Intel is the story the margin story, the share loss or more. Looking forward to getting some more detail and clarity from the ceo of intel that will join us in just a few minutes. This is not all bad news there is a beat on the top and bottom lines really the focus is on manufacturing which is, you know, for generations literally it has been one of intells hallmarks and advantages now the manufacturing job not like i have seen ever in the period that i have been covering the company. Yeah, and john, i think it is a big question for the longer term what makes them so confident that it will be six months and i know we always play this game, but we always look at this, how much has intel shed. Perhaps, guys, what might matter most is that it has fallen blow nvidia they have been neck and neck going back and forth and that is probably the one that hurts. That is interesting i would say in a way less interesting than amd which is really head to head against intel right now in the argument about what happens with consumer pcs. Potentially what happens in professional pcs in the data center as much as intel is down amd now up close to 12 this morning on the prospect that it has running room to make its case this morning it is a challenging argument yes intels loss could be amds gain in this case we have a big show ahead of us lets get to our next guest, a high profile engineer. He resigned from his Vice President role in may because of a vain of toxicimity now he is calling for a break up, thank you for being with us, tim. Delighted to be here, good morning. Now we certainly heard the case from outsiders, lawmakers, and particular youre saying aws should be spun off what does amazon look like without aws. I also think we should break up google, microsoft, and facebook and so on the Cloud Computing unit and the retail unit and the movies unit and so on, they feel like three Different Companies to me. I think they would be more interesting to customers and investors as stand alone things. Let me push back on that a little bit, would it be more interesting to customers and consumers . It has been a profit engine, allowing it to become bigger but innovate as well you can exact large profits from, and you can share that money. And they can use that money to expand into other areas with possibly a result of unfair competition. Amazon seems to want to be in different businesses if you were competing against them you might be grumpy about the competition from the outside. Tim, good morning great to have you. It is john fort. I want to present a counter argument 20 years ago people say that microsoft was too big. It needed to be broken up, it wasnt and now appling with google, and facebook are thriving, and it is a diverver e diversified business amd is surging when you have as much competition as you do among these kpans. If you didnt break up microsoft and intel, why break these up . I was one of those people calling for that back then and it was a very big recognition. They were doing things that would have made it impossible for dpoogle and facebook to arise. If it had not been for that litigation we would have been looking at a different situation. They did not at the end of the daybreak up microsoft. But they managed to change his behavior so i would say there is a pretty good outcome. Is there other ways to change behavior then, other than breaking up if what youre going for is a behavior change there might be regulation and oversight, but im an oldfashioned Free Enterprise type i think you should try to find single strong issues and let competition bloom. I think if you look at google, you have your movies business and so on, those feel like different businesses people could be interested in a range of Different Things to invest in that is easier to understand. It is interesting you know, microsoft in terms of Software Sales went from like stooif to 40 in 15 years, and that decree flattened out. What do you do to growth or a share of sales i think if you spun them off, that would be good all around. One of the major headwinds aws is facing is that it is trying to sell its web services. A very wide range of businesses and theyre all increasingly competing. You could be reluctance to sign a deal if youre worried by doing so youre funding a competitor i think it would be, i think it would unleash awss growth lets get into that a little bit. I want to get your take on the idea that concerns lawmakers that amazon uses data that it collects from Third Party Merchants there was a wall street journal piece talking about how it woos entrepreneurs. Did you see any of this behavior at your time in amazon you were there for five years . No, i did not i was working on the weapon Services Side as opposed to the retail side. I thought that there was a really great document on this. The train on a Company Operating in the marketplace and playing in the marketplace and there was talk of regulating that behavio and it could make the marketplace a more friendly place for the hundreds of thousands of merchants trying to grow businesses. Do you think that entrepreneurs and Third Party Merchants should be worried about handing other that data to amazon i dont know about that but i think they should be worried about competing in a marketplace where the owner of the marketplace is also competing in the marketplace. Why dont we just, you know, reduce the temptation for that to happen . Tim, lastly i want to ask you about what you called the culture of toxicimity. Have you been in touch and have you talked to some of the employees that were fired . I have been in touch with the people who have been fired and you should have them on some time theyre interesting people with interesting stories to tell. I didnt have many communication with the company but i notice that the firing of whistleblowers doesnt seem to be in the news any more. Possibly amazon decided that was a counter productive strategy. Tim, thank you for being with us today. No problem, happy to join you. Bob swan, first on cnbc, Just Moments Away that stock is down just about 14. 