Alphabet, the stock higher after reporting a quarter that is under way. We have full Team Coverage under way and gene munster is listening in on his phone, and lets start out with deerd deid bossa. Im sorry guys just on the call right now the cfo was just talking and i was listening so intently because she was talking about the Second Quarter and shes seeing some signs of commercial activity recovering and she said it would be too early and too premature to make any kind of conclusion or talk about how durable that may be. Going back to the results the ad revenues were hit and perhaps not to the extent that wall street was expecting and they echoed the comments that cfo made saying that it was a tale of two quarters, strong at the start and then ad revenue declined he also struck an optimistic note saying he had reasons to be confident. Have a listen. Let me just explain that to you. He said he was optimistic because as they saw after the financial crisis in 2008, one of the strongest features is that it can be adjusted easily and you can turn it on and off and that is Cost Effective for many of the customers the alphabet business is more diversified now than it was in 2008 the prime example of that is cloud. Alphabet saying that they are not going to be cutting any investments or head count or hiring in cloud whereas they are in terms of shortterm levers which we have heard over the past quarter, and youtube and android plagued the bright spots and now have 2. 1 monthly active play devices that fits into the contact trade story, and it tells you the huge reach i also want to talk about alphabets capital return program, and this is a major question for many on the street. The Company Repurchased 8. 5 million worth of shares in the quarter and the cfo saying that remains intact and the 25 Million Share Repurchase Program and ill get back on it and expect q and a to start very soon when it came to the peculiickupn commercial activity with small and mediumsized businesses which are huge advertisers for google or geographically past the peak are starting to pick up now . Thats a great question, melissa. They were just getting into it which is why i was late to look, but she said theyre seeing some recovery but when i did speak to the cfo on the phone i did speak to her and asked her if there were any surprises and if they were seeing business pickup among Certain Industries and she hesitated and wouldnt call out any specific industry and travel makes up a lot of googles ad exposure and she said there were pockets within many of them that were seeing some bumps she didnt say exactly what. Im hoping theyll give more color there on the call. She just said that theyre seeing a little bit more and did not want to draw any conclusion. So theyre clearly being quite cautious and also striking a confident note which is perhaps why youre seeing shares up 4 in the after hours get back to that call, deidre thank you so much, deidre bossa. Deidre mentioned shares up 3 during the regular session for google so if you put that move in context, i dont know if there is a judgement in the stock market so far on how the quarter was. So, look, to your point, were basically where we closed at 1270 or so if my math is right. Thats number one. So we basically got back what we lost today, number one number two, what we are encouraged by is the youtube, year over year revenue growth. Youtube is probably 10 , 11 of the overall revenue. What youre disappointed about, i think, is the fact that acquisition costs went up which means operating margins are up 20 and you could make a very compelling case for google on a multiple level and just in terms of a cost level. Its not expensive in terms of earnings and this is what i would say. Made an alltime high of 1830 or so on february 20th. The recent low on march 23rd is basically 1,008, so its not surprising that this 1270 level is where its sort of stalled for a week or so if youre bullish on the overall market, i think you say, you know what . Good enough, and if you think today is some sort of turn which by the way, i do, i think youre taking profits looking to buy google cheaper than where we are right now. Most people, grasso, are being looking through the quarter that was reported. If they can get engagement higher, is this then a move for more share in the future and when advertising does come back, they may be in a better position to actually monetize that. Yeah. I agree with that, and i like the way you set it up with guy talking about todays move, and i think if you look at the backdrop of what weve seen, the fang stocks for the last two days have been sold off because theres no way that their safety bet or safety stat us that weve seen in the last couple of weeks can really play out with the rubber meeting the road. So what do i mean by that . You have earnings and when google said theyre diversified out of the main search business, theyre making 160 billion the next best bet is 660 million in their other bets. Theyre not diversified and theyre attached to the ad spend. So thats one thing. Yes, on one side of the scale, you have the engagement, but we need to look through corona to get back to normal life before we start worrying about how these things play out. I will tell you that if these numbers would seem okay, seem to last for the rest of the fang names, then you can see basically that unwind, that rotation that weve seen in the last two days or so into value, sort of fall off the table im long value im long growth. Id like to see that value play work for the next couple of week, but if we get earnings out of facebook tomorrow and earnings out of netflix and the whole gamut of them, i think it will be enough to make it so that this rotation only lasts for a couple of days, but im pulling for tech growth to be sold and value to be bought at this point in the equation tim, come on into the conversation yeah. I want to talk bottom up i want to talk google relative to themselves and relative to the growth areas youtube up 33 on ad revenues is fantastic and we wanted to see this thing grow and