electricity a big idea that's inspired countless new ones from powering the light bulb to virtually powering our entire lives 30 years ago State Street launched the Spyder S&P 500 ETF Spy a big idea that inspired the world to invest differently and still does what can you do with spy before investing consider the funds investment objectives risks charges and expenses visit sga.com for a prospectus containing this another information really carefully before investing spies subject to risks similar to those of stocks only TS are subject to risk including possible loss of principle allows distributing distribution market moving insight and analysis join Jim Kramer David Faber and me Carl Kaitenia on the opening bell hour of CNBC squawk on the street good Thursday morning welcome to squawk on the street I'm Carl Kaitenia with Jim Kramer David Faber at post nine of the New York Stock Exchange futures are a bit read as the Dow looks to snap the longest winning streak of the year so far at least lots of earning movers bank of England holds steady jobless claims popped to the highest level since August a road map begins with a potential crack in the AI stock boom arm holdings notching a surge in profits and sales but shares under some pressure on weak guidance plus medium moves Warner Brothers discovery missing estimates despite streaming growth ad sales fell 11% Airbnb shares are also falling ahead of the open the company sees robust demand for travel but its guidance disappoints investors CEO Brian Chesky he'll be joining us in just a few minutes let's begin with some of these momentum names today including one of the beneficiaries of the AI boom and that's arm holdings down sharply as full-year sales guidance comes in below consensus overshadowing a quarterly beat but shares of the chip designer still up 90% from the September IPO price of 51 a share Jim revenue up 47 licensing up 60 yeah look I think the Renee Haas we able to tell good story that there was really one quote one question on the conference call by Goldman analysts who's very very good which knocked the stock down which is a explain me the down seven percent sequential problem when it when it comes to the some of the royalty arrangements and they were basically saying David that it was internet internet things and what a motive now that is not unusual that is what everyone has been saying like an one semi has been saying that Texas Instruments been saying that so they do have this component that is not wizardry wizardry was very strong if you want to know the truth and wizardry being AI yeah explain wizardry is AI is what but it's it's the data I don't know if you caught the excellent interview John Porte with with Tensea Wong but you know he loves up arm obviously tried to buy arm Renee Haas the CEO is from Nvidia but I just think that this is one where people wanted to sell it they were looking for reason to sell it and they got a reason and I don't think there's more to it I really don't I don't think this was that bad when you see those numbers that you just mentioned David people kill for so I said Rachel down generating Morgan Stanley note here yeah a lot of others well they say with a week key one guy that you're referring to with that down seven percent in terms of guided royalties we think management they have flushed out some of these nearer term concerns I think that they're positive I think that if you would stay close to the company you would have gotten that but the people who didn't stay close the company weren't rigorous and therefore they got fooled it had to do with rigor it did not have to do with Renee when you back up though I have to admit you know sometimes you I forget and I don't mean this in a negative sense but this is doesn't have that much in revenues I mean the multiple of revenues for this thing well okay so pretty darn hi that's a great that's a great issue because what's happened is is that Blackwell which we now know is kind of like Blackwell's kind of like good oh for some people Blackwell includes arm that's the CPU okay and the GPU is Nvidia and that's going to be the biggest combination that's ever hit that's the industrial revolution combination that Jensen Wong keeps talking about and so Carl you get the situation where you're thinking about what's going to happen in September October you realize their arms taking share and they've got phone they have PC they have the world they're going to be this the CPU company even they have a deal with Intel I think they're overrunning Intel. So I like their situation very much because you gotta be thinking about next year at this time. And the billions that are being spent on the data center, when you go into the data center, you gotta look at what's in, oh, it's vertives in there, eatin's in there, okay, but then of course, Grace Blackwell's in there, which is Nvidia, and arms in there, you wanna be in there, or else you're kind of being left behind. >> You're not in there. >> If you're not in there. >> If you're not in there, you're in there. >> You're in there, you're in there. >> If you're not in there, then you're not in there. >> You're either in Warner Brothers' discovery TNT, or you're in the, no, I just say that it's just a very strong. >> To come back to valuation though, you're talking about a company that did $9 or $28 million in total revenue, up 47% year over year, yes, but I mean- >> But we were, they were 10 years- >> All right, but it's trading at what, 25 times? >> Well, okay, it is far more expensive. >> Revenues. >> Revenues, you see it's got that revenue light, it's got that revenue light model. >> I don't understand. So a lot of it is just going right to the bottom. >> Right, so- >> Yeah, no, I get it. >> I don't wanna, you know, Carl, I don't wanna get people excited about a stock that's that expensive. I do wanna say that the so-called disappointment had to do with people who didn't want it to ignore the part of their business that's pedestrian. And we'll get in that with Renee, but Renee did not let people down, let's people think, you know what, this guy in his third quarter didn't do a good job. So, and let's just keep that in mind. >> We're gonna talk to Brian Chesky of Airbnb in a moment. >> Yes. >> Did you feel the same way about the reaction to that guidance? >> Okay, that one I don't understand because I do think that you have this hole in the second quarter, which I don't believe, you know, this little slip. And then you've got this incredible, this