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Separate registration required, see Walmart Plus terms and conditions. Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street. Good Wednesday morning. Welcome to Squawk on the Street. I'm Carl Kington here with Jim Kramer, David Faber at Post 9 of the New York Stock Exchange. NASDAQ 100 looks to open higher by about 2% on the back of AMD. Strong guidance. Got a Fed decision today. The BOJ hikes. And some Dovish macro data has the 10-year, just 12 basis points from the 3-handle. Our roadmap begins with a flood of corporate results including Microsoft, new CEO at Boeing, Starbucks with a cautious consumer and Pinterest tumbling on week guidance. Plus, we of course are awaiting the Fed. Futures are rallying on this last trading day of July as investors seek new clues for the rate cut path ahead. And this hour we're going to be joined by the CEOs of AMD and T-Mobile. Of course, we're going to break down the quarters with both. We'll talk about the AI boom. The state of the consumer. A lot of other things as well, Carl. Let's begin with Microsoft this morning, beating earnings and revenue estimates. But this miss on cloud, a bit pressuring the stock in the pre-market. Certainly on the call last night, Satya Nadella did discuss Azure, AI growth and CapEx. Obviously the Azure, AI growth. That's the first place we look at. That then drives bulk of the CapEx trend. Basically, that's the demand signal. Because you're going to remember even in the capital spend, there is land and there is data center build. But 60 plus percent is the kit. That only will be bought for inferencing and everything else if there is demand signal. So that's, I think, the key way to think about capital cycle. Jim, you excoriated investors who sold last night too soon. Well, there are a bunch of clowns. You have to wait for Amy Hood. Amy Hood is the CFO. She's been an unbelievable CFO. Why would you sell this thing down 30 without listening to the person who actually is the keeper of the numbers? It would not surprise me if the stock actually finished up. Because, frankly, even the so-called Azure slowdown is chimerical. Amy Hood makes it very clear that you just had a couple of European geographies. You really shouldn't let that be the case. Look, what's the real line about this one? And we'll talk to Lisa about it. I'm going to use it in analogy. I'm sick of talking about tech and people hating me and not knowing what I'm talking about. There's this thing called depletion when it comes to liquor. What that is is that everyone trials a liquor. They trial one. And then the question is, do they reorder? Because everyone kind of thinks right now. Oh yeah, what are AI? Who knows if it does anything for you? Sacha, who completely always buries the lead because he's completely calm, said that, look, the depletion's are good, so to speak. People are reordering. Which is the idea that if it were not any good and no ROI, they wouldn't reorder. Now David, when I listened to this call, the big issue was there's not enough compute power right now. Now, that means that it's not, if you go back to the Google call, which I think was very ill-advised, you did not have anyone saying, we get a good demand. What you heard was, well, we better build it because we're going to begin a beat by everybody else. Well, they're getting their ass kicked by Microsoft. This must be the case. Because man, these guys cannot meet demand. They cannot meet demand. Yeah. And I think that that was the tail of the tape, but, you know, sell it before A.B. hood. How many times do we have to have people who don't know what they're doing running big money? Right, well, all right. So we'll keep an eye on what it actually does when it opens. That said, there did seem to be this disappointment. I don't know if you want to call it that concern that somehow the growth rate at Azure at 30% was not as high as many analysts had anticipated. And therefore, that is somehow indicative of, I don't can call a slowdown, but a concern. Well, we know hugging face. How about two-face? The analysts were all two-face. They were praising graduate. Look, can we listen to Amy Hood? Who knows more than anybody? How about we play Amy Hood? To meet the growing demand signal for our AI and cloud products, we will scale our infrastructure investments with FY 25 capital expenditures expected to be higher than FY 24. We are constrained on AI capacity. And you do see us investing quite a bit as we've talked about in build so that we can get back in a more balanced place. Amy washes the show, and she's quick to point out when you don't get it right. She's a nice person. Don't get me wrong. But when you listen to what she was saying, she's saying the orders are just so huge. We're not really sure what to do. We're trying to meet demand. It can't happen. We're afraid actually probably losing demand to other people if we can't make enough. And, you know, the takeaway there is that they missed Azure by a point. Who makes this stuff up? Go back over the alphabet and you're going to say, did YouTube really miss? These are these are fatuous reasons to sell. Now, that doesn't mean that things didn't get too inflated at 38 times earnings. But you know that Nvidia is now selling at 23 times next year. What's after yesterday? It was 800 billion dollars. Yeah. Yes. 800 billion marks 20 plus percent from the price. Right. Sounds like 23 times earnings. Do you want to sell it at 23 times earnings? I say no. Back to Microsoft. Again, to your point, we didn't have this comment from Amy. She was talking there about CapEx, which, by the way, at 19 billion, including leases, is roughly in line, but they talked about it even increasing. So a lot of analysts are now going to 80 billion. That was the day, David. The number is enormous. See, you weren't disappointed because you actually have what I call horse sense. And then, to the point that CapEx, to your point, Jim, is supposed, is going to actually create an increase in available AI capacity to serve more of the growing demand. That was a key point from Amy Hood, which did turn the stock around even in the pre-market. So you get these people who are obviously short the stock. You say, "Well, that's what she's really saying is disappointing." Honestly, Carl, there are people in the business, when they speak, they're not, I don't use the term about what, when people talk and don't really, and hype. Amy Hood has never, I mean, I don't even know if it was like a goldman. She's never hyped anything all her life. She won't hype her kids. I mean, she doesn't hype anything. And here we are. People say, "Ah, you