CNBC News Interview 050125
Malcolm Ethridge
[{'start': '0.080', 'end': '3.439', 'text': "what you've heard from our experts. Now,"}, {'start': '2.000', 'end': '5.120', 'text': "let's hear from the shareholders."}, {'start': '3.439', 'end': '7.279', 'text': 'Malcolm Ethridge of Capital Area'}, {'start': '5.120', 'end': '9.920', 'text': 'Planning Group, Jason Snipe of Odyssey'}, {'start': '7.279', 'end': '12.719', 'text': 'Capital. Both are CNBC contributors.'}, {'start': '9.920', 'end': '14.880', 'text': 'Both own Amazon and Apple. Gentlemen, it'}, {'start': '12.719', 'end': '17.600', 'text': 'is good to see you both. Malcolm, you'}, {'start': '14.880', 'end': '19.119', 'text': 'first. Which one are you waiting on'}, {'start': '17.600', 'end': '21.199', 'text': 'most?'}, {'start': '19.119', 'end': '22.880', 'text': 'Yeah, I think that we probably already'}, {'start': '21.199', 'end': '24.480', 'text': 'know the way the story is going to go as'}, {'start': '22.880', 'end': '26.640', 'text': 'far as Apple is concerned. is still'}, {'start': '24.480', 'end': '28.160', 'text': "behind on Apple intelligence and they're"}, {'start': '26.640', 'end': '30.080', 'text': 'probably going to have a tremendous'}, {'start': '28.160', 'end': '32.239', 'text': 'headwind that reports in this quarter'}, {'start': '30.080', 'end': '34.399', 'text': "that we're currently in uh with regards"}, {'start': '32.239', 'end': '36.320', 'text': 'to iPhone sales, especially in China as'}, {'start': '34.399', 'end': '38.000', 'text': 'Alex just got done saying. So, I really'}, {'start': '36.320', 'end': '40.399', 'text': "care more about Amazon's report right"}, {'start': '38.000', 'end': '41.760', 'text': 'here. Amazon really needs to show a'}, {'start': '40.399', 'end': '44.079', 'text': "number that's comparable to what"}, {'start': '41.760', 'end': '45.760', 'text': 'Microsoft reported uh in order to just'}, {'start': '44.079', 'end': '47.360', 'text': 'satisfy the street and those'}, {'start': '45.760', 'end': '49.520', 'text': 'expectations that were actually higher'}, {'start': '47.360', 'end': '51.440', 'text': 'for AWS than they were for Azure.'}, {'start': '49.520', 'end': '54.079', 'text': 'Otherwise, I think we could actually see'}, {'start': '51.440', 'end': '56.640', 'text': 'those shares sell off uh after I guess'}, {'start': '54.079', 'end': '58.879', 'text': 'at the open tomorrow simply because uh'}, {'start': '56.640', 'end': '61.039', 'text': 'the headwinds with tariffs related to'}, {'start': '58.879', 'end': '62.800', 'text': 'the retail side we already expected to'}, {'start': '61.039', 'end': '64.640', 'text': "be pretty strong. So, Apple's report is"}, {'start': '62.800', 'end': '66.640', 'text': 'going to be really important tonight.'}, {'start': '64.640', 'end': '68.080', 'text': 'Yeah, Jason,'}, {'start': '66.640', 'end': '70.320', 'text': 'I hear you. I I know I know what you'}, {'start': '68.080', 'end': '72.799', 'text': 'mean. Um Jason, Amazon\'s like, "Oh,'}, {'start': '70.320', 'end': '75.119', 'text': 'Microsoft, you really had to do that.'}, {'start': '72.799', 'end': '77.040', 'text': 'You had to blow the doors off. Yeah,'}, {'start': '75.119', 'end': '78.720', 'text': 'Azure had to look like that because now'}, {'start': '77.040', 'end': '81.600', 'text': 'we have something even bigger to live up'}, {'start': '78.720', 'end': '82.960', 'text': 'to with AWS.'