Closing Bell - Microsoft, Meta Fall After Earnings While Alphabet Jumps; David Zervos on Fed, Powell 10/29/25

Episode Date: October 29, 2025

It’s one of the biggest earnings days of the quarter, with Google, Meta, Microsoft, Starbucks, and Chipotle all reporting. Stephane Link of Hightower Advisors and Mike Santoli break down the results. Brent Thill of Jefferies weighs in on Microsoft’s quarter and tells us why the stock is lower. Gil Luria of DA Davidson offers his take on Google and Meta. David Zervos of Jefferies puts the latest Fed meeting in context for investors and offers his analysis of Powell’s presser.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The Fed cut rates a quarter point, which the market liked. Chair Powell cast doubt on another rate cut in December, which the market didn't. The NASDA closing at a record high, though NVIDIA continuing its gains up 14% in a week, more than doubling off the April lows. It peaked above a $5 trillion market cap for the first time, first company to do it. Caterpillar contributing nearly 400 points to the Dow's gain after reporting better than expected earnings and revenue. The company is saying it saw strong growth in its power generation unit, Thanks to the boom in data center construction.

And some of the down names offsetting the positive impact, though, of Caterpillar and NVIDIA, Boeing, United Health, Visa, and McDonald's. Bloom Energy, another big AI winner, beating on earnings and revenue, crediting, quote, surging demand for electricity driven by what else AI. And check out the yield on the 10-year note, rising back above 4% after the Fed decision, and gold prices lower once again today. Well, that's the scored hard on Wall Street. Welcome to Closing Bell overtime.

I'm Morgan Brennan, along with John Ford. We have an incredibly busy hour of earnings coming up. In the next few minutes, we're going to get reports from three of the Mag 7. Microsoft, Meta, and Alphabet, total combined market cap, exceeding $9 billion. The three of them make up 14% of the S&P 500. And if that's not enough for you, we're also going to hear from Starbucks and Chipotle, a host of other names we're watching as well, including Service Now, eBay, MGM Report, Resorts, Carvana, and KLA. And there was also a Fed decision this afternoon.

The Fed cutting rates are quarter point. We'll talk to Jeffries David Zerbos coming up. And now let's begin with our market panel here to help navigate earnings. The Fed and record highs, High Tower Advisors, Chief Investment Strategist, CNBC contributor, Stephanie Link, and CNBC Senior Markets Commentator Mike Santoli. Stephanie, how big a beat do we need for the market to move higher here, particularly from these big names, Microsoft, Meta, Alphabet? reporting here. And Alphabet I'm hearing is out. We're going through it. Stephanie, can you

hear me? Oh, sorry. Yeah, I can hear you now. I'm sorry, John. Look, I think these are really big, these are really big reports, obviously. They're a big representation to the overall S&P 500. In terms of the weightings, there's a lot riding on these results, but I do think they're going to be good. I'm the most nervous about Alphabet only because it's up so much from the second quarter, up 30%. I think meta will be good. It's also down 5% since last quarter, and I think the expense side is going to be the key. And Microsoft, can they live up to the better cloud numbers that is expected? So high expectations, but I do think overall the fundamentals are going to be very strong. And if there's any weakness, I think it gets bought. Mike, is part of the question,

are the times good enough for the biggest companies for the most well-heeled in this economy, that they can continue to pull the rest of it through? For now, yes is the answer. It's more erratic under the surface. I think after the Fed decision impals a hawkish tone, you did see the makings of some concern in the market for a potential growth scare, regional banks, consumer discretionary, home builders, and the like.

We'll see if that still continues into tomorrow as we digest it. So, yeah, it makes it a little more of a top-heavy story and these companies have to come through. We're going to cut you off there because we got McKenzie Segalos with Alphabet results for us. McKenzie. Hey there, Morgan.

So we got shares moving 3.5% higher in the after hours. Now with EPS, alphabet reporting, a gap EPS number here of 287. That's not comparable to analyst estimates due to a one-time $3.5 billion charge that they got from the European Commission that's related to distorting competition and the ad tech market. Now, revenue, that's a big beat here, 102.35 billion. The street was expecting to see 99.8. $8,9 billion. I've also got a cloud revenue number for you for Q3. That's a big AI demand indicator. It's coming in at $15.16 billion versus an expected $14.74 billion. I'm still

digging through this report. Morgan, going to come back to you with search and other revenue, YouTube revenue as well. Those shares now up more than 5.5%. Yeah, and climbing. So Stephanie Link, I'll go back to you to get your reaction to the initial numbers we just got from Alphabet. bet. Yeah, obviously a total revenue beat is great, but cloud revenue really nice. 15.16 billion versus 14.7 billion expected. Momentum continues. It'll be interesting to see what Microsoft reports, and of course, Amazon when we get Amazon's results. But the cloud numbers, the tell wins, Morgan, are just enormous. And you still have enterprises that are still migrating to the cloud, right? there's only 15% of loads, workloads that are on the cloud.

