerns do grow after Airbnb's results and Disney's theme park slowdown that we got in those earnings this morning. Mike. Yeah, Morgan. So the market's been registering a bit of concern about deceleration on that services side of the consumer economy. You can see it's happening for months now. This is a ETF that tracks leisure, hospitality, entertainment type stocks, sort of a proxy for travel and non-goods purchases.

And that's been flagging for a while right now. You see it was keeping pace with the S&P right up until the springtime. And then that's got a little more ragged and, of course, accelerated today with some of the earnings responses and some of those stocks you mentioned. Now, take a look in general about consumer discretionary relative to consumer staples. This is on an equal weighted basis. So it sort of, you know, equalizes for all of the heavy market cap names in consumer discretionary and staples in particular. And so this is a relative chart. You see it kind of maintaining this lead. It's about a two year chart. And this is that sort of range that said, OK, the market is betting that cyclicals are going to beat defensives in this environment.

And that's sort of coming into some kind of question. Now, it's not game over. It doesn't say that all of a sudden we are in the bunker and we're having to rush into Staples, even though they've outperformed recently. But you can see it's kind of on the edge of giving up that leadership message from consumer cyclicals. One interesting element of this, though, as well, Morgan, is that, you know, we've had goods, the goods economy on the consumer side be struggling for a while right now. That, in theory, should be more responsive to rate cuts if we get them. And maybe they're due to rebound. So we can get lucky and see a little more of a transfer back to the good side. Yeah, I was actually just going to go there with you, because if I look at a three month chart here, I mean, the best performing sectors in the S&P real estate utilities and then consumer staples. And it raises the question how much

of this speaks to the defensiveness in the market right now, how much of this does speak to the anticipation that we are going to start to get rate cuts here? I think it's all of it, as well as, of course, the fact that bond yields are down, which is partly about rate cuts as well. And it just suggests that those laggard areas that actually would be direct beneficiaries of easier policy from the Fed are responding in that way. I mean, I don't think it necessarily means that the cyclical parts of the economy are done, but it shows you the way that the market is willing to kind of place the incremental dollar in that direction. All right, Mike, thank you. See you again in just a bit. Let's get Dutch Bros earnings. That stock is way down. Bertha Coombs has the numbers. Bertha.

Yeah, we're looking through this here, John. Dutch Brothers shares are lower in spite of beat pretty much all around. Company posting adjusted earnings of 19 cents a share. The street had been looking for 13 cents. Revenues also beat at $325 million versus a $317.1 million estimate. As far as forward guidance, the company is revising that upward. Now sees $1.2222 to 1.23 billion. The street had been looking at around 1.23 billion or so. Same store sales for the coffee chain came in better than expected as well at 4.1 percent versus 3.8 percent.

The company also saying it is cutting capex. But again, the street not liking something here, perhaps in the guidance, we'll look through it and come back to you when we have more. All right. Bertha Coombs, thank you. 4.1 percent, I think, also represents a deceleration versus last quarter. But I have to go back and check. So maybe that's part of it as well. Applovin earnings are out and Simamodi has those numbers. Sima. Morgan, this is the mobile advertising company reporting a beat on earnings, 89 cents versus a 75 cent estimate. So again, a beat on the bottom

line. Top line was in line at 1.08 billion dollars. And I would just point out some pretty commendable numbers when it comes to software growth of 75 percent and as well for, no, for software, excuse me, growing 75 percent year over year. But shares are dipping by around 10 percent. I would point out the stock has been on fire this year, up about 70 percent and going into earnings. Morgan and John. All right, Seema, thank you. Bumble earnings are out. The stock looks like a fumble, at least initially. Julia Boorstin has the numbers. Julia. The stock is plummeting down about 25 percent. That's after the company missed estimates in terms of revenue. Revenue is coming in at $269 million versus $273 million. But it really seems like the third quarter revenue

