Earnings Deluge: Lilly Tumbles, Alphabet Surges, AMD CEO Exclusive 10/30/24

Carl Quintanilla (0:00)

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 Wednesday 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. Futures are split this morning as Q3 GDP and ADP employment, both come in strong, actually now red. It's Caterpillar's miss that's gonna weigh on the Dow. We'll get to Lilly, Reddit, Google, AMD, and more on the way tonight. Our roadmap begins with this disappointing weight loss drug sale weighing at Lilly. Shares are getting crushed ahead of the open.

David Faber (0:40)

Plus Caterpillar cutting its annual sales forecast on slowing demand and Google Parent Alphabet, it sees double-digit growth as AI bets boost that cloud business in a big way. And speaking of the AI boom, AMD's Lisa Su, she's gonna be joining us exclusively. That's just a few minutes from now.

Carl Quintanilla (0:59)

Let's start with Lilly. Now, sharply in the pre-market, the company does post a quarterly miss, lowers the high end of the full year guidance, sales of the popular diabetes and obesity drugs, which of course have powered the company into the top 10 list of US mega cap coming in below consensus. Jim, we had Rick's on Squawk in the last hour.

Jim Cramer (1:17)

Yeah, look, I'm a big fan of Lilly. I own it so a lot. At 960 on this thing, thank heavens, that's just better be lucky than be good, frankly, it was just discipline. But here's what I'm thinking. The explanations were not sufficient, but not in a negative way, because the actual estimate cut is not very big. You're talking about a half billion, I know that's a lot. It sounds like a lot of money, but the stock is going to be down gigantically. David, here's what happened, I think. They could not meet the demand, so they didn't want to stoke demand, because then they'd run up against the FDA shortage rule, would then let the hims and hers in there to take a lot of share. They are building, unless you think David Ricks just fell off a turnip truck, okay? Let's remember that they are building 1.8 billion manufacturing in Ireland, 4.5 billion in the Lilly Medicine Foundry. They are opening just plants all over the world. Now, maybe they mistook demand, or maybe they didn't get the correct amount into the system, and that you could not get Lilly, so they drove you to Wachovic. Regardless, what he said today was not sufficient to make a decision on whether you should buy it or not. Why? Why? Because he said in one breath, he said, listen, we couldn't meet the demand. In the other breath, he said we have a lot of supply. Now, I've never seen a company have too much demand, have too much supply, and yet somehow that's okay.

It's a high multiple, high momentum stock that is not allowed to miss in this environment.

David Faber (2:56)

Right. It's hard to imagine that there isn't demand for their product. There is without a doubt, demand for their product.

Jim Cramer (3:03)

But you know what?

David Faber (3:03)

It's not as though this is somehow suddenly falling off.

Jim Cramer (3:06)

No.

David Faber (3:07)

In fact, there's this long report, I think it's from City Today on JLP one.

Jim Cramer (3:10)

Yeah, Jim Budweiser is very positive.

David Faber (3:11)

And it's very positive about their long-term implications.

Jim Cramer (3:14)

It's like war and peace though. And it came out on the wrong deck.

David Faber (3:16)

Yeah, just ChatGPT. That's what I did. Give me a quick summary.

Jim Cramer (3:20)

Look at Hotshot with the ChatGPT.

David Faber (3:22)

Paying 20 bucks a month for this thing, it might as well do something for me.

Jim Cramer (3:25)

I'm going to give you a really, the most critical read you're going to get. There is a person who is the CFO of a company called Alphabet, who left a company called Lilly. And at Alphabet, and not Ashkenazi gave you one of the best narratives ever, Ruth Poratasari, I don't mean to disliked you, I think you're the greatest. But this was one of the tour de force conference calls at Alphabet.

David Faber (3:51)

So you're already making the turn here from Lilly to Alphabet? That's it, we're done with Lilly?

Jim Cramer (3:54)

No, because at night Ashkenazi was the CFO of Lilly.

David Faber (3:57)

All right.

Jim Cramer (3:57)

And she knows how to tell a story.

Sara Eisen (4:00)

She knew how to tell a story.