So there's a lot more to go. I think all three can win. I am surprised by the reaction just because Google's had such a nice run, but obviously these are great numbers. Yeah, it also looks like. And again, this is just headlines I'm seeing on the screen here. CapEx for 2025 of Alphabet of $91 to $93 billion. Mike, want to get your response to this,

especially as we see shares of Microsoft turning lower right now as we await those results. Yes, of course, Microsoft, there was a bit of a relief upside. trade after the terms of the Open AI investment came out. So I don't know the details of the, you know, initial disappointment there. But when it comes to alphabet, pretty high bar, they've cleared it. Stock still benefits from it being at a discount valuation-wise to the likes of Microsoft and other comparable names. So I do think that's why you have that positive. And then, you know, the revenue acceleration in cloud, as Stephanie was saying, is something that is going to tell you that we can still tolerate the higher CAPEX because it's

obviously being put to good news. Stephanie, there's an interesting dynamic happening here with some of these big tech cloud names. AWS growth was not as strong last quarter as some invest. Hold on. We got the Microsoft number. Steve Kovac has them. Steve. Yeah, John, we see shares dropping here despite some beats on the top and bottom line and on Azure Cloud Growth. EPS was a beat at $4.4.13. Street wanted to see $3.67. Revenue here, a beat as well. 77.67 billion Street was looking for 75.33 billion. And Azure cloud growth, again, another beat here, 40% growth year over year compared to the expectations of 38.2%. We're seeing shares drop here about 4.5%. I'm going to keep digging through and find out what's going on. And I'll be right back

with some more color for you guys. Okay. Steve Kovac, thank you. Those shares are down 4% right now. But we have more earnings to bring you. Starbucks results are out. Kate Rogers has those numbers. Hi, Kate. So the stock a little bit higher here, as you can see by more than 1.5 percent, a mixed fourth quarter for Starbucks. EPS, a miss here, 52 cents adjusted versus estimates of 56 cents. Revenues, though, would beat 9.6 billion for the quarter versus the $9.35 billion estimated. And that's even with the labor investments that the company is making right now. Comps turning positive globally. Q4 comp sales up 1% better than the 0.3% decline estimated. Q4 North American comp sales flat versus. 0.9% estimates. Transactions declined in North America, but noteworthy update here. U.S. Combs did turn positive in September as the company's back to Starbucks plan takes shape. Q4 international comp sales, also better than expected, up 3%. It's China, same store sales,

second home market there, also up 2%. We're going to be looking out for any guidance and any updates on China and that market on the earnings call, guys. We'll bring you updates as we get them. Back over to you. Kate, thank you. I do want to mention that that meta results are out. Stock is headed lower. And we can go to Julia Borsden on that right now. Julia, I wonder if you can see why the stock is down seven or so percent. Well, earnings and revenue both beat expectations, adjusted earnings of $7.25. That's ahead of estimates of $6.69. But that includes a one-time non-cash income tax charge of $15.9. billion dollars, but without that one-time charge, which is due to the big, beautiful bill, President Trump's big, beautiful deal bill that would have been an EPS beat. Revenues also ahead of estimates, daily active people ahead of estimates, $3.5.4 billion versus $3.49 billion estimated, and the average price per ad was up 10% in the quarter versus an 11% gain that the street

account estimate had anticipated. Now, in terms of Q4 revenues, the company's guiding, to Q4 revenues between $56 billion and $59 billion that compares to the $57.25 billion estimated. And they say the outlook reflects an expectation for continued strong ad revenue growth, partially offset by lower year-over-year reality labs revenue in the fourth quarter. We're going to continue to dig into this. It does seem like everyone is working through this one-time non-cash income tax charge and its impact on the company as well as some other factors. Back over to you.

All right, Julia, thanks. that stock still down more than six and a half percent. Microsoft's off the lows, but still down nearly three Alphabet, though, Google's parent, doing better than the rest. Let's get back to McKenzie Segalis for some more details on that report. Mack. Hey there, John. So one number that we were looking out for is it's full year CAPEX guide. It's now ranging between $91 billion and $93 billion. That puts it very close to the numbers that we've seen from Microsoft and Amazon, the two biggest spenders in that cloud war. They've got KAPX commitments of around $100 billion.

It's backlog number. So that's the best indicator of future revenue. That's coming in at $155 billion. Also key here, it's Gemini app, which goes head to head with Open AIs chatGBT. It's looking at monthly active users of $650 million versus Open AIs 800 million. I want to bring you that all-important search and other revenue number. This is its cash cow for the company. We're looking at $56.57 billion for that segment, beating estimates of $55.1 billion.

