Squawk on the Street

Rebound Rally, Disney Falls Despite Beat, Shopify Soars: Its President Talks Earnings and AI 8/7/24

David Faber and Jim Cramer discussed the stock markets surging for a second straight day after Monday's big sell-off. Wednesday's main catalyst: A Bank of Japan official said the BOJ would not hike rates when markets are unstable. Disney shares under pressure despite better-than-expected Q3 results. Cramer explains why investors should buy it on the dip. Shopify President Harley Finkelstein joined the program to discuss his company's AI-fueled results that sent its stock soaring. Also in focus: Airbnb and Super Micro tumble by double-digits and Novo Nordisk misses on Wegovy sales as part of an earnings barrage, Carl Quintanilla at the Olympics in Paris. Squawk on the Street Disclaimer

Duration:: 46m
Broadcast on:: 07 Aug 2024
Audio Format:: mp3

Squawk on the Street Disclaimer

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Good Wednesday morning. Welcome to Squawk on the Street. I'm David Faber with Jim Kramer. Live from post-9 of the New York Stock Exchange. Carl Quintanilla. He's at the Olympics in Paris. Let's give you a look at futures as we get ready to begin trading on this Wednesday. Half hour from now. That's looking like a very strong, quite strong, open. I'm not sure how you want to characterize that, Jim. I'm going to call it early since the market isn't open yet. Thank you for that. The problem. Keen sense for the obvious, my partner there. Our roadmap begins with the extension of a rebound rally for stocks. A bank of Japan official promising not to hike rates while markets are, quote, "unstable." Disney leads the earnings parade. We've got plenty of them, though. As for its streaming business, it did turn a profit for the first time. But the company says it experienced weaker demand at experiences. Namely, theme parks, stock looking down. Shopify is amongst the morning's biggest gainers, however. AI helping to fuel its quarterly results and guidance. We're going to speak to the company's president. That'll be later in power. All right, let's start with the markets continuing to rebound from Monday's big selloff. Of course, we had a rebound yesterday that by the end of the day didn't really show that much. No, as much as 2.5 percent at various points. Where do we end the day up? Around 1 percent. Interestingly, SP NASDAQ, Nissan 7, Russell 2000 all up similar amounts of real diversion. Dispersion, diversion. What do you want to call it? I mean, when I went to bed, our futures were down. And then when I got up about a half hour later, our futures were up. And the only thing that happened was the Japanese central banker said, "Hey, listen, don't sweat the program." So, David, it does go on to question the whole idea. That maybe this thing really was the so-called Japan Carry Trade, where there's just unwinding. That the hedge funds do a lot of things that we can't see. Remember the buy-a-com? We say, and by the way, we say hedge funds. Really, we're talking about a much larger... That's sort of a catch-all, isn't there for multiple billion dollar funds. Of trillions, as overall, in terms of when we talk about the big algorithmically traded funds or the quantitatively driven funds, the same similar... No, you have to say, you want to have CTA's and... Right. There is so much money out there, and a lot of it is trading on, you know, this, does this, then we do that. You're so right, because people at home might think, "How could a tail wag to talk?" In fact, in many cases, they are the dog. Yeah. And so, when they all do this trade, and it's a very crowded group, crowded, meaning that a lot of people have those like minds, and something happens, like the Yen suddenly does this big move in interest rates. Well, they start to take rates up. Yep. It does surprise people. Some people feel they didn't telegraph it. I don't always spend too much time on it, other than to say, it can jar markets all over the world. And it did. And it did. And we should point out, though, the Yen now has fallen dramatically for currencies against the dollar. Right. I think we're talking, we can take a look at the Yen as you take a look at the S&P. As much as 2%. That's a huge move. That obviously is beneficial, at least, to those who are still in this trade, where you're borrowing in Yen, you're buying dollar, you're buying, and then you're buying baskets of potentially magnificent seven in stocks of that nature. But there's a look at the gain that the dollar has on the Yen this morning. Because of those comments, again, just to hit them again from the Bank of Japan governor, saying they will refrain from further rate hikes when markets are unstable, which, of course, that seems to be the case right now. Right. And so you've gotten basically, that would be Jay Powell saying, "You know what? I saw the market on Friday, it was really bad. I saw the market on Monday. You know what? I'm going to have to take action." No, we don't do that because I think that we have a little better what I would call decorum. But David, as soon as that statement was made, the VIX plummeted. Yes. Now, the VIX has been a very good proxy for the MAG-7, believe it or not. And may I just say that before we go crazy about the MAG-7, there's a super micro-quarter, which indicates that one of the hyperscalers has put a lot of money on it. But the Blackwill will be late. They don't expect anything in the first quarter. And against that is Micron, which has been my key to the market. People don't talk about it enough. Just resumed a big buyback in Sanjay and Barotra. I mean, he literally says there are improved conditions. This is the Japan Central Bank of our semis. You don't expect someone who's a very calm guy. At the light. Sanjay, I got to tell you. Family Guy, when I talk with him, I mean, you just very quickly