tv Tech Check CNBC December 8, 2022 11:00am-12:00pm EST
raimondo will talk about u.s. competitiveness. she has a big job implementing the c.h.i.p.s. act we have the ceo of etsy, josh silverman, he will talk about holiday shopping and pricing and how etsy is sort of different. it doesn't have warehouses or inventory. the stock has had a nice comeback >> sara eisen. >> thank you you're always welcome to join me >> "squawk on the street" is down "techcheck" now. good thursday morning. welcome to "techcheck. i'm carl quintanilla is time running out for tiktok maryland and texas ban the app on government devices while indiana sues over safety concerns elon musk's bankers reportedly considering tesla margin loans to cut that risky twitter debt tesla lost nearly a quarter of its value since musk became chief twit and the ceos of c3 ai and
hashicorp join us. >> we will start with salesforce that stock down 20% in december alone. losses accounting for about a quarter of the dow's deline in december this morning baird downgrades to neutral. the concern growing in part because of the recent exodus of top executives and questions about the company's ability to execute. the "journal" also reporting that tensions had been growing between marc benioff and brett taylor for months before it was announced that taylor was stepping down. this morning, salesforce looking to shift investor perception the salesforce world tour kicking off in new york city as we speak frank holland has been in the room as marc benioff delivers his keynote. he has some highlights for us. what is he saying? >> yeah. marc benioff speaking right now. upbeat tone and very much sticking to the talking points about salesforce successes and the future growth of the company. i had a chance to speak with him briefly, shake his hand.
he gave me a wink. he was very much the rock star of wall street walking around the room with thousands of people in that room definitely making a point to make eye contact with different people and be personable the elephant in the room is the high-profile departures of not only brett taylor but the ceos of slack and tableau marc benioff did not reference those departures he talked about the unified community of salesforce. anybody who knows the company knows we're at the campground of the company and the company tries to have a communal situation when they meet he was talking not only about the successes of salesforce but the growth of it, the organic growth and the inorganic growth. definitely referencing some acquisitions they made over the years, including quip back in 2016 and the addition of tableau. something he was proud of. talking about just the success
it's hard not to talk about the stock and the reaction to some of these departures. the delines in-- the declines of stock. something we're hoping to hear from marc benioff is the future of salesforce when it comes to their targets. on the earnings call on november 30th, he mentioned the hesitancy of many deals failing to close because of the possible economic downturn and he talked about a big shift in salesforce's business we have not heard anything about that yet when it comes to that slowdown he mentioned, there's some other things coming up that are running contrary to that sienna's stock performance, just yesterday, their earnings signaling a bullish demand going forward. and also the performance of cisco and juniper networks, two devicemakers signaling there's still strong i.t. spending, but perhaps not in the cloud
marc benioff speaking to a few thousand people upstairs something we will continue to monitor. >> i think wall street is trying to figure out is this a macro backdrop slowing problem or a salesforce-specific problem. that's on display now with all of these executive departures. there was a "wall street journal" piece yesterday talking about sort of the tensions growing between benioff and taylor before taylor's departure. there was a paragraph that suggested perhaps that benioff was maybe having a difficult time sharing the spotlight, had a few examples at davos where brett taylor was asked a lot about twitter. you know, benioff is used to having the sole seat at the big table with government officials and other ceos of course keith block before this was co-ceo. he left. do you think this is a problem with benioff sharing the spotlight? >> you know what i can say for sure today he enjoyed being in the spotlight >> he always do. >> he is a rockstar in the corporate world. he's like a planet with his own
gravity. people gravitate towards him he goes out of his way to have a personal touch with people shortly before i came down here, his high school friend, who he hired to work for the company, he was making a presentation so he definitely enjoys the spotlight. i was at dreamforce where the two of them seemed aligned you didn't see signs of tension when they were speaking at dreamforce, the giant annual event which has a theme similar to the one here behind me. i had also a brief moment to speak with brett taylor then i pulled him to the side, i would love to get to talk to you as well. he seemed excited about salesforce's business and the future interaction with the community. no signs of that tension that the "wall street journal" references when i saw them in person certainly marc benioff enjoys the spotlight. >> well said, frank. pretty fascinating development
we'll talk more about it it's not just salesforce under pressure, tech is on pace for the worst week this month, though seeing a sharp rebound today. our next guest points out the short-term answer for gains could lie with small caps and european tech with less out performance of the past few years. they have less ground to make up to return to former levels joining us this morning is paul hickey great to have you back before we get to the small caps, let's talk about the fact that we have a bunch of inflation indicators on deck starting tomorrow i wonder if those do come in cool what is the potential upside for tech? >> yeah. i think you have to look at tech in two timeframes. short-term i think there's a number of positive catalysts that could be working in their favor. there is not a day that goes by nowadays where there is not an inflation indicator showing easing inflation pressures we're coming into the ppi tomorrow cpi next week. and then the fed on wednesday.