is the value of the shadow of the death, don't fear any evil. And then it's gonna fly up at the end of the second half. And I happen to think that Chesky is one of the ultimate, listen, I hope it goes really well, but I'm not gonna bank on it. As opposed to, he's not under promising over delivering. He just went scared, I've had him one many times. And if you take a look at the stock, it's just going up, up, up, except for right after a quarter, because he's just a guy, it's almost like he's a superstitious guy. And he does wanna say, you know what, I next quarter is really a blowout quarter. I like him very much, he's done remarkable things. And we're gonna love this interview because this is one of the most exciting times for Airbnb ever. >> Although, I mean, more macro, Hyatt Revpar in the US was up just a smidge. Planet Fitness today, obviously what we heard from Disney a few days ago about travel. >> We do have a problem with travel. We don't have a problem with international travel, which is a lot of Airbnb, but we do have a problem with travel. And I think he's gonna acknowledge that there is a bit of a slowdown. I'm able to get the trip advisor that has a real problem with travel. >> Oh, yeah, true. >> But I do think that if we go back to booking, booking's holding's made it very clear that international travel is very, very strong. The so-called, I hate this term revenge travel 'cause I don't think anyone's really saying, you know what, I'm gonna show my revenge and go to Iceland with Diana. Oh, it's the same next to that spot, next to that, what are you doing? >> What am I doing? >> What are you like prepping to? >> I'm making, yes, I'm making spacer in law. >> It's gesturing. >> Because they can see me even though our viewers can't. >> What are you like a third base coach? I'm not, don't wave me on here. >> I'm doing some science. >> It's the Carol Burnett, your tongue. >> Yes, it is. >> I'm not ready to do WVDM. >> I met Hartman for me. >> I met Hartman for me. >> I met him at a deli in charge. >> What I was trying to do is say, I'm not ready to talk about those, because I wanted to come back to you on valuation on Airbnb. >> Right, okay, Airbnb is the moment. >> The moment revenues for ARM, let me finish my question. >> Airbnb is the moment. >> Let me finish my question, please. >> Yeah, sure. >> Okay, thank you. Airbnb, 41% trailing 12-month, free cash flow margin of 41%, they did 1.9 billion in free cash flow this quarter. >> And they're buying those. >> Last 12 months is only 4.2, so it's great. >> They're buying back stock. >> They're bringing them all to free cash flows. Pretty, not that high. >> Okay, thank you. >> See, when you let me ask my question, you see how happy it makes you. >> Okay, you're wearing two suits at least. >> I'm always wearing two. >> He scares me. >> He's very upset. He's very upset. >> I have to look at you because he's still signaling things. (laughing) But Airbnb is one of the classic growth stocks of our era, and Brian Chesky, if you remember, I mean, this is a man who's with, whether it's some increased weather pandemics, whether it's a big downturn in 2008. He always comes out on top. Why? 'Cause he's probably one of the most creative CEOs in the world, and I think we're gonna get some of that. And we're gonna be overlooking this next quarter after we speak to him. >> Because of the guy about Q3. >> Because of the things he has in the pipe after Q2. >> Look, I see the rev part there, and the Marriott didn't do the right number. And we know that there's a, look, there's a moderate decline in travel, so I understand why this is down. But he's more than travel. He's experiential, exciting. Take the stock down. Don't forget the Olympics are coming. Olympics are loved. >> And you like this new rollout of, what's the thing that's called, icons? >> Oh, come on, that's what I wanted to talk about. So badly, 'cause I'm so excited. I was on it with my daughter last night, and we were trying to figure out whether to book Kevin Hart. (laughing) >> I mean, I'm into the Prince House, but what we can find out. >> Oh my God. Oh, the whole thing's very exciting. When we talk to him, I think people recognize that, yes. Okay, so I have to, I got that. The negative quarter, so-called negative quarter, I don't have to worry about that now, it's been de-risk. But the things that this man has, he's just a creative genius, and we don't have enough of that in business. >> No, we may not. Speaking of de-risk, very much-- >> Oh, where you going? >> Where you going, brother? >> Come on, come on. Discovery has been de-risk. >> Oh, okay, that's all. >> Real quick, take a look. Of course, the company also reporting earnings this morning. >> Yes. >> Constance call just completed as well. And the stock's gonna be down. >> No, not that, not that big a decline at this point. >> Okay. >> Sort of more of the same. I mean, you've got continued declines in linear networks, not a big surprise. You've got some growth, or at least some EBITDA, adjusted EBITDA at the direct consumer offering in Max, which is just under about a hundred million. >> And the raising price right now. >> And they're raising some price. Free cash flow was 390 million. I'm sort of looking at what, you know, the adjustments and what was done there. But free cash flow did come at 390 million, obviously. That was up a lot from a year ago, when they had negative free cash flow. >> Right. >> Since 631 million, I think it was. Something like that. And primarily more discipline approach to content investment, the timing of production, ongoing working capital and proven initiatives, lower cash restructuring costs, and things of that nature. But Jim, it's nothing you can look at in this report and go, "Oh, this changes the narrative." >> No. >> It doesn't. >> And at the same time, Comcast parent company is network, most likely interested in the NBA contract. Particularly because, by the way, NBA survived among Amazon, ESPN. I don't know whether you think we're getting the A package, the B package, or the C, if we do get it, Comcast. >> If we do. >> At least TNT in a questionable position, if, in fact, Comcast, our parent company, is successful in securing the NBA rights. Zaz Love on the call didn't have much to say about it. Simply saying, as we've reported, of course, they have matching rights, it's a big decision, because it's a big number. And either way, if you're Warner Brothers Discovery, it's sort of a difficult position you're putting, spending