Closing Bell - Closing Bell: Tech’s Toughest Test Yet 2/1/24

Episode Date: February 1, 2024

We count down to three of the most important earnings reports of this season: Apple, Amazon and Meta. Hightower’s Stephanie Link, Malcolm Ethridge of CIC Wealth and Virtus’s Joe Terranova debate what is at stake. Plus, Lauren Goodwin from New York Life Investment Management is giving her take on the road ahead for the Fed. 

All right, guys, thanks so much. Welcome to Closing Bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This make or break hour begins with the countdown to three of the most important earnings reports of this season. You know by now, Apple, Amazon, Meta, they're all hitting in just about one hour. We do have ownership all over the desk today of all of those stocks, and we're going to hear from our experts in just a few minutes to get you set up. In the meantime, your scorecard with 60 minutes to go in regulation looks like this. A nice bounce back for the major averages today. That following the market's March Madness meltdown during the Powell presser just one day ago. Tech, a big reason why as well, as most of the mega cap names are on the rise today.

Interesting moves in interest rates, too. They're falling despite the fact that, well, there's going to be that delay, apparently, in rate cuts, according to Powell. It does take us to our talk of the tape. Tech's toughest test yet with those key earnings looming in overtime. With us to debate and discuss what's really at stake this evening in overtime is Stephanie Link, Hightower's chief investment strategist and portfolio manager. She's been buying more Amazon stock lately. Malcolm Etheridge of CIC Wealth owns Apple and Amazon. And Virtus' Joe Terranova, he owns Apple and Meta and several of the other mega cap names as well. All three, of course, CNBC contributors. Welcome, everybody. So everybody owns Apple. Steph, you're a little

underweight than most in the name. It's the worst performing of the mega caps since November 1st, since this market really took off. What do we think we hear tonight? What do you think investors need to hear after four consecutive quarters of negative revenue growth? Well, it's definitely a show me story at this point in time, especially with the valuation at 28 times for 50 percent of their business, which is iPhones, if that's only going to be up 2 to 3%. If they can beat that number, that's interesting. But services is the next piece.

That's 22% of total revenue. It's expected to be 10 to 12% growth. That's going to be important to see if they can come in above. And then also China. How bad is iPhone 15? Expected to be down double digits, while base phones are actually going to be important to see if they can come in above. And then also China. How bad is iPhone 15? Expected to be down double digits while base phones are actually going to be up. So your mix shift is all over the place with margins and revenues. But I think what you need to hear is better growth in services going forward

because that's the real exciting part of the story and some sort of excitement around the iPhone 16 because it's not only the 15 that's kind of bland, it's the 16 as well. So what is the visibility for half of their business overall? Okay, so we have seen time and time again doubt Apple and doubt this stock at your peril. Joe, is it fair to say that this comes in, and it's so strange to say it, with the most uncertainty of all the mega caps, just given the fact that you've got the consecutive quarters of negative revenue growth,

the stock's given up its title as the most valuable in the market to Microsoft. You have reports of these double-digit declines in iPhone shipments. You've got a lot of questions we need answered. Tremendous challenges for Apple. And yes, absolutely. The expectations for Apple amongst the mag seven or AI five or whatever we're calling them today is the lowest. You also have regulatory concerns in Europe. Stephanie already cited what's going on in China. And do I get excited about one percent revenue growth to take? OK, so we're not going to do five consecutive quarters of contraction, but 1%, I'm really going to get very excited about that. I just think that, look, this company has

gotten a pass because they have so much cash. They have the fortress balance sheet, and you know they're going to buy back their shares. Tonight, I want Tim Cook to come out, and I want to hear the vision for AI. I want to know what their vision is for AI. How are they going to adopt it at Apple? Part of their vision, just to steal that word from you, is about their Vision Pro. And, you know, there's a big, glossy, Vanity Fair spread that's hitting the newsstands, so to speak, today. And, you know, they call it Tim Cook's moonshot. Is it going to be successful? It's a big deal and it's a big bet. I'm not going to doubt the potential success of it, but I need more than just the hardware. I need to understand where we're going with AI. And you know what's interesting?