devolvely ask me how my wife is doing. You always get in it with why? Because he is a calm, considered man. So for him to do this buyback here, says enough already. And he is great credibility. I mean, you can see what's happened to that stock, along with so many other semis related changes. That's been the leader. That's been the leader, and you can see how much down from its peak. Yet still up, by the way, as we need to point out many times. This up 34% for the year, we come into trading with the S&P up, 9.8%. And then ask that couple very similar, 9% for the year. No panic. Here we are. Your point on the VIX is an interesting one because, you know, Bob Bassani pointed this out many times. On Monday, we had the biggest spike, I think, in history. Yeah, it was just 42 points at one point in the pre-open. At least as far as the data can go back on that. And then yesterday, it fell the most since I'm seeing here since 2010. But by the way, isn't that kind of saying, whoa, you know, what am I dealing with here? Well, it was like vomit get. That's why it is. It's vomit get. You remember vomit get in the first week of February of 2018? I don't. That's where it was mechanical problems because too many people were using these different options. It ended up blowing up the VIX and then sending it down. And after it, you had a nice rally in the market. So if you use the vomit get in, which is the term that these very cloistered people use, I think you will come up with and say, you know what? That is probably the most bullish sign that we've seen for tech. That and Sanjay, just stick it his neck out and say, this is it. How big is that micron buyback? Do you know Jim? Do you have that in front of you? No, I think the more important thing is that he had suspended the buyback basically. I'll work on this. And what does matter to me is that micron does high bandwidth memory. It's a really great proxy for mic seven. And it does matter because they had suspended the buyback in 2022. By the way, if you put up a long term chart from micron, that does not do micron the honors. Micron was one of the best before me stocks the last couple years. And we really need to put that up to show you how it's, well, now you cut off the right side. Well, that looks pretty good. Do you want me to just draw a picture? That's fine. No, but what's happened is that micron has been the leader because micron has historically moved up and down and up and down ahead of the market. So there's a precursor. Okay, got it. All right. They spent just over 600 million on average each quarter when they were doing it, okay? Yes. So now they come back and I think they have a lot of firepower. The balance sheet's very much improved. It was a terrible balance sheet even three years ago. Okay. That's a good tell. Oh, all right. I was going to go to Disney, but you know what? Let's go to Carl if we can right now. Sure. He's in Paris, of course, monitoring all things Olympic related and has the very latest for us. Carl. Yeah, guys. Interesting day. Fun to watch you guys balance the market talk with the games today. Actually, today's going to be really interesting, especially in track and field. We've got the men's 400 meter final, three Americans competing for that. You have Noah Lyles, of course, who's coming off of that 100 meter victory the other day, now going for the 200 meter trying to become the first American man to win both since Carl Lewis back in LA in 1984. And then you have Gabby Thomas, winning gold in the women's 200 meter last night. This is her third career medal, her first gold. She won bronze in silver in Tokyo. Just the second American woman to win the 200 meter gold in 32 years. And she talked about the difference between the Paris games and her Tokyo experience, which of course, because the COVID was quite different. There is nothing like walking into a stadium of 80,000 people and they're screaming and they're right on top of you. That is a lot of pressure to put on someone and a lot of pressure for us to kind of deal with. So it was definitely very different, but it's also it made it a lot more special when I crossed the line as a champion because I got to share that experience with everyone. Congratulations to Thomas. Guys, the other one and David, I always think of swimming when we chat. I don't know if you've seen this viral video of the artistic swimming move last night in which the team did the moonwalk. Did you see this? It's unbelievable. I got to ask you about the physics of this kind of move. By the way, final day of competition here on that front, China is in first, U.S. in second. U.S. has not won gold in this event since Atlanta 96. Last medal of any color was in Athens of 2004. But how do they do this, David? You don't even see them propelling themselves underwater. I don't know. I don't know. I have never, I have never moonwalked in the pool. I've spent a lot of time in a pool. I've added it up recently. It was years potentially. Never done that. Amazing. Watching them. Wow. Incredible. So we'll be watching for that and wishing the Americans all the best. Carl, thank you. The 200 meters an interesting race. What about that? 1500. By the way, Carl, I mean, that was an amazing race. I don't know. The 1500. I got home to watch that somehow. I turned it on, watched it live. Unbelievable. Watching. And the guy from Norway, unfortunately, didn't even medal as he got passed. And the Americans got a bronze and, of course, the gold. The distance, the delta between the short races, as everybody knows, the 100, 200, even the 400, and that longer race, how you sort of manage and calibrate the gas you have left in the can in those final few hundred meters is pretty incredible. That was a great win. Yeah. Again, I just love watching the Olympics. I can't get enough of it. All right. Can I just tell you? Yes, sir. Tell me