5 or 15 save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Welcome back yesterday we weighed in on how covid is a catalyst for historic disruptive change. In these changes there is a slow deceptive phase of science. We didnt hear about vaccines and now were hearing about hundreds and no therapeutics and now hundreds of therapeutics this is the first time that we have had, as an entire human race, a singular enemy, and that is the sars virus. He says accelerating tech combined with the pandemic makes their rapid reskilling prize top of mind. Rapid reskilling is really about addressing both the exponential tech impact on our job markets and on covid19. But we need a means by which all of us are able to continue to upskill what we do the idea that you went to school for four years from 18 to 22 and that will serve you the rest of your life . Thats ridiculous. We need constant education that is for sure. You can join cnbc events on october 6th for our at work summit this time virtually, to shape the future of work visit cnbc events dotcom to request an invitation. Bob swan on the other side of the break. It is the earnings story of the morning. Shares of intel down 15 at the moment after reporting results after the bell on pace for the biggest drop since 2002 bob, good morning. Good morning, john, how are you today . Im doing fine. I appreciate you joining us in good times and in rougher times. Stocks down this morning that is clearly about the manufacturing delays that you announced and we will get to that first give me a broader view what is going right . You had beats on the top and bottom line of the quarter consumer pc demand looked strong and youre going faster than you said you captured several, john. You know our revenue for the quarter up 20 earnings for the quarter up 16 . Outstanding free cash flows and the needs for products that we design and build are as high as they have ever been. And you know our data business was up over 40 . Our cloud business, our coms business as we deploy into the 5 g network. It was a very Strong Quarter for us across the board in extremely challenging times. Secondly secondly, we raised our outlook. We went in higher than we anticipated at the beginning of the year were growing faster in a climate that is growing. We feel good about how the numbers are playing out. More importantly as you said we launched and our launching a series of products on our ten meter mode they are allowing us to deliver really good product growth of the second half of 2020 and in 21 and 22 and beyond a great quarter. A good outlook for the year. And the demand for the products is higher than we anticipated when we entered the year okay, now level with me on selfnanometer here. What has happened . Seven years ago your predecessor was telling us about 14 nanometer delays investors shrugged that off at the time you had problems with ten, now with seven it seems like we have to go back for a transition where there wasnt a problem who, and what, at intel is responsible for this string of problems ultimately im responsible. Its my job to ensure that every year we can deliver a cadance of leadership products that people can rely on. And our push in the time frame we have a very good line up for 2020, for 2021, for 2022 for our pc products. For our server products. For our i. T. Products in a world where we have talked the opportunity set for us is very big and we have a product roadmap that we feel pretty good about through 2022 the key for us is, okay, what about 23, what about 24. And what we said yesterday is that were going to you know our seven process is pushed. The process, as you know, john, is very poimportant but its not all. Its not everything required to deliv deliver leadership products. There is interconnect, security, software, and we think were uniquely positioned to pull all of those together to continue to deliver an annual leadership products i appreciate you talking speedometer, b responsibility, but you have not be there that long is there an issue of people overpromising and und underdelivering where the manufacturing process is not what it used to be what is the issue that caused over all of these knowns this number of issues thats a good question. I think first with each new node, it is more and more difficult. Some of the learnings that we have had from prior experiences whether it was 2214, 1410, or 107, you have to build contingency plans. They come in two different ways. What are the other criteria that drive Product Performance beyond process. Again, things like packaging and you have to be in a position that, as you look forward a couple two, three, or four years to acknowledge when issues are things are not working out exactly the way you would like, and ensure that you have optional optionality. Things you can do to leverage the ecosystems capabilities so that we continue to deliver leadership products. And that is what we talked about yesterday. That the process is not everything, but it is important. We are going to continue to invest in process leadership but along the way, based on our design methodologies, we have much more flexibility to evaluate when we build, when we buy, and how we package different technologies together. So that we can deliver predictable road maps. I want to ask about your projections. I believe you said your yields on seven nanometer are 12 months behind, but the product itself delayed just six months. What makes you confident that you can close that gap two things in terms of the gap between 12 months and 6 months one is in our product road map we put a buffer in, and the schedule that we laid out at the end of last year, and secondly after the last couple years we have been using a term that, again, you and i have talked about. It is simply a Design Methodology that gives you more flexibility to mix and match technology so that if one area is not working as you planned, you can use Something Else and use design ed advanced packagin to technologies together to bring them together in the same package. Along with a buffer in our schedule we were allowed to observe a 12 month slip in process and only have a twoquarter impact on our product roadmap. Hey, bob. Good morning and thank you for being with us. I wonder what gives you the confidence that you can hold that seven nanometer delay to just six months given the issues that you have seen with previous generations of chips as john pointed out, and if delays are extended does that change your manufacturing strategy i think that good morning. First, i think that again one of our learnings along the way is to make sure that we have options. Options mean either delivering products on our process node using an