We are seeing a miss in its other bets revenue. That's $344 million versus the $4333.1 million. That's where it's Waymo business lives. One other thing for you I've got, John, is your Q2, to your Q3 YouTube revenue. That's beating estimates at $10.26 billion versus the $10.01 billion expected. And last thing I'll say for you, that cloud revenue growth, that percentage growth, 34% higher from a year earlier to that $15.16.16 billion. as it looks to come up the ranks from that third place position.

Back to you guys. Okay, McKenzie, thank you. Those shares are up almost 4% right now. We have more on META as well. So we're going to go back to Julia Borson. Julia. Hey, that's right. Meta increasing its CAPX range for 2025,

saying they currently expect 2025 capx to be in the range of 70 to 72 billion. That's higher. They bring up the bottom end of the range, which was previously 66 to 72 billion. So bringing up the bottom end of that range, dramatically for the outlook for CAPX for the year. Now, they don't give

an actual CAPEX number for 2026, but they say our current expectation is that capital expenditures dollar growth will be notably larger in 20206 than 2025, also saying we anticipate total expenses will grow at a significantly faster percentage

rate in 20206 than 2025 with growth driven primarily by infrastructure costs, including incremental cloud expenses and depreciation. They say employee compensation costs, since there's been so much talk about hiring and firing and META, they say that would be the second largest contributor to growth as they recognize a full year of compensation for employees hired throughout this year,

particularly AI talent and technical talent and priority areas. So not a specific number for 2026, KAPX, but indicating that the number is going to continue to grow. Back over to you. Yeah, I know with some of those big ticket hires, a lot of folks looking at that number. Julia, thank you. Those shares down 6% right now.

Steve Kovac, I believe we're going to. going back to with more on Microsoft. Yeah, that's right, Morgan. One possible explanation I'm digging through the numbers here to explain why we're seeing the shares go down. Intelligent Cloud was a slight miss. We're looking at $30.9 billion compared to $30.25 billion. It's a very tiny miss.

But that said, it's the only miss I'm seeing in the metrics that we follow closely here. We're going to get some more data here on the earnings call. That's when we're going to get those KAPX numbers, guidance, and so many other things that could move the stock the other way. way. But right now, a miss on Intelligent Cloud is the only thing I'm saying that could be a drag on the stock here after hours, guys. Well, near record highs for the major averages in so many of these names perhaps were priced for more than that. Let's get to Kate Rogers now on Chipotle with their earnings, Kate. Hey, John, the stock kind of bouncing around a bit in the after

eyes here. Now it's higher by more than 3%. Its third quarter results essentially in line for Chipotle. The company lowering, though, its full year same store sales guidance. Now for the third quarter in a row. It now expects low single-digit decline versus a prior forecast of flat. Now, that's despite its EPS coming in right in line at 29 cents. Revenue is also in line at $3 billion for the quarter same store. Sales also up 0.3%. Its average check is up 1.1% but traffic did fall by just under a percent in the quarter. Restaurant margin, about 24.5%. That's 1% lower than analyst estimates. It says due to higher beef and chicken costs along with the impact of tariffs. Now, CEO Scott Boatwright telling me in a CNBC exclusive interview that

younger consumers under 100K annual income are pulling back a bit in the quarter. Take a listen. We've seen a pretty sizable step down in the consumer that's under $100,000 in annual income. Specific to that is a group that 25 to 34 year old, which we over indexed to, has pulled back measurably. And we believe that consumers now eating at home more often, not necessarily eating with our competitors. Based on our information, we're still gaining share with that cohort. They're just spending considerably less in restaurants. So he's saying it's really happening across the board here, those macroeconomic pressures. The company plans to lean further into messaging around its value proposition, Boatwright telling me,

and you can see, again, the stock higher by more than 2% on this report, guys. Back over to you. Kate Rogers, thank you. I want to get to Stephanie Link on Chipotle because I believe you own it. Now, this is a stock that I believe is down 30. 34% year to date. So if people are wondering why it's up on results that seem more disappointing versus expectations, some of the big tech names, perhaps it's being measured by a different standard, Stephanie? Oh, absolutely. Absolutely. Look, it's hard in general for this industry

right now from a macro point of view, but they're doing the very best that they can. I think that the expectations were for a negative comp for the quarter. So to be kind of around flatish is not a bad thing. I think their kitchen sinking, the low single-digit declines in same store sales for the next quarter. Restaurant margins are coming down, but they're still industry high. They have, I believe, $500 million left in their buyback or 1% of the market cap. So, I mean, they're doing the best that they can in terms of delivering on the cost structure. They've got products. They've got digital. And they've got a menu that they're revamping as well and adding to, and I think that will lead to better comps going forward. But this is absolutely

