Good wednesday morning im Carl Quintanilla with jon fortt and sara eisen we have Jason Calacanis with his new book entitled angel. Nasdaq hits another record high. Were trying for backtoback days of record gains index is coming off the 43rd record close of the year one standout is going to be amd soaring after beating estimates in the recent quarter issuing strong guidance. That stock is on track for the best day since june 21st the best day in weeks here after an amazing run already. Yeah. First of all, thank you for having me. From what you have seen so far, i think 20 of the s p is already seeing strong numbers out there. From the internet point of view what were seeing, which is very Strong Demand that continues secular shifts, offline advertising coming online, you saw that in googles numbers they are expecting that in facebooks numbers it is strong numbers from advertising driving the demand. This is what we call jason, the sweet spot of the secular trends we have been talking about for most years i think it is fine to summarize it as yumyum for the tech industry. If you look at the growth in advertising, the majority of the growth is two players, google and facebook on a percentage basis, they are running this as smaller numbers in advertising i think that number is running now, google and facebook are going to run the table he said, what would we do with the computer power and then come up with the crypto currency thing to mime the coins, this is stupid and wasteful of energy but selling a lot of video cards and helping amd. Then you add selfdriving cars that people didnt anticipate. Then the gamers seem to, cant get enough of increasing the frame rate and getting bigger monitors so you dont need to play a game in 60 frames a second at 4k. For some reason the gamers cant get enough of the it. Amd is also a counter argument to all this mo nonnopoy talk because one of the tech monopolies with power is intel looking at nvidia, which we talk about a lot, and amd is a lot smaller than intel, but the fact them come back in pcs, they are not done with the epic server processors, thats coming out next as well thats for graphic and laptops it is really interesting theyre able to carve out the niche, somewhat again a counter argument to those saying that you need to break up big tech. I mean, when somebody really smart comes in leaving a company that is an upstate sometimes it makes a difference. Its the one product theory, one product can make it happen we saw it happen with apple and the iphone you see this over and over again. Somebody gets the fluidity of the Global Market that can happen, we all buy the product, and that includes business this is incredible and they are making billions of dollars in revenue. It happens so fast, the velocity of consumer and enterprise is extraordinary. Some of the secular trends that jason was talking about, bob, relate to a. I and the question is, how do you know when theres too much hop in a. I. For a sector like the tech stocks or whether it is a fundamental reason for them to go higher. You saw google talk about being an a. I. First company or previously being a mobilefirst company. Then you really have to tear up, what exactly is a. I. Is it improving algorithms, computing, machine to machine communication, how does that translate into the overall environment but not just on computing devices. Big parts of tam, if the companies can get it right, its a big opportunity for the companies. Jason mentioned the overlay of consumer and enterprise ive heard some people theorize that aws, while dominant now, because microsoft is so engrained in corporate i. T. Could make a run at number one do you think thats likely its still a nice market, you have google going after it hard, microsoft going after it hard, aws, if you would agree, is migrating more and more to Enterprise Clients to use that to get into a bigger Enterprise Client so i think it is very early in this race. Amazon has the lead for now, but microsoft and google have big guns. The question is, probably the most fascinating one and people watching the show have to ask themselves, its overhype in the shortterm but in the longterm it is underhyped whose job listening to this program is beating the top three go players headsup . If you went to work today and your job was literally harder than beating the top three players or three corporate player, then your job is safe. If your job was not that difficult, your job is going to be replaced in the majority by a. I. So attorneys are the perfect examples i have looked at seven startups that youre going to speak into your smartphone to say, i need a contract to do this. And all of a sudden it will spit out the contract and youll assign it and feel comfortable that the a. I. Got it right if you are an attorney listening to this if youre talking about people watching and shouldnt be worrying about their jobs. They should be worried. Watching who was in jeopardy a few years back thats how we do it in the technology industry. We boil the frog well meet you at go, but some of the jobs until later. So as this debate goes on between musk and zuckerberg, have you taken a side . Does this interest you at all . Its extremely interesting, i just dont know enough to debate elan trust me, if it was a zombie apocalypse, im making elan. Elan verse zuckerberg is laughable. Elan was the original investor and board member of deep mine, which was bought by google, and heres doing massive work on a. I. Thats probably largely unrecognized at tesla. And he also funded 50 million for open a. I theres nobody who is bigger expert, has a bigger view of a. I. Than elan musk. Hes applied it in four companies. And hes invested 100 million in other Peoples Companies to try to grow it elan is right. When i talk about the lawyer being replaced in 60 to 70 of the work being replaced, were sitting here nodding that it seems realistic. Im not nodding. What percentage do you think will