just looking at cpi over the last -- the november report, which was released in december, that's come in weaker than expected more than any other month going back to 1998 you have a seasonal bias in favor of a weaker cpi, plus the fact we were just talking about all signs -- pricing pressures are easing so, that sets up the scenario where the fed can talk a little bit more dovish next week or not be as hawkic and spook markets i think that could be a positive short-term setup that coupled with the fact that sentiment has gotten weak for the sector you have it reaching short-term oversold levels on a breadth basis. as you were talking on in the intro, the nasdaq is off to its worst first week of december going all the way back to 1975 the only two years that were worse were 1974 and 1975
so that's pretty bad two consolations those two years, those two decembers, the nasdaq finished up the remainder of the month after that negative down week. and what people forget about december overall and the nasdaq specifically is that it's a back-end loaded month. the first half of december, the nasdaq has typically seen negative results the second half of the month, it's been up a median of 2% with gains three quarters of the time i think in the short-term, while there's looming issues, in the short-term, you have some positive aspects before i forget, rates and the dollar they traded close to tech, in the last few days, both the dollar weak and rates falling. that should be a positive for tech >> for sure. we talk about small caps and european tech, is the -- is mega
cap tech really having chains around the ankles at this point? >> you look at large cap tech, right now it's a valuation relative to the market it's come in by about 25%. the bad news is that it's still valued at about a 28% premium to the s&p 500. over the last ten years, that premium has been 11% on average. over the last five years, the premium has been 20% so there's still -- even though valuations have come in and come in at a faster pace than the broader market, they still have not gotten back to that historical average if we are going to see this recessionary environment come through next year, as traffic was talking about, marc benioff's comments, there's macro headwinds, if that comes through that will add further pressure to the tech sector in general. we saw the biggest runs over the
last -- >> paul -- >> they have not come inasmuch as european tech has, and small cap tech -- >> speaking of small caps, might we be seeing a bit of a floor, even if it's a little false floor, forming under some of these names? i'm looking at c3 ai getting a nice bounce this morning that it has not tended to get after earnings hashicorp similarly. neutanics has been running higher not only on results better than fear given the macro environment but maybe rumors of acquisitions by companies and perhaps even private equity kind of circling and looking at value here. is that significant? >> there could be some of that what i'm talking about in small
cap tech, valuations are attractive some of those names you mentioned are priced on sales still rather than actual earnings looking at the s&p 600, there's 60% of the stocks in that sector trade at under 20 times earnings the large cap s&p 500, it's just 45%. so there's more valuation there and they never saw nearly the run that some of the large cap did. some of these names like c3 ai, which you just mentioned, that did see a strong run during the covid days that is a little bit different when we're looking at small cap versus -- small caps with steady earnings and, you know, established businesses and are not trading on future earnings >> it's going to be fun to watch price action and sentiment going into the last few weeks. great stuff as always. talk soon. >> thanks. let's get to google, amazon,
microsoft and oracle winning a contract with the government worth $9 billion this is part of the pentagon's joint war fighting cloud capability this relies on multiple cloud providers rather than one. the successor to the jedi contract that was awarded to microsoft back in 2019 amazon had contested microsoft's win, causing the pentagon to change its approach, creating the foundation for this current contract oracle pushed back here also i would say maybe that oracle is really the big winner in this. a year ago, they thought they wouldn't be able to be a part of this contract. generated 900 million in cloud infrastructure revenue in the third quarter, versus 20.5 billion for aws. a big win to get this government contract >> i'm not sure there is a big winner there was no one big winner. the conversation has shifted
since this was called jedi i guess the jedi temple has been destroyed. it's no longer about who is the one big winner going to be, there's more talk about hybrid and multi cloud, which we continue to talk about on "techcheck," particularly in this growth slowdown, perhaps recessionary environment we'll see what happens now it's about both/and, not any single big winner. as goes the jedi, so goes the market apparently. >> as wedbush said this morning, the jedi deal circus show is over coming up, the ceos of c3 ai and hashicorp and disney plus raising prices "techcheck" is just getting started.