forecast, which is below estimates, is what is really weighing on shares here. The company forecasting between $269 and $275 million in third quarter revenue. That's below the consensus of analysts around $2.96 million, according to El Seg. Now, I do have to note that earnings per share did beat coming in at $0.22 in earnings per share versus $0.13 estimated. But is that third quarter revenue guidance? Look at that stock down by a quarter. John, back over to you. Wow. Julia Boor Borsten, thank you. That was a lot, Morgan. That was a lot. And for Bumble in particular, I mean, they had the app relaunch, the rebrand. They got a new CEO who's been at the helm since the beginning of the year. So

a big move there. And yes, in terms of Dutch Bros, last quarter, same store sales were 10% growth. So something to just keep in mind. I'm not sure if that's moving the stock, but. Well, plus a beat on the quarter, but the guy didn't move that much, which doesn't suggest great things. No, but big expectations going into it. Well, we're going to have much more on all of this after hours action ahead. Up next, analyst reaction to Robinhood's results and a closer look at Upstart's earnings, which sent those shares up about 40% today. Yeah, big move. Plus, the CEO of the under-the under the radar AI play making major waves on

Wall Street this week. We will talk to Lumen CEO Kate Johnson about the meteoric run for her company's shares, which are up more than 540 percent in the past month alone. Overtime is back in two. Welcome back. Occidental Petroleum earnings are out, and Pippa Stevens has those numbers. Pippa. Hey, Morgan. It is a top and bottom line beat here for Oxy. EPS coming in at 103 adjusted, ahead of the 77 cents that analysts were looking for. Revenue at 6.88 billion, also slightly ahead of expectations. The company did say that their production came in ahead of the midpoint of guidance for Q2, and they also reiterated their full-year production guidance. That stock, of course, one of Berkshire Hathaway's favorites. You see shares there up 2%.

John? All right, Pippa, thank you. Now back to Robinhood. Shares have been volatile in overtime after it posted a top and bottom line beat just moments ago. It is higher by about a percent and a half now. Joining us is Mizzou Host Securities USA senior fintech analyst Dan Dolove. He's got an outperform rating and a twenty four dollar price target. Dan, welcome. You expected good things out of the hood in overtime. Here you got. I can't with you today. I can't. It's taken a while

to decide what direction to go. And it's about in the middle of that range of 12 to 23 where it's been this year. So can you really buy it here? 100 percent. And the reason we like it, they really smoked earnings. Right. I mean, revenues are up 40 percent. EBITDA is up 100 percent. Assets under custody, all time highs, like 60 percent growth in gold customers. They're gaining share from like Schwab and the other brokers, like the actual real brokers, traditional brokers. What's not to like about it? You know, they're firing on all cylinders and are actually adding more cylinders now. OK, so keeping it in fintech, we're talking a little lending. Upstart, you just upgraded that how long ago?

Last week. Okay, and good timing. Thank you. It is up dramatically today. Why and what are the implications for some other lenders? This has broader implications for this. This is our team basically looked at, you know, the banks, the SoFi's of the world. Everyone is showing basically delinquencies

coming down. And we were like, wow, there were no buys on the street on Upstart. We have to sort of be there before it happens. And it happened. So now everyone's going to open the credit box as delinquencies come down. And this is great, not just for Upstart, which we love, but also for a firm, for SoFi, for all the lenders. I do want to go back to Robinhood for a moment because you did have extended trading. They had this outage. It put Blue Ocean sort of on the radar for better or worse for a number of investors and traders this week. How does it speak to this business model that Robinhood is building out? Is it a black eye on credibility, on reputation, especially at a time where they

are continuing to take on market share? No, it's a great question. Look, if you go back two years, they had the issue with Roaring Kitty and everything that happened. They survived it. They improved their internal processes and they came out strong. So I think this was like a 24-ish hour outage. It was done. It was, I think, just one day. And now they're back in business and this is not happening again. So I think that they're learning from their mistakes and they're getting better over time. So I'm not worried about it as a lingering issue. Okay.

Toast also reported on overtime yesterday. We saw that stock tank today. We get shift four tomorrow, which is a direct competitor to Toast, at least in one part of its business. What's the read through? Yeah, so Toast was actually great. The reason the stock is down is macro worries. It's kind of a lazy short. They're killing it on fundamentals. Same thing goes for Shift4.