whatever you do. I was a star at the 200 meters. Yes. You shared that with any number of people on the list. And one day I was sitting next to a fellow on an airplane, not first class, and he asked me if I ran track. I said, "Yeah, I excel with the 200 meter." And he said, "I bought the 400." I said, "I was pretty good if you needed me. You could plug me in at the pen relays." It turned out to be Lee Evans, who had set the men's 400 meter record in the 1968 Olympics. So after that, I've never talked about publicly other than here. Yeah. How good I really was. Well, I'm sure you were. And I once could throw a baseball, but I proved I'm incapable of doing that as well. Oh, that was terrible. It all goes south on us over time. You know, there's a place called the home plate. Yeah. I'm not even going to stop. I don't want to stop. I don't want to stop. I don't know. You don't hit that. You can't run. You can run 400 meters at all. That would allow my knee. I'd have to have a new replacement at the 400th. All right. Carl, we'll see you later. Carl, continue your course. We're going to talk. We got so many earnings to get to this morning. Of course, we're going to start with Disney falling despite posting quarterly results. They were above analyst estimates. We're going to look at where it's streaming. And of course, really, what's important here is the theme parks and what that says about the strength of the consumer. We'll get to all of that. Take a look at futures. Of course, we're going to have a sharply higher open. It would appear when we get started with trading. 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Earning your degree online doesn't mean you have to go about it alone. At Capelli University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals, to academic coaches who can help you form a plan to stay on track. We care about your success and are dedicated to helping you pursue your goals. Going back to school is a big step, but having support at every step of your academic journey can make a big difference. Imagine your future differently at Capella.edu. Welcome back. Let's spend some time talking Disney, of course. The stock looks to be down not sharply, but down nonetheless. The attendance at parks, what was somewhat anemic, is outweighing the first real profit from streaming and the positive signals that sends. Hugh Johnson, the company CFO, Jim, some time back had shared the word "normalization" with the street. And there was never any in the conferences since then. Nobody from the company, Iger, anybody said anything more positive about it. Right. And so perhaps not that big a surprise, that said these numbers, given where the street was in terms of parks, they came in well below. Right, but you might have an opportunity here. First of all, let's talk this time. Yeah. The reason that opportunity here is that there had been a convincing element that Comcast Universal did not have great numbers for the company. No, Comcast did not have good numbers as well, which gave Disney investors pause a couple of weeks back when we heard from Comcast. And so what I went over all the different pieces of research, what I came back with was that people in your Comcast revenue decreased 11% that Disney, they had been shading the numbers down for theme parks. And somehow, I don't understand why the analysts were so far off the mark. Because maybe though, this is just episodic. I thought that what was far more important was streaming. Because what will happen is that, look, we trip advisors not that good, Airbnb is not that good, we saw the airlines not that good. David, if theme parks, the police are going to come back because that's what theme parks do. And I really think that this is... Thank you. And your points are a very good one. Because again, the company seemed to be saying things are not what they were. Right. And in the call, Hugh Johnson obviously giving voice. And on an interview earlier with our friends at Squawk Box giving voice to the weakness of the consumer. But these numbers, again, came in well below, you know, versus expectations. But streaming was strong. Let's listen to Hugh Johnson because this does have broader ramifications potentially for a lot of the concerns around the consumer which we can get to as well. Take a listen. The lower income decile consumers are a little bit more stressed. And they're dialing back and watching their dollars more. At the same time, higher income consumers are traveling internationally much more. And we can see that in the data that we get. Those people, we think, eventually they're going to come back. And as they come back, the attendance will start to come. So, you know, one of the things about this business, and it's a great business because it has such terrific IP, it tends to get hit late, it gets hit less, and it recovers early relative to the other theme parks that are out there. Thoughts? Hugh Johnson is a straight shooter. Everyone knows that from his years at PepsiCo. If he tells me that this could be just episodic, things can come back. I'm a believer in him, which makes me think that if you can buy Disney down here, you should buy Disney down here. Interesting. I'm surprised to hear you somewhat positive on Disney. Yes, I am. I think that theme parks are really the great business. And it was streaming that had bothered me. This is streaming up to this point, some $11 billion, but they are now making money. That's an important milestone for the company. And by the way, we can't not mention the fact that the studio has gone gangbusters. Yes, the last three movies. Whether it's inside out too. Or the latest with Wolverine, with Deadpool and Wolverine. These are numbers that we haven't seen from a box office for quite some time. Yeah, even though the movie theaters themselves are shabby, I find, and not up to snuff. Well, I'll both