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welcome back got an upgrade of at&t with a 24 far get. julia boorstin has more on the call >> shares of at&t jumped at the open and then losing those gains. now that stock is down fractionally at&t was upgraded from hold to buy. raising the target to $24 per share. argus noting management's strategic realignment away from entertainment assets has been validated. saying the spinoff of warnermedia to discovery, a moved past its long, sad foray into the media business. at&t's wireless business has been a star in 2022 adding a substantial number of subscribers. shares of at&t are up 4%, t-mobile is up 26% verizon is down almost 30% jon, over to you
>> thanks. let's turn to c3 ai, that stock is up almost 6% so far this morning on stronger than expected results joining us now to break down the quarter is c3 ai's ceo, tom seibel i want to get to consumption you said on the call that the move to consumption is complete and that it's increasing your engagements by an order of magnitude. is it literally that how do you expect the -- your projections on how business is going to grow to smooth out over the next few quarters under consumption? >> we did -- good morning. we did change our pricing model from subscription-based model to
consumption-based model. that was well-received by the market i expect in a few quarters we'll be doing business with an order of magnitude, more engagements than any given quarter than in the past business looks good. we pretty much exceeded our numbers across the board it was well-received by the market and our business looks promising. >> is consumption the new thing, in the sense that a decade plus ago when cloud and sass was first becoming a thing, particularly when it came to storage, there was a lot of this get the individual worker on board within the enterprise, land and then expand is consumption a way of showing various enterprises that they need this technology and getting value out of it and then eventually they'll want to move back to subscription once they know how much they need to spend and are looking to be able to make that more predictable
>> i think you're raising a very important point. first, consumption-based pricing is the standard in cloud computing, whether we look at google, aws, azure, snowflake. this is the standard, now we're in line with the standard. i think where you get to large engagements like c3 has with shell, united states air force, and this also happens at azure, aws, snowflake, organizations will want to engage large enterprise subscription agreements those will still exist, but there's no question that consumption-based pricing has become the standard and it's been well-received by our market >> it's appreciated by enterprises trying to cut down on spending and only want to pay for what they use.
