Snowflake CEO On Regaining Momentum; Bessemer’s Byron Deeter On What’s Next For Software 11/21/24
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with mining company ringing in the closing ballot in new york's stock exchange and mostly infrastructure group doing the honored at the nazi rush hired for the doll and small caps and bit point while the naz lag, a big drop in the alphabet. That is, the scorn on wall street for the action is just getting started. Welcome to closely melt over time.

I'm working with and coming up this hour earning results from gap ross stores into IT net APP and elastic. I think in to its already out. We're going through the plus and exclusive interview with the CEO of into IT before he talks to endless on the conference call .

and accumulating gains shares a smoke like exploding higher today by more than thirty percent finish up almost thirty three percent after the earnings results we brought you right here on time, we will hear from the company, C, E, O about what drew this stand out quarter. But let's begin with the market in a largely positive session, with only two sectors finishing in the red for the S. M.

P. Joining us now dance skeleton, more gn stanly wealth management. And then I of fort pit capital group.

We've got double dance here today. Welcome to you both. And we did have a higher day, a higher close for all the major averages. So dance skeleton, I will start with you here because what's interesting to me is that despite some of the negativity and mega catered, most notably in alphabet, the fact that the markets did end the day higher and the equal weight S M P and the rustle two thousand in particular, we're strong, tells us what well.

it's going to be back with the first. Morgan, thanks for having me what what IT tells us is that there's a risk on sentiment in the market where people are buying other other industries, other sectors. And really, that's been the trend, uh, prior to the election and then gaining steam after you.

And so it's all of those value oriented sectors like banks, like industrials. And then even as you mentioned, going down the capture, we're seeing a lot of demand there as cash comes off the sidelines into what is, as you know, usually a very seasonally a period. All right.

So then I want to get your thoughts on this market here, especially given the fact that we do have, I will call IT more hawkish ly tilting fed speak. In recent days, we've had a little more mix data today. But in general, economy continues to be resilient. A lot of talk still about animal spirits looking to twenty, twenty five. And yet on the flip side of that, rates have been higher and we do have loft evaluations when you look at stocks.

yeah, a good afternoon. thanks. Thanks for having me. I would agree.

You know, I think we've been pleasantly surprised without wealthy overall economy is holding up. We continue to grow and above trend growth rates. We are expecting a supportive environment for corporate earnings next year.

We expect that to be in more broad based growth across market sectors. And we think that, that explains a lot of the rotation that we've really seen over the last three or four months. And um you know I don't think he gets enough attention, but A A massive amount of of liquidity on the sidelined with you know something like seven trillion dollars in money market funds.

We think that supports kind of the the dip buying mentality from from investors. But you know we are just like everybody else concerned with the straight up move that we've seen an interest rates since the fed started cutting in september。 We think it's the bond market sending a pretty clear message that they may be moving in a bit too, too aggressively. Well.

hold on. Just a moment into IT. Earnings are out. You can see the stock lower by just over six percent into IT reporting results, a beat on the top and bottom lines.

I guide those slightly below the street and got some color from the CEO on that into IT reporting revenue of three point three billion dollars. That's higher than three point one four expected. And let's see earnings per share of two fifty, I believe, higher than two thirty six. Let me let me check that in here. Yes, to two fifty versus to thirty five.

Now four, two, three into IT, getting to three point eight to nine billion dollars of revenue, up the mid point that versus expectations of three point eight eight into IT, also guiding to earnings per share range of two dogs and fifty five cents of two dollars, sixty one. The street was expecting more like three dollars and twenty five cents. I didn't have a chance to speak with two of C E S.

A sun gudruda. He maintains the full year guidance. He did say about this coming quarter. There's some promotional activity in retail around turbo tax work summer that's just going to push some revenue into q three overall doesn't affect the yeah guys but doesn't affect q two.

And said IT isn't that he's excited about the full year, but he doesn't like to into IT does not like to raise the full year guide after the first quarter, will hear more from him in just a bit when coming up. He discusses the quarter before he speaks with analysts on the cola. Meantime, net APP earnings are out as well, and sima mode has a joa nice .

set of numbers from net APP for the second quarter with the nine set beat on its bottom line revenue coming ahead of consensus at one point six six six billion. And if you look at first party marketplace, cloud storage services revenue growing there by forty three percent over year, that is higher than what was he was anticipating.