For the very first time, I don't think the analysts are afraid to downgrade Apple anymore. That was something that was unacceptable. If you downgraded Apple after an earnings report, it seems as though it's becoming a little bit more popular. I want to see where we are in the next several days. Malcolm, you know, the analysts have kind of learned the hard way when they've downgraded Apple, because in many respects, it's marked a near-term bottom. The stock was at 167, 169-ish, not that long ago. And there were haters all over the place saying the chart looks terrible. What's going on with this company? Its growth trajectory? Is it stalled? What's going to happen here? And then it's roared back north of 185. And it sits right about that, and it had moved back towards 200. How do you think about this going into tonight?

Yeah, I don't think anything that you guys have said to this point on Apple is incorrect. I do think to the question you just asked me, the reason that Apple is able to hang in there is because their past performance, right? So their reputation is being second, third to the party and figuring out a way to blow it out of the water is what analysts have been hanging on for all of this time, scared to downgrade and not even reluctant, scared to downgrade that name for fear of being caught out. And I think that even after Apple gives us lackluster earnings once again today, they're still going to get a pass all the way up until about June when we get WWDC. If there's not anything substantial telling us how Apple plans to integrate AI into that ecosystem by that point, then we could see a significant sell off in Apple shares.

But I think that we're probably going to see them, regardless of what the numbers are today, kind of just go sideways between now and then market perform. Let's call it between now and then, because they will get that mulligan just based on their reputation to that today. You know, the other point, Steph, is, you know, this is a stock that has traditionally run a lot into the earnings report almost every quarter that happens. And I'm not suggesting that it hasn't had a nice move to start earnings report. Almost every quarter that happens. And I'm not suggesting that it hasn't had a nice move to start this year. It was up nine, you know, eight, nine percent or so. But I also said that it has underperformed the other mega cap names, which have done even better. I wonder what that does to the stock reaction this evening. Well, I mean, rightfully so, because the growth is a lot lower, right, overall for the company, as I talked about, in terms of the majority of their business.

I think this company really benefited big time from COVID. And now you're kind of seeing the reverse effects, especially on Macs and especially on iPads, too. Plus, in services, they also have really tough comparisons coming up. So there are a lot of question marks, and I think guidance is going to be obviously key. We always talk about guidance. That's so super important, more than ever. I love that year-to-date chart that we put up. So there are a lot of question marks. And I think guidance is going to be obviously key. We always talk about guidance. That's so super important, more than ever. I love that year to date chart that we put up. It shows you now that the stock was right pushing back towards 200. Let's throw that one back up there, guys, if we could, please. I think that tells a great story. If the earnings report was on the back end of 196, I'd say, oh, well, that may be problematic, but it did have that,

you know, sell-off by about 10 bucks or so. Yes, it's recovered, albeit slightly, but nonetheless, that adds some interesting questions right into the print. Let's move to Amazon. I'm coming to you here because you've been adding to this name. You have sold out of Meta, which we'll get to, you've sold out of Alphabet, and you'll get to. You've sold out of Alphabet and you have picked this as your winner. Why? Yeah, and I will be buying it hand over fist if it's down tomorrow as well. I want to be bigger because I think there are three ways to win. I think the cloud business is exciting. It's growing at about, I think about 13% this quarter. And I think they're going to give you a pathway to get to 17% by the end of this year. They signed a couple of contracts in October right after they reported last quarter, so

you kind of have a little bit more visibility of a re-acceleration. So that's one. Two, retail sales. Remember, December retail sales online grew 9.7%. They're taking share. There's no question about it. And so I think retail will do okay. Little bit of promotional activity, which is seasonally what happens within this particular quarter. Are you watching profit