your average contract value went from 19 million to just under 1 million. that's what that model has done to your business i also wonder, private equity and other corporates, they like the subscription model, they're looking for consolidation. in a way this makes you less attractive there does that matter to you? your market cap is at $1.2 billion. i guess do you care that that might make you a less attractive target >> you know, we're not in business to make ourselves a target for private equity firms. we're in business to add value and bring value to shareholders. we have a plan to accomplish that >> what if that is the best shareholder value? >> if at some point in time that opportunity has presented to the company, the board will consider it in light of what's in the best interest of the shareholders hard stop. >> tom, it's an interesting point. your point is that we could
slash expenses right now and get a stock pop out of it, but it wouldn't be the long-term interest for shareholders. where is the line between effective cost management and doing it for show? >> we're in the software business, we have one expense, it's human capital i could make this company cash positive, profitable in 90 days. all i have to do is lay off a bunch of people. that's not in the best interest of our company, of our employees or shareholders, because we're trading off short-term profitability for long-term growth i mean, we have $860 million cash in the bank there's no way we'd run out of cash we have a clear path to be running a cash-positive profitable business by the end of next year you know, we're off to the races. for us to, like, slash expenses to meet the requirements of some
shareholder or some analyst, honestly i think that would be irresponsible. >> tom, let's get to the technology itself and how customers are using it now increasingly under this consumption model in this shifting economic period where are they finding the most value? what are they -- what sorts of use cases are they targeting to figure out what to do next, what will happen next, as they sort of sift through their data and the data relevant to their business >> the largest commercial applications of industrial applications of enterprise ai are supply chain, supply network risk, that's big, with all these supply interruptions demand forecasting, predictive maintenance for manufacturing equipment, predictive maintenance for aircraft, precision health, fraud detection, customer churn. we see this across the industries oil and gas, utilities,
aerospace, defense, intelligence, health, telecommunications, financial services >> tom, finally, this may be outside of your scope, as a ceo in the enterprise ai space, i wonder if you have been playing around with chat gpt from open ai, it's had this viral moment over the last few weeks. do you think there are enterprise applications that it could be disruptive in your space? >> yeah, i have been playing around with it i find it's an interesting piece of technology. you know, i'm not really certain how it applies -- i have not found the intersection with that and what we do i did get online, i have used it i agree, it's pretty darn interesting. one of these days it might pass the test >> scary times ahead just showed my kids terminator for the first time tom siebel, thank you. as we head to break,
crowdstrike, palo alto, head over to cnbc.com/pro to read more we're back in two. at adp, we understand business today looks nothing like it did yesterday. while it's more unpredictable, its possibilities are endless. from paying your people from anywhere to supporting your talent everywhere, we use data driven insights to design hr solutions and services to help businesses of all size work smarter today. so, they can have more success tomorrow. ♪ one thing leads to another ♪
protecting same-sex marriage the bipartisan bill also protects interracial marriages president biden has said he will proudly and quickly sign the legislation into law chevron says it will substantially increase capital spending next year, that includes large increases in funds for low-carbon fuel projects capital spending remains well below levels over much of the last decade. exxon also increasing capital spending to the top end of previous guidance saying this will expand stock buybacks to as much as $50 billion through 2024 gasoline prices are now below where they were a year ago. aaa says the national average for unleaded is $3 a gallon. that is down -- or $3.33 down a penny over the last 12 months an analyst tells cnbc gas prices could drop below 3 bucks for most americans by the end of the year back over to you >> thank you very much let's turn to tesla's tough
week the stock is down 12% since just monday as they face headwinds in china and continued questions over impact from musk's twitter takeover his bankers are new considering new margin loans backed by tesla stock to cut into the $13 billion of debt twitter took own from the deal. joining us is tim higgins. tim, for all of the hand wringing over twitter and the distraction it may be providing to musk, can you argue that tesla fundamentals have been affected yet >> the fundamentals of tesla have been affected by the overall market >> right >> the concern with investors, however, is that elon is becoming distracted with twitter. that's a concern, especially as we go into a possible recession, right? you would want your ceo to be fully engaged as the market conditions deteriorate that's ultimately been one of the big worries about elon as
he's pursued these different things over the years. it's considered one of the big risks. >> at the same time he says he can go from 80 hours and 120 hours and he can handle this how do potential margin loans as bloomberg reported maybe change that equation? does that cause more worries for investors, maybe lead to more of a direct impact? >> this spring, when the original financing deal included those margin loans, there was a lot of concerns among some investors in tesla that there would be an overhang this would introduce risk from twitter into tesla, that's because essentially elon has long been a cash-poor billionaire. all of his wealth has been tied up in spacex and tesla it was only recently that he's been unlocking that cash to buy twitter. if the margin loans are called, he really only has a few ways to handle that. that's either sell the shares and cover the loans or put up more shares.
