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Powell Watch, Rotten Apple, OpenAI Fires Back at Elon Musk 3/6/24

With stocks coming off their worst session in three weeks, Carl Quintanilla, Jim Cramer and David Faber set the stage for day one of Fed Chair Jerome Powell's congressional testimony on monetary policy. The anchors also discussed Apple shares extending losses after their worst two-day decline since September, while Tesla's stock slump continued on news of a price target cut from Morgan Stanley’s Adam Jonas. Also in focus: OpenAI strikes back at Elon Musk after his lawsuit against the startup, Microsoft engineer's AI warning, CrowdStrike soars, Disney's streaming strategy.

Squawk on the Street Disclaimer

Duration:
46m
Broadcast on:
06 Mar 2024
Audio Format:
mp3

With stocks coming off their worst session in three weeks, Carl Quintanilla, Jim Cramer and David Faber set the stage for day one of Fed Chair Jerome Powell's congressional testimony on monetary policy. The anchors also discussed Apple shares extending losses after their worst two-day decline since September, while Tesla's stock slump continued on news of a price target cut from Morgan Stanley’s Adam Jonas. Also in focus: OpenAI strikes back at Elon Musk after his lawsuit against the startup, Microsoft engineer's AI warning, CrowdStrike soars, Disney's streaming strategy.

 

Squawk on the Street Disclaimer

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As investors seek new rate cut clues from the chair on Capitol Hill today. Plus tech troubles. Apple is seeing what is its worst two-day stretch since September. And if you haven't paid attention, Tesla shares, they're down 10% this week alone. That's only two trading days. If they had gotten AI, they'd have to go into that. Actually, we're going to talk about that, a war of words. It's open AI. Jim is firing back at Elon Musk. There's one percent chance we'll talk about that. Publishing emails, which appear to show the Tesla co-founder, actually did support creating a for-profit editor. Lights began with the markets and the testimony from the Fed chair today. Jim got some news on what he will say in terms of written words. Yeah, no, I kind of want marches off the table. I think that this is obviously one of those made off the table, but I want to get a little more expansive. I'm getting tired of the gain of what month. And instead, what I see is a man who has said, "Listen, we're not going to have a hard landing. We're not going to have a soft landing. We've got a good strong economy and we're fine." It gets weaker. We'll cut. It's kind of a great central bank essay about what you need to do in order to be able to get out of an inflationary period. David, I think that he's becoming more of a, let's just say, a true statesman of how to be able to do something and almost everybody's what he couldn't do, which is continue a good employment and not have a lot of inflation. I felt very bullish about this. You do. Typically, beyond that, I mean, the questioning is... Well, can you want to say that most of the time, not particularly helpful? Look, if you want to say it's Greenspan-like, but I think Greenspan, there has been this man in Greenspan. So I think Greenspan was slowly trying not to really say anything substantive. This man has a substantive viewpoint and he'll stick with it, which allows us to have a decent background, at least when it comes to the futures, versus the last couple of days, which have seen this level of toppiness and tech. We haven't had a very low time. It's true. Well, we've also seen rates. Well, they've declined the last couple of days. Well, I mean, yes. And that's why mortgage applications are very big. I'm glad you mentioned that. Certainly revision what we thought. You know, look, well, sometimes it's okay to say, "Look, things are really good, but did the market anticipate it?" And what I'm concerned about is, when I see the action in Apple that we're going to touch on, I see the action in Tesla, I see the action in Alphabet, versus the action that we're getting in the banks. And that could be because we're starting to see that the regulators are starting to let up with some of the regulation. It does seem like there's a shift going on out of the really, really high multiple, and into a target which had a very low multiple going into yesterday's analyst meeting, and into the Wells Fargo's, which, frankly, had been neglected, that were selling at 11-12 when they used to sell at 14-15. Yeah, upgrade to upgrades at Target, got an upgrade of Honeywell. You mentioned the banks' regulators. These reports, they're going to ease up on some of the Basel endgame cap requirements. I mean that, yeah. That's to mention KR region, best day versus the market in 12 months yesterday. Yeah, look, there are things that are happening underneath that I find are not toppy, but are substantive, and what we've wanted, you know, David, look, this Mag 7 market that everybody hated, you get away from the Mag 7 market, and the market, the money does not go over to the 5% crowd. It goes to industrials, it goes to banks, it goes to some healthcare, and it's rather pleasing to the people who have been freaking out that the 7 are breaking down. Yeah, well, true, and most of the 7 have been. Not all. We'll get to, we'll actually get to happen. Well, Amazon, if there's a COVID-19. There's a COVID-19 piece. So good. Alphabet is. Tesla is. Nvidia, obviously, is not. Well, Nvidia's and Microsoft is not breaking down. Can we talk about the Pivot and Nvidia, but what they've done, we overuse the word Pivot. I apologize for that. But what they've really been talking about is they're getting away from the traditional. They're not talking about data center, hard and vast. They're talking about verticals, healthcare. Yesterday was devoted to Nvidia in healthcare. We don't have Nvidia in financial service. Nvidia in cultural emancipation from being American. These are all things that Nvidia and factory because when he wants every country to have it, because