classic, terrible expectations because the stock has been terrible year to date. All right. And I know those comp sales are what we're in focus for Starbucks, too, talking about turnarounds and lower expectations. I want to get your thoughts when we saw it with Meadow with that stock trading lower right now. I mean, higher CAPEX for 2025. It's going to be even higher next year. But a lot of noise in this quarter with that cash charge. Yeah, I mean, look, I think the numbers look pretty good in terms of the growth, but people have always been very sensitive to this excessive spend. And so for them to increase their CAP-X to 116 to 118 billion for this year, from 114 to 116, that's a disappointment, number one, and number two, to be notably

larger in 2026. That's not going to sit well with people. We just want to see operating leverages this company, and we have been had been seeing that over the last couple of quarters. This is actually a departure from that. And I get it. They're building out data centers up the wazoo. They're hiring all kinds of talent for AI. They're doing it for the long term to continue to grow. But I think near term, it's disappointing. Now, I would say ad impressions actually up 14%. That's a good number. That's a really good number, better than expected. And pricing of 10%. That shows that they're monetizing AI. And they're one of the very few that are spending all money that is monetizing. We just don't want to see them spend this much.

But Stephanie, the flip side of this, isn't it? I mean, you got Nvidia touching that $5 trillion market cap, in part because folks like Meta, and there aren't that many, but folks like that are spending all that money on the infrastructure. So do you see anything here that's either derailing or bolstering the AI storyline that's been powering this market so much? These big names are continuing to spend. Meta perhaps seeing some results out of that. I don't know if the intelligent cloud mix out of Microsoft causes any concern or if we have to wait for detail on the call to hear exactly what was going on with that. Look, I think the spend is there and it is gradually increasing, probably at a little

lesser rate than that had been growing at, but they're still spending because the demand is still there. We're in the second innings of this. So it depends on which way you want to play it. You can play it with Mag 7 because they're delivering on the growth side, some monetization, They're delivering on the free cash flow, and they are investing for the future. Or you could go downstream in terms of technology. You've mentioned Nvidia, look at Broadcom, look at Terradine today, up 20%. We don't even talk about them. Then we go into Morgan's world on industrials and look at all of the grid manufacturers or improvements that we're going to see.

Look at the data centers that we have to build. Look at the power that we need so you can own things like quantum services and Eaton and Rockwell Automation and GE Vernova and Verde, which is one of my favorites. So you could do that, or you could even go to the utility company. So you're seeing spend across the spectrum of between tech and between utilities, industrials, and that's why I don't think it is a bubble. But, you know, certainly the ones that are spending more and we don't want to see them spend more, that's why they're taking a hit.

By the way, Microsoft, I think, is down only because Azure grew 39%. But the last couple of quarters, they have been beating expectations by 300 to 4%. 400 basis points. And they only beat by 200. So I mean, really, that's silly. If the stock is down just because of that, you buy that stock. Well, Meta Microsoft also both up more than 25% year-to-date. Stephanie Link, thank you, taking us across the market. Well, Microsoft, meta, Google, all reporting so far this hour, Microsoft's lower meta losing what? Seven and a half percent. Alphabet is the gainer in that bunch, up almost 6%. We've got analysts. lined up to react to all those reports, and overtime comes right back in two.

Well, Service Now, earnings are out, and the stock is up more than 3.5% here in overtime after a beat on the top and bottom lines, a raised guide and the announcement of a five-for-one stock split. Service Now, revenue came in at $3.41 billion versus $3.35 billion consensus. Earnings per share, $4.82-adjusted versus $4.27 expected. I spoke with CEO Bill McDermott about the results this afternoon. On higher margins, he said, you're seeing margin expansion on the op margin level and the free cash flow margin level, not only in the quarter, but we're going to raise the guidance for the full year quite substantially. And then on the guide and the government shutdown, he said, we are beyond any of the high-end expectations on Wall Street without the upside in public sector. And the only reason we're not putting that upside into this particular guide yet is because the government is shut down.

in other words, if it ends sooner, the quarter gets better. Morgan, this is a software name that has very much been driving a good part of the AI story. And, I mean, hey, it's up, which is something with the high expectations we've seen so far in overtime today. A little bit of anomaly. Yeah, certainly notable here. Well, you can hear much more from Service Now, Chairman and CEO Bill McDermott coming up on Mad Money, 6 p.m. Okay, let's get another check on Microsoft. too. Speaking of stocks with big moves this hour, those shares are actually falling. That's despite posting a beat on the top and bottom lines. Azure growth also came in ahead of estimates, up 40% year over year. Joining us now is Brent Phil from Jeffries. Stock's down about three and a half