And comments from CEO George korean, who says A A data driven future has enabled the company to outgrow and market and take share from competitors. This is one of the companies that does sell us da infrastructure to the federal government. So one topic of on the earnin's call will be how the change in administration affects potential future business. Are looking at share over a point five percent on a Better than expected .

earnings result. John and Morgan, all right. Uh, thank you. See a mody. We're going to discuss those results with net F, C, O tomorrow right here on over time in an exclusive interview. And guy, I wanted get to you on earnings in general. Now these in particular, if you want to way in really, but earnings in general, are they enough to support the relative optimism that we're seeing in the market to this point, this post election trump .

trade look, I think that and uh, uh, our fellow dand set at best in terms of the backdrop, earnings are growing in your singing broadly out in terms of leadership beyond max seven, that's key. Along with a fundamentally positive economic backdrop and liquidity backdrop, these are all good. So so john, earnings is not the issue.

My opinion were something like eight percent earning through of year every year in the third quarter of I X energy, closer to ten. I think the key issue as we go into next year is what is the sequence of policy because as we all know, there's a couple of really positive levers out there in terms of tax extension, in terms of deregulation. However, there are some unknown in terms of tariff. So I do think policy sequencing is the next key catalyst for this marked to move hier.

We've got more earnings, raw stores results are out in corney. Regan has those numbers for us high court.

Hi, Morgan. So i'm going to call this a mix quarter, but mostly disappointing. So ross stores coming in with earnings per share of a dollar forty eight, that's eight cents Better than expected, but revenues were light five point zero seven billion.

The street was looking for five point one five million comparable sales. Two also light up just one percent. Street was looking for up to two and a half percent. And then looking forward, there is a light forth quarter guidance. Operating margin was higher than expected.

The C E O barber renta noting actually the business slowed from the beginning of the year, calling out little moderate income consumers continuing to face persistently high costs on necessities, just pressuring their directionally spending. But they still believe they should have executed Better than they were able to, calling out also seasonably warm weather and also the hurricanes for some negative impacts on the quarter. But none of nevertheless shares of ross or higher by almost six percent come back or deo.

all right. Curtaining, thanks. I believe that yes, we do elastic results out as well. Um at the moment, we're going to those, okay, elastic earnings beat on the top and the bottom lines.

Revenue came in at three hundred sixty five million verses three hundred fifty seven expected. E, P, S. Came in at fifty nine cents versus thirty eight expected. And then the guide was strong here as well. Well, you see that stock up, wow, twenty three percent right now in overtime got into revenue of three hundred sixty eight million four fiscal q three versus slightly less than that around three sixty six, three sixty seven expected, also guiding to strong earnings per share middle of the range forty seven versus forty one expected also, as you might expect, raising the full year revenue guide to one point four five four billion dollars and the eps to a box seventy at the midpoint of arrange the previous high end of the E, P, S range that the analysts had been expecting was a about fifty six strong margins here across the board for elastic as well. And we're going to hear exclusively from elastics CEO right here on over time this hour before for the analytical starts at the top of the hour.

Yeah, we are loaded with CEO on their earnings. So dan, I want to get your response to what was just a parade of earnings results and the fact that we are seeing all of these stocks make big moves in both directions here in overtime. I know you in particular are pretty focus on on names like to IT.

I I am and I think that um IT looked like the quarter was was fine, well above expectations. I I do think that the E P S. Guide for the for the second quarter you significantly below expectations.

But I I think it's important for investors understand you, this is a very seasonal lumpy business. Revenue can easily shift from from different, different quarters. So I think it's really important to to focus on the full year guidance that looks like that was that was maintained. But we're really excited about into its uh, you know focus on on really moving upstream to higher value customers within quick books and within their turbo tax live offering, which they're focused on connecting tax filers to to experts and and accountants and making a lot of traction and in roads in that space.

okay. Well, dani and dance Kelly, thank you both for kicking off the error with us with all the major vages spinifex higher even the nazarene eat out the tiny st. Of gains, but the dal finishing up one percent. Let's turn out to senior markets commentator mike san toy for a look at how money is running through this market right now. Yeah.

more than some pockets of kind of aggressive action. It's a somewhat split market in a bunch of different ways. The big cap index is mostly have been kind of consolidating sideways. But here you have on a one month basis, I do you see is the micro cap etf.