}, {'start': '81.600', 'end': '85.439', 'text': "You're right about that, Scott. I mean,"}, {'start': '82.960', 'end': '88.880', 'text': 'Azure 35% growth year-over-year. I mean,'}, {'start': '85.439', 'end': '91.040', 'text': 'that was a traumatic uh blowout quarter,'}, {'start': '88.880', 'end': '93.040', 'text': 'obviously. So, for me, as it relates to'}, {'start': '91.040', 'end': '95.439', 'text': 'you and and the reporter already'}, {'start': '93.040', 'end': '97.840', 'text': 'mentioned it earlier, 20% is the whisper'}, {'start': '95.439', 'end': '99.600', 'text': 'number. 17.6%'}, {'start': '97.840', 'end': '102.640', 'text': "um is the number that we're looking at"}, {'start': '99.600', 'end': '104.240', 'text': 'in research reports. For me, you know,'}, {'start': '102.640', 'end': '106.079', 'text': "they're the largest cloud player in the"}, {'start': '104.240', 'end': '107.360', 'text': "game. So, that's definitely going to be"}, {'start': '106.079', 'end': '109.360', 'text': "important number. That's what the street"}, {'start': '107.360', 'end': '111.200', 'text': 'is very interested in as it relates to'}, {'start': '109.360', 'end': '114.000', 'text': 'retail. I mean, my concern is around'}, {'start': '111.200', 'end': '116.079', 'text': 'third party sellers looking to increase'}, {'start': '114.000', 'end': '118.399', 'text': 'pricing due to the macro and obviously'}, {'start': '116.079', 'end': '121.360', 'text': "tariff exposure. So, that's going to be"}, {'start': '118.399', 'end': '123.360', 'text': 'concerning. And then, you know, 50% of'}, {'start': '121.360', 'end': '126.640', 'text': 'of their third party sellers are in'}, {'start': '123.360', 'end': '128.800', 'text': 'China. So, that is also a concern from a'}, {'start': '126.640', 'end': '130.560', 'text': "macro perspective. So, I'm curious to"}, {'start': '128.800', 'end': '132.319', 'text': 'see how that plays out. The ad business'}, {'start': '130.560', 'end': '135.440', 'text': 'has obviously been a nice business. It'}, {'start': '132.319', 'end': '137.120', 'text': "grew almost 20% last quarter and it's"}, {'start': '135.440', 'end': '138.959', 'text': "very accretive. It's obviously high"}, {'start': '137.120', 'end': '140.640', 'text': 'margin business and Alex mentioned, you'}, {'start': '138.959', 'end': '142.160', 'text': 'know, some of the concerns there. So,'}, {'start': '140.640', 'end': '144.400', 'text': "that's a number I'll be watching very"}, {'start': '142.160', 'end': '146.160', 'text': 'closely as well, you know, as as we kind'}, {'start': '144.400', 'end': '148.400', 'text': 'of see what what this whole thing looks'}, {'start': '146.160', 'end': '150.000', 'text': 'like as we as the print comes here. I'}, {'start': '148.400', 'end': '152.239', 'text': "feel Jason that there there's a much"}, {'start': '150.000', 'end': '155.280', 'text': "bigger unknown with Apple and maybe it's"}, {'start': '152.239', 'end': '158.319', 'text': 'just me but all the issues that are at'}, {'start': '155.280', 'end': '160.720', 'text': 'hand as we speak demand tariffs China'}, {'start': '158.319', 'end': '162.879', 'text': 'supply chain u the questions that Tim'}, {'start': '160.720', 'end': '164.480', 'text': "Cook's going to get to respond to some"}, {'start': '162.879', 'end': '167.599', 'text': 'of the rhetoric out of the White House'}, {'start': '164.480', 'end': '170.000', 'text': 'and elsewhere'}, {'start': '167.599', 'end': '173.120', 'text': 'listen Apple is absolutely in the eye of'}, {'start': '170.000', 'end': '175.280', 'text': 'the storm you know 17% of revenue comes'}, {'start': '173.120', 'end': '176.800', 'text': 'from China you know that is definitely'}, {'start': '175.280', 'end': '178.000', 'text': 'concerned with all the geopolitical and'}, {'start': '176.800', 'end': '180.239', 'text': 'the trade'}, {'start': '178.000', 'end': '182.080', 'text': "uh that that is going on. There's no"}, {'start': '180.239', 'end': '185.519', 'text': 'doubt that supply chains potentially'}, {'start': '182.080', 'end': '187.760', 'text': 'will be an issue. 