percent right now. Brent, why? Azure was a slight miss. The street won a little bit higher on that growth that you just mentioned. And I think that's really largely at. All the other metrics look good. I think the street's not picking up on the booking and the actual RPO. And if you look at those numbers, you're talking about a commercial booking number at 112% of 50 plus percent growth in RPO. That's one of the best growth rates we've ever seen. And that does not include the new commitment from Open AI of 250 billion incremental. So Open AI helped them in the quarter, but all this $250 billion is not in that number, as they indicated in the release. So I don't think the market's picking up on that. So that, to me, is the future indication of health of this company is the

just blew the doors off on RPO and Bookings growth, which is, again, the most important thing that we look at is software analysts. What's the future indication of health? That's it. CapEx was a little bit higher, which everyone had expected. And you saw Google and META also raised their guide. So everyone's asking what's happening in CAPX. We just got basically a raise from all three from what we can see. And then when you think about margins. Everyone's like, well, how can you make money in AI? She put up, Amy, CFO, Microsoft put up better margins than expected. So this is further indication that they're making money on AI, that they're not effectively, you know, losing capital on this investment. They're actually

driving really good margin improvement. So the stock down 3% in overtime right now, and I realize we still have to get through a conference call here, too. Do you buy on this dip? We do. If you look at the booking number, you know, you can't find too many companies growing their backlog, commercial backlog over 100, and their RPO, which is the remaining performance obligation over 50, and that's an indication of what to come for the next several quarter. So we're buyers on Microsoft.

How does this speak to what we saw from Amazon last quarter? They talked about being sort of supply constrained on offering up cloud. It seems like some of the names that were less constrained in how they approached the cloud last quarter, continue to accelerate here. What does that mean for the whole hyper-scaler environment and what investors are both expecting and hoping for in top-line growth and business momentum?

We're year three in AI build-out, and many are indicating it's a 20-year cycle. We have, as a software analyst, we do a lot of work in talking to the data center experts, and they have line-to-10 years of work. So anyone that thinks this is a one or two-quarter or five-quarter investment cycle that they need to check in the field what's going on is this is a multi-year investment cycle and so we continue to see capex numbers going higher that should result in effectively higher higher growth for all the hypers so we think again we look at amazon to your point they put up 25 percent backlog growth they should accelerate their total revenue growth on eWS is for further indication so overall i again i i think we're nitpicking on microsoft on azure okay now one point

it's not like they missed wide right right so how important is it you mentioned meta we'll talk about that a bit later but Microsoft is sort of building software selling software on its own infrastructure here when we hear about the degree to which they're getting margin demand for their AI services on top of office on top of some of the other things they do is that important for the valuation and expectations that investors should have about the impact for the bottom line of AI? Yeah, I mean, as I said, I mean, the margins are close to 40%, which is everyone thought margins would go down as Microsoft entered AI two years ago. What they've done in the last two years is showed you margin improvement.

And that's testament to Amy Hood, who again is the best CFO and software hands down. And as long as she's at the helm, she's going to keep driving efficiency. And they're not losing money on this endeavor. They're actually making money and they just showed you that they can improve margin. So again, I've seen, you know, the last two years, and you think about it in the beginning of a tectonic shift that we're seeing that you're showing margin improvement, it's because they're able to price for it. They're charging a higher price and they're able to make money on these services. And as I've said, Microsoft is the best position of any hyperscalor to monetize AI because all the hyperscalers don't live in the application world the degree that Microsoft does.

monetizing productivity apps and off-the-shelf, ERP, Salesforce automation, custom apps, vibe coding, security, infrastructure. Every CIO is going to Microsoft because they're the one vendor they want to be in a rowboat to a deserted island because they have the entire stack infused with AI. And then from a financial analyst perspective, it's hard to compare when you've got an improving margin, good cash flow, and they're doing all the right things. And again, the bogey line maybe just was a little bit higher. So that's why stocks off a couple points. But again, this does not include the OpenEI $250 billion deal. They highlighted that, and that's trap. So that's what is yet to come.

And that RPO will give you a feature indication that things are really, really good right now. Okay. Front Bill with some good context there. Thanks. The shares of Microsoft down about 3% right now here in overtime. Well, up next, we are going to turn our attention to Alphabet and Meta. The stock's moving in opposite directions. Google seeing a nice jump as search revenue beats.

While meta is falling hard, we're going to dig into both of those results ahead. We'll be right back. Welcome back to overtime. Shares of Alphabet and Meta are moving in opposite directions. Alphabet closed today's sessions at a record high. It's popping up more than 5.5% after earnings results. Meta still falling down 8.5. Average price per ad, though, is up 10% versus 11%

estimates the company raised capex spending to at least raise the low and the floor of it. Joining us now is Gil Luria from D.A. Davidson. Gil, is this meta thing really that bad? I mean, 8%, 8.5, seems like a lot to take off the top. Not at all. Meta reported a great quarter. In fact, all three of these mega caps reported fantastic quarters that tell us how well we're doing. If we're to distill the signal from the noise, I'll focus on four numbers. Microsoft Azure, 39% from 37 last quarter.

