A Chip Sell-Off, Netflix’s Report, & President Xi’s AI Pitch 7/17/26

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**Joe Kernen** (0:58)
Bring in show music, please.

**Cameron Costa** (1:02)
This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode, chip stocks are under pressure. JPMorgan Asset Management global market strategist Hugh Gimber considers it a healthy correction, but he says relief won't come until we know more about big-text spending.

**Hugh Gimber** (1:22)
For me, I think what's key here is not so much what the Semi's names are telling you themselves, but rather what we're going to get from the hyperscalers over the next couple of weeks.

**Cameron Costa** (1:32)
And America's housing affordability problem, CNBC's Diana Olick.

**Diana Olick** (1:36)
How do you fix housing supply?

**Cameron Costa** (1:38)
Joining her is our own Steve Liesman.

**Joe Kernen** (1:41)
If you want to invest in housing, you should buy shares in futon because that's what people are using.

**Cameron Costa** (1:47)
President Xi Jinping is pitching China as a leading AI partner. Eunice Yoon reports from Shanghai.

**Eunice Yoon** (1:54)
He's been preaching a whole lot of openness in contrast, or at least to attempt to contrast the Chinese perspective versus the US closed model.

**Cameron Costa** (2:04)
Plus President Trump's speech stateside, LeBron's next move, and Netflix revenue has disappointed investors. And then there's its content.

**Becky Quick** (2:14)
There's a lot of good content in a lot of places.

**Joe Kernen** (2:16)
But just not Netflix.

**Cameron Costa** (2:18)
It's Friday, July 17th, and Squawk Pod begins right now.

**Joe Kernen** (2:23)
Stand Becky by in three, two, one. Cue, please.

**Becky Quick** (2:29)
Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the Nasdaq Market site in Times Square. I'm Becky Quick, along with Joe Kernen. Andrew is off today.

**Joe Kernen** (2:39)
The other day when IBM highlighted the potential problems with software, the chip stocks were actually up.

**Becky Quick** (2:45)
But now it's the chip stocks are under pressure around the globe.

**Joe Kernen** (2:48)
They're on such a tear that what goes up must come down. Or what do you do to shake out the weak hands? You do things like, assuming it's going to re-accelerate down the road, but things can't just go up, up, up, up without getting, without making people doubt whether they should hold them.

**Becky Quick** (3:07)
And that's the case in Korea this morning, too. South Korea, the COSPI is off by about 6% overnight. That's an index that has risen so incredibly, rapidly. SK Hynix driving the way. But I think the market itself has doubled over the course this year and then even some. So if you take a look, yeah, for the one year, it's up by 113%.
The 6% pullback is shocking in the averages until you consider just how high things have gotten, to your point.

**Joe Kernen** (3:35)
And if you were in there, you'd be like, wow.
Probably, the hardest thing would be maybe to buy the dip, because you just don't know if the whole thing is ready to unravel at this point. How big an air pocket. But that's the great thing about the market, and it just keeps you, always keeps you guessing. It's never easy. Happy birthday.

**Becky Quick** (3:58)
Thank you. It's not today.

**SPEAKER_10** (4:00)
It's not?

**Becky Quick** (4:00)
No.

**SPEAKER_10** (4:01)
Tomorrow? Yeah.

**Joe Kernen** (4:03)
We had to do it today though.

**Becky Quick** (4:05)
Yeah, because you won't be here to torture me tomorrow. No.

**Joe Kernen** (4:08)
But it's the less, all these songs that we were going to... John.

**Becky Quick** (4:12)
Never mind.

**Joe Kernen** (4:13)
Netflix shares are plunging earnings of 80 cents a share beat estimates by a penny.
That's not the problem though. Revenue was slightly below the third quarter guidance. Disappointed Wall Street. Netflix forecast revenue growth of 11.7 percent. That's the smallest year over year increase of any quarter since 2023 The stock right now is down almost 10 percent. I think the high, we're at 66, the high is above 130 It wasn't in the last 52 weeks, but there it is. You can see that's what it was. Over to the left, that's where it was 800 before the split, 800 down to 200