margins as a result? Exactly right. So they did 4% last quarter. I think they're going to do 3.8% this quarter, but I think there's also a pathway to get to 7%. And so I think that is the exciting part of the story. You know, I'm a margin person. Yeah, I know you are. One last thing, then Prime, that should help the ad business. I was going to ask you about that too. That's a piece, and I'm just wondering, where's the bar in terms of AWS growth after what we got from Microsoft and Google? They showed pretty strong cloud growth. I think it's still about 13, 12, 13 percent. Anything above that, I think people get really excited. But again, if they can talk about what they have signed in October and what the momentum was and the cadence was throughout the quarter, I think that'll be really very, very important. This stock trades at 13 times EBITDA, Scott. The historical

average is 18 times. I know, but it's 41 times forward. But it's also 2.4 times price to sales, and the sales growth is growing mightily. So to me, I think that this one makes the most sense. It is very hyped up though into the print, very liked. I know the sell side has like 100% of the sell side of buys on it. You know, I'm not crazy about that, but the momentum is there. The story is great. And there's a lot more that Andy Jassy can do and team. That's a lot of optimism, Malcolm. Do you share it? Yeah, I'm actually in lockstep with Stephanie on this one. If this name sells off after the close and after hours, I'm going to step in and buy additional shares. I think that I don't really care too much about the e-commerce side of this business. I know the year of

efficiency included them getting rid of some warehouses that they overstaffed and also letting go of a ton of staff that they overhired. But I'm more interested in the digital advertising side of this business. After everything we heard from Netflix, everything we heard from Alphabet related to online ad sales, I think that Amazon is actually going to outperform in that area. And if it gets undervalued by people selling it off immediately after that earnings report, I think that's an awesome place to be stepping in and buying at those shares. You, Joe, you're the innocent bystander here. You don't own this name. First, tell us why and what you think happens this evening.

So I can tell you that I have been, over the last week or so, very engaged in looking at what's going on with Amazon and, in fact at what's going on with Amazon. And in fact, why we don't own Amazon. We sold it out of the ETF in July of 2022. And the reasons that we sold it are we saw significant deterioration in the return on equity, the debt to equity, really the quality of the balance sheet. I think you would agree with that. You also, that was concurrent with the cash cow, also seeing the deceleration. And that's AWS.

I think Steph is going to be right on this name. And I think the reason she's going to be right on the name is you're beginning to see the improvement on return to equity. You're beginning to see the improvement on debt to equity. And the reason for that is because AWS might have troughed. And I think that is the integral indicator tonight. If you could see a 15 print on AWS growth this evening, 15%, I think you're in a great position. And I think it moves significantly higher from there. All right. And you said it. Yeah, Malcolm, go ahead, please. I would just add to the point about AWS troughing. Of all of the mega cap techs that are participating in the AI arms race right now, Amazon has the least to lose and the most to gain.

So if they do figure out a way to communicate to us how they're going to profit off of the $4 billion investment into Anthropic and everything else they've done to make themselves the everything store of AI, that is ultimately going to supersede anyone's expectations because we haven't really been talking about Amazon in that way in the AI arms race in some time. Yeah, I love the point you make. It's a perfect segue. I was going to ask you about that generative AI, the anthropic investment Malcolm so perfectly brings up for us. How about that? I mean, I think the sky's the limit for the company. And I don't think that they get the credit, to be honest with you. I think they're kind of on the

back burner there. But I think there's a huge upside there. But again, I think right now, the near term, the stock trades on AWS and on the margins on retail, period. End of discussion. If anything comes out on AI, generative AI, that's great. Icing on the cake. But we don't need that right at this very moment because it is a longer term story for the company. We turn our attention now to Meta. I mentioned your history and the name. It was about, I don't know, a couple weeks ago where you told us you got out of the rest that you had. They got back above a trillion dollars in market cap.