make this point. ESPN didn't bother me that much. You have to write about the movies. David, not everything is going to work perfectly. And I don't think anyone out there who's at home and goes to the theme parks, thinks that the theme parks are going to go away. Of course not. It's just very similar to what Comcast had. So what are you going to get? You're going to get the one issue that had been just really bugging me for streaming. Because it's like maybe it's never going to happen. Then it turns out they did it a quarter head, Bob Iger quietly, no showman on this one. You, Johnson, telling me that things are fine. David, if he tells me things are fine when they were at PepsiCo and I was concerned about something, then I knew I was wrong. Because he's money in the bank. I think you buy Disney off this and expect that now they de-risk the theme parks that if you get a lot of costs out of the business that we know and part to get to that problem. And I'm very calm about it. They've also raised prices significantly yet again yesterday announcing new price hikes for streaming. I don't know if that's good, but the streaming service. Jimmy's fine, but David, if we were, this stock were at 110, I'd be saying, oh my God. Instead, I look at the analysts. Some of them believe that it would be bad. All of them did not. But in 110, this stock was really in danger. At 87, we'll come on. This is a de-risk situation that our viewers should watch and then buy if it stays down. All right. Listen, I have obviously, you know, the IP and the movies really can supercharge a lot of other things and help even with streaming because you get these hit movies. You basically don't have to produce as much content because people want to go to the site to watch them. And all that said, I will come back to the fact that so much of the commentary about the park trends right now is very poor. But why didn't they, the analysts, see it from Comcast Universal? Why did they keep their numbers up? I don't know. Comcast Universal, in many ways, has been a theme question. Well, Comcast said people aren't going because they're waiting for the new theme park to open epic, which I guess is next summer. Then there's a question as to whether that's going to draw attendance away from Disney. Comcast would buy boats, boats. They need to buy cruise ships. I would buy cruise ships if I were, say, Brian Roberts, or Mr. Tyler. Maybe the proceeds from the Hulu settlement, if and when they finally get there. Which, by the way, what I hear is still a ways away. They are arguing and going after arbitrage. Well, we work for Comcast. And if I were in the boardroom, I'd say, you know what? Could we go to Norwegian Cruise? Could we go to Viking? Maybe we do a deal? It's so brilliant that it won't be done. And by the way, if Comcast does have a cruise ship, Jim's going to be on there for a while. I tried it. You know, I had booked. Imagine that. In February 2020, at the last week, I had booked a cruise. Yeah. David, it turns out I haven't been known to you because I announced it at my birthday party that there was this epidemic. And then you chided me. I did. That was your... So, Jim, you're just... All you do is scare people. Four and a half years ago, he won't let me forget it. I've already apologized. Never. I can't wait for his next big birthday. And then Norway, you predicted it with that Norvig school board when they bought the junk box. Norvig, Norway, yes. I have no idea how you got there. Norvig, back to Norway. All right, we got a lot of burnings to get to this morning. And we're going to do that as well as this man's mad dash. Stay with us. My dad works in B2B marketing. He came by my school for career day and said he was a big row as man. Then he told everyone how much he loved calculating his return on ad spend. My friend's still laughing me to this day. Not everyone gets B2B. But with LinkedIn, you'll be able to reach people who do. Get $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. Earning your degree online doesn't mean you have to go about it alone. At Capelli University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals to academic coaches who can help you form a plan to stay on track. We care about your success and are dedicated to helping you pursue your goals. Going back to school is a big step. But having support at every step of your academic journey can make a big difference. Imagine your future differently at Capella.edu. All right, let's get to a mad dash. We're going to talk a little, "I get it now," Ralph Lauren. If I'm nothing, if not stick, right? Yeah, you are. You're all stick, man. I can do plates on sticks and everything else. They didn't need a solvent show. But this is Ralph Lauren here. That's an RL cap there. Yes, it is. And I've got to tell you, it is part of what I regard as being a terrific number. That what they did, just so people know, this was actually a stronger European and Asian quarter than the United States. But they had great direct-to-consumer. This is about brands, and brands that are timeless, that held up. Interestingly enough, even though China's only 8% of the business, they were way up in China. Now we didn't see that from reach moment. We didn't see that at LVMH. We didn't see that at Nike at Burberry. You didn't see it. So the brand is very, very strong. And I think you're going to find that Patrice Louvay, once again, is going to be able to tell a fabulous, fabulous story. And the reason they can tell it, David, is because they've gotten rid of anything that is low-end. They're all high-end, and they're quality. And I salute them. This is a terrific quarter, and I do think that you've got to grow mid to single digits. Look, they can, they can really, they're never going to shoot the lights out. But they're consistent in a business that's emphasized. And in a business that people