what he's afraid about is jingoism. He doesn't want the deans to have to rely on American ecosystem. You're talking about generative AI for every one. Right. And I just powered by Nvidia's chips. But Nvidia centers that are created in these countries. Correct. And I think that the big speech that's coming up, I think it's going to spend a little more time talking about the need to be sensitive to other cultures, not make this thing into something that's dangerous and not make something that is acceptable. All right. But what about, you know, you've got open source, a lot of this stuff. Maybe there's a little less being released, but a lot of it has been open source. So there certainly is open source available, matter for example. Right. What about bad actors? What about countries that don't have humanities best interests at heart, so to speak? Look, I think a lot of us are a lot of the New Yorker article where some people thought he was glib. I asked him directly by the foot. I said, this seems a little glib. He went to the pier. Because he has been saying, look, it's going to, it's happening. So look, we're going to have to develop ways to stop it. He's not, he's not, you know, like the Musk emails where we just say, listen, this thing could be the kiss of death for society. He's really going the opposite chance. I mean, that's important because what he sent, what Jensen's saying is, we'll control it. And I know that there are a lot of very good people. Who's the we? Who's controlling it? Jensen, me, Jensen. You and Jensen? You too? Oh, you're the arbitrary fate of humanity hangs in the balance? Because you know, Jensen? Do you think I play this Clark Kent role all the time? No, like, you're going to a fully regulated... I had a big sense of himself. I didn't realize he thought he was literally standing at the gates stopping the end of humanity. Okay, well, look, I think that when he's, he accepts Carl, that we're going to, it's going to happen and he wants to be calls for a responsibility. He's not saying government should look at it. And by the way, can we just understand that when it comes to compliance with China periodically, I hear that he, you know, he's unhappy with China. Well, no, he wants to do business with everyone. But he's the most compliant with Gina Romondo, the Commerce Secretary. So let's just get away from that. He wants to be in others and that's because that's the militarization that people are really fearful. We do have a piece of interesting story on CNBC.com just ran about 20 minutes ago, I guess, with a former AI engineer from Microsoft, worked there for six years, who said he's sickened by the technology's ability to create violent images, sexual images, totally ignore copyrights. All very sensitive issues, I know those of us who did some things in terms of trying to look at what a, say, a brigade of soldiers that were from the other side in World War II, what they would look like, was not sensitive to the reality. To put it, what that's about is you, from this it was like, yes. But I do think it's a real issue, the whistleblower, and this is right to you saying, David. I mean, we're not in control of this stuff. No, but I hear you saying two different things. We're not in control of this. It's a real concern. This is saying that Gens is wrong, who is saying we have to get it under control. They are the engine under which all of this stuff is happening. Both, and by the way, just, you know, both software, increasingly. Yes. And the hardware. Yes. You work in teams with him. Right. So we don't talk as often, we talk so often about the H100 chip and what will be the H200, the next generation, but we don't talk as often about the software that Nvidia has, which is as important, isn't it? Well, because you have the software alerts. And so when you go to Amazon, it can take a look at all your data. Now, that's interesting. We're going to have to talk for a moment and say the Nordstrom versus the targets versus the Walmart's. Because Target has enough resources to be able to use it to inference. Yeah. And it comes to doing same day. One of the reasons why Nordstrom seems to be almost going away is they don't have the scale or the capital to do this. But this is an Amazon game. I mean, inference, 40% of their business's inference would shock people that it was that much. And then, of course, is their ability, David, to be in your head and say when you are buying a pair of new balance, you are probably going to like something from new women. Right. This is rather amazing. And it's just getting better and better. It's getting better and better. It requires a lot of data, which of course they have more access to than virtually anybody. And it also requires a lot of computing power to your point, which is quite expensive. We're going to get the power soon on that. That's quite expensive. No, to even pay for that. I'm saying to have them to have all this running. And then when you talk about, I know, these are conversations we're going to be having for quite some time. But these are what I mean. We also are going to have a conversation about power itself. Well, it's going to say vernova, which is, dude, this is the launch of vernova. The vernova is the game plan. It's not to talk about the GE spin, the energy. It's going to be talking about the 5% increase each year, the largest demand in the history of the country for electricity in a short period of time because of alphabet and because of Amazon and the need to have scope and Microsoft. And all these data centers that we talk about are getting built. By the way, don't look at the public data center companies, their REITs, their rate-based. I know. It's just like, I find everybody's like, well, you talk about all these data centers, but I don't see these stocks going up. Absolutely correct. The same thing is has the lowest yielder of almost all the REITs. It's not the same thing. But we're talking about the enormity of the construction projects going on right now. So maybe a step further, who is going to