So even smaller companies that are in like the russia two thousand, although some of those are micro caps and up four percent, you see it's kind of diverge from XL g is that fifty largest stocks in the market. So for most of this years, we know at least the first half IT was dominated by mega caps. And it's not just that oh, smaller, more second companies are working a lot more speculative, lower quality, more leverage.

Tight names are humming as well. Some of that crypt are related, some of that been mimic ed. Some of IT is just of writing.

Along with the rally in capital markets activity. Now take a look here at etf flows. Equity etf inflows, this is basically like a three months trAiling average, you sume。 We got to pretty close to A P here.

This is from early twenty twenty one. This is from top zone over age to tickets. What that means is there's reasons for optimism and you have public optimism.

But on a short term basis, that contempt me a little bit of a sugar rush effect. They have to have that worked off and metabolized maybe a short term pause. Although for the end of the year, often that stuff doesn't come into play in terms of the market having a pull back until until the new year.

I will also make a final point. This is all in dollars. So market cap of the S M P five hundred was way lower in early twenty, twenty and and I they were up like fifty percent since then. So this amount of money is not as dramatic as IT was a few years ago when we always .

loved the context in the fact that you pulled these charts out over the course of years instead of weeks or days or months. I got to go back to something we were talking about yesterday, and that is bitcoin. And what we're seeing there as that moves to another record high closure, two hundred thousand, because we do know that is playing out in the equity market and names like microstrip gy right now as well.

You got gary gangster or at the sec, and you're going to step down early next year. You've got headlines about companies, including trump media company looking to potentially make a purchase in in cypher to currency space mania. Or are there are there fundamentals that, that actually support all of this?

Well, as far as I can tell, the main fundamentals among the bulcke in in bitcoin is that more people are going to buy IT. And so it's really A A much more of a supply demand, a snapshot as opposed to a fundamentals in terms of what I can earn or how we can grow or how we can be used. That's all very good.

I am very alert to the fact though that it's becoming you a very much a high momentum trade. The derivation places you make a microstrip gy had big downside reversals today. A lot more attention on whether the equities have have gotten over done related to bitcoin. Hundred thousand and seems like a kind of mission accomplished level if we do get there and you do have this huge string of really positive headlines feeding into all this is just leaves the question of like what do you do for an on core, at least in the short term?

Indeed, IT does mike and told, see you again in just a bit. Speaking of on core, still ahead access, you only get here on overtime, the heads of elastic and into the way and on their results before their earnings calls. And snowflake CEO will be willing to talk about the quarterly report that sent the stock higher and more than thirty .

percent in the regular session, plus no vital investor in trying to talk about the opportunities he sees right now in a eye. The cloud and the broader tech space of a big show stay with us over times back into.

Our goal is to empower you to be a Better, best music teaching. I was able to learn and become financially independent in my join the club with jim s best deal of the year at C N B C D com slash club like for friday terms of restrict and supply.

welcome back gap earnings around corney. Reagan has those numbers.

High court high there morning. yes. So for the third quarter gaps, earnings beating consensus coming in at seventy, seventy two cents share. Excuse me, the street was looking for fifty eight revenues about online, maybe slightly like three point eight billion compared to three point eight one billion expected comparable sales total for the whole company of one percent. The street have been looking for that to be a little bit higher.

Um gap IT looks like the gap named six stores were the strongest of the bunch of three percent old navy flat banana republic negative, but only slightly. So at one percent, that was about inline. Gross margins coming slightly higher than expected to at forty two point seven percent.

The companies also raising their full year outlook for net sales, gross margin, Operating income, and they are calling out the reason being due to the third quarter results of the interesting to hear what they have to say about the expectations for this big key holiday quarter here to come. Shares of gap right now, in reaction are up about five percent. This is a big one, is a big retailer, and IT has is kind of undergoing a bit of a turnaround again. John.

back you all right to thank you. Well, snowflake posting its best day ever. The stock up thirty three percent. I spoke with the CEO sheet, our romo's, well after the earnings call last night. He emphasized the way snowflake is opening up access to data as a productivity driver inside the enterprise, knowing more employees to benefit from A I and from the snowman develops environment.