I love it. They have a huge stronghold on resorts. They're the best at what they do in that. And then, you know, Warren Buffett always says, you want to bet on an entrepreneur that did it since the beginning of whatever. Jared has been doing this since he was 16. He really knows this business. So it's one of the best sort of owner,

entrepreneur owned FinTech businesses to own. Okay, Dan Doliff, thanks for joining us. Thank you. Well, speaking of Jared and specifically Jared Isaacman, we will get much more insight into the health of the fintech industry tomorrow when shift 4 reports earnings i'll be speaking exclusively with ceo and founder jared isaacman in the 11 a.m eastern hour on money movers well after the break the ceo of telecommunications company lumen which has become a stealth ai play it's

doubled just this week gonna join us here on set for a first on CNBC interview about the remarkable move in the stock and the billions of dollars in new deals in the pipeline. And we've got more ahead on the big drop for Warner Brothers Discovery. You see it's down about 6% right now off the lows, but how that stock also compares to its media peers when Overcom returns. Welcome back. Check out Lumen Technologies.

Shares soaring more than 30% today. Remarkably, that's only the third best day since July 30th. The stock is up more than 540 percent in the past month. Part of that is driven by a flurry of recent deal announcements, including with Microsoft and optical connectivity giant Corning and a massive free cash flow projection in yesterday's earnings report that was revised pretty dramatically. Joining us now is Kate Johnson, Lumen president and CEO. Joining us here on set, it's so great to have you. Welcome. Thanks. Thanks for having me on the show. You've had quite the week. You had earnings after the bell yesterday. We just

mentioned the free cash flow guide. I'll get to that in a second. But the day before you announced five billion dollars in new deals tied to AI and then another potentially seven billion in the pipeline with prospective customers being talked about. We talk about power being needed for data centers and AI. We talk about some of the other infrastructure, things like cooling, but fiber, we haven't really talked about it very much, and connectivity, that's where you come in. That's right. AI needs data.

Data needs data centers, and data centers need to be connected, and that's what we do. We're a networking company. We run a big portion of the world's Internet traffic on our infrastructure. And right now we're massively expanding our network and the internet at large to build the backbone for the AI economy. How do you do that?

Well, the first thing you do is you work with the hyperscalers, cloud companies, social platforms, etc. And you understand what they're doing in terms of training their models and where the flows are. And I think everybody's realizing that yesterday's network just doesn't serve the AI needs of tomorrow. You know, at a time where there's been a lot of skepticism about how the investments by all the big hyperscalers and AI players are being deployed, how they're going to pay off, if they're going to pay off, and you even have some investors like Elliot last week saying, ah, this is overhyped. What do you say? I say the people who are building the AI models and training them are the ones with the most insight about how much data there actually is and how much networking is really required. And remember, this isn't about the health of the economy in the next six months,

the next 12 months or 18 months. This is a long-term play. We're building critical infrastructure to run AI for the next several decades. And so these companies are well-capitalized and they're thinking about the future. And I think they're pressing the gas pedal because they see the need. People might remember you guys as CenturyLink from way back. And the danger is always in this business, it seems, becoming a dumb pipe, right? So even in this AI era, where we're seeing this surge and need for bandwidth, need to connect,

how do you make the right investments now in technology to keep that from happening down the line when people get used to AI? Yeah, it's a great question. We've basically got a great network. We've got great coverage, great routes, diversity, and world-class fiber, thanks to our great partners in Corning. But I think the most significant moat that we're building competitively is we're building a digital platform on top of this physical network. And by the way, this physical network, it's kind of like the rest of the telco, the final frontier for digital transformation.

And we've addressed that head on the past two years. We've spent building with a vision to deliver truly effortless, quick, secure customer experiences. And that's how we stay away from the days of yesteryear of being dumb pipes. I do want to go back to earnings yesterday. The fact that you raised free cash flow guidance to a billion dollars for the full year. Previous guidance was $100 to $300 million. How do you get there? And how much does this speak to the pivot as you've been looking to restructure and transform this company?

