Netflix Surges on Subs Beat, New Market Records, Tesla Earnings Countdown 01/24/24

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. After three straight all-time highs for the S&P, the Bulls press on here with help from some strong results at Netflix, ASML, SAP, overshadowing some light guidance at some old line industrials. A romance begins with stock records on a roll. Netflix does provide a big boost, ahead of the open, after delivering that subs beat.

David Faber (0:32)

Plus, AT&T shares under a bit of pressure this morning. Currently, earnings results did miss some expectations, free cash flow perhaps as well, but the company is seeing subscriber gains.

And we continue to monitor the ongoing fallout at Boeing, the FAA saying it may further expand its probe. And the CEO of Alaska Airlines saying he's, quote, angry.

Carl Quintanilla (0:54)

Let's begin with Netflix. Up sharply in the pre-market, company reports 13.1 million new subs in Q4. That is the second best quarter of editions in its history. Revenue also exceeding forecast. Jim, a lot of price target raises on the street. I counted 18, several with a six handle.

Jim Cramer (1:10)

But it was just a really torrid fourth quarter. And as usual, a conference call that I found to be just very special. It's a special company. It's a company, there's a lot of people gonna talk about how what really happened was they cut down on password sharing. I'm not buying that at all. They obviously knew how to do that. They have what I call David, and I'm gonna be really specific about this. They have, as opposed to almost everyone else, exactly what people want. Now we can talk about TKO, we'll do that later. But the fact is, they said one line in here that really just was very telling.

They said, we're not gonna buy Linear. You know what Linear is?

Linear is cop shows, Linear is fire department shows, and it's hospital shows. And what they're saying is, we're not interested in that crap.

We're not interested in that stuff that Procter & Gamble wants to advertise against, and McDonald's wants to advertise against. We want real advertisers who don't mind that we talk about real life, and that stuff was our parents' stuff. So that's what this whole quarter was about.

David Faber (2:10)

It was worth noting, I'm glad you did, Jim, in terms of them saying, no interest in Linear Networks. Not that we necessarily thought they were.

Jim Cramer (2:19)

Chicago, whatever, Detroit this, NCI that.

David Faber (2:23)

Would they ever want to buy Paramount?

And obviously the studio might be of interest, but nobody's buying Linear Cable Networks. No thank you, no way. Listen, one person said to me this morning, as so many have before the streaming wars are over, and Amazon has won.

They've reinvented themselves numerous times along the way. Think about from House of Cards to where we are right now, and now they're making forays into gaming and obviously live sports, as we know well. And even the ad-supported tier, which early on people said, ah, it's not really amounting to much. Now they've got 23 million subs. They're up 70% quarter to quarter. And the fact is that there's also questions to whether they're going to start to take ad dollars from these very linear cable networks you just discussed at Warner Brothers Discoveries of the World and the Like.

Jim Cramer (3:10)

That really was the kind of sub rosa thing is that, what they're really saying is just that right now, linear is dictated by different companies, advertisers that want certain kind of programming that don't want to be boycotted, don't want to cause a problem. So what you do is you do what they used to do in the 80s and 90s. Listen, we got to have someone shot, we got to have someone go to the hospital, we have to have someone arrested, we have to have someone prosecuted, and we're home free, except for when we're in NCIS world. And what they're saying is that's over.

And those shows cost a fortune and nobody's really interested in them. What resurrects Suits, all right, Suits worked, but for the most part, that is not what people want anymore. They don't want cop shows. They're not interested in hospital shows. What they're interested in is serious drama, no matter where it's from, and even if it's translated, the young people don't even mind subtitles.

Carl Quintanilla (3:56)

But they did license, for example, Sex and the City, and one of the bull cases is that the more you license, the less you have to take big swings that are expensive.