Companies dont have exposure to china, with the exception of amazon, which as a retailer and a distributor has a lot of exposure there they have the most china risk, outside of if you leave f. A. A. N. G. , of course theres alibaba, which its all china exposure i guess thats how i would answer the question. I would also make the simple point if you look at the f. A. A. N. G. Names, you pretty much had acceleration growth, Revenue Growth acceleration for all four names but theres a couple of very specific issues in the back half of the year. The ones with the best fundamentals right now with the easiest valuations is facebook and google krish, whats the next irobot i mean, looking at hardware, whos got an amount of china exposure that could be really damaging you know, apple clearly has a pretty high china exposure and as you mentioned before in this program, anytime theres negative news on u. S. china trade, apple becomes kind of the punching bag what i would characterize as overall what you have seen is that apple has been trying to mitigate some of those risks, especially in china, given the fact that they have done some trading with iphones, so they can potentially solidify their market share or the iphone units sellthrough. They had some pretty good strength on the services side, especially in calendar q1, which typically coincides with the Chinese New Year and theres a lot of game downloads happened in china and the third thing i would also characterize is the fact that one other important step apple is taking is the new foxconn festival in india, which would eventually help them actually ship more into india without the risk of duties, and that would potentially help them gain more share in india that could offset future weakness in china mark, ive got to ask you about netflix versus roku. I mean, heres what i know youve been bullish on netflix you seem to be kind of lukewarm on roku, but its had an amazing run and now youre still not really behind it on valuation, even though you think netflix has a lot higher to go from here did you miss something on roku and its rise and why you still not completely onboard yeah, so, we downgraded three stocks, three midcap stocks that were phenomenal outperformers in the first half of the year. Trade desk, lending tree, and roku and the one we clearly have gotten wrong is roku that stock continued to soar another 30 after our downgrade. They have got really the winds in their sails so i think its a very good asset. I would prefer to buy it on a pullback and i dont know that i have a particular catalyst for it theyre a great play for the streaming wars that are coming up later this year we think they have a catalyst in terms of international exposure. Well probably be ending up chasing it sometimes you get the valuation downgrades can be very tricky and i think we got that one wrong. On netflix, i find netflix very interesting. This is obviously a contrary call with the stock down near 300. You pointed out before, the stock hasnt really done anything in a year and a half. Theres all of this overhang related to the disney launch later this year. Im just going to make the simple point that the content slate thats coming out of netflix in the back half of this year is strongest that the company has ever had and so if they cant put up the best subscriber numbers that theyve ever had, then theres a bigger problem and i dont think there is so we actually like netflix. I think its probably the maybe the singlebest contrarian call in large cap outside of those outside of lyft and uber although when theyre spending 500 million, mark, with on three movies, how expensive is too expensive in terms of how much theyre willing to spend, look, their cash spend is 14 billion, 15 billion a year, but they also have 150 million paying subscribers and theyre adding 30 million paying subscribers every year, which means that incrementally theyve got 3 billion to 4 billion in extra spend to add on to that video ad spend. Look, no doubt about it. Theres going to be a day when netflix is spending 20 billion a year on video content. If they have 250 million subscribers, they can do that and expand margins thats the scale advantage that netflix has. I dont care who theyre competing against, nobody has that kind of subbase therefore, nobody can generate those kind of positive economics longterm. Krish, its been amazing to see the volatility, the pullback and then really the bounceback, the rally weve seen in semichips, just in the past week, with all of this ratcheting up of tensions between the u. S. And china im curious, though, longer term, youve got china investing in its socalled big fund, which is aimed at the domestic chip industry in that country youve got headlines like the one today, huaweis founder wants a, quote, invincible iron army to fight the u. S. Given the fact that we do have these dynamics between two countries right now, do you think this is going to accelerate chinas own development of its chip industry and if it does, what does it mean for the u. S. Semiconductor stocks sure. I mean, i would say, absolutely, yes. China does have big ambitions. And they are trying to do everything that they can to accelerate the Semiconductor Industry the original was the Semiconductor Industry by 2025 and clearly, they have fallen behind on that timeline. The grand scale for them is to eventually compete with the qualcomms of the world, the intels of the world. But whats really enabling them are some of the Semiconductor Equipment companies, like the Applied Materials where they dont have any viable second source to them so at the end of the day, i would say that a lot of chinas semiconductor ambition