The stock's coming off its best year of all time, following its worst year of all time. You have had the ad market recovery. You've had the year of efficiency now in have had the ad market recovery you've had the year of efficiency now in the rear view mirror what do you think it's a great company i don't think there's anything wrong with it but the stock is up 160 in the past year and the stock has re-rated substantially from 13 times ebitda to 20 times ebitda it also trades at 27 times forward which is not egregious but you're getting getting about 22% to 24% total revenue growth, and that 27 times is a historical average.

We know the numbers are going to be good tonight in terms of top line, double digits. We know Reels is hitting it out of the park. Click to Message is doing well. Blue is fine. Instagram's off the charts. We got all that. I think that's already known. The big question to me is expenses,

and the number right now is anywhere from 30 to 35 billion in expenses for the quarter. There's whisper that they get up to 40. We'll have to see how the stock reacts there. Then the big question is for the full year, do they do 94, 95 billion dollars in expenses overall? Because that's really the trigger point. It's at the expense side of the equation. Are investors going to be, Joe, more sympathetic in some respects to another ramp in spend as long as the spend is going to the place where investors want the company to be? I don't think so. And this is the one name I am concerned about tonight. Reality Labs. You own it, by the way. It is in the ETF at a market equal weight, not market cap

weighted. But I'm concerned because Reality Labs, it's bleeding. It's bleeding. And the spend to support the metaverse and the Reality Labs is so significant. Now, Reels has been really strong. We understand that. AI has contributed to the core ad business. Is there enough there in this quarter? Is that able to continue? That's been what's been clouding and obscuring the challenges on the spend with Reality Labs and the metaverse. I don't know if that can continue for multiple quarters. I think that at a certain point, investors are going to grow frustrated with the spending. They're going to look past the strength in other areas, and they're going to see what the metaverse and reality labs really is. And it's a bleed. 15 billion a year they're spending on the metaverse. So to the extent they tweak that down,

stock would be on fire. That's what you either need expenses to come in line and the guidance to be where it is. I think people will be fine with that. But if they were to tweak metaverse and the spend there, I mean, Katie bar the door, the stock would go much higher. The stock is up, Malcolm, 31 percent from November 1st. So you talk about a really solid ramp into a print tonight. You don't own this name. What would it take for you to buy it? Yeah, I think it would take a ton for me to actually buy this name. One, because I just don't like the fact that their one revenue stream is tied to something cyclical, which is digital advertising. Right. I just mentioned that I prefer that Amazon has it as one leg of the stool.

But here, if all of a sudden we go into a similar scenario as 2002, where companies pull back on their ad spend, so goes Meta. Also, the company has quite a bit of founder risk. Right. He got it right yesterday as far as testifying on the Hill is concerned, but that company is one bad statement to Congress away from suddenly selling off because who knows what litigation gets brought against it. So I just think there's too much risk there versus the reward that we have seen, but good on them for the year of efficiency that has brought, you know, more than 100% return in the last 12 months. Hey, how about this? I just got something in front of me. Let's go back to Amazon. Let's show the intraday here as we get back to talk about that for a minute, that they've announced something called Rufus, which is a new generative AI-powered

conversational shopping experience. So So Malcolm, you were just talking about Amazon and AI and wanting to see more. Well, they just gave you more and I just told you about it. And the stocks, I think at the highs of the session heading into the number in overtime, you want to comment on this where you said this company has everything to gain relative to AI? Yeah. So I started off this year recognizing that investors were starting to sour on AI, AI, AI, save for anyone who could tell us how they were going to turn that into commercially viable products that we could feel and touch and pay money for today. And so all of the other companies that were promising returns in

the future, years in the future, the market started to sour on it. And so I saw it as Microsoft being the one that was running away from the pack as far as being able to have proven how they plan to generate a profit. Amazon hadn't really given us that yet. But with such a massive e-commerce business, it was obvious to me that eventually they would figure that out. It sounds like based on what you just gave us, they're at least walking in that direction if they haven't already arrived. And so I'll be interested to see what an impact that ultimately has on sales in e-commerce and how that starts to increase their top line. HOD for Amazon, high of day. You want to comment on this? Makes me nervous. You know me, I'm always nervous.