say, "Oh, I don't know, up and down." They're not up and down, and I salute them. And yes, the Olympics is going to produce some very good numbers for them. Because it's a high-number of viewership that we know from Comcast. Well done. Let's get the opening bell right now. Here's a big more place. I'll take a look for real-time exchange. We're going to have a lot more read on that board, giving it a piece of work. Doing the honors here. Abbott. At the NASDAQ AI Technology Company. Healthboard AI. That's a listing via SPAC. Yeah, and they've still got some SPACs. Have you looked at Fortinet today? Yeah. At TNT is up... Cybersecurity? Have they ever seen? I was seeing it up. Let me see what it's up right now. It's very easy comparisons. We've got a bunch of earnings movers to get to. Okay, I want to start with this one. Let's start with this one. Fortinet. Yeah. By the way, $50 billion market value company. But at the same time, I'm saying that we've had a glitch in Cybersecurity ever since the problem of crowd strikes. Yes. And if you deliver... People started thinking maybe this industry is not as... Maybe it's more gloomy than we thought. Right. But you know what? Fortinet shows you, if you have easier comparisons and you blow the numbers away, people will buy it. I think that's very interesting. They hit on... They beat on the top line that is obviously the revenue line, but also operating margins were stronger, I believe, than had been. Eggs, the margins were terrific. I don't know if the margins are sustainable. That may be the weakness there. And then on the countryside, David, Super Micro. We have to get to the not so Super Micro today. I've had them one a couple of times. They had very good revenues, but they had terrible margins. Now, a lot of people are going to link them to Nvidia. Yep. And they did say on the quarter, "Look, Blackwell is late. That's the much disputed Blackwell." And they don't expect anything to the first quarter, but they did come up with something that people should feel better about. The H-200 and the H-100 are selling like mad. So what happens is you may have this seamless transition to Blackwell as people just keep buying the current iteration, which by the way, the most wants your fabulous one. So the read through in Super Micro, even though the stock is down 13%, and they're often linked, is that it may be good for Nvidia, which is why Nvidia is up, not down. However, they compete with Dell. I think we get Dell tomorrow. They compete with Dell. Now, Dell's down. Now, Dell was at 179 in May, David. It's now at 90, and it's down to another four points today. It's down in part because of this report from Super Micro. Yes, it is. And they are competitors, as is HPE. I think it'll be quizzical to see if Michael Dell can't tell a great story, given the fact that in the end, you know who Michael Dell is? One of the most deliverable CEOs in our history. Michael Dell is, I've said it probably doesn't quite get the kudos he deserves. In terms of one of the major business figures of the 20th/21st century. And by the way, talk about kudos that he doesn't get. You have to go down to Texas to see how much this man has given. Well, given. I mean, listen, Dell was in Austin, right? He came out into, I mean, Austin is now a technology center. It was not when Dell beat him. That's him. That's him. So anyway, I think that I, look, I'm not saying that Michael Dell's going to have a good quarter for Dell technology. I am saying, I want Disney that the stock is down a lot so that their opportunities here can't stick my neck out for Dell after how bad substitute Michael was. Because I don't know whether they're equally as pressure in the gross margins. By one particular hyperscale. Let's go. Well, some other names that have been a favorite of yours in the past. Airbnb. Yes. That is getting hit. We're getting a lot of movement off of earnings for the point out this morning. This is travel. And we're going to try to get to the biggest ones that we can. This is travel. And this goes back to shorter lead times, essentially, right? People are booking their trips not as long in advance. It would seem, at least that, according to the commentary from Airbnb. And that is a good tell for the fact that there's a lot of open homes that you can rent. Now, I was a little bummed by how negative Brian Chesky really was. Brian Chesky, the CEO and the CEO of Airbnb. And frankly, he's talking about watching the trends closely. If you are Disney, you're doing the same thing, TripAdvisor, you're doing the same thing. So maybe Andrew Ross Sorkin was talking about the Yolo trade this morning. You only live once. Yes. And whether it's over. And I have to tell you, I think it is over. You do. I do think that unless you're on a cruise where you have to be frugal when you live once. It's like, I only live once, so let me be frugal. Not exactly the dictate of the website guys. I'm not calling, why do you think it's over? People have run out of money. People have run out of money. I don't know. I wouldn't... I would explain it. Room nights, physical... They also watch TV. ...room nights for Airbnb came in up 9%. The street was looking for higher. Yeah. Much as 10. Bicyte, maybe it's been a little bit more. It was a bummer. Excuse me. Guided for the third quarter to, quote, sequential moderation relative to the second quarter. It was a bummer. And, uh, stable sort of, you know, that's the story there. Can I give you a contra that's very good? Sure. Brack and Darryl, who ran in law. Yes. Stop making fun of me. Who ran, uh, Logitech and went, ran it well. Yes. He went into VF court, which had been just a travesty. It had been so horrible. Yes. It was running the ground. Yes. He had to make some emergency sales. I predicted when he came on, made money, that he would do it. I thought it was a little more positive on