Google Cloud, 34% growth on 32% last quarter. They grew ads 15% from 12% last quarter. Meta grew ads 25% from 22 last quarter. All the main businesses are accelerating from very large bases. So these companies are all doing very well. What happened is Meta has traded at a big premium to Google for the last couple of years.

Google has caught up and in fact as we look at the prices after hours Google is now trading at a higher multiple than meta for the first time in a while people are excited about Google they see it as the winner in AI we think that that may be true but meta is going to be a winner they're the only ones that provided guidance for next quarter was a little lower than people expected that's what we're seeing after hours but they just beat expectation significantly this quarter even though they're comping an election quarter last year so meta is doing very well they just guided a little lower than people expected these are both ad names these are the two

really huge ad names and they're both using AI to try to improve their performance from what you can see in their results is that working is that a reason to believe uh a that they're going to continue to be dominant in their spaces and then be that regardless of what the working class consumer does that the customers are going to need to use their platforms, metas and alphabets, to target the consumers that are spending. Yes. Yes to all of those things. These companies are doing phenomenally well.

That tells you the macro is stable. It tells you they are getting better and better at targeting the right ads, which allows them to charge more, and they're using AI to do it. Again, especially meta. Meta gaining share, grown 25% in ads. Google 15% very impressive, but Met is the one gaining share because they're doing even better. They're both keeping the consumer in their apps. Really the only threats are TikTok from ByDance and Open AI on the consumer side.

Let's not forget, within the next 12 months, we expect Open Eye to turn on ads. That's going to take from both of them, but more from Google because it'll be more search ads. But right now, all they have to do is split the pie a little bit with ByDance, and they're really splitting the rest of the pie. And again, meta still doing better than Google. So Gil, how does this set us up for Amazon tomorrow, especially the readthrough that we're seeing from some of these cloud results today?

They better grow AWS more than 20%. If Azure and Google Cloud can accelerate to 39 and 34% respectively, if Amazon reports another 17.5% growth quarter, that will be very disappointing. It will mean that they're now losing share in a very significant way. and they need to fix that. Now, they do have Project Rainier coming online

where they're providing significant capacity for Anthropics ramp. That should drive accelerating growth. It may not have caught the September quarter, but they better guide for it to help accelerate AWS growth. Otherwise, they will really be perceived as falling behind. Okay, Galoria, thank you.

Thank you. Coming up, we'll get you details of some of the other big earnings movers reporting this hour. including a eBay, which is falling pretty hard right now down about 6.5%. Plus, the Fed cuts rates by a quarter point, says it'll be ending its quantitative tightening program in a month. David Zermost is about to join us with his take on the Fed's moves and the market rally when we come back. Welcome back to overtime on a very busy day for the markets.

Stocks losing their gains after the Fed cut rates. But as Fed Chair Powell says, another cut in December is not a foregone conclusion. that sent bond yields higher as well on those remarks. The 10-year, getting back above 4%. Home builders hit by those rate comments, too, Toll Brothers, D.R. Horton, among the decliners, and it's not just the builders either. Other housing-related companies, such as the deckmaker Trex, also down significantly, about three and a half percent. Nine trillion dollars worth of mega-cap tech reporting results just this hour. Microsoft's slightly lower, despite better than expected results. Meta also down big, pretty notably so, almost

percent right now. That's despite beats on the top and bottom lines, an alphabet higher. After beating on revenue for cloud, search, and YouTube, those shares are up about four and a half percent. Other names getting hit after hours, though, MGM resorts with an earnings miss, also weakness in Las Vegas, similar to what we heard from Caesars just yesterday after that stock tumbled in regular trading today. eBay falling as well, despite a beat guidance for the current quarter, less than what the street had been looking for. And finally, Carvana. Now, we're not comparing its earnings per share to the analyst estimates, but it did beat on revenue and sees fullier earnings at the high end of the previous range. But as you could see right there on your screen, those shares

are also falling about 4.5% here in overtime. Yeah, we are just under 24 hours away from Apple's earnings tomorrow right here on overtime. We're going to discuss what to expect from those results coming up. Oh, and by the way, we had a Fed decision today. Up next, Jeffrey's chief market strategist, David Servos, he's here. He's in the house. He's going to react to the Fed's latest rate cut plans to end quantitative tightening and what he thinks of these markets. Welcome back to closing bell overtime. I'm Kate Rogers with some updates from the Starbucks investor call. You can see the stock is higher by nearly 2%. So a reminder here, Starbucks will give some formal guidance at its investor day in early 2026. But it's CFO Kathy Smith just said on the