be in control of the grid? Is it going to be Amazon, Alphabet, Microsoft? Or is it going to be the president in Congress? Because Amazon, Alphabet, Microsoft, they want solar. That's true. But do you know the first thing you have to do when you want to put up a new data center? I mean, the first thing is you have to identify where your power is coming from. Exactly. They measured these data centers based on how much power they consume. There's actually the way they measure them. There's a full day meeting today with Enbridge, which is the largest provider of basically. That's called fossil fuels, trying to defossel us. And what's amazing, Carl, is they're just trying to figure out and buy areas where they can be low cost producer. Remember, not gas for the customer. So low. In order to be able to entice these mega companies that are really nation states within our state in a country. You're going to need nuclear power. Okay. So Gene, what Vernova's going to talk about, I'm glad you mentioned that. Thank you. There's a small form factor that you're doing in Canada, which they'll have done in five years. But TVA is about to announce a big deal with Vernova. That's going to be extraordinary. So get your hopes up. Tennessee Valley authorities. How would you just say that? Yeah. Just checking. Yeah. TVA. TVA. Yeah. It's a form of super company, a second rate drug's coming. No, no, no. Don't confuse everybody. I know. Someone last night, Carl, is that with a leading group of intellectuals? And they said, you know what? The discussion is Sylvia Plath. Sideshow. Really? No. They actually liked it. Precious seconds shaved from our show to discuss Sylvia Plath. But anyway, I love this idea of, like, David's going to have to start getting used to this because of what happened yesterday in the public party, but hate him or like him. Former President Trump is a fossil fuel guy. Oh, yeah. But you know what? Amazon is not. Mark Zuckerberg, who is now very close with Jensen Wong, head of NVIDIA, will come out in favor of Scope 3. That's why, as The Times reports, Elon met with Mr. Trump. Now, how about that? Wasn't that interesting? I'm trying to figure who else would be in that room, some of these wealthy people. David, wealthy people meeting with Trump. Is that a story there? No. I don't believe so. No? I don't believe so. But Elon Musk meeting with him is. It's interesting. Of course, he did not support him previously. It's unclear where his-- Is this what you do when you're-- You know he's not going to vote for Biden, obviously, he's still stung. And perhaps he should be by the fact that that EV summit at the beginning of the Biden presidency bizarrely didn't include Elon Musk. I think that started him down a path. But whether or not he supports Trump now unclear, but the two didn't eat, he's anti-Iger and anti-Biden. What is that? Yes. And he's anti-Sam Altman. As we now know. Yes. Well, and, you know, look, the only way to save that chat GPT plant was to give it to, I learned to give it to Tesla. I didn't know that one. Well, that was the other. It was an interesting, there was an interesting email. It included in sort of this, a bit of a rebuttal from OpenAI called OpenAI and Elon Musk in which they cite a 2018 email where he said, listen, you guys, you know, we're never going to be able to compete. Yeah. And maybe the only hope we have is, sure, maybe going for profit, but actually incorporating OpenAI into Tesla. Again, that was in 2018. Well, you know, I'm using Tesla as its cash cow. And then, you know, I don't think-- I believe attachments to other large suspects, Apple, Amazon would fail doing an incompatible company DNA. What I would say is interesting is that they believed Google was so far ahead in artificial intelligence in general that it could never be caught. Amazing. Amazing. Now, one of the things that, yeah, my retired lawyer, litigator, Paul Weiss, Bruce Perinbaum, would say, you know, Jim, that's a bad letter. It's not helpful for any changes into a bad set of facts. This probably doesn't even end up in a courtroom. I just really do. You think it does? Well, because I just think that Elon likes everything. He wants a show trial. No, but I'm just saying. You think he wants a show trial? No. I don't know. I guess there's some sort of settlement here. Maybe. Maybe. He's a little radical. Why would you say-- I mean, did he not have that email, which basically says, I want to steal this thing from you for not 1%, but what percent did he say it was going to fail? I know. Like this, we're sad it's come to this with someone whom we deeply admired, someone who inspired us to aim higher than told us we would fail, started a competitor, and then sued us when we started making meaningful progress towards OpenAI's mission without him. We'll see if we hear back from Musk. But again, as I've directed people, read the complaint because it was a good read from Musk. The complaint was very good read. I'm so glad you mentioned that because it was so cool here, and it made it very clear that he was absolutely one at non-profit, and it's exactly the opposite. What are the letters? The emails. The emails. Well, OK. Let's see. Yeah, interesting. He's definitely going further out, reportedly telling Tesla employees to vote in a new D.A. in Austin. Yeah. Meantime, Morgan Stanley trims Tesla's target to 320. That's a great note. Jonas says he'd be demand decelerating despite the price cuts, fleets are selling units. Jim is-- and hybrids pushing more competition. And that was before last night's BYD price cuts in China. I think that-- and then I was watching the stock of Hertz yesterday, $7. Remember it was Steve Sher who first brought it to our attention that the repair rate, much higher than people thought, people that the um-we toward this. And then we know Jim probably has been saying hybrid, hybrid, hybrid, and the numbers are extraordinary. David, I'll go so far as to say that other than California EVs have peaked, up without subsidies, of which hate them or like him, do I have to then