know, it's not that good." 30% growth, 31% growth, maybe a little bit shaky. I mean, what do people think this is? Bethlehem Steel, which is now a defunct steel company? Well, the street wasn't too, it was pretty non-plussed. Goldman reiterates a buy, B of A says second half, azure re-acceleration makes this whole thing sort of temporary. There were some questions about the PC unit, which is obviously lower priority. Right. But I know Milius today wrote about, that's an open question. Yes, and I know that we'll speak to Lisa Sue. I think it's much closer to the PC unit than Microsoft. I mean, Microsoft, you know, PCs matter. They're part of the pastiche. You know, Xbox matters. But what really matters is cloud demand and the statement that you read about trying to meet the demand for AI, whether it be co-pilot, whether it be the big proposals that are making it so that major companies are getting 2X an employee. Twice out of an employee. Right. Hey, by the way, David, if you can get twice out of an employee, what do you have to, do you still have to hire as many people? I wouldn't think you do. Why don't people talk about that because it's just a point sad? Uh, it's sad. It's a concern that people don't want to perhaps address publicly. Yeah. I mean, these companies certainly don't want to remind you that they may be responsible for a diminution of the workforce. Right. I don't think. When you're hiring these associates for $200,000 a year and they're proofreaders and you hire a hundred of them, I'm just using them. I wouldn't let you choose any firm. But you have a list of how many people hire. Do you need as many proofreaders that make $200,000 a year? And the answer is no. Do people know that their proofreaders have ever been at one of these firms? Oh, my God. And I proofread for free firm. Right. And it goes, "Don't go proofreaders." Well, beyond that in terms of the general of AI. I mean, it's going to be an hour from proofreading at college. It's coding is obviously going to only increase in terms of efficiency and its ability that is generative AI to do what has otherwise been done by humans. Yeah. Amen. But it's back to that debate. It's back to that debate, Carl, which of course is every advance in technology people are very concerned but ultimately more jobs arise that we aren't aware of. So we always have to, that's the code every time. When they made that typewriter, Electric David, I got out of that Smith, Corona business. The other big story this morning is Boeing, wider than expected loss, revenue miss, going to try to get to their 737 production target by the end of the year. But the big news, of course, is Kelly Ortberg, new CEO. Yeah. Now, when you talk to the people who selected Ortberg, what you first of all get, and I know David liked this, he's going to come. He's going to go. He's going to actually go to the factory. He's going to live out. By the way, he's going to live out and see out. Now, this guy was an experienced hit at Rockwell College, which is one of the best, absolute best aerospace companies. He's a customer guy, too. He's not really been a hands-on, get dirty, but he'll do that. David, he's 64, but he is physically fit. It is interesting you point out 64. It is always when you're 64. It's always refreshing to have a CEO who's actually older than I am at this point, but does it indicate in some way this is a short-term assignment? You mean that they put Pope in, this COOI? No, it's like, effectively. Turn this thing, get this right for three years, and then you're done. No, not three. It's going to be five six. Okay. And what's great about this guy, frankly, is that he is universally respected, and he doesn't work. It almost demanded, Carl, that they do not have a Boeing person, because the culture must change. I think this is the beginning of major changes. I think that that whole crew that moved to Chicago and moved to Washington, these guys, the FAA blew this company up. And I believe that this guy is an FAA blessed guy, and I think that matters tremendously. That's why this stops him. I'm taking a big charge on the regulatory headaches that they've had to deal with the wake of the crashes. What about their production? Can they get to what is it, 38 a month by the end of the year? I think he would say, "Why did you give me that number? I'm not prepared to do it." I think he's not a blowhard. I think he's not going to be sitting in some lake house telling you everything's good. He's selected by Mollinkoff. You know, David, you know Mollinkoff, and Gittlin, too. Now Gittlin is a pretty nice guy. Mollinkoff, I would not describe him as a nice guy. He's a scrappy Baltimore guy that I don't want to cross. He's a serious gentleman. I mean, he's a good apple. See, Mollinkoff is a serious gentleman. Yeah, he really is. He is a nice guy, actually. Once you get to know him, Jim. It's just as bad when you -- no, no, I haven't liked Steve, but I would not be on the other side of Steve. Like, for instance, he ran Qualcomm. Why don't we go to someone who runs AMD? That would be amazing, because AMD's earnings, of course, are getting a positive response in the marketplace this morning. Oh, David, there's a backstory. I mean, these guys who that said the stock has been down 22% over -- not a very short period of time. It's doing that, Mrs. Lincoln. How was the play stuff? Come on. Let's go back to work. All right, let's get to Lisa. Go ahead. You know, super strong quarter. Sending shares much higher -- of course, when it was first announced, the stock was actually down. A lot of this is around AI adoption. We're also going to have to see PC. CEO Lisa Sue joins us now, first on CNBC, to discuss the quarter. At least it's great to see you. Very good morning. It's great to see you guys. Okay, so Lisa, on page five of your conference club using the fact set, you say something that I think was kind of jaw-dropping. I don't know if people understood that. You said, as a result, we now expect data center, GPU, data center, data center data. That's important. Okay. That's the AI there. Revenue to exceed $4.5 billion up from $4 billion that you guided in April. You just guided up $500 million in one quarter. Well, first of all, we had a very strong second quarter, very excited about the traction that we're seeing. It is all about AI. You know, I know that you guys were talking about AI in the earlier segment. There's no question that AI is like the biggest technology advance over the last 50 years, and we're very excited to be helping power that foundation. So yes, we were able to have a very strong data center quarter. We more than doubled our data center revenue in