two upwards of potentially as much as two and a half billion dollars a year on the NBA for a company that is trying to generate as much free cash flows as it can. That's an issue. At the same time, to your point, if it goes away, what is TNT? >> It's short term. >> For example, they'll say, "Listen, when it comes to sports, we still have hockey, "we still got to have the main show." >> Short term, man, so long term. >> That's madness, we still have NASCAR, but that said the NBA, and certainly, as a result. >> Let me pause. >> I've been watching every night, I'm sure a lot of other people have. >> Oh, then let me pause you something. I want to ask you. You know how the Manning Brothers became a company? >> Yes. >> Would Barkley be able to come a company if this contract goes-- >> I don't know. >> Does he have a change in control? >> There's a lot of chatter about his ability to get a good deal in this round. >> I think he's one of the great figures in TV, and it may matter. He's very compelling to watch. >> He really is. >> A good show. >> I know. We'll see if, in fact, NBC secures that, again, it wouldn't start until the current contract goes through next season, and then it concludes. >> But they've got 11-year deals. We've talked, reported on this last week in some fairly extensively. Not much to add at this point, other than to your point, it just points overall to how sports is so important to getting anybody to watch some of these general entertainment networks, and without them, without it, what are you doing? >> Well, look, you're over here. I mean, take a look at, I'm still staggered by the Monday night football numbers. How just, you know, you had the greatest. I mean, it's just something that people do watch, yeah. The question is, is 2 billion, you'd be between it, but I mean, there's a level where maybe it's not worth paying. >> It may not be. They did also announce with the press release from Disney that they are going to be bundling Macs along with Disney+ and Hulu. >> There you go. >> Which is something I had asked Iger about during our last interview in early April, because I'd gotten a sense that that was a possibility. >> But is this the lead up to what's called a shot? >> I don't know, do we have it? Do we want to play it? It was sort of, yeah, it was a back and forth. I was sort of pushing him on. Is there a possibility for bundling these kind of entertainment services? This is what he had to say. Do you ever see a day when there could be a bundle, not of, you know, but of competitors in a sense, but to make it easier for the consumer in the same way that you are bundling sports with Warner Brothers Discovery and Fox? >> Yes, I think there are possibilities there, sure. >> You did. >> Now, that was only a month ago. He had to know this was probably in the offing, but he didn't seem particularly enthused by it in that answer. That said, you are now going to have the opportunity come this summer to buy this package. And maybe it adds more glue, so to speak, and reduces churn and gives people a better opportunity in terms of pricing for both those services. >> I'd rather own arm and air being big, 'cause I prefer growth, just stagnation. But that's just me being new-fashioned. >> Yeah, that works down 11, studio down 13. >> Look, I mean, go look at Trade Desk Quarter, which was fantastic, where they say, look, this was the crossover. It's no longer linear, it's actually literally right now. It's non-linear, that's the biggest, and that's it. Trade desk, Jeff Green, smart guy, radio. Is it radio? Is it newspapers? >> I know. >> Which is a cop show, man. Which is a hospital show, man. >> I got no answers for you, Jeff. >> Yeah, I didn't think so. >> Yeah. >> Boy and Order, David Faber. >> All right, tough guy. Actually, that's the one that's doing most of it. >> When we come back, we'll check in with the Airbnb's Brian Chesky on the heels of that quarter. A lot of names to get to, including some double-digit movers, Zapp Levin, Bumble, Warby, Roblox, when we return. >> At EverNorth Health Services, we believe costs shouldn't get in the way of life-changing care, and we're doing everything in our power to make it possible. Behavioral health solutions that also keep your projections at their best, it's possible. Pharmacy benefits that benefit your bottom line, it's possible. Complex specialty care that cares about your ROI. It's possible, because we're already doing it, all while saving businesses billions. That's Wonder made possible. Learn more at EverNorth.com/wonder. Support for this program is provided by Chevron. Demand for Energy is projected to continue rising in the future. To help keep up, Chevron is increasing their U.S. oil and gas production, and they're innovating to help do it responsibly across their operations, including their Gulf of Mexico facilities, which are some of the world's lowest carbon intensity operations. Helping supply energy that's affordable, reliable, and ever cleaner. That's Energy in Progress. Learn more at chevron.com/meetingdemand. All right, one of my favorites. Airbnb stock has moved in lower this morning. Quality results beating speed estimates, but there was a conservative guide, which was indeed below consensus. Joining us now is Airbnb CEO Brian Chesky. Brian, can I have a VIP house with Kevin Hart? May I wake up to the museum or say, or can I drift off in the uphouse? Because I think we're burying a lead if we don't talk about icons. Yeah, I mean, absolutely. Icons are the coolest experiences on Earth, and you can stay in the uphouse, which we've recreated, the Prince Purple Rain House. And what this gym really represents, I think, is the beginning of the next chapter of Airbnb. Because we've been known for stays, but now Airbnb is starting to move into experiences. And we're starting with just, you know, 4,000 people can do these this year, whether you want to stay at the Ferrari museum, or the X mansion, which is completely recreated like you're stepping into a comic. But eventually, we want to do is be able to bring the magic of icons to millions of people around the world. I think it's just a sense of like, where we're going as a company. Well, I think this is really important because there are people obviously want to focus on something that does matter, 'cause you obviously have a company with a stock, and that next quarter does seem up, you did say things could be a little lighter, and there is a concern, whether it be from, if we listen to