It's a great question. We're super excited about these deals. They're long-term deals. We get a lot of cash flow coming in or a lot of injection of cash at the beginning. And it's enough to do three things, really. We can build out the networks that we've promised and make commitments to build out with these customers. We can also accelerate our transformation and we can opportunistically look at our balance sheet. And I think that's the response that you're seeing in the marketplace. Very quickly, 540% gain in a month.

Has it surprised you? It's delighted me. I'm grateful for it, but I'm maniacally focused on our customers and what they need because that's how we're going to get the next 540%. Okay. Kate Johnson of Lumen Technologies, thanks for joining us here on set. Thanks for having us. Great to have you in. Well, we've got more earnings just crossing.

JFrog, it's not jumping. It's going lower. Earnings per share beating by a penny of 15 cents, but revenue narrowly missed, coming in at $103 million versus estimates of $103.6 million. Third quarter revenue guidance was light, as was third quarter earnings guidance and the full year guide. Well, time now for a CNBC News update with Bertha Coombs. Bertha. Hey, John. Two men have been arrested in Austria in connection with a suspected terror plot to attack major events in Vienna, including the upcoming Taylor Swift concerts. Austrian police officials said today they were trying to determine whether the chemicals found in the 19-year-old man suspect's home were for a bomb. And show organizers

announced just minutes ago that they are canceling the Swift concerts over fears of a possible attack. Warren Buffett now owns more Treasury bills than the Federal Reserve. Billionaires conglomerate Berkshire Hathaway held just over $230 billion worth of T-bills by the end of the second quarter, while the Fed owned just over $195 billion. The Oracle of Omaha has noted in the past that he would buy Treasury bills during times of crisis. And finally, IndiGo, India's largest domestic airline, now allows women to avoid sitting next to men. During online check-in, a pink icon will indicate if a seat is occupied by a female passenger, but the feature

won't be shown to men. Indigo's CEO tells CNBC the program was based on feedback from customers and made possible with emerging technology. You know what I'd like to know is whether I'm seated next to somebody who has a cat as a comfort animal because I'm allergic to cats so I always worry about that on planes now. Well either way this is good news for the indigo girls out there. Oh John I was gonna say they need to implement this on the subways with manspreading but maybe that's maybe that's another story. No, they're closer to fine. All right.

Thank you. After the break, the changing fortunes of media companies. Mike Santoli is back. He's going to look at earnings from Warner Brothers Discovery and Disney and reveals the one name in the media complex that has outshined them all. And later, we'll talk to the CEO of health tech and consumer electronics company Massimo, which you might remember was part of a David and Goliath patent battle against Apple, as that stock rockets higher on the back of results.

Over time, we'll be right back. Shares of Warner Brothers Discovery down 7% in overtime after posting Q2 results. This comes after this morning's report from Disney, which showed that company's combined streaming service turned a profit for the first time. So let's bring back Mike Santoli for a broader look at these media companies. Mike. Yeah, John, this WBD news and response going to do nothing to really change the winners versus losers equation in the industry here. You see the stock performance over three years. Netflix, Disney, our parent company Comcast, as well as Warner Brothers Discovery. You see the downturn

here. Obviously, the race is seemingly for second place in terms of streaming Netflix with it clearly. What I do find interesting is that there really was about parity at a certain point right there about a year or two, two years ago. And the separation has happened from there. Now, just to look at the similar equation for market cap terms, and you'll see Netflix obviously opened up a pretty wide lead over both Disney and Comcast. Actually, Warner Brothers Discovery, even lower than this show, $17.5 billion with $40 billion of debt on top of it. What I also find interesting is how relatively modestly sized these big media companies are when we have, you know, Meta and Google in the trillion, two trillion dollar range. And basically old media and even Netflix are very, very pint sized relative shows you what the economics are delivering.