the second quarter, and we see strong growth into the second half of the year. So part of that is, you know, acceleration in our AI growth, and that's what allowed us to increase our guidance from greater than $4 billion, you know, 90 days ago to greater than $4.5 billion for the year. Extraordinary guide up. Now, one of the things that has bothered people ever since the alphabet call was the notion of like, well, we better build it because they might comment, if not, we're going to fall behind. When I listen to your call and I listen to you, I feel it's the opposite. I think customers are desperate for compute power. Whether it be from you or Nvidia, they got to have it, which of course you're taking a share when it comes to some parts. Is it not true that the real issue is can you meet compute demand? It is absolutely true that compute is really the foundation for what unlocks all of this, you know, AI capability. It is true that the supply chain is very tight right now, and frankly, people need more compute. You know, we're in a very, very strong position in the sense that we're continuing to ramp up our MI 300, which is our AI compute chip, but we also see actually, you know, broader demand trends that say even in traditional compute that had taken, you know, a little bit of a slower start for the year has actually now seen some very positive signals. So we see that on the traditional data center CPU side as well. So overall, you know, when I talk to CEOs and CIOs across the enterprise, I think this is an opportunity to invest. It's an opportunity to invest, to really capture, you know, all of the capability of, you know, AI, and it's also an opportunity to refresh, you know, data centers that have been aging for some time. So these are some of the trends that we're excited about going into the second half. >> Or so, Lisa, maybe because you're a plain spoken person like my friend David Faber, both from Queens, I might add, can you please explain to people that even though AI is not necessarily curing cancer or putting a man on Jupiter right now, it is integral to many of the organizations that you deal with and talk to every day. >> Absolutely. First of all, it's great to see, you know, David and Carl as well. You know, when I look at AI, I really look at AI as trying to really help every enterprise, you know, every company, every sector really become more productive. And we see it in many different ways, from simple things, you know, you'll hear people talk about call centers and customer response, and I call those, you know, very low-hanging fruit to much more complex things like, you know, designing better chips, that's something that, you know, we do and our semiconductor peers do, or designing better factories, or actually even helping discover the next big drug discoveries and, you know, the healthcare things that you mentioned. I do think this is a long-term arc, so people are always expecting, you know, things that happen overnight. This won't happen overnight, but the time to invest is now so that we see the payoff in the one, two, three, four, five-year timeframe, and that's what companies are doing because we see the huge potential for using AI in all of our businesses. Lisa, it is David. You know, back to the M1300 and the guide to 4.5 billion that Jim pointed out that I think is being embraced by investors. I've had a couple this morning actually ask why it isn't even higher, given if you annualize the quarter and you add in a growth rate, it would seemingly get you perhaps as high as 5 billion. Are you being conservative? Well, David, you know, the way we look at these things is, you know, we call it like it is today, and what we see is it was very important when we started the year to pass some important customer milestones. We have some great partnerships out there. You know, we've talked about Microsoft being a very strong partner for us across the data center and especially in AI. We've talked about Meta, we've talked about Oracle, we've talked about, you know, a lot of the OEM partners as well that have adopted MI300, and we wanted to go through some of the key milestones. So the fact that, you know, we're sitting here at the middle of the year and calling, you know, over 4.5 billion for the full year, I think is a great place to be thinking about, you know, just where we are in this trajectory and we'll continue to, you know, call it like it is as we see every quarter. This came up, something about a high bandwidth memory problem that had you losing some yield. It was not you, it was related to a supplier. Was that an issue that's been resolved or is there anything you can comment on or clarify? You know, David, I would say that there's a lot of noise in the system and I would really not pay attention to those kinds of things. These are extremely complex products. I mean, MI300 is like over 150 billion transistors. Of course, we're always working things real time. But as far as, you know, we look at this, this is a very, very successful production ramp. We're very excited. We're seeing MI300 now in our customers, data centers, in volume, running production traffic, giving great results, and that's what gives us the confidence for the growth trajectory in the second half of the year. Hey, Lacey, you might have heard me and Jim talking about PCs a moment ago. Where are you right now in terms of whether or not AI-empowered PCs will drive consumer demand? Yeah, absolutely, Carl. I'm bullish on AI PCs. You know, I view AI PCs as really a category changer for the PC market where, you know, we see an opportunity not just to do the things that we normally do with PCs, like, you know, gaming, as well as enterprise productivity type applications, but AI will give us yet another capability with the PC that allows us to do things locally. And a lot of people actually, you know, although we like working in the cloud, you know, it is, there is some latency involved with that. And the idea that you can do things on your PC with your personal data, I think, is a positive. Now, again, the way to think about this is we're very excited about AI PCs. We just launched a bunch over the weekend. It will take some time to go fully through the PC ecosystem. So I see, you know, second half as a positive for PCs, and then as we go into 2025, even more excitement around AI PCs. All right, Lisa, let's talk share both high-end when it comes to what I would regard as being accelerated computing and also lower-end that we just talked about with PC. I see, tell me if I'm wrong, that there's so much business that I'm not concerned about you in NVIDIA. I think that everybody is completely overwhelmed