11AM Hour: The Case for a Rate Hike, CEOs of Mondelēz and Teva on Earnings 7/29/26

**Sara Eisen** (0:00)
The board recommends approving...

**Sam Altman** (0:01)
Regarding that seat on the committee, we're promoting...

**Richard Francis** (0:02)
to most quarterly earnings...

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**Carl Quintanilla** (1:00)
Good Wednesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Sara Eisen, who's back at post night at the New York Stock Exchange. Today, the tech trade weighs on stocks. Yet again, chip stocks already shedding more than a trillion in market value since Friday alone. We'll discuss what Meta and Microsoft need to show us tonight that might ease some investors' AI jitters.

**Sara Eisen** (1:20)
Plus higher pricing and steady demand, fueling a beat and raise for Oreo maker, Mondelez, chair and CEO. Dirk Van de Put joins us exclusively to break down the quarter and his outlook.

**Carl Quintanilla** (1:30)
And the CEO of Teva is with us. Stocks up more than 100% in the last year. Rallying again today after revenue guidance exceeds expectations. For the time being, tough setup going into the Fed this afternoon. Dow's down more than 1.5%, S&P lowest in about five weeks. Only sectors that are green are energy health care staples, VIX near 20 and Brent close to session highs above 91 And let's begin with two big tech names set to report earnings after the bell. Kate Rooney's got Microsoft, Julia Borsten's got Metta. Morning Kate.

**Kate Rooney** (2:00)
Hey Carl, good morning. We'll start with Microsoft. It's gonna be a big test for whether Wall Street is still willing to fund this AI build out. Investors are gonna be watching three main things. You have Azure growth, AI revenue and then CapEx, capital expenditures. That forecast for spending in particular, the Azure cloud business for Microsoft does really remain the best barometer of enterprise demand out there. Many analysts want to see that AI is actually helping to accelerate cloud growth, not just shifting some of those existing workloads. Capacity constraints, another big thing to watch on the demand side, also known as a backlog. Microsoft has acknowledged that AI demand was at least at one point exceeding capacity. Investors do want to know if data centers are coming online fast enough. And there has been a lot of fatigue, guys, around some of the AI spending, especially after Google raised its CapEx outlook. Last week, investors are growing more sensitive to just how much these tech giants are spending in the AI race. Microsoft has already guided to about $190 billion in investment this fiscal year. Cowan and Evercore, among those out there, saying that any further increase could pressure the stock today. Investors do also want to see how AI is really showing up in the numbers for the quarter and then answer the outline, outgoing question.
What about returns? They want to see real returns. If that could actually show up in products like Copilot, like 365, those are becoming meaningful revenue drivers. And finally, any sort of commentary from the CEO, Satya Nadella, on the call. Microsoft has been diversifying away from OpenAI, one of its biggest partners. Nadella has waded into this open source debate too, and he has shifted his message in recent months. He's focused a lot more on delivering AI at a lower cost. Microsoft shares for the year down about 15%, guys. Back to you.

**Sara Eisen** (3:43)
Yeah, I mean, you do have to wonder, like, whether the, how the market's feeling about Microsoft. Is it an AI stock, or is it a software stock? And that relates, because, I mean, they had a good quarter and a really poor sell-off after earnings in the last few quarters, right?

**Kate Rooney** (3:58)
It seems like the narrative has been dominated around AI. Even if the quarter looks good and some of the enterprise products look good, there has to be some sort of return on that investment. And I think Microsoft has enough avenues within the company, within that entire corporate umbrella. It's sprawling to show some evidence that that is actually paying off, whether it's CoPilot and some of these Chatbots or the Office Suite. They really do have a grip on enterprise if they're able to turn that story into, yes, the spending is paying off. I think that's where it comes full circle. It's not just spending. It's, hey, are we starting to even see breadcrumbs of this paying off? And that's the challenge for all of these executives is to sort of show the trust me story the demand is there and explain that to investors. And if they're able to tow that line, it may be starting to pay off. But we'll see if they're able to kind of shape the narrative.