finish the sentence? President Trump would not give you the subsidies. No, one would anticipate that there will be a reversal, if possible, of the IRA under a Trump administration in general for all of the such issues. Not just by the way, for EVs, but for renewables across the board. That said, let's-- We don't just roll it. Jonas always worth paying attention to, and you know, your point, he says-- He's a little of a Stephen King, and Jonas is descelerating EV demand, not in key markets. No. Again, it's still growing, it's just that the growth rate is decelerating. Look, it's the Chinese who couldn't make it in real estate, have now decided to wreck the world. They're suggesting every single leftist government by saying, "Look, do you want clean skies and white things?" But even if it wipes out your order, sure you won't. We got the solution. There's-- Most of them don't have an auto industry, so they're happy to buy Chinese EVs. Yeah, you see German exports up six. And you can't buy them here. Mexico is going to be the battleground. If Claudia Shinebaum gets in as the next president, she's a scientist. I see look out. She's ESG. They don't call it that anymore, Joe. Right. ESG skeptic now, yes. Yes, of course. MRVL. Okay. Take a look at the pre-market, trying to avoid three days down, which S&P hasn't done since the first few days of January. We'll get to some specialty retail. Jim mentions CrowdStrike. We'll get ADP Jolt's beige book today in addition to Powell on the Hill back in a moment. This is Rob Wilhite, founder of the Wilhite Law Firm. If you've been seriously injured in an accident, you want Wilhite to handle your case. Awarded Best Law Firm in 2023, Colorado drivers know that when their hit, we hit back harder. Our firm stands up to insurance companies who want to keep the settlements down. 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That's looking for some gains after yesterday's sell-off, even though they did avoid to end the day on the lows. As we said, trying to avoid three days down, first time since January 2nd, 3rd and 4th, Kramer's mad dash is up next. Then the opening bell. Don't go anywhere. As you might imagine, I heard a lot about platformization over the last week. To me, it's kind of a made up for Daisy term, but what I believe our competitors are talking about is bundling, discounting, and giving products away for free, which is nothing new in its software and security software. It's been done for the last 30 years. When we think about what we've seen in the past with other competitors, we know free isn't free. We're on a block for a bit, I've seen this movie of wrap and roll and bundling together with multiple products that were acquired. Last time I saw that, I was at McAfee. That's the finish of the thought. That didn't go too well. Let's get to a mad dash. That was George Kerst. That's George Kerst. George is not usually as funny as that. Wow. Easy being a technical term for your complete idiot jerk. Total for Daisy. Who's coming after Palo Alto? Oh my. No, me goes after Microsoft, but this was a direct dagger because the cash talked about the platformization, which George is saying, listen, we got the cheaper and better. He always takes a shot at Microsoft, but there were three separate shots at Palo Alto. In part because Palo Alto changed his model, and he's saying they changed the model because frankly, they don't have the horses. It was a combative call. George is usually not as funny as that, but he came out on top to stock up $65. And going to have a huge gain today on the back of these numbers and the fact that they've guided to 28 to 31 percent year over year revenue growth. That was in line heading into the print now, but when everybody steps back, Jim, they make the point that we're making here, which is he came right after Palo Alto. Yes. Well, the number one rival is poo-pooing a platformization. I'm reading another note here about it as well. Chippy is certainly one way to describe the rhetoric on the call last night. And the question now is how does Palo Alto respond if they choose to as well? I think that Nichesia is going to take it not. I don't think he wants a spinning match here. I think Nichesia is a higher end guy. They are, by the way, they're not frenemies, but there's mutual respect there. I thought this line, which is not, I understand, applied to Palo Alto is very important. An eight-figure multi-year win at a Fortune 100 business where the Falcon platform displays five different products with recent breaches, costing them hundreds of millions of dollars. Someone had a hundreds of millions dollars breach, and we don't know about that. Is that what they referred to that, right? Yeah. Yeah. Now, what is that, David? But the SEC are supposed to in four days. A lot of students. You are supposed to. Well, it may be the one that we do know. It may be the one that we do know. I mean, there have been so many of these. George attacks Microsoft. The last night was all about Nichesia. Should we wait for Nichesia to come back? Yeah. We'll come back. All right. And we'll see George on Mad Money tonight. We've got an opening bell right after this. Now is the time to embrace a new wave of workers. Every day, your team grows younger, more digital, and more drawn to entirely new ways of working, which means you need flexible solutions to connect them where business gets done. T-Mobile for business was born digital. With America's largest 5G network, we can make it easier to work together from virtually anywhere. Your team may be changing, but with the right tech, it can be more productive than ever before. Get started at T-Mobile.com/now. A lot of news in specialty retail this morning. Most of these names, Jim, are trading lower pre-market A&F, Ross, JWN, Footlocker. Yeah, there were a lot of, and the Footlocker business had correctly. This is Mary Dillon, who ran Alton. Now, the stock had just doubled, so it was not, it was a question of where it could go. This quarter actually very good. Same store very nice. The inventory