I mean, it's great. Look, this would be really good news. But I don't know how material it's going to be to the top or bottom line in the near term. But it would give us something else to talk about. And this becomes a four part story in terms of how it can outperform, not just a three part one. Is this a season, Joe, earning season? I'm speaking, of course, of divergence between some of these names. Now, maybe we got a little bit between Microsoft and Alphabet. Obviously, Alphabet's having a little bit of a rebound now, but we know what happened in the aftermath of earnings. But we're still talking about this AI story, however many stocks, key stocks you want to put in there are going to trade together for the most part. I think that they are. Listen, you're going to get disparity amongst the big mega caps. That's obvious.

But look at a day like today. The market's being lifted up once again, and you're kind of washing away some of that negative feeling we had post-earnings on Tuesday. Yeah, Dow's up 331 right now. Look at the S&P. So we're back at 4,900 on the S&P as we speak. We're at 4,901. Looks like a 50-plus point gain on the S&P as we speak. We're at 4,901. Looks like a 50-plus point gain for the

S&P, which is coming off its worst day since late September yesterday on the March tantrum, which happened immediately after the statement from Powell and then in the news conference from the Fed chair himself. So we're getting a nice rebound in part because these stocks are all bouncing back. Yeah, it's going to be interesting to see the reaction tomorrow. Can we get good earnings and good follow-through? We obviously didn't get that on Tuesday. We had a little bit of an exhaustive feel to it. I'm going to be curious to see how we close out the week, if we close out with some real strength.

And I think at that point we'll look past these earnings and say, okay, the mega caps really didn't hurt us as we thought they were going to on Tuesday. Malcolm, I'll give you the last word. Is the next leg of this rally riding on tonight? I don't necessarily think it's riding on tonight. I think we got what we needed out of Microsoft yesterday because I have been feeling for a few months now like it's Microsoft and it's everybody else. And I think they validated that with the numbers they gave us yesterday. You've been asking all week on the network, is the 33 times multiple too much for a company like Microsoft? And I think the answer is a resounding no, because we're talking about a company that's nearly 50 years old,

has been public for nearly 40 years, is worth $3 trillion, and still somehow figured out how to increase top line revenue by 17% year over year. So I think that the sky is the limit as far as the near term is concerned. And I think right now what we're seeing is they are stepping away from the pack and it's becoming Microsoft versus everyone else. All right. We'll make that the last word. In fact, great stuff, everybody. I appreciate the conversation so very much. Malcolm, thank you. Joe, Steph, see you guys soon. See what happens tonight. Don't be too nervous. All right. Let's send it over to Christina Partsenevalos for a look at the biggest names moving into the close. Christina. And to calm the nerves, the top S&P

500 performer today is agricultural provider Corteva. Its shares are popping about 18 percent on a profit and guidance beat. Volumes may have dropped, but the firm benefited from higher seed prices and management's betting demand for grain and biofuels will increase later this year. And you can see shares are actually 17% right now. Activist investor Elliott Management telling CNBC it now has a larger 13% position in Etsy shares, making the investor Etsy's largest shareholder. The e-commerce platform also announcing today, Elliott will get a board seat. Although you can see shares up about 9%, they're still down 11% on the year so far. We just turned to February. Yeah. All right, Christina, thank you. We'll be back to you before the end of the show, obviously. Christina Parts and Nevelos, we're just getting started. Coming up, what's next for the Fed? Stocks getting a post-pau bounce today following that sell-off yesterday.