so, ultimately, the concern is that there could be some kind of death spiral, that ultimately a lot of shares would go no the market and hurt the overall shares of tesla's value. >> tim, one thing people are watching is if this capital structure truly gets revamped, what is the pain threshold for a revenue decline, right can they -- if they lose a billion in revenue, if it goes down into the 3s, have you looked at that and thought about where maximum pain -- where we begin to talk about existential risks to the platform? >> for twitter yeah that's the issue, right? you have these debt payments that are more than a billion dollars. at the same time you're seeing ad revenue be pulled back as advertisers are worried about the future, about the erratic or chaos at the company in some ways, it's classic elon that they would be considering using these margin loans to reduce the risk at twitter
elon has a history of focusing on the fire or the emergency in front of him and leaving those other issues of his empire to deal with at another time. right now, the biggest problem he what is twitter and he is using potentially the resources of his kind of financial kingdom to try to address that we've seen that before it has put pressure on the other parts of his kingdom in the past i think of 2016 when solarcity, the company that he was the largest investor and chairman was in trouble, he had a lot of margin loans there as well it was seen as some as a bailout when tesla bought that company to get out of trouble. >> yeah. but, simplify this for me, right? that was also in a different kind of bull market scenario what happens, one, if tesla's stock price drops when there are these margin loans in place. two, does this end up being a three-legged race with tesla and
twitter running together if he's not able to turn around twitter quickly, is there a concern he'll need more loans, more leverage out of tesla? does that start to hurt tesla? >> that is a concern shareholders in general have been willing to, if not hold their nose, support his margin loans over the years in large part because tesla has been a rocket ship up. the shares have continued to go up and up. but in the last year we've seen these shares fall, increasing frustration among tesla shareholders about his antics. they want him to focus what's going on you're getting to this point in a rough financial market, if these companies are essentially seen as being tied together, there could be a twitter overhang on tesla shares the drama that's occurring in san francisco at twitter hq, then that is viewed through the tesla stock. that's the worry >> that's a good point tim, finally, how do you think
markets and investors would react if elon musk gave up that ceo role at tesla altogether >> this is an interesting question debated for years a lot of people think there's a premium, an elon premium baked into that stock. when there were concerns that he would lose and be kicked out of the company in 2018, among the go-private issue, you saw the stock go down because of this idea that elon is the vision, he's selling the hope that's baked into the stock for the future of the car and for the future of mobility a lot of people are betting on elon musk through tesla. >> tim higgins, always great to get your insights. thank you. coming up after the break, disney plus raising prices and then the park in shanghai reopens. we'll talk about some of the implications for disney when "techcheck" comes back ah, these bills are crazy. she has no idea she's sitting on a
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disney plus launching a new tier this morning while a price hike also goes into effect julia boorstin has that for us >> well, jon, in an effort to draw and retain subscribers and boost profitability, disney plus has a new ad-supported service launching at the same cost as its ad-free used to cost before that got a $3 price hike disney saying it secured more than 100 advertisers for the new service and ads will show up in
the form of pre-roll and mid-roll spots the new ad-supported app is available everywhere except for roku the two companies have not yet worked out revenue sharing terms. disney's new ad-supported option is a dollar more than netflix's version. among these streaming services, the only one that disney costs less than is hbo max 1 in 4 disney plus subscribers could trade down to the cheaper ad-supported plan, a plan that bob chapek told me in august would be accretive this comes a month after netflix's rival service, and netflix shares are up 14% since it launched its ad tier november 3rd. disney shares have fallen 9% in that timeframe netflix could generate $1.2 billion in ad revenue, disney plus, $1.8 billion in ad revenue. both of these numbers by 2025.