90% of assembly um is'}, {'start': '185.519', 'end': '189.920', 'text': "done in China. So that that's definitely"}, {'start': '187.760', 'end': '191.680', 'text': 'a concern for me. And then you know we'}, {'start': '189.920', 'end': '193.599', 'text': "talked about the probe earlier. I we've"}, {'start': '191.680', 'end': '195.680', 'text': 'been reporting about it a lot uh'}, {'start': '193.599', 'end': '197.599', 'text': 'throughout the day. This could'}, {'start': '195.680', 'end': '198.800', 'text': 'dramatically affect the services'}, {'start': '197.599', 'end': '201.599', 'text': 'business. I mean the services'}, {'start': '198.800', 'end': '204.080', 'text': 'expectation growth is around 12% uh for'}, {'start': '201.599', 'end': '206.080', 'text': "this quarter. But there's a workaround"}, {'start': '204.080', 'end': '208.480', 'text': "um to get out of that ecosystem. there's"}, {'start': '206.080', 'end': '211.680', 'text': 'another pay for somewhere else. That is'}, {'start': '208.480', 'end': '213.040', 'text': 'a dramatic development uh for Apple'}, {'start': '211.680', 'end': '215.680', 'text': 'going forward. So that is something'}, {'start': '213.040', 'end': '217.840', 'text': 'definitely to watch for and see how that'}, {'start': '215.680', 'end': '219.519', 'text': 'story continues to mature. Yeah. What'}, {'start': '217.840', 'end': '221.440', 'text': "about that Malcolm? You didn't mention"}, {'start': '219.519', 'end': '223.599', 'text': 'that at all and and few people have'}, {'start': '221.440', 'end': '226.640', 'text': "today because we're we're so hung up on"}, {'start': '223.599', 'end': '228.319', 'text': 'the issue at hand of tariffs and the'}, {'start': '226.640', 'end': '229.680', 'text': 'huge amount of revenue that this company'}, {'start': '228.319', 'end': '232.640', 'text': "gets out of China, we're not even"}, {'start': '229.680', 'end': '234.159', 'text': 'focusing on the courts. Yeah. So, I'}, {'start': '232.640', 'end': '237.360', 'text': 'think that it is important that we'}, {'start': '234.159', 'end': '239.920', 'text': 'consider how much the regulatory uh'}, {'start': '237.360', 'end': '242.239', 'text': 'issues that Apple and uh Meta and'}, {'start': '239.920', 'end': '244.159', 'text': "Alphabet have right now, but it's really"}, {'start': '242.239', 'end': '245.599', 'text': 'tough to even look that far down the'}, {'start': '244.159', 'end': '247.360', 'text': "road because we're talking about"}, {'start': '245.599', 'end': '249.840', 'text': "potential breakups. We're talking about"}, {'start': '247.360', 'end': '251.680', 'text': 'potential uh appeals that could overturn'}, {'start': '249.840', 'end': '253.120', 'text': 'decisions or alter decisions that have'}, {'start': '251.680', 'end': '255.519', 'text': "been made. We don't even have the"}, {'start': '253.120', 'end': '257.040', 'text': 'benefit of looking that far beyond uh'}, {'start': '255.519', 'end': '259.199', 'text': 'where we are right now because the'}, {'start': '257.040', 'end': '260.959', 'text': 'tariff situation is still very alive and'}, {'start': '259.199', 