Expedia, we'll listen to Hyatt, the red bar, listen to Marriott, we do get a sense that travel has slowed. And I don't know whether to lump you into that particularly American travel, or just say listen, you've got to see through this little valley, 'cause we've got a new brand new Airbnb that's very exciting. >> Yeah, I mean, if you think about Jim, as you and I used to talk before we went public, we were basically break-even when we went public. And the big question was, would we ever be a profitable company? And in three years, we made so much progress focusing on this, and now we have 41% free cash on margin. So today, we are now at the beginning of this next step. And the question is, what's next for Airbnb? And the answer is, there's going to be a lot more coming over the next couple of years, new products, new services. And I'm very confident that we can re-accelerate growth. >> Well, I want to talk about icons again, because one of the things that I now find to be, let's say incredibly important is, before I start my travel trip, I have to go to icons to see if there is something that I might want to do. But I also worry if I go into the uphouse, whether that costs a fortune, or whether these are just all kind of, let's say, not above what someone might be able to pay. >> Yeah, I mean, the uphouse is actually free, and all of them are under $100 a night. And so, these are essentially tickets that you apply for, you fill out your profile. There'll be 4,000 lucky winners. The winners get a digital golden ticket, just like Woolly Wonka. And, you know, this is just, I think, a really fun idea. And one of the reasons we did this, is last year, when the Barbie movie came out, we created the Barbie Malibu Dreamhouse. It got so much press, Jim. It got more press than our IPO. And we realized there's a big idea here. And what icons do, is this gonna bring a lot of people to Airbnb? You know, keep us top of mind. You know, travel companies really have to pay a lot of marketing dollars to get people to come to their app, and where you get a lot of organic traffic. >> Now, let's talk about some other things. I mean, I'm a big fan of the Olympics. I just think it's gonna be one of the most exciting things. This museum, you know, a museum door say, is one of the great monuments to art in the world. How do you come up with something like this? 'Cause this was so inspired, that I said, maybe I should just throw my hat in the ring. >> Yeah, I mean, you can literally sleep in the clock tower, and the room is designed by the same design who designed the Olympic torch. You have the museum all to yourself. And how do we do this? Well, we have some of the most creative people in the world at our company. And I think that's one of the strengths, is, you know, we're not just a technology company. We sit at the intersection of technology and creativity. And I mean, I'm a designer. I went to design school. So I think that's one of the things, that makes this company different. But, you know, speaking of Paris, we have, you know, we have 120, 130,000 homes in Paris. A large percent of the people, going to the Olympics in Paris this year, will be staying in Airbnb. And I think what we're able to do, is keep the cost of staying in an event much lower, because we add a lot of excess capacity. >> Now, I do want to point out that you make some really interesting, let's say, projections about what would happen if more people around the world were to list their place. Obviously, there are the competition hotels, just can't hold a camera what you're offering. But is it possible that just organic growth could make it so that we could look through this quarter and not be so concerned that we're at the beginning of a downturn? >> Yeah, I mean, honestly, Jim, we are just scratching the surface of our core business. You know, we've been focused on reliability and quality. And our customers tell us, for every person stays in Airbnb, there's eight or nine people that still stay in a hotel. If we can just get one of those people to stay in Airbnb, we will double the size of this company. And so there's a huge amount of growth opportunities ahead of us, just by continuing to focus on improving the core service, we've made a lot of improvement. Then Jim, that doesn't even put international. You know, we have very low penetration in Asia, Latin America, even parts of Europe. If we can get those countries, even to half the penetration United States, it's going to be a much larger opportunity. >> Well, Brian, Jim mentioned the Olympics, and we keep watching dollar strength. What's your take right now on foreign exchange, dollar strength as a way to incentivize people to go international? >> I mean, I think that one of the things we're seeing is a lot more cross-border trips. And I think this summer, you're going to see, you know, nearly half our business is cross-border. In a really big opportunity, our Americans traveling overseas, especially to Europe. I think the Olympics is just a star. I think you're going to see a huge amount of travel coming this summer season. So I think everybody's going to be the place to do that. >> Well, Brian, I want to congratulate you. I know it's been 10 years and they can do experiential. You did blow us away. I urge people to go to the video, because what they'll see is not an actual rendering, but real pictures. And I found it very exciting with my kids. And I think other will be too. So congratulations on all the excitement that you generate. It's Brian Chesky, CEO of Airbnb. Great to see you again. Thank you for having me today. >> Of course, thank you. >> When we come back, we'll get Kramer's mad dash. Count down to the opening bell. One more look here at the pre-market on a pretty packed Thursday. Don't go anywhere. >> At EverNorth Health Services, we believe costs shouldn't get in the way of life-changing care. And we're doing everything in our power to make it possible. Behavioral health solutions that also keep your projections at their best, it's possible. Pharmacy benefits that benefit your bottom line, it's possible. Complex specialty care that cares about your ROI. It's possible, because we're already doing it. All while saving businesses billions, that's wonder made possible. Learn more at EverNorth.com/wonder. >> All right, let's get to a mad dash and then we'll have an opening bell for you. I just looked over it. So I think it's going to be Costco. >> Yeah, I got a story, I'm going to bust some gloom