Morgan. All right. Mike Santoli. Thank you. It's quite a chart. Is the future of the Firefox web browser in jeopardy following the Google antitrust search ruling? Well, the president of Mozilla Foundation, this is the nonprofit behind Firefox, weighs in next. And check out shares of Axon. It's a big winner in the S&P 500, the maker of tasers and body cameras, beating sales estimates, raising its full year revenue outlook thanks to a surge in demand for its AI service, which helps to draft police reports. We'll be right back. Welcome back to Overtime. A federal judge this week ruled Google illegally held a monopoly on the search market.

The ruling could have a big impact on companies like Samsung, Apple, and Mozilla, which have deals to use Google as their default search engine. And Fortune writing, forget Apple, the biggest loser in the Google search ruling could be Mozilla and its Firefox web browser. Well, joining us now is Mark Sermon, president of Mozilla Foundation. Mark, it's great to have you on. And I am going to start right here, even though we've got a lot to cover. And that is your reaction to some of these reports, not only to this ruling about Google and its search being a monopoly, but also about some of the reports that Mozilla could be the biggest loser. Well, you know, we obviously are taking a close look at the ruling. It's going to be a while before there's remedies and we see what the actual impact is.

So let's look at the monopoly question first. Mozilla has long been a champion of competition of openness on the internet, especially in search. And even today and always, we've had more options than just Google and Firefox. And so what we're doing is continuing to promote choice. Okay. And I realize that this is a situation that's going to evolve and shake out over the course of likely years. We already know that Google Alphabet is going to appeal this decision as well. we are seeing the search landscape in general evolve and evolve quickly as open AI and generative AI capabilities in general begin to infiltrate search options. Yeah, I think that's really important to zoom out and both look at the Google deal as well as the broader context. And so on the Google deal, we've been trying to move to diversify our revenue for a number of years. I mean, this is a process that's been going on for a while. And so our own privacy respecting ads in Firefox have grown to be a significant, almost double digit percentage of our revenue. We bought a company named Anonym,

which is a B2B company focused on privacy friendly advertising. So you see us moving into a bunch of new domains to diversify that revenue at the core. But what we're also doing is moving into AI, as you would expect we are, because how we interact with the internet, including search, is changing. And so that includes everything from integrating AI in a beta way into Firefox. You can choose different AI models, just like you can choose different search models. And we set up a company, Mozilla AI, to really get close to developers, build out open source AI, and build a business there for ourselves. to an AI era where it's not about links and search so much as it's about understanding user intent, the degree to which that's stored, where it's stored, and who has access to the map that

various companies or organizations are making of your mind? Well, I would say there's two ways, and they're really grounded in our history. Often we talk about Mozilla trying to do for AI what we did for the web. And one of the things we did for the web was champion privacy. That still does matter in the AI era, but it's going to be shaped differently. And so in championing privacy, we're looking at local on-device models. You see it in an early way in Firefox in that our AI-driven translation only happens on your device. Nothing ever goes to the cloud.

It's more private. And we're also doing things like we launched something called LlamaFile that lets you run Llama on your local device. So privacy and local is one piece of it. And then open source, which has always been what Mozilla has stood for, which is at its core,

something that drives innovation, competition. That's going to be key in AI. Open source, which has always been what Mozilla has stood for, which is at its core something that drives innovation, competition, that's going to be key in AI. We see that open source may actually become the winner, much as Linux became the winner, things like Firefox became the winner in the Web 2.0 era. Mark Sermon, thank you so much for joining us. So much to talk to you about. We look forward to having you back again at a future time. Thanks so much. Well, now we've got a news alert on Intel. Seema Modi is back with that. Seema. John, a class action lawsuit has been filed against Intel and CEO Pat Gelsinger by

the Construction Labor Pension Trust of Greater St. Louis, a current shareholder of Intel, alleging securities fraud and claiming that Intel concealed issues that led to disappointing quarterly results that were released last week that included that suspension of its dividend and a reduction in its workforce. We have reached out to Intel for comment, and we are looking at shares down just fractionally here in overtime, Morgan and John. Okay. Yep. Seema, thanks. Yeah. Up next, all the overtime earnings movers that need to be on your radar as we count down to Robinhood's analyst call.