New York Life Investments. Lauren Goodwin is back, has a rate hike playbook. Well, has a playbook where she sees some serious opportunities right now. We're live from the New York Stock Exchange. You're watching Closing Bell on CNBC. We are back with both Amazon and Medicine Gains today, ahead of those important Q4 results in overtime. Mark Mahaney is Evercore ISI's head of internet research. He covers both of those names, and thankfully he joins us now. Mark, welcome. It's good to see you again.

Good to see you too, Scott. Let's do Amazon first. What are your expectations? I need to know the most important thing to watch is what? There are four things. First is this AWS growth. Did it accelerate or not? It's 12% the last two quarters of the year. Are we up to 13% or higher? If we are, that's probably the single most important thing second is are these north american retail margins continuing to rise rise aggressively are we going to have record high operating margins for uh north american retail we think that one but that's the second most important thing third thing especially given the microsoft and the google capex comments about it being um materially higher notably higher what's Amazon going to say about its 24 capex outlook? And then the fourth thing is the advertising breadth. Are we going to stay above

20% ad breadth new for Amazon? We think that's going to be the four key things that people should focus on with Amazon tonight. How come you didn't say anything about AI, Anthropic? You know, I just read the news that broke a little while ago about this Rufus generative AI shopping related thing. How important is that? What's your read on it? I know you're just learning about it probably as well, but give us some knowledge on it. Well, I'm just learning from you about the Rufus thing. That was new news to me earlier today. And then on AI, look, AI should be one of the... I mean, AI and machine learning have been part and parcel of Amazon for a decade or something like that. Now, the next wave, the really aggressive wave of deployments of Gen AI,

that's something different. That should help with the workloads at AWS. It should be a driver of acceleration, sort of like it has been for Microsoft and Azure. It's not clear yet that it's got a much bigger base with AWS, so it's harder to move the needle than with Azure. I'm not sure we're going to still yet see the evidence of that, but sometime this year we should. There should be another driver of this acceleration of AWS growth. That's how I think AI shows up in Microsoft. How, gosh, I'm just trying to think of, you know,

how investors are going to view CapEx on things that they need to spend money on versus cost-cutting on things they simply don't, and how much scrutiny there's going to be around all of that. Well, there's a number out there. In fact, it's ironically, it's right in line with Microsoft's sort of street CapEx output. Both companies are expected to spend roughly $56 billion on CapEx this year. Yeah, it's a big number. The question is whether there's commentary, the results. I don't think they'll really guide to a full year of CapEx,

but whether the commentary is going to have people take their CapEx numbers materially up, like what happened at Google. I don't think so, because I think the retail business, don't forget, that's half the business here, half the CapEx spend. I think that's going to be relatively flatlined after that aggressive growth of 20 and 21. I think it's the tech infrastructure,

the AWS part of the CapEx, I think that is going to grow materially, like 25%, something like that. That's what we've got penciled in into our models. If we get the sense that that's kind of the right cadence, the stock's fine. People expect them to invest aggressively in AI, but that's kind of the number of people we'll be looking for. Is it going to go faster than 25%? Let's turn our attention to meta. What's the most important thing there? This is simpler. $40 billion. You're going to get close to that high end of ad revenue that they got to, total revenue that they got to. And the market's a

little nervous about that, given the Google results. So I think they'll still get close to the high end of that. But we did have some headwinds in the quarter around brand advertising in October 7th. So let's not forget that there were some headwinds. And then the second one is also the CapEx outlook. So Microsoft's jamming up CapEx, so is Google. Is Meta going to have to do this as well? Meta actually has the best corporate practices out there. They tell you five quarters in advance what their full-year CapEx and total expense guidance is. All companies should do this. I don't think that Meta is going to be amping up or increasing its CapEx outlook. They're at the high end. They're calling for about $35 million in CapEx. If they stick with that, I think the market's going to be a

little bit of a sire for relief. And they shouldn't have to spend materially more than that. They're not as hyperscale as Microsoft, AWS, and Google. They're not running cloud businesses. But they do need to spend aggressively. As long as that CapEx number doesn't go up, I think things are fine with Meta. With a stock that's coming off its best year ever and a stock that has a 30 plus percent gain just since November, what does that do to the bar? Are you concerned, given that move, that the bar has just gotten too high? You see how stocks have been priced to perfection in some respects and punished if even they report really good results, but just not high enough. The bar is definitely higher, Scott. You're right about that.