be replaced by a. I. In ten years, jon i cant see a. I. Doing a good job at criminal defense. Okay, sure. So leave out the less third. My question to you remains the same, what percentage of an attorneys job 10 to 15 years from now is replaceable by a. I. . It will taken a eternity for me to answer that, so im youre taking the fifth commentary, were good were good a. I. s not going to do better than us. Im just wondering, to wrap it up, as we await the amazon results tomorrow, apple next week, at what point do you talk about bubble evaluation when seeing the companies combine, the bank stocks and apple, bigger than what, the economy of a place like the u. K. . Well, first of all, we just had last week our biggest ipo week of the year i think you had six ipos, 11 followones, youre seeing big demand for interesting ideas a lot of the Portfolio Managers are looking for incremental alpha going after the names not capitalizing, not only on the core business, but also the optionalty, whether autonomous, a. I. , vr, the large temps to go after. Portfolio managers are paying up for that also when you look at the larger companies, you want to tear it down a little bit because theres a lot of parts to facebook, its not just one entity, theres a lot of parts to google and amazon as well you need to tear them apart, not look at a raw p. E. Multiple. There are earnings coming out of facebook after the close. The company grappling with slow atgrowth and costs. Well get Company Plans for original content we are hearing they are working on a smart screen as well. I can tell you it is fake news on the speaker because evan spiegel hasnt launched a speaker yet so its impossible facebook would it makes no sense for them to have a speaker because the Component Parts of the speaker would be having a. I. , it would be having surge, having hardware dexterity. Its not the components they have and theres no natural connection to facebook at all, except maybe listening to your conversations, finding key words to retarget you on edge, which seems crazy, but something people are working on in the technology industry. So i dont think it would be an interesting product for them, nor do i think its happening. The background on this is, all the labs spit out stuff. Then something leaks and a blog, like a tech blog just says, oh, my god, or a gadget blog says, this is going to get us pay juice. It could be happening in a lab somewhere but not going to move the stock in any way bob, the message for so long has been facebook, alphabet, theres room for everybody but i look at the numbers and it looks to me like two years ago googles revenue was five times bigger than facebook now its three times bigger. It looks like facebook is going to turn in net income thats more than half of googles i mean, has facebook built a better google . Is it time to start asking that question well, the real interesting part is they hat to monotize the properties with billions of users. You start to talk about messenger and whatsapp theres a lot of room to run there. If they have hardware ambitions or other ambitions were not aware of, still large tams to go after. Should we be cautioning the fact that last year facebook told us on the Earnings Call that ad Revenue Growth is slowing meaningfully in the middle part of this year because they were going to take ads out of the news feed is that starting to happen User Experience is paramount and key. The real driver there is conversion its advertising roi as long as advertisers are getting the roi they want, they will keep bidding up on the ads that are there so you dont necessarily need to keep adding ads, but as long as you produce the roi in advertising, they will bid up the pricing. They are definitely pushing the envelope two point, one, people bidding on the ads on facebook are finding the costs getting too expensive and looking for all nerntives. Alternatives acquiring a company for 40,000 on facebook, i can go on the street and acquire a customer in 20 in the real world and humans. Not as targeted but it doesnt matter if the person signs up for the subscription or not. Did they buy the product literally putting people on the street selling product was beating facebook because there are so many people bidding up the inventory. If you look at instagram, the number of ads on there is getting annoying and people are mentioning it in social feeds. If you look at google and facebook, that dynamic is interesting because google took their eyes off the prize and they were looking at all these different moon shot products and then facebook and zuckerberg said, forget about the crazy ideas, lets run the table on advertising and build a better mouse trap to your point, its a better mouse trap with more targeting it has targeting so powerful its going to be removed, including the ability to target people based on race and this is something that is going to come up you probably have seen some of the stories about that maybe during the campaign they targeted specific minority groups that came out for obama during the campaign with antihillary ads that all is starting to unravel right now. Youre going to see facebook actually remove targeting, i believe, from their products because its become too creepy and too disturbing. That sounds like a slippery slope. Well, do you believe you should be able to target ads based on somebody being hispanic, africanamerican, white in society right now we do it by channel where people predominantly tend to view, even if you dont do it directly by race, they will end up doing it one way or the other. They will figure out a proxy for it. I look at jewelry ads, i dont know. About the video if facebook manages to crack video in a bigger way, the way they seem to be with these later initiatives, is that a significant leg higher given what googles been able to do with youtube its a huge tam, a huge opportunity. They are basically nowhere there yet. Theres been reports about