really hinges on the Semiconductor Capital equipment sector, where they dont have a second source and they would need the u. S. Help in that and i think thats kind of where the whole debate among investors today is in, you know, how that is going to enable china to get to the next level on sanctions finally, mark, are you watching some of these expirations of huawei licenses and exemptions as some sort of dramatic deadline . Lets see, dramatic deadline for names like google . No, i dont think so i think its largely a nonissue for google its a small issue at the margin i dont think its actionable. And if there were a tradeoff on google shares because of that, i think that would create a better buying opportunity i think its almost immaterial to the business. All right says a lot about the size of the other businesses, thats for sure mark, krish, appreciate that, guys nice way to start the hour thank you, carl and when we return, kara swisher has been testing out the new apple card were going to get her take on that and putting the trust back in tech, next. Stay with us hey im bill slowsky jr. , i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. Well, the first reviews of apples new credit card have been trickling in and our next guest has been using the card for the last two weeks and says in her latest oped, when it comes to creating products you can trust, apple, quote, appears to be doing the right things, unquote. Recode editor at large and cnbc contributor, kara swisher joins us now kara, good morning hi. So this apple card, theres no number on it, no Security Code apple says that theyre not going to track any purchases that you make on it. Of course, if you buy something from the apple store, they know that from the retailer end but is this apple trying to create a market for the privacy that so many of us have sort of given away in this era well, yeah, i think part of it that the privacy element [ inaudible ] uh, it sounds like we really dont have great audio from kara on this, guys, which is too bad. Some of us have been briefed on this, as well. Even though i didnt sign up for the card, its a really interesting attempt, i think, to change the entire card paradigm, right . I mean, because with this, theres no number on the card. You get a number inside the wallet appthat changes pretty much every time you use it so nobody can steal your credit card number. The one thing that for me, as a consumer, conceptually doesnt work for this is you cant take the transactions and import them into Something Like mint or wealth front or these other services that help you track your transactions. So its kind of a universe unto itself, a walled garden. Which is a very apple thing. Yeah, its really, apples staking a claim in the sand in terms of security, in terms of privacy, in terms of rethinking basically the economics and the businessard credit ca around cr. Basically, protecting consumer data much more than weve seen with other Financial Institutions that are involved in this game right now but as you mentioned, its really very sticky the whole point of this is to be that much more engaged in using your apple device, your iphone, wallet, and this idea of services and growing that business within the apple ecosystem. And carl, oits not just your most creditworthy consumers that are getting this card. Some people with some Credit Scores in the 620 arena have managed to get it, but with a low credit limit weve tried to get from apple some description of what a minimum credit score is and theyve been pretty tightlipid about that but the headlines on some of these reviews is that apple is dipping back into some kind of subprime Consumer Market i think well get back to kara swisher in a minute verdict announcing operations after a significant change in financing surprising both the industry and Venture Capital committee. Ceo jim cantrell, whos been our air in the past, has left and cofoundered john garvie has stepped in to try to salvage the startup the company also laying off a majority of its workers. This is significant, because vector has been viewed as an emerging frontrunner in the small sat. It received its First Air Force contract just last week, its unclear what happens to that now as well. But since its founding in 2016, vector has raised about 100 million from investors, including codeham growth partners, squequoia capital, lih speed, and Morgan StanleyInvestment Partner partners so what im hearing now is the investor pulled out, but this speaks to how new and how in many ways untested this commercial space sector really is space is hard, but investoring in it can be hard too. And with some of those investor names i listedoff, this is an area thats starting to get increased interest and money from the Venture Capital community and other kinds of investors. So its one to watch are these essentially Hardware Companies in a new era . Im used to sort of the playbook for flameouts in Silicon Valley hardware we saw the mp3 players in Handheld Computers things like there. There was a sort of inventory and kind of component issue that they could get into and then things just blow up. Is there that kind of playbook yet more space i think what youre seeing start to materialize, and you know youve heard me say it a million times on this show but in many ways, you see the space sector as the next internet, and going through those same kind of growth patterns and trials and tribulations that we saw in the 90s when you look at small sat launch industry, theres more than a hundred Companies Competing in this arena. Only one of them has actually made orbit, has gone to orbit so far. So theres a lot of competition, not necessarily