We're no longer top of the this is no longer a re-raider. I think somebody earlier, Stephanie, that mentioned that the stock's gone from 13 times earnings to 22 times or 23 times earnings on next year's number. Yeah, we've had a great re-rating on that. Now, my pitch is that it was underrated or whatever. We've way oversold on stock. That's what created the opportunity last year when you could go with earnings growth and a re-rating. That's not the case now. This stock goes up really on a compounding of earnings. And I think you're going to get that 25% to 30% earnings growth because of top-line

growth, margin expansion, because this company is continuing its years of efficiency, and because they're buying back block stock. I think that's a good formula for investors. I think the stock can go higher. Yeah, your points are well taken. It's so rare that you have a stock have its worst year ever followed by its best. But that's the world we're living in. Mark, I appreciate your time very much. That's Mark Mahaney, Evercore ISI, joining us ahead of that key print coming up. Up next, we're tracking the biggest movers

as we head into the close. Let's get back to Christina Partsenevelos, who's standing by for us today. Once again, Christina. Yeah, Peloton still falling short of turning a profit, but that's not the case for the maker of Invisalign. Those stock movers next. We're 14 from the closing bell. Let's get back to

Christina Partsenevelis now for the stock she's watching. Christina. Thank you, Scott. Well, Peloton is still months away from churning a profit, according to management. The fitness firm posting mixed results for its holiday season, losing more money than anticipated and forecasting weaker sales in the current quarter. The CFO also warning about the difficulty with growing its paid app subscribers. Shares are down 24 percent right now on the year. Check out Etsy shares again. A person familiar with the relationship between activist investor Elliott Management and Etsy told CNBC, not Elliott itself, that the investor was increasing its stake in Etsy to 13 percent.

And that's why you can see shares pop in 9 percent. The maker of Invisalign, you know, for your teeth, impressing the street with its earnings report. Invisalign beating on the top and bottom line, posting an in-lie guide. They plan to lower their CapEx in 2024. And margin expansion should also help raise full year 2024 estimates. That's why shares are almost 3% higher right now. Scott? Christina, appreciate it very much. Christina Partsenevelos, we are closing in on Apple's results. We'll tell you what to expect when those numbers hit the tape in overtime and what it could signal for the tech sector in this year ahead. Closing bell is coming right back. Let's give you a check on shares of Amerisports today. It's the maker of Wilson Tennis Rackets, Solomon Ski Bo, making its debut right here on the New York Stock Exchange today.

$13. That was below the originally expected range here and not much of a pop either. The company raising $1.37 billion in its IPO. Again, $13 a share. It's up 2.5%. And that was down from the previous range, as I mentioned, 16 to 18. So we will keep our eye there in the days ahead to see how it has a day after, if you will. Market Zone, next. We're now in the closing bell Market Zone. CNBC Senior Markets Commentator Mike Santoli here to break down the crucial moments of this trading day.

Plus, two big earnings reports out in overtime. Have you heard? Kay Rooney is monitoring Amazon. Julia Boorstin has her eyes on Meta. Mike, I'll start with you. We had our own version of March Madness yesterday. We've recovered quite substantially. Why? I think on one level, clearer heads prevailing

on the fact that there wasn't really that much of a decisive shift in policy by removing March as the start of an easing cycle. Then the long-term bonds also did their own easing. We had this compression of 10-year yields. And essentially, I was saying all along, March isn't make or break for the market, but a lot of people feel like it's important. So you'd have to absorb a little bit of a disappointed selling response. What we have done today tactically is go up to yesterday's open at forty nine hundred or thereabouts. So you spent most of the day inside of yesterday's range. So it's in other words, it's not perfectly decisive to say, hey, we shrugged it off and we're fine. But Microsoft's within like 1% of where it was before it reported.