whats gone up in cloud up 52 and remember the multiples coming for other big players in megacap tech and amazon is coming from cloud and microsoft. Look at that up 52 on cloud and we all know that its roughly a 59 ad spend story at google. And Everybody Knows the concern we have around the ad business and heres a positive spoin that whats going on in linear tv and the eventual destruction and whats helping netflix even during a time of competition is fantastic for google this is a tailwind for youtube and its a tailwind for some of the other businesses so if you look at this as the tale of two quarters, it described relative to either one of those quarters, the core businesses that you want to see grow are doing better than expected and this is at 20 times multiple for a company of that size where almost 18 of the companys market cap is in cash. This is the easiest highconviction play in the market for me right now, and i think its something that people, despite the obvious headwinds should get comfortable with the bottom up story karen finerman, your shots here so what did you make of the quarter . Okay. Sorry about that i thought it was a relief clearly, the revenue numbers are good, but the question is whats going on happen now, but i think that it is a complete reversal of the stock action during the day. I agree with everything tim was saying this reilly ally is an incredib powerful story and when you think about the mood of the business and we havent started to see costcut which is is something we never see from google in any meaningful way so i think to the extent that theres softness theyll be able to help the bottom line somewhat and its not really a near secondquarter, thirdquarter story. Its such an extraordinary business and that cash hoard is huge and im glad theyre still using it because it gets even cheaper and it is not a crazy price for an extraordinary business lets get more on the quarter here and bring in luke ventures gene munster and hes been listening on the companys call. What are the highlights so far from that call melissa, this is a stellar advertising business and hats off to them. Its pretty easy to do the math and you can break the quarter down into the first nine weeks and three weeks when things really hit and they were growing their advertising business at 20 which is the same rate that they grew over last four years, impressive and whats surprising to me is over the final two weeks of the quarter, it was effect life flat and they declined dramatically from that 20 , but for me, a flat business in this environment is impressive so hats off for an incredible advertising business engagement, too, off the charts and the amount of searching thats done is 4x higher than what it was in the super bowl. So people are at home, theyre using google products. This is all really good for their advertising business, but i think it was guy who was putting this into perspective for companies on the other side of this, what does the future of investing look like . This is still an advertising business we have cloud which is the only diversification thats 8 of revenue. Solid business, but if you compare that to a company, say apple which is slightly more than half the revenue is outside of the iphone and other companies that are trying to engineer the future world. Thats where i come to, as a trader and someone who is investing in this, think about the multiple longer term 26 times next year is still a Pretty Healthy multiple. Gene, i dont know how advertisers work in terms of how real time their what google takes or what alphabet takes in is a reflection on whats going on in the economy. If youre a travel company or a Small Business and you want to advertise on google, do you buy that a week out . Do you buy that two weeks im trying to find out if there is a lag time because theyre talking about the last three weeks that we have seen so if people have bought that ad space three weeks ago maybe we dont know what the full effect is so whats unique about the google model, this is different than facebook and well be paying close attention to that and it turns off virtually immediately and thats why they refer this as two quarters i think there is a very clear delineation over the first week in march thats good news, and they can come back relatively quickly they also had a piece of the comeback side as they said that some of the results in asia pacific were slightly more positive which i think speaks to trying to put pieces together about when this recovery starts. It is a conservative person i try to always exceed expectations and google is setting expectations that ultimately things are starting to improve and it is encouraging. All right gene, thank you thanks for your time and analysis well see you tomorrow so, guy, your quick thought after hearing what gene said and the latest on the Conference Call well, im not correcting gene because you cant see and it was steve that mentioned sort of the diversification that google enjoys or to steves point and maybe not enjoys as much and again, if youre putting your trader cap on which gene was sort of doing and im not take away anything from the quarter and they operated better than a lot of people expected my point is this, if you look at the context of what the Broader Market did and theres this 1275 and twef1280 level and its a 5 retracement to take money off the table and look to buy this stock cheaper. Afterhour session highs up 4. 