VF than he was. Yes. But it turned out I was right. And the stock's screaming on this quarter. And as I have said repeatedly, anybody named Brack and Darryl, you can get behind that. You can, your name is Brack and Darryl. I told you. I told you. You're on the stop. You're on the stop. Otherwise he can't trust men with two last names. Right. But Brack and Darryl may be violating my father's dictate. Brack and Darryl is, uh, yeah. All right. We're taking a look at the broader market there. By the way, Brack and Darryl, postman, you know, he, he was supposed to meet the Darryl. I would look at the Darryl. I have no idea. But he was going to play in the NASDAQ. What, what were you going to say? Sorry. I'm just, we're not showing shares of VF Corp. So I'm trying to talk to what's on the screen. I thought that he might be the next bond. The next who? James Bond. Brack and Darryl. Yeah. Ah. If we have a picture, you could see why I would think that. I think he's more of the Sean Connery bond, maybe, maybe the Roger, you know, the Roger Bond. I don't know. Roger Moore. Yeah. I don't know whether. By the way, you know what, the Assistant Attorney General for Antitrust looks a lot like the previous Assistant Attorney General for Antitrust. No, it's interesting this morning in watching Mike and Dale Rahim, of course, who ran the Antitrust Division of the Department of Justice, which undertook the litigation against Google as we pointed out. Yes. On search. To try out the law. Don't get chaps eight rounds. I don't know who the next Antitrust head is going to be, but I do know this. They better get their glasses game working because when you are the head of the Antitrust Division, you've got to have strong glasses. That's the only thing Snapchat's done right. That's Snapchat. Right? That's Snapchat. And Snapchat. And put that together. And I mean, so whoever's going to be next in that position, just go to Warby Parker and get your game on. All right. Just wanted to point that out. Back to-- Find a way. I mean, there's no doubt about it. I'm making this clear. No. Yes. The day. Canner's good. You know, I don't want to make, you know, some people are saying to me, Jim, are you saying canner's bad? Canner argued that Google case very, very well. And that was not his case. He did not bring that. No. Canner good. Thank you for saying that. Novo. Not so good. Oh, right. Not an artist. Sales up 24%. Let's talk a little GLP1, shall we? Okay. So Novo does not have as good a product as he likes. But well, Gobi is just fine for people who want to lose weight. Well, look. Everything's going to be brought down because suddenly people realize, wait a second. These guys are very much in a dogfight and the prices are coming down. Well, no kidding. Are the prices coming down? Yeah. The pressure coming down. The dogfight you're referring to is between Lillie and Novo. They aren't by far the leaders. We have plenty of other potential entries. So they look for an oral appeal instead of having to get a shot. Right. The Amgen talked about that. The Amgen, I was surprised to see how not far they are. That was a little discouraging for me. Yeah. But I would say, David, that when you own these great gross stocks, like you buy Lillie when Ken Lingo, the great Ken Lingo, told me that, look, they could be a trillion-dollar company. They almost touched it. There's $7.35 billion. You have to ride the roller coaster if you want to win with these. You should point out Lillie shares are also down. And it will be. Perhaps on this. There's a real... You know, this is... No, we also have a price work. Yeah. They also... I mean, sales in North America, operations for Novo were up by 36%... Yeah. High expectations. Quickly. Listen. I believe we have the CEO on CNBC. You're up saying a few things about the quarter. Take a listen. We're very confident in our ability to scale and also supply patients and deliver our stronger growth for the second half. So I say, we're less about what happens, specifically in Q2. There were some adjustments to rebates, et cetera. Look at our guidance and we believe there's a very attractive growth in front of us. All right. That was Novo. As I say, look, can't have a day where you don't talk about GOP ones. I mentioned yesterday, of course, the effect it has, not just on people's appetite, but on other things as well, including even gambling. That's amazing, gambling. Let's stay in the health... What kind of... How does gambling taste? It doesn't taste good when you're on a GOP ones, but you drink less. So maybe drink the gambling? I don't know. I don't know. There have been casinos that have told me to leave, but wait. Inca is a GOP dashboard. Are you counting cards? No, but I will tell you this. Don't forget, Ujaro, which is the Eli Lilly for weight loss, 20% body, and people felt that, well, Gobi does not deliver that more toward the 15%. Now, in the end, David Ricks, the incredibly calm, terrific Indianapolis cult-like CEO, and that's not C-U-L-T, that's C-O-L-T, will not be hyperbolic, so you can't expect them to come out and say, "We're much better than Novo." So I just had it for him. I'd like to hold the chair by the way. Jonathan, he's going to be a bell cow. I've got it. It was a receiver course. Thank you for your NFL picks. I always appreciate that. I want to talk a little CVS, because that is a company that's called in transition, but Karen Lynch certainly had her share of challenges as the president and CEO of this company. That better reception to the numbers, though, again, I'm looking at a stock that is down over 2%. See, I hit up CVS when I talk to you. You hit CVS, but it's no longer listening. Now, Karen will be on, they have money tonight, and this is an odd thing. It was actually healthcare that hurt them. I'm so used to hearing about Amazon eviscerating the front of the store, but this was