'end': '263.280', 'text': 'well. And so we have to at least'}, {'start': '260.959', 'end': '266.560', 'text': "consider what's happening right now with"}, {'start': '263.280', 'end': '269.040', 'text': '145% tariffs against uh Chinese uh sorry'}, {'start': '266.560', 'end': '271.120', 'text': 'American goods for a company that its'}, {'start': '269.040', 'end': '273.199', 'text': 'flagship product about 80% of that'}, {'start': '271.120', 'end': '275.280', 'text': 'flagship product is coming out of China'}, {'start': '273.199', 'end': '277.120', 'text': 'and that is the problem we have to focus'}, {'start': '275.280', 'end': '278.720', 'text': 'on right now as it relates to Apple.'}, {'start': '277.120', 'end': '280.560', 'text': 'Everything else is a a fight for'}, {'start': '278.720', 'end': '282.400', 'text': 'tomorrow. I want to hear from you both'}, {'start': '280.560', 'end': '284.960', 'text': 'on this question but Jason you first.'}, {'start': '282.400', 'end': '287.120', 'text': 'What have we learned do you think so far'}, {'start': '284.960', 'end': '288.800', 'text': 'from the three of the five big ones?'}, {'start': '287.120', 'end': '290.960', 'text': "We're not counting Tesla. it's already"}, {'start': '288.800', 'end': '293.120', 'text': "done and we're not counting Nvidia"}, {'start': '290.960', 'end': '295.759', 'text': "because it's yet to come. But from what"}, {'start': '293.120', 'end': '297.520', 'text': "we've gotten so far about AI spend and"}, {'start': '295.759', 'end': '299.759', 'text': 'the key questions that you both wanted'}, {'start': '297.520', 'end': '302.720', 'text': 'to get out of this group, did you learn'}, {'start': '299.759', 'end': '305.520', 'text': 'enough?'}, {'start': '302.720', 'end': '307.520', 'text': 'So AI spend is obviously healthy. You'}, {'start': '305.520', 'end': '310.800', 'text': 'know, both folks have kind of re'}, {'start': '307.520', 'end': '313.440', 'text': 'reiterated the capex uh there. So and'}, {'start': '310.800', 'end': '315.280', 'text': 'cloud obviously has has has been very'}, {'start': '313.440', 'end': '316.960', 'text': 'healthy. So I think there was a little'}, {'start': '315.280', 'end': '318.560', 'text': 'bit of concern kind of coming into this'}, {'start': '316.960', 'end': '321.520', 'text': 'quarter and what that would look like.'}, {'start': '318.560', 'end': '323.120', 'text': 'So I think that has been very productive'}, {'start': '321.520', 'end': '324.560', 'text': "and I think that's why we're seeing some"}, {'start': '323.120', 'end': '326.880', 'text': 'of the posit. The other thing I would'}, {'start': '324.560', 'end': '329.360', 'text': 'say which has been interesting is search'}, {'start': '326.880', 'end': '331.039', 'text': 'search and advertising um has been'}, {'start': '329.360', 'end': '333.440', 'text': 'positive as well. Hearing from Google,'}, {'start': '331.039', 'end': '336.639', 'text': 'hearing from Meta, uh those names have'}, {'start': '333.440', 'end': '338.880', 'text': 'obviously uh responded you know to to'}, {'start': '336.639', 'end': '340.560', 'text': 'the advertising numbers. So, in general,'}, {'start': '338.880', 'end': '343.039', 'text': 'I mean, these names have responded very'}, {'start': '340.560', 'end': '345.680', 'text': "well and and we're seeing that the ad"}, {'start': '343.039', 'end': '346.880', 'text': 'spend and the advertising uh businesses'}, {'start': '345.680', 'end': '348.800', 'text': "have been healthy. So, I think that's"}, {'start': '346.880', 'end': '350.639', 'text': 'been a net positive for sure. Malcolm,'}, {'start': '348.800', 'end': '352.080', 'text': 'how would you answer that same question?'