is good. It pushed out a plan that I thought was going to be up for extreme profit in 2025. Maybe up to 20, 20, 20, 20. Hey, Bob, I want to say this, Mary Dillon is a season pro, and she will get it where it has to go. I felt that Nordstrom really had terrible things. I mean, wow, cautious consumer, minus one to two, same store sales. I have to wait for the special big sale in the second quarter. Nothing good there. I didn't mind that the problem is to get the extra fortune to do it. Yeah, then get to a few of the other retail games we got last night and today. Let's get the opening belt and the CNBC Real-Time Exchange and the big board, FinTech firm Atlas Clear, celebrating its recent listing via SPAC at the NASDAQ. It's the 15% pledge calling on companies to dedicate 15% of purchasing power to block owned brands. That's great. CPB's. I didn't get to finish Admiral Cromney. I'm sorry. Yeah. I did not have been down. That was an amazing quote. Yeah, I'm sorry. No, Thompson, line, Jim. Abercrombie up 28. Well, look, Abercrombie is the best. It's up 57%. And the fact that the stock was down four, I was telling people before I came up, I said, there is one opportunity in the world right now that is just wrong. The other one is going to surprise me, the gap stores are going to be good. The recent upgrade out of the JPM? Yeah. A gap stores is... I don't know if you've been to Banana Republic lately, and that's really the lagging division. It's got a lot going, but I think you go to gap instead of... I mean, David, I'm not going to go to gap over Breony, okay? That's just not going to happen. I'm sure it's not. But I would expect that. A gap has some great close. Does it? I actually was in a Banana Republic. They've kind of... You were... No, I... They had this one. They were on Doris. Is that when you're talking to Rock? I wandered in there. That is... There is a Banana Republic. Trying to find some things. I think it was Valentine's Day. You probably couldn't afford anything there. I probably couldn't afford anything there. And it was more upscale than I recall. Yes, it really is. Yes. I put a pair of leather gloves. They were trying to make that move. I know. Yeah. I'm glad you saw that. The comp stores are going to be out. I saw it. I know it. And Old Navy has not been... It's been a while since I've been Old Navy. My kissing is okay. I prefer Walmart Old Navy when it comes to style. All right. So you prefer Breony or any number of other things? Brunello, Cochinelli, and Old Navy are rarely put in the same sense I just did. Except for Kramer's closet. That'd be a good... Kramer's closet. Kramer's closet. Yeah. Gap has happened in a tough stock to home this year, though. It's up 66%. Yeah. And the new fellow came in and it's doing such a great job. By the way, every week shouldn't talk about this. We have it. We were talking about shrink, which of course is stealing. It is under control. And Brian Cornell explained that better than anybody, but Brian Cornell's conference, his Zandell's being, "Torta force, David." Torta force. Torta force, huh? Torta force. Okay. Because same store advertising he's starting to talk about doesn't get, doesn't pin down any numbers. But Target's going to keep going hard because they have 11 brands that make a billion dollars that are house brands. And I think a lot of people don't realize it's gross margins and the house brands are extraordinary. Yeah. That's a 52-week high as Target has a couple of hundred bucks. That conference call was like, it was kind of a Beethoven 7th. Wow. Today we get upgrades out of HSBC and Deutsche. Tim, pricing is interesting at Campbell's, 1% versus 3 prior and 10 before that, even though we had volumes down one. No. But you know, one thing I would say, I think Mark Klaus is uniquely set up for this moment. The Rayo's deal, good. Everyone keeps worrying about his cookies and GLP. I have intuitive surgical in tonight. They actually saw on the bariatric surgery, that's what's being her. Okay, David, that's what's down. Klaus is going to come out of this and I think people are going to want to win on that stock. Remember, he doesn't have Coco. Coco is the big problem. Right. Coco is just-- Because prices are up so much. Yeah. And that's why Hershey's been squeezed. Oh, this guy is so good. He's so good. But anyway, I was glad to see Mark beat the number, Mark Klaus beat the numbers. The distinguished vet has been instrumental in hiring vet, so he's always got a point of who's doing that because you want to see those companies do well and I'm very proud of him because he's been struggling and this was a breakout quarter for him. You guys were mentioning CrowdStrike earlier, a nice halo effect on Sentinel-1, Zscaler Gym, Palo Alto. Yeah, I mean, the funniest thing is that he's trashing Palo Alto in the stock. And meanwhile, it's benefit. Oh, but it was up 10. Now it's only up one. So someone's a bother to read the conference call. Yeah. It's too gazzy. Don't usually hear fugazzy in a conference call. No, but you know what? The Mets have a lineup of fugazies and the Knicks lineup is a little more fugazzy like than I thought. Well, we have a lot of injuries. We'll be back. We'll be back. It's a term used to use for-- And I don't understand why you're taking shots at the Mets already. It's just gratuitous. Look at Palo Alto. Someone now read the call and realized that the share he took from Palo Alto, my chapel test team, they've been one of the best performers. Nick Hess will be back. But the platformization that Nick Hess talked about, George just had so much fun with it. I mean, look, when you have numbers like Kurtz, who has by far now, we realized the best suite, and you have the bad guys using AI, and he's stopping them. It's a feel-good story. Apple and Tesla are both down in the early going here. Not much, but it's notable, of course, we started the show talking about what has been as you take a look at Palo Alto shares that have now turned around, not benefited from. I remember, it was those great numbers that