just limited to the opportunity here in the u.s. now, the good news for streamers is that despite an overall ad slowdown, display video ad spend, that is expected to grow at a compound annual growth rate of 8.8% in the u.s. between 2022 and 2027 that's half a percentage point higher than the average for overall digital advertising. that's all according to forrester. and disney and next are driving a growing trend. deloitte projects by the end of 2023, two-thirds of all consumers in developed countries will use at least one ad-supported streaming service that's up 5% from 2022 the question is whether we'll see netflix and disney offer free ad-supported tiers. earlier this week, netflix's co-ceo said netflix will have multiple ad-supported tiers over time and we are watching the potential in these free ad-supported options
in the media world, they call them fast channels >> i want to go back to that roku point, the fact that this new tier version is not launching on roku. give me your analyst take, your analysis here. is this good for roku because it's going to appimprove roku's reach? or is it bad that it might challenge roku's relevance >> it's better for roku if they can have all the options, every single streaming service, including ad-supported ones. remember, roku has been struggling and has its own free ad-supported channel i suspect these two platforms will work it out because i think it's beneficial for roku to have everything on there and not have consumers say i want to trade down this cheaper option why can't i do it on roku. >> i wonder if it's better for
roku that it doesn't launch on roku, so they can say here's how they did before. here's how they're doing with us >> i feel like disney plus is ubiquitous on all of these platforms. it will be interesting to see what kind of power roku has there. remember, roku has been struggling in this environment >> thank you very much for the breakdown. up next, indiana sues tiktok and multiple states n e p.bathap that's coming up don't go away.
welcome back the u.s. government security concerns over tiktok, they continue to grow multiple states banning the app on government devices this week. kayla tausche is in washington with all the latest. kayla? >> states are taking their own actions as the federal review into tiktok's big business drags on with no deadline in sight indiana launching two lawsuits against the company focused on the treatment of its data and the targeting of children with certain content. the state's attorney general calling the app a clear and present danger five republican-led states are banning the app on state networks and devices nebraska was first to do this in 2020, but now south dakota, south carolina, texas and maryland all joining in just this week. the maryland governor larry hogan told cnbc this morning his actions followed information he received from federal officials. >> all of the federal agencies have been talking with all of the states about the threats,
yet the federal government has been refusing to take actions at all. we felt that in order to protect our systems, we needed to take these actions. >> tiktok's u.s. business has been under a regulatory microscope for three years the council on foreign investment into the u.s. first opened its investigation in november 2019. the following year, oracle and walmart struck a deal for a stake in the app and a plan to store data the biden administration inherited the cfius review in 2021 a year after that, a deal appeared close tiktok said the plan to relocate data of american customers dubbed project texas was expensive and challenging. new reports this week suggested government action that would determine tiktok's operating status into the u.s. could stretch into the new year. a spokesperson says they believe they're on a path to rectify national security concerns the white house and treasury declining to comment on the status of the investigation and whether there's any urgency to
resolve it back to you. >> all right remarkable we'll be talking about that for a while. kayla tausche. coming up, the ceo of hashicorp is with us stock is up about 8% after results. don't go anywhere. r my small business. (vo) verizon has business internet solutions nationwide. (man) for our not-so-small business too. (vo) get internet that keeps your business ready for anything. from verizon. what should the future deliver? (music) progress... (music) ...innovation... (music) ...discovery? or simply stability... ...security... ...protection? you shouldn't have to choose. (music) gold. your strategic advantage. (music) visit goldhub.com. thanks to avalara, we can calculate sales tax automatically.
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as you can see, the nasdaq is up more than 1% you know it's up more than 1%. another earnings mover, hashicorp. those shares are up about 8% after delivering a beat across the board for q3 guidance for the current quarter coming in above for the currente coming in above consensus, so is there any read through on overall cloud demand or is this just an outperformer dave, good to see you. so steady growth here, 52% year over year, backlog growing in the form of remaining performance obligations at $553 million. what are customers doing differently if anything in this belt tightening environment? i mean they're still transitioning to the cloud you're helping them do that in a secure multicloud way. still lots of demand for that? >> good morning, folks i think it's more of the same what we've been doing for quite
some time. what's clear to us if there is an infrastructure modernization cycle under way in the world of infrastructure people fog from predominantly private data centers to cloud you're seeing them really all around the world going through that cycle and i think that's really what you're seeing flow through in certainly our results and others in that category and that is really a trend i think you were at the event last week and it was remarkable to see just the scale of large companies that were there, you know, getting experience about the cloud transition i think that's reflesctive in al our results. >> these longer sale cycles is that the enterprise holding their stomach for a moment as the momentum in the economy shifts or is that a new normal is it something your sales teams figure out how to solve for because customers want a different type of flexibility?