as much demand yet, and youre going to see winners and losers and i think this is an example of that and yes, its space hardware that is absolutely what were talking about here can bubbles form in space is that possible, in a vacuum . A physicist can help us out. Meanwhile, weve got kara swisher back kara, really wanted to hear what youve got to say about this apple card are you going to keep it or are you just trying it out you know, i like it im going to use it all the time a couple of things that are important, obviously, are the privacy elements and the ability to see where ive actually bought things by physical location, so you can remember things the second part is, i had a bit of a security thing when they werent sure what i was buying on the apple services, and it was immediately resolved via text it was very fast and it was like i was talking to a real person, which is very interesting. And the third thing is, the cash back thing is very simple and easy a lot of cards have cash back, but these are, you find immediately how much cash back you get depending on whatever youre using so i found it really great and im very excited, for the physical titanium card one of the big issues is, though, that apple pay just isnt everywhere a lot of places ive been here dont accept apple pay big places do, but small stores dont. So that is one of the issues that you can use all kinds of apple pay or any of those services, they need to permeate to small stores and other places and i think thats one of the probably big issues that they have Going Forward kara, how much do you think the fact that apple does seem to be, maybe its too early to say, getting it right here, the fact that they have drawn this line in the sand and the fact that they are saying that theyre trying to rethink ways to protect their users and consumers privacy, data, where they make money, how they make money. How do you think thats setting us up in terms of winners and losers in this new, more privacycentric world . And do you think consumers really care . Do you think thats going to be a big selling point . Its good for the phone they dont need to market to you. This is not their business, just like how they dont need to be in advertising they dont need to constantly be advertising to you thats a plus. And it also helps the phone. And even if it helps the phone, is what theyre going to be doing in software and services anything that makes it more convenient and more seamless the only issue is how prevalent apple pay is how prevalent you can use these services when youre in a big store like cvs or stop and shop, it works great and i use it all the time. And it instantly pops up with the information, so you can remember where you its very convenient for the phone and it so makes my phone a better experience. And i think thats where theyre focused on most of all and the privacy part, obviously, is something theyve been pushing and advertising and Everything Else and its a Business Opportunity. Now, the question and the cashback is just simple, just nice to get whatever, however many percent back just immediately and its immediately put on your apple cash card, which i use, too its designed for the phone and its also a credit card. So thats helpful, i think, rather than just apple cash, which i just had all my other cards on apple, but im not using them on apple pay anymore miami using just the apple card. Kara, for consumers who are using it as a credit card, we know what credit card rates are like in this country, one of the big selling points here is that it gives consumers intelligence on what they would need to do to avoid large interest payments. Has that been impressive to you . Yeah, i like it i havent paid my bill yet ive charged a lot on it, but its a little wheel that tells you how much interest you owe. Dont worry about it, carl my credit is excellent its this little wheel that you play with that shows how much interest you pay it gives you a whole lot more information than most credit cards. Again, its designed for the phone. And so youre used to the Wheel Movement on apples device, if you ever had an ipod or anything like that, so it gives you that information and you can scroll, if you pay now this much, youll pay this much in interest, and you should pay this now here this is the ideal amount and i think for millennials, like, theyre using, you know, lots of these nerd wallet and things like that its sort of in that genera. And so thats kind of interesting. You know, again, privacy is an advertising opportunity and a Business Opportunity for them. But i do think they its not their business, and so therefore, you can sell it in that regard. The whole overall thing i was trying to get to is who do you trust and what else would i buy from apple what other service would i buy, you know, thats the question is what can they move it to agenda agendasies the same thing like, would you buy your sports stuff from nike . Yes, your clothes. Would you buy your health club from them . Would you buy health care from them you can think about all of these Companies Moving to adjacent markets where they trust companies to do more and privacy is a big deal for me, so therefore i trust apple more of kara, thank you got to admit, guys, i like perks. I like perks a ot. And this card doesnt quite have a premium tier yet you mean, beyond cash back. Yeah, like airport lounge access and miles special privileges. Concert tickets exactly yes, carl you have those things for me thats exactly what im talking about. Note to apple, i guess, from jon fortt. As we head to break, dow losses are picking up steam right now. 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