crashed, right? One point this moment. There's a look at Apple. Look at Tesla, and obviously we've discussed at the top of the show what has been a decline for both that has been quite significant over a fairly short period of time. Hardly magnificent. No, they are hardly magnificent. You know, Tesla, we discussed the Jonas note. Obviously, he still has a $320 price target for Tesla, so say what you want, but the guy is still amazingly bullish, looks for almost a double and a stock price. But he likes Ford. That's his favorite name. Well, the other interesting point about his note is that only what a fifth of his target is based on the car business. I know. Look, I mean, people are using some of the parts everywhere. They are. Right? I mean, every time you can't make the numbers. Have you thought about the sum of the boards? You know, and some of the parts is great if you can actually get those parts separated and maybe see what happens. There's too much S.O.T.P. and David adjusted EBITDA's made a comeback like you would believe. EBITDA is everywhere, it's good for us to remind people that oftentimes adjusted means we're not including stock-based comp, which is like, well, what's going to happen if you can't give people stock anymore and you have to give them cash? That said, Jim, it never seems to rise enough to become the issue that some would say it should be. Who's at the forefront of stopping? Gary Gensler, who? I don't know. Mark Benia. Really? Yeah, his buyback is really to be sure that that doesn't occur, which is why his stocks declined 20 of 20 points since he's worried he's mistaken. Well, but your point is, well, taken, which is a lot of the buybacks are in place to actually offset the amount of shares that are given to employees. Shares that obviously represent oftentimes a significant part of their compensation but is not included in what is adjusted EBITDA. Well, yeah, but that's what paying your employees should not be included. It's our job to tell people at home that it's a joke. I could adjust EBITDA and be as rich as Musk. Oh, Bezos. Excuse me. Is that why? That's the new standard? Why shoot low, right? Shoot them. Yeah. Hey, they're good at hearts. You know, I used to enjoy it. I thought you were a good at hearts. I thought you were a good at hearts. I thought you were a good at hearts. Good at hearts. A long time. Yeah. Is that worth his declining and continues to do so? That is Elon Musk. I don't think we're worried about him. Nobody's going to hold any fundraisers for him. Right. What about Apple, Jim? You know, I know these old mantras buy it. Don't trade it. Let it go. Own it. Don't trade it. Let what go? I'm just looking at Nikesh's tweet. Wait, no, no, no. Don't get distracted. Don't get distracted. I'll give you an Apple. Okay, so Apple, Apple, you came back with like something from a Disney movie. Let it go, let it go. Cyber security, don't talk to me about Disney. It has lots of room for good companies to win. It's Nikesh. Okay, here's what I think the problem with Apple is. There's a story that comes out which basically says sales are down 24%. Now, we know from when the conference call came out. They already had a read about China. And there was no one who was negative as that. At the same time, I think anyone who has China whether it be Nike, whether it be Starbucks, it is just-- Or Tesla. Or Tesla is stunned. Last night, I had a group called Inspire Brands. Now, that's actually a lot of-- That's a private company. You know, 36, 36,000 stores. I mean, there's-- Right, they own Dunkin. It's Baskin' Robins. It's Buffalo Wild Wings. It's R.B.'s Sonic. And I said, "Guys, where are you in China?" And this CEO, Paul Brown said, "You know, we like to be in growth markets, India." Yeah. That said-- How many Starbucks are there in Shanghai? 11, 100? Too many because-- Too many because-- I mean, the numbers are enormous. But Lux and our Sim has been saying, "Look, things are not great. I still believe, I think I believe that the cup of coffee is not-- Is transcendent. You can afford it if you live in China." But it's China, like David, the Apple phone may be too expensive for China. Right now, because the knockoff phones look a lot like Apple phones. Well, again, you've got Huawei back in the market in a more significant way. Not with a phone that equals Apple, but at the same time to your point, that can do plenty. Well, we need to hear that the 16 is going to have all the AI we want, but that would then freeze 15. We need to hear something that refused the 24% down. We have not. We need to hear something about VisionPro doing well. And, you know, what's going to happen is it's just going to drift until we get a new data point. I say own it, don't trade it, but I told people in the club, "Look, I think it's going lower." You know, the drifting could continue for months, though, because the developers' conference is not until-- June. When we are expecting, and there's going to be a lot more pressure on them to deliver on something, having to do with generative AI, being a real part of the iPhone 16. The other part is, and we mentioned the Jonas note, he's a separate note where he talks about Apple's decision to cancel the car, and he thinks that's going to spur other companies to pull the plug on Robotaxes. He thinks long-term, it's going to be humanoid robots that might beat Robotaxes investments. It could be, but, you know, let's go back to Apple-- That's the two, by the way. Yeah. Let's go back to the elephant, and I heard someone say the elephant in the river yesterday, and I always thought it was like, you know, the elephant in the room, because the river is like, "Yeah, I like to drink." Sure. Watch out for the hippos, though. Yeah, they're very dangerous. Very dangerous. But, you know, you know, Alphabet, we have Waymo, right, and they celebrate that they're going to be allowed to be able to take a Waymo from the airport in Phoenix to Phoenix. But you can't go to the Phoenician, David, because they won't let you. So you've got to get out. I