We also release something called dynamic tables, which you can think of as a fast, easy way to create data transformation pipelines without even writing code.

And that of thread for you is that while a few million developers, like called IT, four, five million developers can right code, there are four to five million analysts um that are not so profession with writing code um but absolutely can do things like right sequel which is a little bit easier to learn and snowy x all all journey is that we empower all of these people to become date engineers to be able to create these amazing data pipelines, transform data, but then on the other side, using A I and make this data available directly to business users. Snowman is one part of start of the larger puzzle of snowplough really becoming the to end data platform of choice. And this is about our acquisition of data. All law, which lets us bring more data in the snowfall, also plays in. Here is all part of our plan to be the one stopped shop thought our customers when IT comes to getting value from their data.

He said snowflakes approach to driving efficiency has LED to enterprise customers feeling confident enough to buy when budgets are tight because of the results.

I'll give you a simple example. Let's say you had a table um with not certain by glaciation about patients that they say you know just two years ago. If you wanted to write a program to analyze all of the and say extract all of the symptoms that patients had are the potential diseases that would be a project IT would take somebody, you know a group of five, six people, five, six months in order to get IT done. I would take a lot of time to maintain in snowflake, that is one single, single quality. So what used to be a project before all of a sudden is easily accessible, that's the magic V, C, A.

I bring uh to business intelligence tools as well right now as you know, if you want data, you got somebody has got to talk to an analyst was gone to write some equal and then they will go change some B I two and maybe next week going to get data about you know, some question that you had with A I um we are creating products where a business user like my C F, for example, can ask a question, will immediately be told as a question answer able. And the question is answer able, a table with the structure data. Autograph is they .

want that roman sm is also using A I himself from a lot of different providers in some amusing ways. No.

I am almost ashamed to admit t this. I have subscriptions to geri, to cloud as well as chat. P, T. I like playing with them.

Uh, Michael workers are subjected to random cartoons that I make with ChatGPT of what every topic under the uh under the sun ah you know little programming jobs that previously I used to write bits and pieces of bite on or perl far a language models can solve all of the box. I'm not about writing poetry uh, with these models looking for word choices. Um I think the value that you can get out of this is pretty amazing.

We're going to else to talk to him about anthropic and the partnership that they have there is interesting. He described anthropic as being one of these apex models alongside OpenAI. A few months ago, a lot of people thought that mistral and some others would be able to deliver models of that half, and he says not so much.

It's clear those two are ahead. So that partnership is going to allow them to deliver much Better tools, he says, to customers getting developers to want to stay in that snowman environment. And then that helps drive more business, more margin for snowflake.

given the fact that he's been experimenting with all of this, he would know, I suppose, all right. Well, for more on snowflake in the rest of the cloud and A I space, let's bring violon data from investment or venture partners by and it's great to have you back on and lets her the conversation right there. Those comments about this partnership between snowplough anthropic, you're an restaurant and anthropic. So I imagining you have some thoughts about uh, the comments that john just relate.

Indeed, we'll great to be back in and me on and it's fun to see snowflake back on offence. This partnership is one that I think we'll see replicated across many of the incoming as they try to leverage their platform and data assets to be a first mover in this A I wave and were proud investor's and anthropoids. They're one of these foundation models that helps with the unlock.

And so you combine that with snowflakes acquisition, with their strong print, and you're seeing investors excited about this road map ahead as the battle. What data bricks intensifies. All eyes are on data bricks in the private markets is they're now valued plus remind us in the same ballpark as snowflake and growing a little bit faster. And so that orange races is escalating very publicly and very much around this A I battleground.

So as that arms race escalates, are we entering that chapter of general AI deployment, that is, the application layer? Are we starting to see the winners and losers being mainly when IT comes to enterprise often?

Are we very much are. It's starting to move up stack. This trend started with the foundation models that started with the infrastructure players.