or has the overall demand picture shift snd. >> i think i'd go back to the core dynamic of the infrastructure modernization cycle is clearly happening i think what's clear is how that flows through the procurement process in big companies i think that's what you're seeing across the globe is more uncertainty as those companies -- we all sell to large, large enterprises as they look at their own businesses and perhaps more measured on own spend appetite in the near-term i think that's what you're seeing happening, people applying a bit more scrutiny to their process. that just means the sale cycle is somewhat lengthened for everybody as that happens, and that's different from what you saw a year ago when people were being a little more comfortable and confident in their own businesses to some degree that's just the normal -- that's the way cycles work the long-term technology cycles are very, very profoundly true irrespective of what's happening in the finance departments of our customers. you know i was traveling around
europe and asia and north america over the last month and it's incredibly, incredibly consist. that long-term trend is there. the procurement departments are what we have to deal with. >> that's interesting, david i wonder as you make your rounds at this point what is the bigger motivator? price or some of the new features and products that you mention in your release? >> no, i think it's more the acnomthat if my current data centers where all the things run, i know how to run that infrastructure what's very clear to them all is, hey, now more of my applications are running on amazon or an azure or google and they're really just trying to conceptually understand what that modern stack is going to look like. it's not a near-term thing, not a feature here or there but a philosophical bet from those customers what that new stack is going to be. i think now we're 7, 8 years into this cycle the realization
the multi-cloud is the reality i think that's become clear to most people. i think it's much more that, setting themselves up for the next 30 years of their infrastructure versus any one particular thing and that's what lends sort of the longer cycles to be what they are, because these are deeply considered decisions. this is very valuable real estate for all of us, and i think that's really what's happening. it's more philosophical than it is feature >> i've got to address an elephant in the room there's a rumor out there a certain large networking player sis ko is very attracted to hashicorp. i don't know if you want to say anything about that. it doesn't hurt to be popular, but what's the partnership with long established technology companies from a marketing and sales prospective? does scale help you? >> i also don't comment on rumors and speculation we're partners with many large
companies. you'll see them talk about our products pretty much every time. if you go to even vmware these are deep, deep partners. our products drop into an environment with other things already there, and so for example people use one of our products terraform that's just the role we play and inevitably puts us in the path of heteroganaity. we won north american security partner of the year for amazon, which represents how firmly we're entrenched from the most modern of applications, but that's typically an application
one more thing before we go, fintech companies get a haircut. plaid slashing 20% of its staff, about 260 employees. this follows chime and stripe layoffs last month plaid $13 billion, chime $25 but stripe cut its internal valuation by 28% this past july something i know you've been keeping track of >> and i would say there's a huge difference between value in your company at a loss fund raise versus cutting your internal valuation, probably a lot more realistic, john, given the macro backdrop but really
important as venture capital firms have to get their valuations in line >> it's important to note here plaid is a leader, carl, in what it does, and its business continues to be attractive, but it still has to make this kind of cut >> busy night tonight, guys. let's get to the judge carl, thank you very much. welcome, everybody, to the half time report. i'm scott wapner front and center this hour reversing the wreckage in techch the nasdaq is still sitting 30% off its record high. we debate what might change that slide with the investment committee. let's check the markets. we always do a little bit of bounce today in the nasdaq, too. nasdaq is up 1%. still feel like we're waiting for next week. that's where the action is josh, what breaks the slide in tech because