when it comes to compute power, both you and NVIDIA. On the lower end, when Intel wasn't five, when you were five and Intel wasn't 40, you schooled me in a way that made me think that one day you'll be at 40 and Intel would be at five. These latter hasn't happened yet, but do you take a lot of share from Intel on the lower-end and you're taking whatever you can do to meet demand on the high-end? Yeah, I mean, the best way to think about it, Jim, is, you know, I think about computing as end-to-end compute. You need the most powerful stuff, you know, in the cloud and we certainly, you know, love the work that we do with all of the hyperscalers, and you also need the right compute at the edge in the client, and we have an end-to-end computing portfolio that allows us to really service all those needs. Certainly, I'm very excited about the market. We called the AI market, you know, last year at, you know, upwards of 400 billion over the next five years, and we see that. We see that there is just tremendous need for more compute for high-end AI, but we also see need for compute across the edge as well as the client. So these are all great opportunities. Yes, I love the large market. I also love the fact that I think we have a very competitive part of portfolio, which gives us the opportunity to gain share. We have seen a pullback in some of the hyperscalers lately in the stock market, in part because of this continuing question, Lee says, to whether all of this enormous spend will actually get a significant return on what's being invested. And the worry is, at some point you hit a wall, and the spending slows. So how do you think about that from a larger perspective? I will say, David, from, you know, the conversations that I have with, you know, our customer said and sort of the broader industry, we can see that AI is a multi-year, you know, I would call it a super-cycle, frankly. There's tremendous need for more compute. Now, you know, how it goes on a quarter-by-quarter basis, you know, obviously you guys are hypersensitive to a percent here or there, I wouldn't be hypersensitive in those areas. I would say, are more customers using it? Is every enterprise asking for it? Are we seeing more applications on a daily, weekly, monthly basis? The answer to that is absolutely yes. Everywhere I go, everybody wants to talk about how can we incorporate AI into our businesses faster and more efficiently, and we're all learning along the way. So that's the beauty of technology this early in the cycle. There's a lot of learning and experimentation, but definitely there will be the return on the investment on the other side of it. Okay, so we know that Jensen Moss is the eternal investment CEO of NVIDIA. It is almost instant. I believe that you would say that an employee may be doubly productive with AI. And yet, we still don't hear from any executive, you know what, we have AI, and we've been able to trim staff, we've been able to become much more productive, and we've been able to boost earnings per share. When will an executive come on and say, "Listen, our numbers are going higher because of AI?" I believe that you will see overall AI will increase productivity, will help us get more productive, and most importantly, help us get better products out faster. So I think all of that is there. Now, I don't believe that things are instantaneous, you know, technology takes time to adopt. That's just the way technology cycles are. We're investing today for the return in a couple of years, and I think that's absolutely the right thing to do. That is, you know, that's the way we think about these investment cycles. So not quite instantaneous, but they're definitely coming, Jim. Well, Lisa Sue, thank you, and the guide up was amazing, even though, of course, David wanted to double the guide up. We're going to let you have just the guide up, as you did, since it's the biggest one I've ever seen from your company, Lisa Sue, CEO of AMD, thank you so much. Thank you. Great to be here. We'll take a quick break, take a look at the pre-market here. We'll get to so many names, MasterCard, Starbucks, Mondalees, Humana, DuPont, Pins. In a minute. Walmart Plus members save on meeting up with friends. Save on having them over for dinner with free delivery with no hidden fees or markups. That's groceries plus napkins plus that vegetable chopper to make things a bit easier. Plus, members save on gas to go meet them in their neck of the woods. Plus, when you're ready for the ultimate sign of friendship, start a show together with your included Paramount Plus subscription. Walmart Plus members save on this plus so much more. Start a 30-day free trial at walmartplus.com. Paramount Plus is central plan only, separate registration required, see Walmart Plus terms and conditions. My dad works in B2B marketing. He came by my school for career day and said he was a big row Azman, then he told everyone how much he loved calculating his return on ad spend. My friends still laughing me to this day. Not everyone gets B2B, but with LinkedIn, you'll be able to reach people who do. With a $100 credit on your next ad campaign, go to linkedin.com/results to claim your credit. That's linkedin.com/results. Terms and conditions apply, linkedin, the place to be, to be. Imagine earning a degree that prepares you with real skills for the real world. Capella University's programs teach skills relevant to your career so you can apply what you learn right away. Learn how Capella can make a difference in your life at Capella.edu. We've got to take note of the pre-market here as the NASDAQ looks to jump about 400 points Jim, although the queues are now lagging the spiders here to date. Yeah, and look, you're still dealing with the notion of an NVIDIA that's lost $800 billion in market cap. You're still dealing with the notion that people think Alphabet had a soft quarter then verified by Pinterest, which seemed to have a soft quarter. We're still dealing with the notion that these companies do not benefit from great cuts versus the Stanley Black Conductor where the ports are basically an okay number and then goes up $9. So, remember, they don't, they, the market still would rather prefer something that's legal for lower rates than speaks today than they would be to compete. We will see what we did at 2 o'clock, Bank of Japan, of course, hiking, quarter point, Bank of England tomorrow. Let's get the CNBC real-time exchange to the big board. It's blackberry into the NASDAQ, Armada, acquisition court, a blank check. The company, as we're back about 5,500, bottom line, Jim, is you still are hesitant to let go of the MAG 7 trade. Yeah, because you've