Frankly, there were very few trades available in the public markets other than the hard war players like NVIDIA and the hyper scales themselves. It's now starting to become in bedded within the leading at a providers. And so we're seeing the reaction elerson in the applause. Er, we're seeing things like that. The emerging cloud index start to benefit from that, and we expect the IPO pipeline for next year and beyond to reflect the leverage from these LLM and the leverage from these AI foundation models to really we start leading the business benefits at the at layer that will drop to bottom line in results.

bye. I'm a little concern that some investors might be missing the forest for the trees in a way we talk about the AI trade and how overheated that scotland in some cases. But I think a lot of times, we're talking about the mega caps here in this earnings season, and i'm going to call out elastic because I just came out and know we can throw that chart up.

We've seen some names that are focused on an enterprise data that have been a bit beaten down, names that aren't mega caps, particularly those with consumption models, kind of having a nice goal of IT. I would include c three A I, though we're not talking about its earnings and I not reported yet. It's had a nice bump since that microsoft partnership announcement earlier this week.

Ah it's really been a max seven rally and the APP providers have largely been left out of IT to date, especially the midd cap at players. And so the question is how's this disconnect gona reconcile? E, either there's been irrational spending and video been a disproportion of benfica ary and there isn't going to be in our life from that or in a delayed fashion, we're going to see that roll through into the apple.

Er, i'm a big believer in the latter. I think that we're going to see these benefits will through, I think, these economically rational actors and that the software providers are now starting to instantiated the AI products and application benefits into their top yer and user facing capabilities. Those will lead to higher Prices, higher growth rates and will start to see this reacclimatise over the coming quarters.

Were early in that um but that's the opportunity ahead. And I think that's one of the trades that will start to be possible in the public markets. That's really only been possible in the private markets from the smaller peer play, uh, A I APP companies today.

Barn in my conversation was at all on a swami from snowflake. One of the things that he drove home to me in a way that I had never really thought about before, was the way he expects AI to transform business process and business analytics, he says, giving every enterprise potentially the same kind of superpowers that google has had for a long time. Of course, he was a top executive there. If that is the case, I think that's an angle on A I and its usability and the possible demand for IT that we're not hearing a lot about him. If you really need this to understand and the basic mechanics of your business and what the data is telling you, then that means a lot doesn't IT IT does.

And I think IT goes directly to market size. And this is why I think people may be off. They're looking at traditional software markets and they're thinking of incremental improvements of this AI efficiency drops to a bottom line in a workflow market.

Maybe they can sell twenty percent higher and that will grow tam proportionally. What they're missing is exactly what you are hitting on, which is we go into the services portion of this as well. We are super charging business workers.

We are super charging paralegals and lawyers and nurses and accountants. These fields are going to be revolutionized. And the total adjustable market by AI software will not only be the historical software market, but will also include the labor portion that were super charging.

And these tanks are going to go dramatically. And that's where this big debate of our we overheated nai, I come out on the site thing, absolutely not. Where in the early days, there is going to be a lot of volatility to get there. But these terms are unprecedented and the percentage that goes to software capture over time is going to be proportionally much greater in line with capturing some of that labor percentages. Well.

alright, barn deeper from best or thank you. When we come back the CEO of nearly two hundred billion dollars, software giant into IT joins us with his first comments on today's earnings results as that stop pulls back in overtime.

And later, we will get an analysts first take on gap earnings and what they signal about the health of the consumer with those shares now thirteen percent over time will be right back.

Our goal is to empower you to be a Better, best regimes. Teaching, I was able to learn and become financially independent in my regional join the club with jim best dealer of the year at C N B, C docs slash club life friday terms and restrictions supply .

welcome back over time. It's time now c abc news update with lesly picker high .

lesly hi Morgan, brazil of federal police today accused the country's former president jarl scarrow and thirty six others of plodding a coup after losing the twenty twenty two election. The police also accused the group of being a criminal organization and that some of the conspirators had planned to assassinate current president lula to silva, brazil. Prosecutor general will now decide whether to press charges against bolton arrow.