mean, they'll provide you with Uber. I mean, what kind of things is this? There's Waymo, thank you. David Waymo, yeah, you, I think, fundamentally ignore the fact that Waymo, they've spent billions, and what do they have to show for? Right. And that's because the risk reward of, unfortunately, is fatality. Let's talk about fatality. People just, yeah, but fatality with the self-drive, and it's just like, that's worth like a thousand fatality. Alphabet's Waymo unit has also run a different kind of AI to instruct the automobiles different than what Tesla's now doing, apparently, which is using generative AI, and it, they hope we'll actually get them to full self-driving in a way. So many of you are doing generative AI. I wonder who that is. Well, of course, it's NVIDIA chips that are running it. Thank you. I rest my case. As Tesla. But the prosecution rests. But you're right. I think it's determin, deterministic models versus imitation models is what they call it now. Remember that Jensen will not rest until they solve the black guy's problem, which is right next to his office. It's just black guy's black guy's back. Also that behind him in his desk last time was his plan to put him in on Mars and what it would take. And it's the last mile issue, kind of like Amazon with your prices. Wait, Jensen's also thinking about Mars the way Musk is as well? No, he's beating Musk. He's beating him. Well, he doesn't have the rockets. So, I'm not sure he's beating him. David, it's about to match that. It's just a distract. Is it necessary? Get over there. They really have to be doing that. They don't ring a bell at the top. They just ring it all the time. I think to say I fight the spat between the cash and George has got real legs. Because it's now continuing on Twitter and I think it's going to get nasty by the time you start. I would have just came over to the picture and wanted to get there. It might be an electric short for all. Guys, we do have a new statement from Microsoft regarding this piece. Profiling the engineer who has shared his concerns with not just CNBC but the FTC as well. Microsoft's rights, we are committed to addressing any and all concerns employees have in accordance with our company policies and appreciate employee efforts in studying and testing our latest technology to further enhance its safety gym. The story and the engineer's concerns sort of spell out plug in anything. Pro-choice. It's true. And the library of offensive images that will give you. It's interesting. When you speak to the people who read it, which is going to be front and center within the next month, they think communities are policing. So the communities will say, look, this isn't right. This is a closed shop. There's no community to police it. No, no, and it's, listen, I mean Adobe, a very different approach, right? Firefly only uses copyrighted material. And it is so extraordinary. And so will indemnify you. Did you see? Will indemnify you, in fact. Will you able to see some of the things that people are doing on Firefly? You can't just distinguish between LBMH and your own. It's like the highest end. That said since, I think it was Sora since the image generator came out from Chatch EPT, right? The one that not a live motion, for example. That's used. But Adobe stock has been down. And it's just shaped. The small meaning such businesses have adopted Firefly like you wouldn't believe. So you're a believer. Can I just be proud for a second and say that my daughter used it for business and a huge uptick? Sure. Because it tells the creators. Well, seeing some of the worksheets, the marketing system. Well, it's all this Adobe. It's rather amazing what you can do with the product. And we are not creative guys. We're looking at whether the big R deal is going to go through it. Well, there's creativity to everything, Jim. Come on. Sure. Don't undersell it. Look at Oppenheimer over here. Creativity drop. That's me. It's what I go by usually in the house. People, you know, they don't call me dad. They call me Oppenheimer. It's good for you. I thought that was the name of your dog. No, scoop. Yeah. Scoop. I'm aware of your dog's name. Actually, your dog's not named in video. Video RIP. Yeah. Did he adopt? What's the stock? How much is up today? Because it's not allowed to go down. It's over three percent today, and I'm glad you mentioned it. I'm going to go here. Because Nvidia's market value is now eclipsed $2.2 trillion. I hit him with Lerner and Lowey. He doesn't even know. I think he knows who to learn that law. I do know who they are. You miss the, you know, let it go, let it snub. Well, that's my reference to Frozen. That's well now. Whitty chief. Way past you. Do you know who wrote that? That's Roger's heart. What? Let it go? No. No, I don't know. That, Nelson Peltz with... Nelson Peltz wrote that. He might claim he did it. Oh my God. We haven't talked about Eiger's extreme confidence now in 24th. It's no longer just confident. It's extreme. And you saw the Moffatt note today? Yes. Now, I mean yesterday came out to stock jump the quarter on the fact that the rear, the fourth quarter is going to be good, but he's been saying that. He hasn't been saying it for a while. I think a lot of the things he said yesterday at Morgan Stanley and other things that he has said previously. Thank you. Including even talking about there you see sort of in terms of the parks and the parks performance. And then even talking and raising free cash flow guidance as well. That was important. Stock though. Well, it was during the trading day yesterday. Yes. But yeah, it was. It was one of the things. Do you sense, David, that... But he also talked about Netflix getting their technology up at Disney Plus to a level that approximates at least what Netflix is able to in terms of therefore being able to cut marketing spend because you can keep customers more easily because they just have better tactics. That addresses the last 20 pages of the magical mystery tour of Nelson. Did you read the laugh, bring the match back? The