been video-selling it at 23 times next year's earnings, which is my calculation, and it's the greatest growth story of our era, I'm going to have to stick with it. I can't get rid of it. I have to own it and not trade it. Look, let's, let's go back to what's going to happen later this week. Apple. I can tell you that the individual around the globe is buying a good PC and taking the services. Then I think that can make it so that people feel more at home, because it's a high-cost thing. I mean, here's something really crazy. McDonald's lowers the price of a hamburger and then people come. It's interesting. Starbucks still has not lowered the price of a cup of coffee, but they have for the rewards. Now, we do have to talk Starbucks because a lot of people hated the quarter. I didn't hate it. I didn't hate it as much as other people. It did have the gift that keeps the Trojan horse, which is China, down 14%. If you have China, other than DuPont, other than DuPont, if you have China, you missed your quarter. Yeah. Marriott, too. Lowering guidance was China. Yes, it was something, a soft US, but then lowered China. I remember when they built up in China, David, China is, can we just call it a disaster or do we have to hold back? No. You can call them whatever you like. Starbucks, obviously, is getting a positive response. They did acknowledge Elliott as a shareholder. They talked about constructive dialogue with Elliott, which, as our viewers know, certainly is probably the premier activist at this point in our markets. Unclear where that goes, whether they end up with a board member or two. I'm told, I believe that steak is a significant one, as much as $2 billion. And I understand that it is indeed constructive, that that's not just fat choice, that's real. And what, Jim? What happens now? Well, okay. So, here's what I think is the real story of a Starbucks, and it's a painful one, actually. They have, the people who are already customers, in other words, the bottom of the funnel, are doing, they're spending a lot of money now. They've actually picked up the transactions, it's going well. But David, the casual Starbucks drinker, who may have been affected by mischaracterization of Starbucks and its relation to a country and an issue, that's still there. That's still an issue. Yeah. They don't discuss it. You're obviously referring to what are kind of boycotts related to, yeah, to Gaza. I'm kind of hard to talk about, just because they use mischaracterization. And it's bizarre because it's like, why? Why? Because Howard Schultz, the founder, not even founder, but the man who is most associated with it is Jewish, I guess. That's the reason. Yes. I mean. And they don't discuss it, do they? No, they call it a mischaracterization. Yeah. I'm going along with them because I have no desire to stoke or to-- No. But it's had an impact. No, that's the casual-- the casual Starbucks person, for some degree, has been dissuaded by protests, been dissuaded by boycotts, and Carl, you know, it does have a stigma that I think is undeserved, but it doesn't matter, and who am I? But that has hurt the person who says, that may be able to go to Starbucks. That's for real. Yeah. Although the last time Naira Simmons was on with us, it was about throughput and wait time and mobile ordering, crowding, right? And that's increasingly-- they're getting better at that. There's a couple of seconds that they're saving, and obviously what they're really doing is trying to figure out where the siren points are, the crisis points, that they're getting to that. Do I think that this was an inspirational quarter? I think that this was the quarter which just said that Starbucks may be out of the existential in the US, but China-- who the heck knows? And China is so horrible for almost every single company, except for the companies that are involved directly with public health. For instance, GE Healthcare will tell you that next quarter it's going to be better, but I have no solution. If I were a Luxman, I know I can change things in the US by making things faster, getting the labor force to be better. I don't know what they can do in China. They can't shut it. I know what I liked about it. What I thought was surprising was Starbucks stores a lot of cities when it's underrepresented. Luxman's using a tier three cities. That's always been the way that you characterize China in our country too. Where the hope is that they can start putting up new Starbucks where they need them and have them be efficient, which is what Luxman's real calling is, not healthy. Guys, I did want to draw your attention to the fact that Nvidia shares are up seven and a half percent. Obviously, AMD is up a like amount. The CapEx numbers, so Microsoft have to certainly be viewed positively in terms of what that means for Nvidia, not to mention, of course, just AMD as well in a way helping. The stock was down sharply yesterday as it was. It was a painful day yesterday for those who were sort of still caught in that rotation on the wrong side. Yesterday was the day of maximum despair, and then Microsoft didn't help that that stock was down 30 when they reported David Lork. I like what Lisa Sue said very much. I really like what Nadella said on the call. I keep going back to the alphabet call, which was not good, because the alphabet call basically just said, "Listen, they have to do it. If someone doesn't do it, they may lose." That's a terrible ROI. That's a no ROI, and that's been dissuaded on top of this, which makes you feel better about Nvidia, about Jenson Wong, and by the way, about meta. Meta as well. Yes. Why? Well, because meta is a huge customer now, which is kind of unbelievable, because five years ago I never would have imagined it would be because Jenson wasn't that crazy about their business model, but meta is a huge customer. If you talk to Lisa Sue, by the way, someone we've almost forgotten Carl in the discussion, which is Elon Musk, they put 50,000 of the H100s, and now you've got the Blackwells. What they're all saying is they're being used. The H100 is being used, but they're not sitting in a warehouse. I think that the demand is there. I think that the really important people are Elon Musk and Mark Zuckerberg, because they're the two that present use cases that are not a traditional computer. They say good thing. Well, Elon said good things about Nvidia, but if Mark says good things after his fireside chatter during the week, that will really make it, so you get a second day in Nvidia. Yeah, Morgan Stanley today in video topic doesn't change their number on target earnings. That was a good piece. Again, 23 times earnings. Now, remember, Nvidia