Alphabet hasn't bounced much but it's up for the year still. So in other words it's not as if it's really cut into muscle in terms of the rally. Risk-reward seems more balanced, not like juicy let's buy it right here at $4,900. But it feels as if market's able to get its footing because yields are cooperating and good economic news is good news for the market. That's been the case for months ever since the Fed pivoted. Nice bounce for mega caps today into these important earnings. Amazon, Kate, among them.

Nice move today for this stock and getting a little bit of a bigger bounce during this hour on this new AI announcement. Yeah, stocks creeping up ahead of earnings here, Scott. It's all about Amazon Web Services today, AWS, which has really become the company's profit engine. Investors are watching revenue growth in particular for its cloud business to see if that's bottom. It's bottomed. It's been lingering around 12 percent in the past two quarters. Back in 2022, though, it was in the 30 percent range today. The number to beat is 13 percent on that growth rate. Piper Sandler calls that the bogey and says that'll determine the outcome for the stock around earnings. Also watch spending.

So Google and Microsoft both called out capital expenditure increases around AI. Speaking of AI, any commentary on where Amazon stands in this whole AI race and how they're going to monetize it? They just announced, Scott, I know you mentioned it, that new generative AI shopping assistant called Rufus. We should get some more detail around that. Investors are expecting margin improvement in its North American retail business. Possible upside as well for advertising as Amazon launches ads on Prime Video. But Amazon's stake in Rivian could be one drag on results. Shares of the EV maker down about 30% this year, Scott.

All right, Kate, we'll see in just a bit when those numbers come out. Julia Borsten on Meta. What do we expect here? Well, Scott, the key number to watch here is revenue. It's expected to grow 22 percent. That would be a hair down from the 23 percent revenue growth that Meta saw in Q3. Now, earnings per share are expected to grow by 182 percent. Meta shares have surged 160% or so in the past 12 months, but analysts are still overwhelmingly bullish. 81% have a buy and 16% have a hold, pointing to tailwinds, including artificial intelligence, boosting both usage and ad spend.

But after Google reported that its total ad sales fell short of analysts' expectations and it warned that capital expenditures would be notably higher this year than in 2023, Meta's ad revenue and its costs will be under a microscope. And remember last year's year of efficiency? We'll see if CEO Mark Zuckerberg has any new proclamations about cost controls and if he follows up on his public apology before Congress yesterday.

Scott? All right, Julia, we'll see you in just a bit as well. Julia Borson, Mike, I turn back to you. You want to just put in your own words what you think is at stake this evening? Both Amazon and Meta very much consensus longs, it seems to me. Apple, actually, there's a little more reservoir of doubt. The street's kind of lukewarm on it. It just has less of a longer term kind of automatic

growth story behind it. So it seems like for Meta and Amazon, you know, they have to clear a relatively high hurdle. It shouldn't seem that difficult for both of them. You know, the AI trend, whatever they say about it seems like more of a tailwind, whereas for Alphabet, it feels like they're playing defense against the AI movement because of what it might mean for search and the fact that they have to spend a lot is sort of seen as a negative. So I don't know. It doesn't seem like there's a lot of a lot of edge here. It's good that, you know, Apple is like 7 percent off a tie going into the number. It's better than not at this point, even if they're not going to have anything compelling to say about accelerating growth or iPhone.

We've learned our lesson, too. Investors, in doubting Apple over the years, on earnings and stock moves. Usually a ramp into the number, not so much this time. There's the bell and it is about to get real. Can't wait. Let's send it into overtime with Morgan and John.