And the other is boss naro says he will review the allegations with his lawyers. A senior north korean general was injured in a recent ukrainian strike in the current region. That's according to the wall sty journal, which says western officials didn't share how the officer was wounded, but confirmed IT was the first time a higher rinking north korean military officer has become a casualty in the conflict.

The U. U. S. Officials say more than ten thousand north korean troops, russia are in russia's reason.

And a controversial piece of art features a banana stuck to a wall with a duck tape that six point two million dollars an option. This week, the work, called comedian, was purchased by crypt u. Entrepreneur and tron founder Justin sun. He says he plans to eat the banana as a quote, unique artistic experience, a unique artistic c and expensive experience, I hope takes good.

I'm share. It's gonna taste like a six million dollar banana.

I wouldn't know. I've never tried quite.

Thank you. And we thought a million dollars, he was going to be expensive for this piece of art, really.

for the piece of paper, for this piece of art. Meana.

we have a news alert on OpenAI. You've go back as the story, Steve. Hey.

there's Morgan. yeah. Open a eye is considering making a web browser. This is according to a report just out in the information. This is just part of a cascine series of products that we've been seeing from open the eye. They announced their search product um just a couple of weeks ago that starting to roll out obviously going head to head here with google on that front.

And by the way, this is coming just twenty four hours or less than twenty four hours, rather that the department of justice recommended that google has to spin off of its chrome browser in order to satisfy remedies for the na trust case lost. And also that could be, of course, a threat to its search business as well. We see google shares down about a percent here after hours.

John, interesting development. Steve ve come back. Thank you. Well, back to earnings. I spoke with in two at CEO. Assign gadara about the quarter beats on the top and bottom. But as you can see here, with the stock down about four and a half percent of all the lows, a guide short of the street on the top.

bottom 干。

Uh business platform a grew percent. This is our online ecosystem. Credit karma grew twenty nine percent. So those are really the big a drivers behind our performance in Q, U, an and were quite excited about the year, which is why we reiterated our our guidance for the year. I would use two words, I am very bullish and we are bullish about the year.

I think the second word I would use as prudent, we generally don't touch our guidance for the year after the first quarter. We love our progress. We love the momentum, but listen you sports analogies ah, we want to win the game and we got three quarters left and we're not going to declare Victory. Although were very bullish about the year given how a quarter has started.

He further explained the reason for the q two guy, the short of expectations, including retail promotions for turbo .

tax for the second quarter, uh our consumer group turbo tax uh will deliver a single digit decline. And it's really because uh, we changed some promotional uh activities uh, for turbo tax desktop in retail. So you imagine the Cosmos in the wall Marks of the world. Uh, then the promotional activity is is good for consumers, but the timing of one we're doing at just shifts, uh, revenue from Q Q to q 3 doesn't impact the year at all。 So it's just the shift between quarters.

Dari also told me about the state of the consumer with the credit harm of business rebounding. He said, things are stable with the consumer overall, but from a difficult place.

I would say, one, things are stable. But two, you have to remember IT in context of credit scores are down like twenty points in the last couple of years. BaLances, credit baLances are up, you know fifty five to sixty five percent depending on the cohort of consumer that you are talking about compared to two years ago.

Finally, we talked about the department of government efficiency president electrons initiative LED by elon musin faveh ramos wami a few days ago. Words surface that they would push free tax filing and into IT in h and our block stocks reacted, guzy said. He doesn't expect problems from doge.

First of all, i'm personally engaging uh with uh, new leaders and the new administration are coming in and if I first started articulate uh a few priorities uh that uh that they have uh one is they are really focus on a budget cuts uh and really driving efficiencies to really reforming the regulatory environment uh because less regulation， less procrit y is really good uh for consumers and businesses.

A and third sort of the area fraud, uh, both identities left that leads to tax fraud and also just small business loans and and the fraud that comes with that, that's an area where uh, there is a huge opportunity for efficiencies and the last but not least, an opportunity potentially to just simplify the the tax code, which is good for businesses and and good for our consumers. I'm excited. And as a company, these are areas that uh where we can help because our mission is the power prosperity for consumers and businesses uh and simplified tax code uh, less regulation uh and just more streamline Operations is an area we can help with all of the data AI capabilities that we have.