4 well keep you posted on the moves in the Conference Call breaking news on uber. The ridehailing giant is discussing plans to lay off 20 of its employees and lets bring on amir efradi and he just broke the story on the information already on april 16th they withdrew guidance so we knew they were foreseeing the impact of covid, but tell us what sorts of employees and what other sorts of costcutting measures may be in the offing well, employees of all ridehailing companies whether uber or lyft or anywhere in the world have seen their businesses take a nose dive as much as 80 compared to next year and there is an expectation broadly that layoffs were upcoming. It is unfortunate because ride hailing and uber is maintaining the profit a lot of people dont even realize that, but never theless its all gone now and they dont know when the recoverys going to happen. A 20 reduction is one of the things that theyre very seriously discussing right now some groups may be hit harder than others and its a huge company of 27,000 employees. Google wenting with the drawing their guidance a week later. Are we thinking, probably this will happen also at lyft yes lyft is much smaller in terms of its business so its fixed costs in terms of employees are much lower than uber. They have a lot food delivery unit at uber eats that is growing as fast as it was in the Fourth Quarter of last year, reit now so they have something to hold on to and put their effort into. Amir efradi with his information about his report on this, youre looking for a return to normal, but where would you expect that turn to happen i think that turn happens and there are similar dynamics here with the airlines and whether youre more comfortable in a localized environment getting into a ride share versus getting into an airplane when you have to go some place or you really want to go some place, but the easier decision is to locally figure out Something Else and so i think the fact that theyre cutting costs and getting what they can to get through a difficult time, we talked about balance issues with this company in particular. So i think this is a case where you have very little reason to get back in especially for a company that, yes, was showing profitability trend, but still the complexity of this business makes it a harder business in this environment, and if you had a relative value, would you rrth rrt rather lyft is an easier call i dont see where you you would invest you go for option c recalcitrant coming up. We have a lot more earnings reports to break down and well dive into the numbers for starbucks, ford and amd and mike wilson will join us with his thoughts on the rngseaeain sson and why he thinks we may have turned a corner. Stay with us connected. Committed to keepinu so you can keep your patients cared for. Your customers served. Your students inspired. And your employees closer than ever. Our network is resilient. Our people are strong. Our job is to keep your business connected. Its what weve always done. Its what well always do. Swithout even on yoleaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 12 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. Welcome back to fast money. The dow snapping a fourday win streak while the s p 500 and nasdaq closed at session lows and the maga stocks are kicking off a huge round of tech earnings and lets bring in the chief equity strategist. Mike, great to have you with us. Thank you we got the report from alphabet and the stocks up in the afterhours session about 1 over what it lost in todays regular session. Im curious, if the rest of tech sort of delivers like this, do you think we can hold on to gains . Thats enough. I think you guys have said it right. I just got back in the after market what it lost throughout the day and these stocks have been tremendous winners for years and not just this year our view on the market overall is that were bullish overall and we just think theres more upside in potentially some of the laggard areas and one of the reasons we feel that way is because quite frankly, the revisions have been much worse and the earnings revisions have been much worse for some of these smaller cap names and some of these out of favor areas and the down side risk is less there and when things turn which we think they will in the economy later this year there owe operating leverage and upside in those names and thats not saying anything bad about google and the large cap growth stocks. Theyre Wonderful Companies and wonderful Business Models and you dont have the upside potential as the laggard areas do in terms of the upside that you foresee whats your forecast and im curious in terms of the upside and youre saying that this rotation that youve seen recently to value, thats going to persist that is going to drive that upside its not so much value as you can have growth stocks, too. Its really kind of names that have not been leading in the past cycle. Whenever you have a recession you should be looking for leadership change and it does revert back to early cycle groups and part of those are consumer discretionaries and the banks and some of the beaten up areas in the material space and even Energy Stocks have been on a tear i wouldnt recommend diving bark into energy given whats going on in the Commodity Markets perry is. The areas that were completely eviscerated have a more upside and it should be a Broader Market and when you come out of a recession it should broaden out and i think its a healthy development. Guy, you have a question. Mike, im sorry, mel. Mike, you navigated this really well in the Broader Market and in terms of, first of all, does it matter necessarily what your forecast for s p 500 earnings are . If it does, whats the number and whats the right multiple given what the Federal Reserve is doing right now yeah. I dont think 2020 really matters that much, guy i think the market is already looking past this year into 2021, and so 2021 does matter for right now our range is sort of 150 to 160. I could see an upside case to 170 if we get back to work faster and theres no recurrence of the virus i can also see down side to 140 next year if things go poorly and i would say 150 and 160 and the multiple connection expands further given what the Federal Reserve is doing and they have completely taken out the chance of risk premium blowing again, and theyre intervening directly, and i think you can trade 20 times, to 119 and it gets you to 3,000 as a base case and 3200 as an upside case. Mike, ive been long its steve, by the way. Ive been long value waiting for this rotation to take hold and longer than a day or two when youre looking at value and this taking place, what gives you the confidence that it can actua