here. >> Okay. >> Because they are the single greatest inflation fighter of our time, keeping prices down. They know they actually talked about inflation. It's over there. They are rolling prices back. But most importantly, did non-foods increase mid-single digit. That's not unusual. Everybody knows they're great for food. Sundries of mid-single digit. But how about this? For the first time in several years, toys did well. Now toys have been an area of really kind of a black hole. Now we know what it tells really kind of flattening. But Hasbro is making a comeback here. So it might be a good degree toward the Hasbro. If you're looking at Costco, this company bottom around 717 has been straight up ever since then. Possibility of a, well it's always possible if a member should be increased. But they are what the Fed needs more than anything else in the world. A company that just says, that goes to suppliers and says, uh-uh, no, we're not taking that price. You're lowering your price. So, I salute Costco, great numbers. >> And you still feel comfortable with the stock. Even up, look at that. >> Yes. >> I mean 57% over the last year. >> I feel very comfortable. >> That's quite a move. >> I know the multi was very high. >> Yes. >> But I think they offer such a bargain. By the way, this cold thing that they've done was just brilliant, you know, you buy cold bars. But what I really most like about it is, is that they are pretty should be lower than anybody else. By the way, Instacart doesn't deal with it too. You want to go to that room. >> Insta-reporting after the bell last night. >> Yeah, a little EBITDA beat, up 17. >> I like it. >> Jim, they do guide Q2 above, as I see. >> They are bringing very good at new partnerships. I mean, they've, by the way, they have a Kroger deal. They have a CPJ, super packaged goods deal that is very good. >> They did an excellent job. >> They just did that deal with Uber that we were talking about earlier in the week. >> That was very important. >> The Uber Eats. >> They're hustlers. >> I didn't, no, there's enough such a prize for me. They are hustlers. And I did not see that they would put together such a great quarter, because I had felt that they were a little static. That was quite wrong. The numbers there are very good. >> Yesterday was a tough day for the e-commerce ETFs, given shop and trip, were really similar. >> Right, now, trip was so disappointing, because they put themselves up for sale and nobody came. And that's got to be a great bummer. I noticed that there was a, we got an upgrade for shop. I mean, look, Shopify, there was an unequal. Now, Harley did not, when I tried to press him when the point five goes toward the divine, he did not really, it wasn't, let's say, as definitive as on the call, where they said, "It's lower margin business that's hurting us." But Max Lovechin, who's a partner, a firm, who wants to answer this, and the transaction continues. (buzzer rings) >> And Shopify has been separated over J&T, it's the opening bell, and it seems as if you guys are on the same board, it's the Children's Tumor Foundation, and with the Nasdaq Global Infrastructure Company, Thrombial, celebrating its US listing gym, as we didn't put together six straight wins for the Dow. We haven't done that since December. >> It's been so quiet, led by the utilities, which is obviously a strange leader. Yesterday, the banks out of nowhere, Jay P. Morgan up giganticly, you can search, and search, and search, and find absolutely nothing about why it went up. It is a quiet bull market based on different shades everyday, but when the utilities go up, it does take up some things, but it leaves a lot of the stuff behind. This has not been a great moment for technology, just be aware, there are Roblox, as I regard Roblox, as the technology company. >> Oh boy. >> Dave Bazougie, I mean, he came on the last quarter, the last quarter was a breakout quarter, no. But I just find each day there's a drug company that does well, a two company does well. It's a mosaic of things, but the utilities act in, like they are the next Nvidia. I just tell you, if I have one more person come on our air and say, is it Nvidia, or are you trimming Nvidia, or what do you think about Nvidia? >> Nvidia is a company, okay, that happens to have very high-speed semis. We should be comparing their many companies. Okay, how about Apple, remember that? Wasn't company companies come up a little bit? >> Yes, a B of A today reiterates outperform, they look at some global App Store revenue in April, Jim up nine, China up four. >> No, Apple, this was obviously, David, I'm willing to say that Apple might have been a bit of a bottom, it was when it was most hated, of course, that's how bottoms are formed. >> Guys, you want to talk about Equinix? >> No. >> Well, too bad, okay, you have to. >> Yeah, all right, that's right. >> I thought you'd be excited by that. >> No, I am, I worked a lot on Equinix this morning. >> Oh, good, I figured this was awesome. >> We never obviously talked to each other before the show, so I never have any idea what is working on it. >> The top out, by the way, just need a little preface, stock was down big last night. >> Yes. >> And that was just the shorts pressing it, and the shorts are hung on this one, and you know it. >> They are hung, we're talking about Equinix, this is a 75, almost 80 billion dollar market cap data center company. What those who own it particularly like is its footprint. You know, it's in London, it's in New York, it's in Madrid, it's in all these major metropolitan areas, so it has what many consider the best real estate, if you will. It's customers are, as you might expect, any number of companies, including the hyperscalers. Yes, they own a lot of their own facilities, but they're also leasing and renting. It's a REEC, Equinix, and it had a very strong quarter, and as Jim mentioned, there was a good short position in the stock, in part because of a report from Hindenburg that noted research outfit that comes out after these companies. >> And they do very high quality work. >> And they do high quality work, it was in March, they don't have the opportunity or time to go through all of their criticisms, but it had to do specifically with what they call adjusted funds from operations, and what they call the key accounting trick, where they were misclassifying maintenance capex, as growth capex, giving the appearance the company's cost to maintain its revenue base is lower than it actually is. Now, in