investor call. We also recognize we've got more work to do as we continue to rebuild our transaction base. Turnarounds are difficult to forecast. And while we have good reason to believe that our U.S. company operated comps should build through the year, we also know that recoveries are not always linear. Reminder for viewers here, comps did turn positive in the U.S. in September. Executives say that continued in October. They had been negative for six straight quarters. They were flat in this most recent quarter. Q4 momentum clearly building in the back-to-Starbucks plan guys. Morgan, back over to you. And the stock perking up in response up about 2% right now. Kate Rogers, thank you. What started as a record day on Wall Street ended with

most indices in the red after the Fed's latest interest rate decisions. The Dow lost its 300 plus point gain, but the NASDAQ did manage to hang on to a half percent gain to set a record close. The bond market also selling off the 10-year yields topping 4 percent again. Meanwhile, the two-year yields crossing above 3.6 percent. This came after Fed Chair Powell said that a December cut was not a sure thing. In the committee's discussions at this meeting, there were strongly differing views about how to proceed in December. A further reduction in the policy rate at the December meeting is not a foregone conclusion.

Far from it. Policy is not on a preset course. Joining us now here on set. David Zervos, Jeffrey's chief market strategist, a CNBC contributor. It's great to have you here. Welcome. It's good to be here, Morgan. I mean, it's worth noting that they're also flying blind without not a whole lot of data right now, given the government shutdown, the quantitative tightening piece of this.

I want to get your thoughts on that. Yeah, I mean, a lot of people would say just on your flying blind that the Fed does fly blind a lot. I mean, we've had massive revisions to these labor market data over the last 18 months, so it's not at all clear that it's that different. But I hear what you're saying. I think on the QT, look, very much to me expected, given what we've seen in money markets, repo, sofar's been a little quirky. They don't want to take chances with that. Reinvesting straight into T bills, all the mortgage stuff kind of seems to fit the Waller mantra

on the committee that they don't want the duration to extend too much on the portfolio side or on the holding side. I don't think it's a big surprise. I don't think anything in here was a big surprise, other than Powell came out, like, really wanting to be hawkish. I just felt like from the service, like, we are not on a preset path. We are, you know, we have a strongly disagree. You know, the committee's got strong disagreements. It just felt like he really wanted to make a statement that we shouldn't take December or anything in the future that seriously.

And I feel like the market kind of yawned. It was sort of like, okay, you're hawkish, but you're gone in May. So maybe it's not that important. And I feel like that's the summary of what I saw today. Okay. So how does that set us up for Descenderberg and perhaps more importantly for 2026 now? I think that's where the market's focus. The market's focused on the fact that this committee is going to do a lot of changing.

It could go in a lot of different directions in the next six to nine months. It's going to be, I call it a more cooperative committee. Some people call it a more doveish committee. Some people might call it other things. But I think it's going to be less of a headwind. more of a tailwind, probably take a little bit more risk with inflation, and focus a little bit more on some of the jobs data that look somewhat unpleasant when you dig a little deeper. You guys, at the micro level, what are you reporting on every day?

It's a this layoff, that lay off, these changes, the AI guys that I speak to, and you speak to them much more than I do. I mean, they're pretty dystopian some of them, like really dystopian. Privately at least. But happily so. Well, yeah, because they own the capital. Right, exactly. So you're saying enough of the uncertainty talk, enough of the bubble talk,

but there have to be a couple of things that you're tracking that could be concerns. What are they? So, look, we're always going to, when we're looking at Central Bank's, we're always going to worry about that inflation, right? The inflation is the kryptonite, great CPI data by at least expectation standards, but you're still watching it, and it's not out of the woods by any means. but I just think they'll be willing to take more risks as the committee evolves in 26 and 27. And I think there's a lot of that AI story that you cover every day, which just has a lot of

disinflationary 90s style overtones to it. So I feel pretty comfortable that that's not the big risk. The big risk is that we wake up in a year or two years, and we have a pretty strong economy with not much inflation risk, but the unemployment rates got a five handle on it. And we're wondering how do we get these jobs, like really good quality, generally what we would call good quality jobs, kind of how do we get people back into this labor market? But cutting interest rates can't be the only prescription for fixing that, can it? What else needs to be done that the president isn't already doing? Well, I think there are a lot of things they could do.

There's lots of ways fiscal policy can address that, but they're long term, right? They're sort of training programs. they're redirecting some of the things in the one big beautiful bill, put vocational schools back in focus and giving funding to vocational schools, recognizing that those trades had been largely left behind, maybe focusing a little less on some of the service sector stuff. But, you know, I think monetary policy can affect labor demand. I mean, you saw the reaction in home builders today wasn't great, right? Like, we need people to build homes.