last 20 pages are about are, this is how bad this company is. I know. You know, there was some interesting things about the presentation from them. Obviously it was an interesting read, the white paper I'm talking about. Some are noticing that it was very similar in style and scope to Eliot's white paper, so to speak. Did you notice that? You don't cut the thing going? Look at that. Come to think of it? Yes. Look at that. Isn't that interesting? Here, maybe we can show people. There's the Eliot art. There's the... One is Eliot's NRG slide and the other is the slide from Trianne and Disney. Since you're from France. Exactly. And then this is Eliot Arconic on the top left. Tell them that is. You're just in here. It's the number of days that you bought you would be down. Yes. I mean by the way, these things do, they are, they end up being similar. Of course they are. They're fight letters or fight decks as what you call them or white papers, but it was noted by a number of people that there was significant similarity in terms of presentation from Trianne's white paper and a number of ones that have been done by Eliot. I thought they are. It's interesting that one of the directors they're targeting really presided over the compensation of the final days of Avon. Where, you know, she was not bored of Avon. As you know, she was going that Avon board. Avon is not a name I've heard in a long time. Who was the lady who ran Avon for love this year's? Amy? Andrew. Andrew. Yeah, that was a suboptimal period of Avon. A long standing company that kind of disappeared. By the way, Elf is on fire if you win. That's better. Why music? So is JD.com on fire. Well, they're doing a Bible. Yeah. The government lets me do a Bible actually. That's what they're doing. Can't you sell that? You don't have to sell it. You don't have to sell it. You don't have to sell it. You have to slag the Chinese Communist Party today. You want to do it now? Well, I just think they... We're running out of time. I just think if you're a seller right now, I've got to send me an invitation to your long-term confinement. A beautiful prison, perhaps, near where the workers are. Powell, just around the corner coming up in the next hour. As we go to break, we'll watch what bonds are doing in advance of his Q&A at least. Ten-year did get down to 411 or so. That's going to take you back to about the 8th of February. And we're back about 5,100 S&P. Don't go away. Let's look at some S&P laggards today. The banks, the regionals in particular, giving back some of yesterday's relative outperformance, Northern Trust, PNC among the big laggards. Tesla as well, which is now flirting with falling out of the 10 largest market caps now behind Visa. Dow's up 125. Stop trading with Jim's coming up. Let's get to Jim and stop trading. Okay, this is really important, Carl. I've been saying that the so-called Browns and liquor, which are whiskey, are doing really poorly. I did not know they're doing this horribly. Jack Dales would get, of course, parent coming brown for me. Their numbers were down 6%. This was the premier brand of whiskey in our country. And now look, there's two things that are going on here. One is that there is that younger people are really turning against the Browns and the clear, by the way. But second, this is really GOP desk one. And no one's going to talk about it. I can tell you that these GOP desk ones have eliminated the ability of taste when it comes to whiskey. I thought you were going to throw cannabis in there as well. And this phrase, California sober, Jim, is all over popcorn. Can't even try that. I should have, I guess I'm more focused on how that one, particularly going to be down because whiskey is really being obliterated by the taste is, you know, people tell me, look, you just as soon have Gatorade, you know? But what's amazing to me, Carl, is that this is the first one that's really happening very quickly, GOP desk one. And cannabis is such that people get a better buzz. They don't have to bring down the price. And that's the, the bourbon's raised price, raised price, good luck. If I were, if I were a pal, they asked me like, what do you, what are you doing? I would say, did you see Jack Faz? Why? Did you see the pressure? Yes. Wireless services in bourbon. But it's rather mark on breath. Why would not touch that thing with a 10 foot GOP shut? Yeah, big piece on the GOP ones on today's show this morning. How about tonight? Okay. So tonight I have crowd strike. Let's just continue this Gazy spot. Get it really going here. Look, I, just to be clear, George is right now got the better. The cash did not have good numbers. And George had some of the best numbers I've ever seen. And I think that George is just a fantastic spokesperson for an industry that is really under siege because the bad guys are using gender, AI. Just like David predicted. This is the oxide. It's not going to get any better. I hate to tell you. Oh, there you go. Well, this is your bright side. Isn't that, they have a song about it, isn't it? Yeah. Sorry. Shane Pottsmover. Shane Pottsmover. No, I'm talking about it. It's more popular. You wouldn't, you wouldn't understand. I would not stop it. It's not but I am. How but do you steal my heart? You know, that, that one. You know, like Henry the fifth? Are you good on that? How, why can you go? I thought Sylvia Plath was deep. He thinks Milton's Milton Burl. Oh, my God, I know it's still good. Jim, we'll see you tonight. A busy session setting up with Powell on the Hill. Q&A with House Financial Services. We'll get that going in a minute. You've been listening to the opening hour of CNBC's "Squawk on the Street." All opinions expressed by the "Squawk on the Street" participants are solely their opinions and do not reflect the opinions of CNBC, NBC, Universal, or their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information, "Squawk on the Street" participants consider reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. 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