them going to reprietary content, proprietary content. You look at cpms pricing that the brand advertisers pay for, whole buckets of advertising that facebook is not getting and maximizing this is a huge opportunity for them obviously, in googles results the other day, you saw the impact from youtube. Video is we talked about it here two or three years ago, the impact it would have and it will be the main driver now. The tv advertising is such a high cpm when compared to other advertising that its really making facebook go super nova. And they are probably 5 or 10 into the story of video. In fact, this weekend zuckerberg did a live stream of himself barbecuing, which is where that elan musk a. I. Comment came from so he really believes in this. And when you look at ceos and the founders and what theyre doing in their spare time and what theyre playing with, that is the ultimate tally. So when you saw larry and sergey at the conference getting all absorbed in google glass and, you know, moonshotlike projects, flying cars, larry page has two flying Car Investments outside of google. And these arent even moonshots. They are very distracting. And i think well be sitting here in another five years saying, how did google let facebook catch up . It is extraordinary that facebook is catching up. And really, if you think about m a, they have run the table on larry and sergey they have gotten demolished by suggester zerg the fact that they didnt get instagram or oculus and whatsapp is phenomenal. They gave up a huge portion of that to get whats app and it made google look pathetic Portfolio Management is a big part of the facebook story. Who is running google they are playing with glasses. They have 2. 0 glasses out who cares . You guys are great together thank you so much. Thank you great to see you. Thanks for the plug for the book that was big we should also mention in this conversation a number of major tech names are hitting new alltime highs today lets go to don chu with the latest the shares leading the s p 500 after beating forecasts on the top and bottom line, amd is raising the fouryear guidance ramping up production. Texas instruments also has Second Quarter numbers beating the demand for industrial customers. T. I. Is estimating Third Quarter profits among estimates. That stock among the leaders in the sector as well aside from earnings, a number of the tech names reaching record highs in trading today amazon is consumer distre discretionary. And record highs today, we should point out on the downside, you have apple and technologies standing out at the worst performing s p 500 stock those shares hitting 1. 5 low after forecasting Current Quarter sales and profits that missed some wall street expectations the negative results coming as its traditional immediate a Delivery Business under pressure this prompting price targets on the stock. Also keep an eye on facebook, guys, you guys mentioned it, the social Media Company reporting Quarterly Earnings after the closing bell today carl, right now the Options Market is pricing in what could be a 4 move, higher or lower in the stock on the heels of the earning reports, guys. Back over to you. Buckle up for tonight, don, thank you very much. When we come back, well go live to las vegas where the top Security Experts try to find ways to defend against the latest threats facing companies today. Elan musk has a new video showing a special feature of the hyper loop tunnels and then later on, how one company is hoping to revolutionize the farming world with the help from bezos when squawk alley continues. Welcome back to squawk alley. Executives, Security Experts and hackers are gathering at the black hat conference in las vegas this week to talk about the biggest Cyber Security dangers facing companies right now. Aditi roy is live from the very timely conference. Aditi, good morning. Reporter good morning to you, sara. Things are bustling here in las vegas at the black cat Cyber Security conference. You can see a lot of people behind me, they just opened those admission doors here moments ago where Companies Like rsa and fireeye have set up boo boots. When it comes to hacking, no one is safe, even the people attending this conference, possibly yesterday we spent a lot of time at the black cat Operations Center where we found a team of security pros, engineering pros working hard to make sure that the attendees at this conference stay safe from hackers this as experts are warning that the risks are more great than ever before. One study that just came out shows that the number of u. S. Data breaches so far this year get a half year record high of nearly 800 thats nearly a 30 jump from this time last year. Another recent survey also polled 600 of the top leaders here at the black cat conference, they found 60 of them believe that the success of this security infrastructure will probably happen in the next two years. That is manipulating power grades and the Nuclear Power plant. So why are they so worried 70 of those surveyed said recent examples of statesponsored attacks, so anything from the allegations of russian official hacking to north koreas possible involvement in the wannacry attack has really eroded their confidence in the Critical Infrastructure only a quarter of those surveyed believe the white house will have a positive impact on Cyber Security policy. So how do you solve for all the dangers . Security pros tell me that Companies Need to do a few things, do hygiene checks regularly of the networks, they need to bridge the gap between upper management and the i. T. Teams. Above all, the Cyber SecurityIndustry Needs to hone in on addressing the shortage of workers, which some tell me is reaching critical levels guys, back to you. Aditi roy, thank you very much just one day after announcing the biggest global sales jump in five years, mcdonalds is expanding the Mcdelivery Service through uber eats its available today in 47 countries. We t