more of the "etna" part of it. UNH had a much better number. This is more like Humana. This is a challenge company with a terrific CEO, so I got to hear what she says tonight on mid. Good. Looking forward to that. Thank you, Karen Lynch. That's cool. That's called promotion. That was well done, Jim. Well done. And I did it seamlessly. Oh, so good. Would you like me to give you grades on your performance? I just want a gold star. Now, by the way, it's being a gold star, it's important, it's driving a whole cohort. Is this hybrid security higher, as even as CrowdStrike is up? No, CrowdStrike is up. I just, come on, George, we didn't even talk about it. Microsoft also feels like the Delta gave them shorts. Yeah, it's interesting. Delta's now in a feud with both CrowdStrike and Microsoft. That's a smart position to take. It's not unlike you. I must be in a feud with all the advertisers. Yes, I'm suing all my advertisers for not advertising. Yeah, that's exactly what you want to do. By the way, Linda Yacharito is in charge of selling. She joined in that little practice that they've got going. You know, having sold and taught selling in my life, I never wanted to sue any of my customers. He tried. I always felt it was bad to close. It's hard to close when you're suing. He tweeted or whatever you call it, now he posted, this is war. He's starting to feel like Biff. Biff. Biff. Yeah. Biff, not from death of the sales? No, from the back to the future. No, from death of his sales. Oh, from death of the sales. Right? Okay. He's Biff. Oh, got it. Biff. Unbelievable actor. Unbelievable actor. A number of people have done that role quite well. Yeah, but I've got to tell you, when you're Biff, you're not, you're like trying to steal pens and stuff, I am very, very upset when you sue an advertiser, because this was the sales. Right, because what happened is when you sue them, it often comes up when you're trying to close. I'd like to buy ads, but you know, you're suing. Okay. So maybe you get out on now to buy ads. Let's move on to Rivian. Why not? Down 6% on earnings. They, you know, they previously reported the company produced 9,612 vehicles, delivered 13,790. They talk about that new JV they formed with Volkswagen. Who's buying that stock? I mean, come on. You're really just betting on VW, continuing to put money in. Is that what you're doing? Yeah. And I'd rather, I'd rather buy Tesla thinking that thinking that demand isn't that distracted. I don't know. Finally, we got Shopify, which I guess we should get to because we pointed out the stock is up sharply, Jim, and I believe we are going to be joined by the company's president. We sure are. Shopify shares are indeed surging, and I got to tell you something, David. I think that Harley Finkleston may argue that the previous quarter wasn't as bad as the market said. This though is just a total reaffirmation of the old Shopify, the estimates handily beaten, and that's thanks in part to what I would say is a boost from Are You Ready? What do you think helped him? AI. Oh, yeah. Yes. Iverson, number three. Harley Finkleston, Shopify president joins us. I'm going to call this a first on CNBC because I've not seen it anywhere, anywhere. Harley, I can call it first. I can call it first. But isn't it true that this is just a continuation of all of us a strong quarter that people didn't like last time? I absolutely agree. I mean, this is the best version of Shopify, Jim. We're focused. We're executing on the plan that we set out last year, and you're seeing our results. But I think this quarter in particular demonstrates a trend that we can achieve both seriously meaningful combination of growth and profitability, and just on growth for a second, I mean, when you exclude the sale of our logistics business, revenue was up 25% to $2 billion. That's our fifth consecutive quarter of at least 25% top line growth. On the profit side, growth's profit was up 25% as well to $1 billion, which grew faster than revenue. And then, you know, your favorite question, how's it going on on the free cash flow side of things are free cash at margin more than doubled from last year. It was 6% to 16% this year. It was almost triple, Harley. You're very, very conservative today. Well, I just, it's important now whether or not, you know, last quarter's results were, there was an overreaction in the market or not. This is a Shopify that is growing. We can grow top line. We can grow bottom line. We're getting some of the largest brands of the enterprise level on. The point of sale is doing incredibly well, and I think, I think these results demonstrate that the plan is working. Okay. So people felt last time that you couldn't balance between revenue and profit. I think you showed them that you absolutely can. How did that happen? Yeah. I mean, first of all, it's really important for us to make sure that we, you remember, if you go back to when you and I first started talking, I don't know, nine years ago at the IPO, let's say, there was one thing that we, I still have some hair, but a little less hair now, we had one on-ramp into Shopify, which was e-commerce for SMBs in English-speaking geographies. Today, we're this unified commerce platform. We have brands of all sizes and all geographies coming to us for point of sale, for B2B, for online retail. If you just think about our actual enterprise business, and you look at sort of where we're at now, this quarter loan, you saw Casper away TheraBody, QVC, Barnes and Nobles, the largest brands and retailers on the planet are coming to us as well. If you then think about how some of our growth drivers are doing, look at Shopify point of sale for physical retail. That didn't exist five or six years ago in the way that it does now. GMV was up 27% year and year for point of sale, and we've now surpassed a hundred billion dollars in GMV for our point of