A Tale of Two Tech Earnings, UNH DOJ Investigation, Live: Commerce Secretary Lutnick 7/24/25

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David Faber (0:47)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (0:53)

Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. First real day where we get some patchiness in corporate earnings as American, IBM, Chipotle disappoint. Dow cuts the dividend in half. That said, jobless claims down six weeks in a row. That's the longest streak in three years. Tenure yields at about a one week high. Our roadmap begins with two of the Mag-7 names out with earnings Tesla and Alphabet going in opposite directions. We'll break down the numbers.

David Faber (1:20)

Plus United Health shares are also under pressure. The company reveals it's facing a Justice Department investigation over its Medicare billing practices. We're also going to speak to US. Commerce Secretary Howard Lutnick after of course a close of an agreement with Japan this week, EU deal in focus, and we're also getting some important news involving our nation's railroads. We're going to get to that in a moment, Carl.

Carl Quintanilla (1:42)

First up though, two major tech names to watch today. Tesla shares are down after missing on both the top and the bottom lines, a 16 percent decline in auto revenue. On the flip side, Alphabet shares rallying on their earnings beat. Company raising the capex forecast to 85 billion dollars. This is Sundar Pichai on the call last night.

Sundar Pichai (2:03)

CapEx stuff, obviously, we are seeing strong momentum across our portfolio and especially in Cloud.

You are right, it's a tight supply environment, and we are investing more to expand, but there is obviously a time delay between this additional investment will play out in future years. So that's why both of them are true at the same time. But we are planning ahead and we are investing. But overall, it's exciting to see the traction, particularly in Cloud.

Carl Quintanilla (2:45)

Jim, building on the stock which rallied for several days into the print.

Jim Cramer (2:49)

Yeah, the Cloud was important. I think the big focus is frankly, the pay clicks were picked up 4%.

I mean, I was thinking pay clips might be down. I was worried that I felt that this was the beginning of the erosion and the cannibalization versus Gemini. That was completely wrong. YouTube up 200 million, really, really fantastic. You know, Cloud accelerated to 4%, but look, the story here is that the more chips they get, the better they're doing. They have so much demand. I was quite surprised that's true.

David Faber (3:22)

Yeah, and I think you hit it, Jim, and it's what a lot of other people are focused on. And we will continue to wonder whether they will lose share at Google in terms of search. There's no doubt that you have to continue to look at that, given the vast changes that are taking place and the way people seek information. And they go to Chetch EPT., and they go to Grok, and they go to Proplexity. But 4% up in paid clicks was unexpected. And it's unabated, it seems, the need and their ability to actually monetize search in terms of from advertising. So record numbers there. YouTube is just a force.

Jim Cramer (4:01)

It's a great subscription model. And we don't think of it, we should. We're making a mistake. That's number one subscription model.

David Faber (4:08)

By the way, they don't even, the subscriptions from YouTube for YouTube TV, the paid service and all the other things associated with it, what you get from Alphabet on YouTube is ads as a revenue number. And you can take a look, just the ad revenue from YouTube, it's running at almost a $40 billion a year run rate. They come very close to, it's 9.8 billion this quarter. And you put that in perspective to a Netflix at 11 billion. Now obviously, that's subscriptions for Netflix, ads for YouTube, but I mention it because one had 16% growth, that's Netflix. The other 13% growth, that's YouTube. YouTube, as we've said many times, is where people spend the most time, the most time. And it's only going to, one would expect, grow, as you get user-generated content that becomes even more robust with all the AI tools out there, Carl. So it's amazing.