tends to surprise to the upside even more than the $500 million or a guide up that we just got from Lisa Sue, but if Nvidia surprises, it may turn out to have a high-teens P.E. Well, now you're starting to talk about a P that's dramatically lower than Proctoring Game. Why? Dipers. Yeah. Yeah. And screwed up in China. Geez. Anti-corruption. David. David's been the two. You guys have been to China. Was it anti-corruption, like two gums or something? Because the companies that are being anti-corruption are not corrupt. That's Singapore. Oh, yeah, that's right. Did you get that? But they whip you. But, I mean, China, anti-corruption Proctoring Game, well, Proctoring Game was like the most honest company in the world, and they're now for anti-corruption. What is going on over there? I mean, that's just why one that needs to use that. I guess they're all so exact. It becomes so afraid of telling a truth about China. It becomes more and more difficult to find out what's going on there, and you can't really talk to people who are in China about what's going on there because they don't feel free to discuss it then. But I did have an opportunity to conference outside China to meet with a lot of Chinese businessmen briefly who are out and women, I mean, from the business community. And of course, it's what you'd expect. It's not black and white. It's very gray. They're, you know... This fashion is great. These are... What's great about fashion? Sometimes you remember, these are still... They're still capitalist. A lot of the people that I was talking to. Oh, yeah. They're capitalist. Yeah. The person who runs... They're cool acts. The person who runs acidic. The person who runs CIC. Yes, they are capitalist. They're cool acts. They're the first to go. Meantime, China manufacturing PMI down three straight months, Jim, if it weren't for that, or it might be even higher on some of these Hamas Hezbollah positions. You're not allowed to tell the truth about China, which is that business is pretty much ground or a halt unless it's emergency services, okay? I mean, they don't... Real estate is not doing anything. The stay-owned companies are not growing. I mean, you don't... People aren't drinking a cup of coffee. Honestly, there's a lot of debt all over there, all over there in different pockets with their economy. They may not be fully recognized, particularly at the local level, taken on by municipalities, that thought that they were going to be able to meet those interest payments by selling property that they were not, that they had been unable to. So that continues to be a real issue for... So do you think it's the military that can save them? The military? You grow the military? I don't know. I don't know. You know, at the same time... You've done that in our country. Huawei, which we were supposedly putting out of business, is more dominant than it's ever been in the Chinese market. So, you know, you may say one thing, but there's also another, which is that they do manage to continue to grow companies rather well with state support, no doubt. Would you rather own Geckers, which is Hoka, would you rather own On, On, or would you rather own Nike? Well... Who's got a big high on business? Because they squeak. Well, you get pebbles stuck in them, it's really bad, you know, I don't like what you walk in. So I guess I'd go with the Hoka. Okay. That's good. That would hook up for 300. Yeah. Because what's happening, Carl, that I think everybody realizes is that the consumers tapped out there, whether it be for an expensive cup of coffee or an expensive, or Jordan's, okay? So then the question is, does the consumer have enough money for an Apple phone without a phone company like a T-Mobile or Verizon that's backing them up? And that's what I wanted. We're going to talk to Seaver in a minute, Subgrowth Topping, both AT&T and Verizon. Props to our friends at Squawk today, great show with the Chiefs of McDonald's, Coca-Cola, our bosses at Comcast, and Delta, where Ed Bastian talked about what kind of recourse they might have after losing half a billion dollars in five days. Take a listen. I think this is a call to the industry, everyone talks about being sure big tech is responsible. Well, guys, this cost us a half a billion dollars. What's going to happen? You're suing. Well, we're gone. We have no choice. Yeah. Over a period of five days between not just the lost revenue, but the tens of millions of dollars per day and compensation and hotels, and we did everything we could to take care of our customers over that time. We have no -- so if you're going to be having access, priority access to the Delta ecosystem in terms of technology, you've got to test this stuff. You can't come into a mission critical 24/7 operation and tell us we have a bug. It doesn't work. And on to say they had to physically reset some 40,000 servers. Oh, it's unbelievable. It's just unbelievable. We have some of the companies that have done well, were companies that had no money and didn't -- to take the update because they didn't have it. And then I think that we're going to hear from Tim Cook that maybe you need to have Apple in the enterprise, because Apple didn't have this problem. So I think that's one of the things I'm looking forward to speaking to Tim Cook about. David, Apple is coming through in so many different places as positive, including being able to take AI from other companies. That's going to be the battleground. That's the stock that's the battleground. That's the one you need to be focused on. And we're going to obviously get results from Apple. You're going to be bringing us, I believe, as you typically do at least some portion of a conversation with Tim Cook. Absolutely. And of course, Amazon also yet to come. That stock is up another 2.5 percent as well. So the earnings from both of those are on their way. Speaking of earnings... Can I just tell you that there's... Do you know Matthew McConney, the actor? I don't know him personally, do you? He was sitting to the left of my wife. Yes. And to the right was a guy, Mike Siever. Uh-huh. And my wife said, "Boy, that guy, that guy, he's so boring, but wow, who was that guy from T-Mobile? He's dynamite." Well, speaking of Mike Siever, amazingly enough, Matthew McConney, he's not here. Sorry, Matthew. Good morning, guys. But Siever, it is. Well, let's give you a quick intro, Mike, because the second quarter of revenues and post-paid phone that adds were ahead of estimates. You raised full of your customer and free cash flow guidance. And obviously, you're here joining us at Post 9. Thank you. Of course. Great to be here. Good to see you. 770,000 post-paid