the current report that just came out, and Jim referenced this, Equinix announced its audit committee, along with independent third party professional advisors, has substantially completed a previously announced independent investigation of its accounting, and found that Equinix's financial reporting has been accurate, and the application of its accounting practices has resulted in an appropriate representation of its operating performance. So you couple that with what we're very strong numbers, Jim. >> Yes. >> 992 million in adjusted EBITDA, that was up 8%, and an EBITDA margin of 47%, and you get this. A stock up sharply with, as you point out, a very large short position that may be scrambling a bit today. >> Look, this is one where, we don't know what it needs, we don't know what Hindenburg's gonna say. I mean, obviously, and a lot of committee, you could argue, well, maybe they, maybe they weren't as independent as you thought, but I would tell you, it's one of the great growth reads. And anything data centers on fire, but it was taken on because of these accounting issues, and I think that the people who were spell out travelers who were shorted, who are now thinking, why am I shorted this? >> And those who, like the stock, would point out that with the AI revolution that we spend so much time talking about appropriately, you know, this is like a, think of a building that the rents keep going up, and the tenants keep turning over, well, that's what's happening here. So you've got, I think, as much as a 20% roll-off each year, they're gonna be paying more. >> They can raise the rent. >> They are going to be paying more. >> They're more than a shopping center. >> What's in an equinix? >> All the stuff you just talked about. >> Yeah. >> It's a duck comes down. >> Yeah. >> It's a scratch or more, an NVIDIA. >> It's all NVIDIA. >> Yeah. >> And everything else that goes in. >> And a little arm, as you point out. >> Yes, arm. >> It's such an arm. >> It's such a cheap view there. >> It's a bird of people. >> It's bird of people. >> Helping you build it, yes. And it's, by the way, the old fashioned people had eaten. You know, Carl, what are the things that, when you speak with you, I like to speak with utility people. They're actually like, they tend to be pretty fun loving. The guy who's trying to market like your powers on the rock and roll hall of fame, board, I went to see you. I, that's where I realized that there was this group. This is three, four years ago. >> Any better, have you heard of him? >> I have. >> She's unbelievable. >> But I do say that they are the ones that are on, they have their under fire. They can't provide enough power. Power's going to go up 5% for the next three years each year. And we've had a grid that hasn't grown in 20 years. So these equinex are part of many, many changes within the grid, which just say, you know what, we're real power in power. >> And that's-- >> And what you need, and here's a good one that we didn't mention, that we'll mention when we speak your name. Why do people like arm chips so much? >> 'Cause they don't use as much power. And by the way, when it comes to these data centers-- >> Do you put anything past him? >> When you talk about them, that's what, I mean, they talk about how much megawatts they use. So equinex is pre-least and incremental 48 megawatts of capacity across its Frankfurt, 10, Osaka 4 and Osaka 5 assets, including approximately 34 megawatts, least in mid-April. I mean, this is the kind of thing that they put in press release. It has to do with what access to power do we have? 'Cause to Jim's point, that's where you start. You can't build these things unless you have access to power, and you're going to need a lot more of it as we generate, as we move into the world of Blackwell, even though it consumes less power, we're going to have a lot more of it. And eventually, obviously, we're going to be wanting to power the robots that are going to take over. >> The robots have to burn lighter than they do. They burn heavy. >> Yeah, they burn too heavy. So civilization may stay around a bit longer if we can prevent the power generation going up too much, and maybe we want to limit the electricity. >> The most boring part of Jensen Wong is the part that he believes in the most, which is that he has to try to have a smaller footprint. Things he cares for minutes about waste, cares for minutes about amount of power that's used, and that's one of the reasons why arm is almost always chosen. >> Yeah, decent morning for industrials, Chevron and Caterpillar lead the Dow, where you got this upgrade of Emerson this morning, Jim? >> Emerson's in the data center. I'm Ms. Judge Emerson. They made, I was not happy to miss two quarters, and now they've come one very strong, and they are in the data center big time. >> As for restaurants, we got pizza, comps down to Jim, interesting the dominoes has reclaimed the throne on pizza comps. >> Look, dominoes, they, well, one of the things that has to happen when you get a dominoes, you have to have a really powerful value runs it, and Russell Wiener is just traumatic. >> He's so hot, those, by the way. He's growing up. >> He did. >> He stole it, yeah, he's skating. >> It's good preparation. >> I sold ice cream, I sold ice cream. I thought about it. >> Yeah, ice cream, I got ice cream here. >> Skipper, good boy, it's called the Skipper or Cap. >> We mentioned a bunch of double digit movers pre-market app-lovens in there. Bumbles in there, Warby's in there. >> Now Warby has become a choice tenant for the real estate investment trust. Believe it or not, they often mention, and we got Warby. I remiss if I didn't mention Dine, Dine Brent, where, T-I-N, there's the problem, is people are trading down at I-HOP. I did not think you could trade down at I-HOP. I mean, I think you were really down there already, David. Can you trade down from what, the blueberry pancake to a plain old pancake? >> You can't even get real syrup, but I have, you can only get high-fructose corn syrup. >> But Apple be sourced from people trading down, but you should have real syrup available. >> Which, to me, must be the shepherd's pie down to the, no, I happen to like Apple, 'cause you just go to the plain kids. But then my kids grew up and didn't want to go there. >> To where? >> I-HOP? >> No, Applebeats. >> Oh, Applebeats? >> Applebeats? >> Applebeats? >> I've got to have these pancakes anywhere, anytime. >> They got a, they have a mess-scale margarita