We need more homes. If we get interest rates down and mortgage rates have a forehandle or possibly even a three-handle in the next couple of years, you know, that's a place where we could see mortgage banking, we could see construction, we could see anything related to real estate services and real estate in general, kind of maybe offsetting some of that AI dystopia that we hear about every day from many folks in those companies. In the meantime, if we do take a look at the markets, I mean, we are trading right near record highs. Risk on? Does that continue? I think so. I mean, I think it's,

a fantastic investment environment. One of the best ones I've seen, the micro, you know, I talked to our bankers at Jeffries, and it's just like they're as busy as they were in 2021 when I thought they couldn't be any busier. I think, you know, they schedule 10-minute meetings sometimes. You know, when the meeting sizes get really small, it's like, I got 10-minute windows for you. So I think that's a great sign that the DREG story that I've been pushing most of this year, the less federal government, the sort of get out of the way, let business do what it,

it does get the government out of, you know, out of the crosshairs of every transaction. Just let us do what we do best, maybe sometimes too good and get a little crazy. But those are in the end games. And just you're seeing it at that micro level. You're seeing, I think, the DREG story really drive. It's just M&A, it's investment, it's a lot of capital returns and a lot of earnings potential that get me very excited about that risk on trade. And, you know, if something goes wrong,

I think we've got a lot of room for the central bank to kind of come in and buffet that. So I feel pretty good about my risk parity trade. It's been a great year for that. Probably going to stick with it in 26. And I think you've got to have double-digit returns on the equity side, and you could have some pretty good returns

on the fixed income side if this committee kind of becomes a little bit more cooperative, which I expect it will by the middle of the next year. All right. We're going to leave it on that optimistic note. David Zervos, thank you. Always good to be here. Up next, much more on all of this overtime earnings action, including highlights from Meta's call.

And shares of Cleveland cliffs sinking more than 7% here in overtime. The company announcing a proposed offering of 75 million common shares. Overtimes back in two. Welcome back. Let's get a check on the big names reporting results this hour. Microsoft cutting its. its losses down only slightly now well to a 2.5%. A nice gain for Google, though, after our hours on strong revenue and other beats across the board, really, up about 5%. Meta down 7%.

Company's conference call is underway. Julie Borson has more details and more contacts for us. Hi, Julia. Hi, the call is going on right now, Mark Zuckerberg, talking about the opportunity for the business as AI continues to bolster engagement and ad results, saying they're working to build a leading AI lab and meta's super intelligence lab is off to a strong start. Zuckerberg said that AI recommendation systems are delivering higher quality and more relevant content, and that's increasing time spent. He announced that Reels now has an annual run rate of over $50 billion. He also said the run rate for AI-powered ad tools is more than $60 billion. Now, as for meta's chatbot tools, Zuckerberg announcing more than 1 billion active users for

meta AI also saying every day there are more than one billion threads of communication with AI business accounts across meta's messaging products. Zuckerberg talked a lot about how the new vibes AI video sharing platform is off to a strong start. He said it's just one example of the kinds of new content he thinks will see AI create. I'm expecting a lot of questions in the Q&A session about increasing CAPX. CFO Susan Lee just said seconds ago that there's significant infrastructure, moments ago I should say, significant infrastructure investments are about preserving maximum long-term flexibility. Big investments there, guys. Julia, question. I think of reels is sort of the pace car for META's case on AI's benefit, not just for them, but overall,

the idea that they can do matching of content to people's preferences better and sustain engagement. Is that the case that he's making? I think that's exactly the case he's making. We have to remember, Reels is still a relatively new product, very similar to maybe the video format on TikTok. And what they're saying is not only the driving engagement, is also driving ad results. And I do think MET is a little bit unique from some of the other hyperscalers in that it has already seen the value of its AI investments. And now as we talk about raising the lower end of its cap-ex range, it's doing so, having already shown the impact on both ad engagement as well as, you know, both engagement for consumers and ad results for its advertising

partners. But the stock down 8%. There was that one-time non-cash charge as well as questions about this increasing cap-ex, both this year and next year. All right. Well, I'll let you get back to the call. Julia, thank you. Meantime, let's get you set up for tomorrow's trade and what will be another massive day of earnings. Drugmakers Merck, Eli Lilly, and Bristol-Myers Squib, along with MasterCard and Comcast, will report before the bell. And then it'll be a whirlwind of an hour where on overtime will break down results from Apple, that's a big one, Amazon, Coinbase, Gilead, and Reddit. Apple closing above the $4 trillion market cap threshold yesterday. The stock is up 29% since its last earnings report in July. Options market, pricing in about a move of 4%. AI matters so much, Morgan,

for the names that reported today. But investors have to hope those that are long that it matters less for Apple. Yeah, definitely. But I think the fact that you're seeing all of these names today boost their CAPEX plans for this year and potentially going into next year, too, is going to bode well for the broader AI trade too.

We've got a B.OJ decision tonight, expected to hold steady. Same with ECB tomorrow. And Trump-She meeting expected on the overnight as well. So we'll be watching that. That doesn't press here at overtime. Past money starts now.