phone net customer editions. That was top of the industry. Despite what seemed to be in concerns were there that, you know, you raised price, would that actually hurt? It didn't seem to. Why not? Well, David, it was the biggest Q2 on customer growth in our company's history. And it really shows that we've got to bond with customers. They trust us to be the best value. And of course, over time, every company has to keep up with the times and make some changes. But they trust us that we deliver the best value, and increasingly, that we deliver the best network. When you add that up, we're able to outperform the entire industry, more than AT&T and Verizon combined on customer growth, yet again, this quarter. Yeah. I've got to get right to this because it came up so often in the call, there was a herd on the street in the Wall Street Journal about it today. And this is the fiber part of your business, which frankly, we rarely, if ever, have talked about because it hasn't been much. Fixed wireless. Yes. Obviously, I should point out high-speed internet ads. I mean, you had, what, 406,000 high-speed internet net customer editions. Yeah. That was the highest share of the total broadband industry we've ever taken in a quarter. About 75% of all industry broadband nets, including all fiber, all cable, and all fixed wireless. 75% taken by T-Mobile and Q2. How much of that 406,000 was actually fixed wireless as opposed to fiber? Pretty much all of it. Okay. So we're really just getting started on fiber. And last week, we made that big announcement of our joint venture with KKR to acquire MetroNet. Right. And look, we picked MetroNet because they're the best. The industry's fastest growing pure-play fiber business and arguably most important. And so we wanted to be in business with them. We have a business plan of achieving six and a half million homes passed by 2030 with no further capital calls to support that business. Yeah. That's a key question, capital calls, because people want to understand how you're financing this and what the impact will be on your other capital allocation decisions. So how do you explain this fiber strategy vis-a-vis especially capital allocation? Well we're in it because we think we can make money in it. And we think we can outperform purely disinterested financial investors because we've spent tens of billions of dollars building a brand, building a scaled national capability. Collecting now with this quarter, more than 100 million post-paid wireless customers that we can sell into. That's a milestone for us. And so those are advantages for us in the fiber space. We're not doing it to defend a wireless business, we're doing it to make money. And of course we're doing it in business with the very best. And you believe you can compete on price in that business as well? Absolutely. We can compete on price and quality. And with pure-play fiber business, you know, we've saved pure-play. What does that mean? Because, you know, look, this is an asset. With fixed wireless we have the best value. And so now we're covering the other end of the spectrum with the best product. You know, what that means is, you know, this is fiber to the home, symmetrical speeds, the highest performance available to consumers. Are you telling me there's no latency? You're telling me there's no latency? Come on. This is going to out- I'm telling you there's this latency. Keep cable for quality on the one hand. But on the other hand, we out-compete them on price with fixed wireless. And so, you know, there's a great opportunity here for us to bring more options to consumers. I'm watching Kansas City Chiefs versus the Miami Dolphins on Peacock. Are you telling me that your product is as fast on just right on NBC? If you have 10 high-definition TVs in your house all watching separate channels, we got you with our fixed wireless product. Well, when do you max out? I can't believe that you're able to put more than six and a half. That must be it. And then cable starts doing better. Well, we'll see. You know, on the fixed wireless product, our view is this is a long-term business with room to run. And not everybody agrees with that. But then again, not everybody thought we would be able to do 5 million subscribers in just the last three years. Look, there's a segment for this that is here. And the capacity won't be capacity constraints to Jim's point over time. And everybody assumes it's going to run out of steam. Now, obviously, pure fiber is a different strategy. And now we're augmenting it with fiber. And so now we have multiple ways to attack the marketplace and serve customers in a very complementary way. One that's based on value, taking advantage of our embedded assets in wireless, and one that's based on super high quality with the very best assets in the space. What if the terrific people at Verizon in AT2, I'm sure you completely respect and trust, decide to go to Tim Cook and say, you know what, we are really in trouble. This T-Mobile is killing us. We got to go give away the 16, the 17. Is that okay for you? Because I have to believe that my look at these numbers, the Verizon AT2, are not happy with how they're doing versus you. Well, they also had quarters that were better than were expected of analysts. And so, you know, the overall market is very, very healthy. And you know, we're all expecting a big iPhone launch this year. I'm really excited about it. I think consumers are excited about AI, but it's hard to predict what upgrade rates will be because a lot of that AI technology is also good on your existing phone. So we'll all have to wait to see what Apple unveils, but T-Mobile's ready to compete either way. On the home market, we talk a lot about this lock-in effect in housing where rates are high and inventory is low and people don't move. If that were to loosen, does that unlock more opportunity or is it more about getting people to switch in their existing home? I think it's about getting people to switch. You know, obviously moves are a big opportunity. They always have been in the market. And it's certainly an opportunity for fiber because now you're going to make a fiber choice. But look, fiber's just a lot faster, you know, especially on the uplink. And fixed wireless is a lot lower price. And so both are reasons to switch. More than half our customers on fixed wireless are coming from cable. Well, to Jim's point on Apple, it's not an unimportant one. And again, to your point, we don't know what the phone's going to be exactly. Do you think you're going to be, you have to be in a position to subsidize it to compete? Well, that's been the case for a long time. You know, this