Microsoft and Meta Blowouts Fuel Tech Rally 05/01/25

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David Faber (0:47)

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

Carl Quintanilla (0:58)

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. Big Tech coming to the Bulls Rescue as Meta and Microsoft earnings offset this continued cloudy outlook on trade talks. Challenger layoffs jump another 63% for April. Jobless claims two month high. Our roadmap begins with this tech-fueled rally. As we said, Meta, Microsoft helping to ease concerns that AI spending will slow amid this economic turmoil.

David Faber (1:24)

Plus, Tesla's board is denying a report that it was at least beginning the process of replacing Elon Musk. This coming is the Tesla CEO steps back from Washington and his doge responsibility. The president saying, quote, he wants to get back home to his cars. And the trade head wins for business. McDonald saying consumers are grappling with uncertainty while GM expects up to as much as a $5 billion hit from tariffs.

Carl Quintanilla (1:51)

Let's begin though with this morning's big market catalyst. That is Microsoft and Meta posting blowout results. Jim, this could be the best earnings reaction on Microsoft in about three years.

Jim Cramer (2:01)

Well, Microsoft had guided three times bad. So suddenly you get on this call and not only do they just crush it, they guide higher and there's glee on the call. It's glee. Amy Hood is happy. Sacha Nadella is happy. They correct people if anyone is less happy. It was just David, a happy call.

David Faber (2:21)

It was a happy call. You're right and I think it's an important point. You raise it right away. Three times in a row, not happy.

Jim Cramer (2:28)

No.

David Faber (2:28)

Not happy and a lot of questions in terms of what was happening here and at least weakness, not this time. No. Obviously, unexpected in terms of Azure growth. Not just AI, but frankly, it seems as though more even away from AI.

Jim Cramer (2:45)

Oh my God. Remember Halle Amy Hood at one point. She said, listen, that was non-AI that was looking good. She corrected a wayward analyst who just didn't get the memo. Look, Meta was such a tour de force that I found myself thinking, if I could start a business, I'd like to send a check to Zuckerberg and he would target the people I need to find. I mean, this was a call we actually just did basically, Procter and Gamble, what are you doing? Yeah. McDonald, stop. I mean, he was saying that advertisers, if you put money in a linear TV, you're just trying to reach the septuagenarian crowd or the octogenarian crowd. Come join us. It was just, it was so good. It's still, they're losing more than 4 billion reality labs, but that's just some sort of what? Is that Area 51 or something? What have I got there?

Carl Quintanilla (3:32)

Meantime, yeah. Advertising revenue up 16, average price paid on ads up 10, Jim. And no real, anything in the Q2 revenue guidance that suggests that would soften.

Jim Cramer (3:42)

No, and both Microsoft and Meta have one single problem, that the liars who come on air all the time, maybe they don't realize they're lying, maybe they're just brainwashed. These guys all need more data center. I mean, that was the theme. I thought the theme was that there was too much NVIDIA and there's too much data center. David, there was a narrative that started ever since the...

David Faber (4:03)

Ever since DeepSeek, really.

Jim Cramer (4:04)

DeepSeek, ever since the DeepSeek Sputnik.

David Faber (4:06)

Yep.

Jim Cramer (4:06)

And now you have Jensen Wong explaining to President Trump how you have to be able to have more countries, and we don't know whether he's going to win people over.