that's done by Brian Cranston. >> We haven't done Hood, where Crypto sales up 230%. >> What? >> Let's go Hood, because they, when you listen to Vlad Tenon, he is just telling you the greatest story on one earth, and they're opening a lot of counts. And then when the other hand, we look at what they buy, they're buying crypto, and they're buying options, and so far that is sustainable. I don't know how long it can be sustainable. But, that said, Vlad's put together, Vlad's taking accounts from everybody. And I think that everyone who is watching, who is in the business must be saying, what is that guy doing? He's taking our accounts, and the answer is, he's going where the puck is. You know, he's skating ahead of the puck. People want crypto, and he's got the best collection of crypto. >> I think he's doing a good job. >> Zuho reiterates a buy today. Vlad Tenon was on last call, last night, take a quick listen. >> We tried to create what's called a special purpose broker-dealer for the purpose of transacting in crypto assets. And we actually came in good faith to meet with the SEC. I think we met with them 16 times, and unfortunately that was not reciprocated, and it was clear that there didn't seem to be a path. >> Let's hope that's benign. When he says special purpose, Vlad, has he watched the movie "The Jerk"? (laughing) >> He can't. >> This is all I need? >> Yes, he can. >> The cans. >> That guy does not like cans. >> No. >> All right, quick correction from me, 'cause I don't want the people at Dine mad at me to be banned from IHOP. They don't use high fructose corn syrup. >> Oh, geez. >> Not sure they use, I don't know what, they use maple syrup. >> They use the natural stuff, it's just, I don't know if it's natural. >> I'm just saying it's more of a, a message of what it has to do with the consumer than it does, but I have no idea. >> Well, I know you hit it very briefly, but Roblox, I mean, it is down 20 plus percent. >> Yeah, that was suboptimal. >> Suboptimal, as you like to say, average daily users, 77.7 million, that was up 17% year over year. I think there was, we got something about engagement that perhaps it was down, but it's headed back higher. >> But there's kind of, David, because the last quarter was so cold, break out quarter. >> Yeah. >> And it was not the break out quarter, although the stock was down 11 at one point. Technical issues apparently slowed down performance of the game and hurt engagement. That at least is what the CEO told. >> I'm going to ask, by the way, one day as Brian Chesky about technical issues, the technical issues in Virgo, a competitor, they had a move over from their app, and I think it's going to benefit, but he's being honest saying that this quarter may not be that great, but these should benefit. >> From the problems with VRBO. >> Guidance guidance guidance. I mean, it feels to the story of this week, to a large extent, has been guidance that has not met what the street had hoped for in any number of names, and many of them have been down, whether it's Airbnb today, or Roblox today, or ARM, or Disney from earlier in the week, and although as we pointed out, Q1 guidance is classically, negative, or at least subdued. >> But I am a little hurt, because last night I did a whole piece about guidance. I started with the great Frank Slootman legendary, comment when I said, "Listen, your guidance is weak." He goes, "Jim, the guidance is the guidance." And that always kind of shoved, that's like going to Cincinnati with Belichick. >> Well, the guidance might be checkered, but buybacks, Jim, big piece in the journal, up 16% here on your-- >> You should look at that buyback that Chesky has, it's really kind of typical of what's going on. The buyback, you know, Salesforce is down badly today, like I know why that is, but they've got to buyback to try to keep it so that the stock-- >> It is down badly. >> You don't know why it's down, is that what you mean? >> Well, in some clowns selling it really hard, if he sold it a little less hard, he wouldn't be-- >> We're talking salesforce when he's driving it down. You don't sell like that. You don't come in with guns blazing. You know, there were some, they announced what day they were going to report. Someone thinks that they're reporting on it the wrong day. But that's the type of thing that happens in this market. There's one, they have to find a buyer, but they don't know how to trade. So they should let the bids build, and then they can sell it for $3, but they obviously are stupid. Never been to trading school. I'm going to have Karen Kramer come over here. >> Is anybody going to trading school anymore? >> I want to trading school. >> Do the machines go to trading school? >> No, machines don't, you know, machines are, they're programmed by us, unless you're with David, who says no, they've programmed themselves-- >> Well, they will be programmed themselves very soon, that's true, you know? >> David, you're saying that in other words, we're all going to be turning to the linear TV by the robots. It's a very good way to think about it. >> Okay, there you go, all right? >> Linear TV being, when I used to be on radio, they said, don't worry about it. We're not going to be like newspapers. And then I went to TV, and they said, don't worry about it. We're not going to be like radio. >> It is a, we're in a market remarkable transition. Speaking of some of that, Jim, I don't know if you've gotten any of the blowback about Apple's iPad ad, which has been written about, big piece in the Hollywood Reporter, calling it dystopian. >> dystopian. >> Tim Cook posted it yesterday, and it basically is a giant machine press, crushing objects of art into a very thin iPad, almost the inverse of the 1984 ad, as some pointed out. Take a listen. [MUSIC] >> The most powerful iPad ever is also the thinnest. [MUSIC] >> Not much to add on it. >> I don't like that ad. >> Well, it's different. >> I don't like it. >> I had not seen it, and that is my reaction. >> Unlike on rats. >> Anybody cares, which I'm sure they don't. >> No, no. >> Apparently, neither did a lot of other artists. >> Correct. >> Well, I don't know. We just ran an ad for Apple. I mean, maybe it's, you can say, that's not, that would not be my ad of choice, but I watch Apple Plus, by the way, and that was a huge car. >> You're a musician, you got, you're really, well, they're crushing a piano. >> It's good. >> Well. >> All right, we got Bernay Hodge. >> [LAUGH] >> Jim, a little bit of macro. I