sale product. So all these drivers are working really well. We have our guardrails in place to make sure that we are very thoughtful about how we're spending, but the results speak for themselves. Okay, so a lot of people are concerned about the macro. I was concerned about the macro when I read Etsy. It was very difficult not to be concerned about the macro when you read what Amazon felt about what was happening in their retail. What is your feeling on the state of the consumer? Yeah, I mean, like you, Jim, we hear a lot of other companies talking about a softening consumer spend. Our data shows us that merchants on Shopify continue to outperform the broader market. And I think that's happening for a few reasons. The first is, remember that if you think about your top brands, the brand's consumers absolutely love. Those are all on Shopify. In fact, new brands are being built and more brands migrate to us every single day. But the other thing to keep in mind, our business model, what's really amazing about our business model is that we have a very diverse set of verticals of merchants. So we have scrub companies like Figs and pet product companies like Barkbox. We have Nestle and Heinz and Mattel and Staples. So there isn't one type of particular type of merchant on Shopify. We're across all types of verticals. Also, we have a great direct-to-consumer business. We also have companies like Carrier who's selling their industrial heating products using our B2B product. So whether it's online, offline, D2C, B2B, local, global, these are the brands and merchants coming to Shopify and we're seeing a great success with them. Harley, it's David. We talk a lot here about AI and its impact. In a real way, you talked about it on the call, but you said you're leveraging emerging technologies to enhance your feedback loops and you went on to explain a bit what you're talking about in terms of sharper, more iterative feedback, but can you explain to our viewers how you're using it in the business and in a real way, explain what exactly you're doing with the information that you perhaps would not have otherwise had quite as deep a look at in the past? Yeah. I mean, we look at AI in two ways. One is how can it make Shopify's operational efficiency better? So I mean, to your example, David, the way that we're looking at marketing channels, we're able to now experiment at a much faster clip. I mentioned this on the call half hour ago, but in Q1, we began to experiment with an emerging new social platform. We put a little bit of money to work to see what the results would be. It worked really well. We doubled down on it in Q2 and we saw about a 50% increase in customers and merchants coming to us in the quarter, from the previous quarter on that particular channel. This ability for us to make much smarter bets within, of course, the financial guardrails and an average payback period of 18 months means we can make smarter decisions much faster. Same thing goes in terms of how we arm AI, our merchants with AI. If you think about all, you know, we have millions of stores on Shopify, we're now about 11% of all e-commerce in the US and we're growing our market share considerably there. We're able to give our merchants great tools to make better decisions so they can place their own ads, so they can write better marketing content, so they can make better decisions to run their business. In both cases, whether it's internally or externally, these types of innovations are making our merchants more successful and our businesses predicated on that, so it makes us more successful. Well, look, it was the kind of quarter that we're actually used to. I think that the last one wasn't as bad as the market indicated, but it sure is glad to have you back in the huge plus column, Harley Finkelstein, our president's Shopify. Really good job. Thank you, Harle. Thank you, Jim. Thank you, David. All right, before we head to break, let's just check out the bond market for you. Not an unimportant part of our overall capital markets and one that perhaps we should get to it a bit earlier sometimes in the show, but not today necessarily. You can take a look, though, that 10-year creeping back up towards the 4% level. It's 20-year, hey! Yeah. Remember to do so. At the beginning of the week, as you look at the two-year exceeding a 4% yield once again, we'll be right back. And we're at it out of our hour here. I wish I had a time to talk about Amgen and a little bit of disappointment on the weight loss. Yeah. I'm giving you any particulars. I've got Celsius, which is a garling of younger people, David. That's the energy drink that makes claims that it's really good for you. We have CBS. And by the way, just Karen Lynch did a great job on retail. So I'm not willing to throw the baby out with that bath, but we have it just because they have health benefits, not that good. And then Rick Moncreek wants to talk about Devon. A lot of natural gas there. I'm going to press him on data center. You've got a really good, interesting, diverse group of us. It's very useful. Well done. That's one of the reasons I was up last night. But I was like, this is just the panoply. One of the many reasons you're up last night. Right. And they're true. But aside from my just-genual insomniational sleep. The only person who sleeps best of me is George Kurtz, who can one little monse by not sleeping. I'll do it. Now he's trying to win Delta. All right. Well, don't take any naps between now and Mad Mike. Delta? Let them tell you. Microsoft and CrowdStrike said Delta didn't do the job. Gotcha. Not a man I would mess with. Delta Club, David. Delta Club. Jim Kramer, everybody. Yes. We're staying on top of this rally this morning. Don't go anywhere. You've been listening to the opening bell on 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. And that's it. [BLANK_AUDIO]