So one are eager to a partner on that front to power prosperity for those that we serve。 I think the other thing, john, I would just say to your question is I believe that the last thing the new leaders and administration want to do is add to the reaux racy and d costs in an area where offering already exist. Uh and so as you know, uh free tax offer a mobile APP is already available to all americans and not .

just from into IT in organ. I thought I was interesting. He's already engaged with folks from the trump camp, the incoming president.

And also we talked about the mid market business that analysts earlier we were talking to us about and how that strongly developing as well into its small business enterprise approach. Moving up, mark a bit. It's interesting .

those comments make me think about some of the more recent government contracting we have seen where the government becomes one of many customers. Uh, it's these public private type partnerships you see. And maybe there is an opportunity based on what he saying, in fact, that he is interacting with the administration to see that type of model brought to something like the irs and accounting.

Government software does not have a great track record at this point.

no, but private sector does. So IT will be interesting to see what happens here all right up next much more. And alpha, that's big hole back today and how its valuation now sets up to the other mega cap tech giants.

And later, the CEO software company, elastic gives us his first comments on earnings as that stock bounces double digits of fifteen percent so far. And over time, we are that. Will go back to over time share. Alphabet closed out their worst day since january after the justice department suggested in a court filing of the company should sell its chrome browser, mixi, and told his back with a look at the stocks under performance.

Like yeah job in a story really for this entire year here. IT is compared to meta over the last three years. And you see how matter really just took flight relative to alphabet and the obviously of multiple france, there's the regulatory side of IT and then also just alphabet google seen as net losers in the A I world, potentially whether meta has a very clean A I exploit case.

Take look, the valuation as a result of this really alpha tes never been cheaper compared to the overall market as IT is a right now. And this has been moving this P E MIT with the adec, one hundred of which is a very large component until recently. As you can see, we're back know not far from the hides in the next that one hundred.

And here you are with the alphabet is that you know under nineteen times learnings, the S N. P. Itself is around twenty two.

So clearly the market in doubt about the durability of that earning stream. Finally, analysts consensus Price target is way above the Price tar per stock Price right now by about, uh, twenty five percent. That's an usually large spread.

Sometimes what you want analysts, actually, they are downgraded or bringing that target out as a sign of maybe some capitulating. Maybe the market is sort of leading sentiment in this way, but that is pretty stark. I look back multiple years before this. You can really find too many instances of the shortfall in the Price verses the analyst target.

John, i'll take IT mix and holy, thank you up next, all of the overtime earnings moves that need to be on your radar as ga bs conference call gets set to kick off in just a few minutes.

And bitcoins record rally roles on the critter currency tapping 88k for the first time ever， now up more than forty percent since the presidential election earlier this month.

The right that welcome .

back to over time, let's check on some movers. This our raw stores that's higher after reporting a mix quarter where earning speed revenue miss. Operating margin came in above expectation shares about six and half percent.

Net APP is also higher after beating on earnings in revenue and giving solid three quarter earnings guide lusher of three percent. S O Green. This is moving lower after the real state investment trust announced a four hundred million dollar stock offering. Those shares are down about one and a half percent.

also gap shares surging after an earnings beat up next the top retail analysts. So what he wants to hear from management on the call that starts just a few minutes and kill the Q R code yeah there is is the latest installment of my, on the other hand, news letter. This ones close to home.

This week's debate is, is the move by cnbc pay comcast to spin off its cable networks into a separate company. The death now for cable, you can scan that code on your screen to join. The conversation will be right.

Welcome back. Gab shares are storing. And over time, after beating on the top and bottom lines, let's bring in a corraterie of jeffreys shares, about thirteen percent right now. Cory IT was a beaten race quarter for gap, and this really is a turnaround story for the company. So so where would you say we were in, in that process?

I'd say we're probably in the early and middle innings here. This is the first quarter now in quite some time where the companies actually pointed to market share gains across all of their brands. So that's gap.

That's old navy, which accounts for most of the cells and profits. Banana public, which has been struggling for quite a while, an athlete which just recently composition. Ly, so I think you are still in the earlier stages of this transformation.