Plus, Massimo having its best day in 10 years after stronger than expected earnings. Up next, the company's CEO on how his AI strategy is impacting the bottom line. We'll be right back. Welcome back. Let's run through some more earnings movers fastly. It's plummeting despite narrower than expected loss per share and a beat on revenues. But earnings and revenue guidance. Well, that was soft. You can see those shares are down almost 20%. Meantime, Duolingo getting a pop. Nice beat on the bottom line. Paid subscribers were at 52% year over year. Sonos sinking despite beating on earnings and revenue. You can see those shares are down about 8.5%, John. All right. Well, I also spoke with Massimo CEO Joe Chiani today after earnings results, and mainly a guide sent shares 11 percent higher.

That's its best day in 10 years. The raised guidance got Wall Street hopeful that the hospital slump is over. After covid subsided, everything from nursing shortages, payment changes to hospitals and people afraid of having procedures kind of brought census down pre-COVID level. And now we're back to, I guess, pre-COVID levels rising again. And, you know, there's a lot of messy stuff out there. But I think some of that is lack of innovation by those companies. You know, what really sets Massimo apart, we're serial innovators, and that is helping us keep growing and keep taking more market share. Now, moving forward, Keanu told me the artificial intelligence work the company had been doing has now found an audience as healthcare customers look to fill out their AI strategies. That's what we needed to track not only the vital signs that we were measuring,

but the data we were gathering from the EMR, whether it was blood work done or imaging data, and bringing it together and using expert system to pick up on patterns of deterioration, whether it's due to sepsis or opioids, and warn clinicians before it's too late to respond. So that never gets old. That is what you need to do. You don't need to do more. You don't need to create more power consumption problems. But we did the hard work and we have the foundational work with Halo.

Of course, there's ongoing activist pressure there. They are spinning off the consumer business. The question is whether it's going to be to a joint venture or just spinning it off themselves. You should know by their Q1. Well, up next, the key economic data and earnings on tomorrow's calendar, plus an update on two astronauts stuck in space and potential bad news for Boeing. Be right back. Welcome back to Overtime. We don't normally say this, but weekly jobless claims will be closely watched tomorrow as investors gauge the health of the labor market. But it'll be earnings taking center stage again after the bell. Paramount Global, Expedia, Take-Two Interactive, Unity Software,

Gilead, Dropbox, Capri Holdings, and Elf Beauty, just some of the big names reporting results tomorrow in overtime. Elf Beauty on that consumer read, I imagine, is going to be especially important. Especially because makeup and beauty had been very strong, and then that's sort of given up the gains recently as well. One more story that we're keeping a close eye on is this ongoing drama of two astronauts stuck in space. NASA says Sonny Williams and Butch Wilmore, who have been on the International Space Station since June 6th

after their Boeing Starliner spacecraft ran into some issues post-launch, may not return to Earth until 2025, February. And they may not return on Boeing's capsule either, but rather via SpaceX's Dragon. That's if the Boeing ship is deemed unsafe. The test mission was slated to last around eight days originally. Keep in mind, though, it is a test mission, but certainly one more potential issue, John, for Boeing when we know they're navigating so many right now. Oh, my goodness. Just thinking about those astronauts, that not a situation that one wants to be in. Bringing it back, of course. I think they like being in space. That's what they say publicly, we'll say. OK, I would try to convince myself of that as well. But thinking about the markets and these questions around jobless claims, given

what the market did at the end of the day yesterday and again at the end of the day today, lots of issues about fundamentally what is this macro data telling us and then how will equities react? That's right. We've seen the shift in recent weeks from buy the dips to sell the rallies. That's very much what happened today. We reversed the gains that we saw earlier in the trading session. Major averages finished the day lower. To your point, claims are going to matter, especially because not just initial jobless claims, but also continuing claims have been trending higher,

and we know that we don't have a lot of macro data this week. Next week, that'll start to change. I thought the Klaviyo results paired with the Shopify results, interesting as well. We were talking about the digital ecosystem. We'll see how that continues to play out. Yeah, and we keep an eye on all these consumer companies too. Dutch Bros lower today as well in overtime. Well, that's going to do it for us here at Overtime.

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