Nelson Peltz Interview: Activist Investor Speaks Out on Disney Proxy Fight, Board Seat Rejection. 01/18/24

David Faber (0:00)

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

Carl Quintanilla (0:06)

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. Bulls looking for some relief, at least on S&P NASDAQ, and they'll get an assist today from a high profile Apple upgrade, an upbeat guide from Taiwan Semi. Yields do bounce though as Java's claims hit a 16 month low. A roadmap begins with three straight down days for the Dow. Apple though is trying to lift the group as BofA upgrades the stock, calls for more than 20% upside ahead. We'll talk about that.

David Faber (0:32)

Plus shares of Uman are getting crushed in the pre-market. This is after the company did slash its earnings outlook. It had higher than expected medical costs. It's also dragging down some of the other insurers as well.

And layoffs at Google. CEO Sundar P. Shah is saying, yeah, we're gonna need some job cuts in 2024 to reach the company's quote ambitious goals.

Carl Quintanilla (0:54)

Let's begin with the markets as we said, trying to bounce after a couple of down days on S&P. Three days down on the Dow. Jim, we mentioned that Apple downgrades so much to start the year. How much attention should we give to BofA?

Jim Cramer (1:05)

I think we did big. This happens to be the level that it had held. The technicians all know that.

The reasons why they say you wanna buy it, frankly what they do is they take that immediate short term off the table, which is very smart. And talk about a series of reasons that I think are really kind of very sound.

And this is talking about AI and it's talking about the notion of the company, Vision Pro really reinventing. And you know what, the negative sentiment is just insane versus what they're talking about. I'll just give some of these points here. Risk around the legal, we just saw that. Don't worry about it, it's manageable. The recent unperformance, they actually like, most people dislike. Stronger multi-year iPhone upgrade, I thought that was interesting because people thought that was not the case. And David, higher growth in services is my theory of why you can stick with this because the customer loyalty is such that when you take their products, you take the service and the service stream is very sticky.

David Faber (2:07)

There's no doubt about that.

You're charging your credit card. I mean, I don't know about you. I see, you know, now it shows up on my phone. Apple's getting charged, I don't know, numerous times a month for various things.

Jim Cramer (2:17)

Do you think it's sneaky that a lot of times it's pre-20 a.m. I'll be watching my phone and I'll say, holy cow, I just paid Apple.

David Faber (2:24)

That was $9.99, I guess that was for the Apple Plus. I don't know, is that for them? And then that was for my storage and I'm not sure what that one was for. But of course, and that's why we've talked about it for years, Jim, and it does get a higher multiple in part because of the recurring nature of those revenues and the fact, to your point, that they are very sticky as opposed to coming out with a new phone and you never know how it's gonna be met in the marketplace. That said, the multiple still gives some investors pause.

Jim Cramer (2:51)

I'm not gonna disagree with that.

We sold, our goal is not to sell any Apple ever, but they've moved up a great deal. It's becoming, we were becoming the Apple fund and I didn't like that. Apple fund's fine if it's 20 times earnings, not if it's 29 times earnings. So I understand exactly what you say. That said, this is a roadmap, this Pancake of Marketpiece that really defeats the defeatists who basically say this cycle is bad. Now, I'm struggling with Vision Pro, by the way, because candidly, I was hoping, and Carl, you watch a lot of things on Netflix, and I was hoping so much that.

Carl Quintanilla (3:25)

Yeah, yeah. Apple's been giving some demos. I got my shot at Vision Pro yesterday.

Pretty fascinating.

Jim Cramer (3:31)

Yes, it is.

Carl Quintanilla (3:31)

We're definitely in a new era, and you get a very minority report sense of moving these things around with your eyes. But yeah, the Netflix thing is a sign that not every developer is gonna be on board, in the beginning, on Vision Pro.

Jim Cramer (3:45)

In the beginning, and maybe that's a wait and see. Did you get to see any sports on it?