You have a new CEO whose focused on reinvigorating these brands. His name is Richard diction. He was appointed just about a year ago, year a half ago. And he's done a really nice job of driving some brand bars and reinvigorating moments in each of these brands while also driving Better margins. And that's been a really big focus for us as analysts and investors, you know, on a lot of conference calls that i've been on. And it's nice to see that in the quarter that they reported today, that they've seen some really, really significant flow through on the fails beat in the Operating margin today. okay.

So they're got a ways to go to get to fifty two week high, which would be near thirty books to share. How much more do they have to show you for you to get off your hold rating?

I think our focus going forward is really on two key outlets of this business. It's on market chair and it's on margins. So we've seen the market chair gains thus far, but I think we need to see a little bit more of IT to really convince us that what we're seeing is sustainable.

There's been a lot of noise in retail over the last month or two. We've had hurray es. We had october, which was one of the dried months on record at least in the northeast. Um and we've also seen a lot of excess inventory in retail.

And combine that is the fact that now in this holiday season of five less selling days between thanksgiving and Christmas, so we think that an environment where people prioritizing what they need over what they want, I E shifting more into food and consume bulls versus directionally in general merchandise, you really have to have the right product at the right Price. And an environment where again, going into the holiday, which is a short and time frames ers to required year, it's gonna a get promotional. So you really have to be careful in terms of string. One of driving sales at the expense of margin in this holiday season is going to be really telling for that.

We think. okay. So in light of that, we did get results from raw stores as well as hour, which you cover. Those shares are up higher, if no is a more mixed print, presumably in part because margins were Better than expected. How is ross stores position for that environment that you just laid out?

So ross .

stores has done a very, very nice job over a multiple cade time horizon, are continuing to grow stores, gaining more and more customers is just that. Recently, what we've seen in with their strategy is that they decided to embark on the strategy where they are acquiring more branded merchandise. And along with that, when you require more branded merchandise, which is mostly opportunistic and and close out market, these are friends like nike.

It's their access in tory that, that ross is looking to acquire. This comes at lower margins. okay. And so this is a strategy that they're in barking on where we think while IT will potentially help drive sales, IT does come at the expensive .

profits OK all the time. We'll see where he goes and will leave IT there for now. Corry, thank you. Corry, time up. Next, elastic CEO on the software makers earnings before he runs through those numbers within.

Don't forget, you can catch us on the goal by following the closing bell overtime podcast on your favor. Podcast up, we will be right back.

Welcome back. Let's get back to elastic ahead of that earnings call. With shares just slightly off over time, hires now up about eighteen percent all for several quarters now, I ve been hearing data focus enterprise software CEO pumping the brakes on questions about how much A I was driving upside in their quarterly results that's changing.

I spoke with elastic CEO, as called horney, about this report. Elastic software enables real time enterprise search of unstructured ata, which is a key piece of the process of typing in the AI. And that's the area that's the sweet spot for us.

So when it's anything to do with unstructured information in real time, and you just think about all the business processes within any organization that rely on that kind of data being processed today by individuals, by human beings, often manual processes generated eyes is presenting an opportunity to automate many of them to really provide Better experiences both for employees and customers then whatever possible. And that's what we are seeing our customers do. They're building these genii retrieval augmented generation style applications that are just amazing and that's driving the demand for our technology.

Morgan elastic shares were at about seventy box and share in early september. Right now in over time, it's trading at one eleven. And I think this is part of the points we're talking about with bon deaders.

It's not alone. Look at build dot com. Look at snowflake right after today's move. Some of these other not exactly small but smaller than mega cap software names, there's something happening there .

is something happening in the moves are very dramatic to your points, are starting to see a shop in the earnings. And it's a very different story starting to materialized from just a couple of months ago when everybody was reading the death.

Now sk software is dead, but the question of how much is AI transform business intelligence, there are some chatter out there about questions on the ceiling on these large language models. I'm starting to wonder if that misses the point about if this becomes part of the circulatory ory system of the enterprise and therefore, necessary for invidia chips and some of these best of breed software solutions to be a part of everything that's going to drive m na.

And that's going to drive some value. And of course, we've been talking about that, right? The opening up of ema ipos and everything else says part of this broader market story looking to twenty twenty five, we'll see how plays out. That is first here .

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