}, {'start': '350.639', 'end': '353.680', 'text': "Yeah, Scott, I don't think that we're"}, {'start': '352.080', 'end': '355.440', 'text': 'completely out of the woods yet, right?'}, {'start': '353.680', 'end': '357.280', 'text': "There's not an allcle signal for the"}, {'start': '355.440', 'end': '359.199', 'text': 'entire market or even the tech sector'}, {'start': '357.280', 'end': '361.520', 'text': 'specifically, but I definitely think'}, {'start': '359.199', 'end': '363.280', 'text': 'that we should at least take a get a big'}, {'start': '361.520', 'end': '364.720', 'text': 'sigh of relief that these earnings so'}, {'start': '363.280', 'end': '366.560', 'text': 'far have been better than feared. Right?'}, {'start': '364.720', 'end': '368.479', 'text': 'If we consider the fact that we were'}, {'start': '366.560', 'end': '370.479', 'text': 'having a conversation maybe two weeks'}, {'start': '368.479', 'end': '372.479', 'text': 'ago about whether uh guidance was going'}, {'start': '370.479', 'end': '373.840', 'text': 'to be pulled or altered or adjusted, now'}, {'start': '372.479', 'end': '375.440', 'text': "we're talking about companies coming out"}, {'start': '373.840', 'end': '377.919', 'text': 'and blowing it out of the water. You got'}, {'start': '375.440', 'end': '380.800', 'text': 'a 50-year-old tech company in Microsoft'}, {'start': '377.919', 'end': '383.520', 'text': 'showing uh doubledigit topline growth.'}, {'start': '380.800', 'end': '385.600', 'text': 'Also a 10% increase in share price in'}, {'start': '383.520', 'end': '387.039', 'text': 'one day. That does not happen. And so'}, {'start': '385.600', 'end': '389.120', 'text': 'you have to couple that with the fact'}, {'start': '387.039', 'end': '392.160', 'text': 'that Meta actually stood firm and'}, {'start': '389.120', 'end': '394.479', 'text': 'increased how much it its capex spend is'}, {'start': '392.160', 'end': '397.199', 'text': 'expected to be by about $7 billion for'}, {'start': '394.479', 'end': '398.880', 'text': 'the year. I I think that sounds very'}, {'start': '397.199', 'end': '401.280', 'text': 'good for a space that Wall Street'}, {'start': '398.880', 'end': '403.280', 'text': 'analysts have had a number of questions'}, {'start': '401.280', 'end': '404.800', 'text': "about whether they've gotten too far and"}, {'start': '403.280', 'end': '406.639', 'text': "they're overbuilding and overspending"}, {'start': '404.800', 'end': '408.800', 'text': 'and everything else. I think that we got'}, {'start': '406.639', 'end': '410.800', 'text': 'an answer to that story. So for the long'}, {'start': '408.800', 'end': '412.800', 'text': "term, I think that the money they're"}, {'start': '410.800', 'end': '414.720', 'text': 'spending to build out those suites are'}, {'start': '412.800', 'end': '416.240', 'text': 'definitely uh proving it. I think that'}, {'start': '414.720', 'end': '418.080', 'text': "also there's the the danger of"}, {'start': '416.240', 'end': '420.960', 'text': 'underbuilding which Apple might actually'}, {'start': '418.080', 'end': '422.160', 'text': 'be experiencing uh right now. So, I'}, {'start': '420.960', 'end': '423.440', 'text': "think that we're in a pretty good space,"}, {'start': '422.160', 'end': '427.520', 'text': "but I definitely don't think that it's"}, {'start': '423.440', 'end': '427.520', 'text': 'an all clear for for markets uh broadly'}]