has been a market where the promotions, you know, iPhone 15 on us, you kind of see those consistently across the industry. I don't expect a big change in the competitive dynamic. The all the competitors compete ambitiously, especially around launch time. I don't really see a catalyst for much change. We intend to be there with great offers for customers. And again, we're excited to see what Apple will unveil this fall. I think it's going to be an exciting launch. Do you know anything we don't know? Well, I'm a fan. You're a fan. Mike, finally, just to end on another company, we talked about a lot here on its board Starbucks. Are you happy with the direction and the strategy of management at this point at Starbucks? Well, I'm certainly pleased to be a part of the company. It's a company with just a storied history and tradition and incredible opportunity. And, you know, there's some near-term challenges, and you heard the team talk about those yesterday. So the board's very actively engaged in all that, being helpful and supportive. I think there's changes that are required. And Lakshman outlined some of those yesterday, including a strategic change in China and other changes that are coming. But look, I think what the team needs is a little time to correct some of the near-term challenges that have the company's been struggling through. Well, Mike, we always appreciate you keeping us up to date on T-Mobile and the continued success the company has had. Thank you. Thanks, guys. Chicago PMI's on the tape. Let's get to Rick Santelli. Hey, Rick. Yes, the weakness continues, Carl. Chicago PMI for the month of July, expected around 45, comes in at 45.3. Yes, it's a smidge better than expectations. But it's sequentially lower than 47.4 in the rear view mirror. And this is the 23rd month where we've only had one reading above 50. That was November of last year. Weakness and employment cost index came in a little bit light, ADP, the weakest, going back to January of this year. And we could see yields moving lower, extremely lower today in front of the Fed, 10-year, getting ever closer to 4%. And if you look at 2-year, we are now at 4.33 down 3. We're comparing to February in 2-year to March in 10-year. And squawk on the street and return after a short break. Walmart Plus members save on meeting up with friends. Save on having them over for dinner with free delivery with no hidden fees or markups. That's groceries plus napkins plus that vegetable chopper to make things a bit easier. Plus, members save on gas to go meet them in their neck of the woods. Plus, when you're ready for the ultimate sign of friendship, start a show together with your included Paramount Plus subscription. Walmart Plus members save on this plus so much more. Start a 30-day free trial at WalmartPlus.com. Paramount Plus is central plan only, separate registration required, see Walmart Plus terms and conditions. Imagine earning a degree that prepares you with real skills for the real world. Capella University's programs teach skills relevant to your career so you can apply what you learn right away. Learn how Capella can make a difference in your life at Capella.edu. Let's get to Jim and stop trading. You know, Colin, Visa reported they really laid an egg and a lot of people were surprised because these are very consistent companies. And we see the consistency coming from MasterCard, where Mike and me back report some really good numbers. Healthy consumer spending, continued strong cross-border growth, those are all good. Strong demand for their value added services, including some cyber security they do. And they... The results are really very, very strong and I think that's important because when Visa came out, that was part of like the downbeat portion of the earnings season and I think that puts this one takes that bad taste away. I was going to do DuPont. They were breaking up and every single division was much better but I couldn't believe it's about it. It's like a $35 billion company and MasterCard's a $430 million. Yeah. Well to your point about some of the industrials, JCI, Bork Warner today. Yes. Yes. Yes. All with a five single digit percentage. Yeah. You know, Eaton is a mega cap trend stock but it's been hurt very badly by the new theory that data centers are not going to be built because they're integral to data center. I think what happened with both Microsoft and AMD has put that story to rip to bed. There's going to be a lot more data centers built and that's Eaton's wheelhouse. Finally, some of the cruise lines and CLH raising guidance helping some of the concerns about travel or normalization and cruises. I keep hoping that that could reflect well on Disney which has been rather quiet and rather awful. Jim, how about tonight? Okay. What's the matter? Oh, I'm sorry. I didn't tell you. It's suboptimal. I forgot to be a diplomat. People want diplomats. They're not a bad quarter. How's that? Underwriter labs. The world needs that mass. No. What do you think? These people are like, you know, the Phillies were a great team but they're 25 and 22 in the last few and they're like awful and they stink, okay? That's the world I'm from and the quarter from Disney was not good, okay? They stink. They lost last night to the Yankees. I mean, they had the game one. They walked Bryce Harper. Next thing you know, we lose. They come back in the 11th. I'm just saying that for sports, we have rigor but for CEOs who are paid the same price as people who are professional athletes, we have no rigor because we can't insult them. We can't. Bryce Harper is sold every athlete in Philadelphia so you're not living up the potential but no CEOs. 35 million dollars. They're fine. They're either fine. Okay. It's a fair point. Not bad. Disney down from 1.20 to 9. Yes. Yes. Easy. Come. Easy. Hey, the cast member's got a tentative agreement. Absolutely. I didn't see the cast member who was smoking his cigarette without the mickey hat on. That was really terrific. No, it's fine. Everything's fine. Anyone who makes 35 million dollars is fine. They're immune to criticism. Anybody, whether it be baseball, basketball, NFL, CEO, they're fine. They're immune. The entire media landscape? They're immune. All of it? Yeah. Anybody who paid all of it. Why don't you make 35 million a year? You're the man. Or the one. Jim, we'll see you tonight. Bad money. 6 p.m. Easter time. When we come back some breaking housing data after the break, don't go anywhere. 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, NBCUniversal, 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. Neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. [Music] [BLANK_AUDIO]