don't know if you saw yesterday at Atlanta Fed. Is it 4-2? A lot of pieces looking at peak goldilocks, either the Fed's going to have to adjust, or that number is going to come off. >> Look, we're sitting here listening to one of the great business people of the time, which is Brian Chesky, and he knows that next quarter is not that good. Roblox, the next quarter is not that good. I know we could say it's the guidance. No, if they had order books that were strong, I think they would say, this is no slowdown. I think that there is a slowdown, and the slowdown started in April 14, when that Timmaris interview with Chief Power, he just said, listen, it's got to stay higher for longer, and we have problems with inflation. And then people, this has kind of really turned down since then. That was the beginning of the utility average rally. >> I know, but since then we've had a jobs number miss, biggest increase in claims today since June of last year. >> We have slowdown, and I think that one of the things that has to happen, I know that the Fed Chief is not going to David just say, you know what, that's one month, because he did that last time, can't do that. So we're going to, we're heading to a slowdown. I mean, even cyber security is slowing. I mean, the bad guys are slowing. >> No, they never slow down. >> Sadly, Joe, sadly. >> Jim, let me at least end on my front with one more piece of news, Norfolk Southern. >> No, no, I'm not going anywhere, but we're going to probably take a break because we have arm holdings coming up. But, well, actually that's after that's after that. >> I don't care what would be up. >> And Cora gets what, they get three board seats, right? >> Yeah, but they did get three board seats. >> This was a hotly contested proxy fight, but the CEO lives on for now, any thoughts? >> Well, look, I think that there's a great conundrum here because you don't really get to make the change with those people. I happen to think that Alan Shaw is doing a decent job. I mean, he did have the Palestine problem in Ohio and that's bad, but they're not doing that badly that they have to band and ship, but that was just not enough to be able to make a difference. >> It reminds me of Macy's. >> Not enough to make a difference. I mean, it's three different. >> No, but see, they can't throw Alan out. >> No, they can't, and Cora, of course, for its part, saying it highlights their opinion that Alan Shaw essentially received a vote of no confidence with barely 50% of the outstanding shares supporting him. >> You see, this is not like a British parliamentary-- >> But that thing is like an American company. >> And he may get no confidence, but he's going to be in. >> He's still in? >> He's still in. >> And look, should the stock be down? I happen to think that really one of the crux of the problems here, what I've referenced what you're talking about, Cora, is that the railroads are not seeing a pickup in traffic that I would have expected at this time. And that's worse. >> We'll watch it, obviously, light week for data, which is forcing us to grow up a little bit ahead of PPI on Monday. Take a look at the bond market as we go to break. Get a 30-year note auction today. We mentioned claims already. Of course, in the BOE, a holding steady at five and a quarter, that's still a 16-year high, although Bailey suggests that inflation might come close to target in the next few months. >> There you go. >> Take a listen. S&P down, just to touch, Brett is on the positive side. Take a look at the heat map there. Later on this morning, by the way, Goldman Sachs Professional Investment Forum will be sitting down with the company's president and COO, John Waldron. It's coming up on money movers at 11 a.m. Eastern Time talks of macro environment, CEO confidence, capital markets, and more. We will get stopped trading with Jim in a minute. Let's get to Jim and stop trading. >> One stock that kind of captures all the zeit guys that we've been talking about this hours. >> Duolingo, it's stock's down 50. $49 is off, 19% today. Duolingo, two theses that people are propounding. One is that maybe people aren't traveling as much so you don't need Duolingo, and that certainly we know are traveling. It's not that much. And then second, this Samsung phone. Well, you don't need to speak the foreign language. You speak into it, and it speaks the foreign language for you. Some of the question is, why do I need Duolingo when I have the Samsung or putatively, maybe the Apple? >> They still have translators at the UN. I mean, they do? Human translation, real time? >> I don't know. I don't know. My guess is yes, 'cause they seem to be a bit behind the times. I wouldn't expect that they're necessarily on top of the latest. >> My wife took cheers of Italian, and she still can't speak anything other than a war. So I don't know. There's some more languages out there. I go to countries that are, they speak English, I don't have to worry about Duolingo. >> But you aren't gonna get to a point where you're gonna be able to converse the-- >> Right, well this is it. >> Some sort of device, or your phone. >> A lot of David Faber. Let's just, we say that in, I'm gonna have to put it in Mandarin, or what do you want to say? >> I don't know what language I want to put that in. >> It's a good point, I just spoke in English. >> I'm a Greek. >> Greek. >> Yes, Greek to me. >> Yes, they're pericles. >> Jim, you're gonna stick around, right? >> You know what, I don't feel like going anywhere. >> Why not? >> I just wanna leave. >> Jim's gonna be here. >> I'm gonna leave. >> I can hear B&B from me, I'm gonna run it for the next hour. >> Because we're gonna talk to Arms Chief Rene Haas about earnings, chips, and AI after a break. 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, 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, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full "Squawk on the Street" disclaimer, please visit cnbc.com/squawkonthestreetdisclaimer. With the Wells Fargo Active Cash Credit Card, you can earn unlimited 2% cash rewards on purchases you want and purchases you need. That means you earn on what you want, like trying out that new workout class and 2% cash rewards on what you need, like a foam roller for your sore muscles. That's the beauty of the Active Cash Credit Card. It's ready when you are with unlimited 2% cash rewards. The Wells Fargo Active Cash Credit Card, that's real-life-ready. Terms apply, learn more at Wells Fargo.com/activecash.
