Earnings and the Consumer, China-U.S. Trade War, Southwest CEO "First on CNBC" 04/24/25

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And co-pilot keeps you two steps ahead, giving you the right insights at the right time. Get started today at hubspot.com/ai. Market Moving Insight and Analysis join Jim Cramer, David Faber and me, Carl Quintanilla on the opening bell hour of CNBC Squawk on the Street.

Good Thursday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber in post nine of the New York Stock Exchange. Pre-market is trying to hold steady, even as we get an array of underwhelming earnings from consumer facing companies. Pepsi, Chipotle, the Airlines, Procter, jobless claims in line at 222K, the 10-year right around 431 Roadmap begins with the impact of tariffs on the consumer, uncertainty and slowdown, the key comments from some of those companies.

David Faber (1:27)

Plus, there's continued trade talk confusion. Right now, China is saying it is not involved in any ongoing talks with the US. And over on the airline front, while Southwest cuts its flights this year and it pulls guidance, CEO Bob Jordan will be our guest later in the hour.

Carl Quintanilla (1:44)

Let's begin with the markets after two straight days of gains, Jim, but as we pointed out, Pepsi with a rare miss, Chipotle comps negative for the first time since the pandemic.

Jim Cramer (1:54)

If I was listening to what you were saying about that Teppit and Teppit is the operator of Terman, the only one that is just blow away was ServiceNow, Bill McDermott.

David Faber (2:06)

Oh, right, ServiceNow and Texas Instruments are the two outliers today, right?

Jim Cramer (2:09)

Yes, Texas Instruments, they're very...

Carl Quintanilla (2:11)

LRCX maybe, you throw in there?

Jim Cramer (2:13)

But then people lowered the price targets. I thought LAM was great. I mean, LAM is just chock full of really good numbers. Texan, you're absolutely right, but Texan is so non-promotional. It was like, look, we've had the customers don't have enough inventory, so things are better. But ServiceNow is worth talking about for a second because a lot of people felt they were going to miss because of Doge. I'm now thinking they made goods with Doge. I think people have just said, you know what, we bring in ServiceNow, we can really make this company, what, it yourself?

Carl Quintanilla (2:45)

No, it just reminds me of Palantir back above 100 yesterday.

Jim Cramer (2:48)

Yes. Okay, so these are companies that are now perceived as being secular winners. You bring them in, they figure out ways to save money and everybody likes them. What I didn't count on was the ServiceNow was also going to move into customer relations management, moving into the Salesforce term.

David Faber (3:05)

Right.

Jim Cramer (3:06)

So we have maybe a new claymation death match.

David Faber (3:09)

We may. ServiceNow shares obviously, again, and bucking sort of the overall trend this morning to some extent. Every so often, I do like to point this out, Jim, and we have a brief discussion about it, which is gap versus non-gap earnings. In the case of ServiceNow, they do have a lot of non-cash compensation. It amounts, I think, to as much as $2.27 earnings. Now, investors are focused on revenues, margins, free cash flow generation. But it's always worth mentioning, particularly in a period where people are starting to question valuation. Good point. Apple doesn't do this. NVIDIA barely does it. Salesforce, ServiceNow, huge non-cash comp.

Jim Cramer (3:46)

No, they do.

David Faber (3:47)

Non-gap versus gap is a giant difference.

Jim Cramer (3:50)

Right.

David Faber (3:51)

I just like to make that point.

Jim Cramer (3:52)

An accounting way to be able to legally overstate versus other guys. Overstatement obviously is, they'll hear that.

David Faber (3:58)

Instead of conceivably giving cash to your employees, you're giving them stock. By the way, as well, then they have buybacks. But really, all the buybacks are doing is offsetting what they're issuing.