ecosystem, and so that in the event that we have schedule related issues that we can still meet commitments to our customers. It is important for us when were developing world changing tojs that enrich the lives of every person on earth that we have plan a, plan b, and plan c. So that if one thing doesnt work in particular we have the ability to fall back on alternati alternative demands. So it is having options and flexibility to ensure that we continue to meet product commitments along the way. But youre confident that it will only be a sixmonth delay yes i want to ask you about the soft bank listing. What does that mean for the chip bank at large and does the uncertainty around its future provide an opportunity that intel is looking at . I think for us, you know, as i mentioned to john we had the largest served market in the companys history. Were in a world where increasingly everything looks like a computer. Not just your pc or your crolou but your network, your factory, your retail store, home, school. We see a market where everything looks like a computer and they need more and more silicon and we want to develop a product for each segment of the market so were well positioned as compute evolves. So we have a prod portfolio, a very diverse makeup, and were focusing on the needs of our customers. Bob, it is carl as for the sell sides response to the quarter, a lot of analysts that are not optimistic point to something that we have talked about since you got the job. Your become in finance rather than engineering what do you say to them . We have 70,000 of the brightest engineers in the world surrounded by a very Competent Team that helps cover my blind spots. We leverage each others capabilities and as a team we think the whole, the makeup of the team is better than the sum of the parts because of the inherent diversity on the Leadership Team and the 70,000 best engineers in the world. I wonder act margins. You have less processing power, and higher costs when you have a contingency when someone else is manufacturing for you, right i think it is not the process that the products pay for, it is the products, and the performance of those products includes a armt of Different Things the role that so muchware plays, so continuing to deliver leadership products is important for us to capture asps. When we transition from one node, currently from a 14 nanometer node to a 10 nanometer node, when we make those transitions to a new process the tendency is to see them dip and come back out as process yields improve. That is exactly where we are now. We have a serious of products coming to the market in the near term that means margins come down a little bit and we expect has the ten nanometer getting more mature its marks will improve overtime you said that apple will transition away. I know you want to make them reconsider, but i want you to help investors understand the takes. Yes apple is 23 or 3 , but dont they punch above their weight in profit contribution . Well, i mean, apple has been and is, and will continue to be a important customer of ours for the next two years theyre very important and were going to continue to build great products for apple and our customers. The margin dynamics from one customer to the next is not dramatically different and not too material on our overall results. So we will continue to plow forward with great products for our other customers in the hopes they will be well positioned and continue to gain share okay, bob swan. The stock is down 14 5 at the moment the beat on the top and bottom lines. We do appreciate you coming on and talking to us about it thank you, i appreciate it. Have a good day. We certainly do appreciate him coming on. Up next the creator of fo fortnight, gears of war, and more, tim sweeney is up with us next stay with us lets get to julia this morning. Thanks, carl. Were joined now by tim sweeney. Epic games just closed a 200 Million Investment valuing epic at 10 billion thank you so much today after that big news this month thank you for having me what are you seeing for User Engagement during this stay at home period of covid people are not getting together in person, theyre getting together online. Were seeing record levels of engagement people playing with groups of their friends and it has been really great for building the Online Community i think it is interesting that fortnight is expanding with a live concert by travis scott where are you expanding in terms of the types of activities and events your create ing in that platform yeah, theyre just the beginning. We had movie cross overs, and we want to make it possible for any of them to bring their own content and any brand to have their presence known in fortnight. And rather than having these events every few months, as you see on our social platforms where you dont need to do a deal with epic to be online and have your event appear in fortnight. Youre taking a pretty public stance against apple and their fees in their app store. Tell me your position on apple and how youre trying to position yeah, apple created the first computer here is my apple 2 i remember what it was like in the early days anyone could write ode juicers could install software from any choice. And now apple locked down and crippled the eco system by alleging a monopoly and preventing entire categories of businesses from being in their eco system yeah, it is great to have you once again i wonder more broadly in the gaming eco system, isnt it a problem . I look at games on the pc versus on the county sonsole. How a player can play a game from one pc to the next. I know you dont have that in fortnight but that makes you unique how does that get fixed . The good news is the Tech Industry is improving rapidly, right . You could not be an xbox player, platformed at rules preventing communications and in the past few years, sony micro so microsoft, and all of these have become very pro consumer now the remaining barriers for competition, and the robust evolution, are store monopolies where they dont allow competitors to exist on their platform at all and google stifles other stores by having user interface barriers and obstructi obstruction. If they could accept their own payment and avoid the 30 tax we could pass our savings along to all of our consumers and players would get a better deal on items and you would have an kpik competitikp economic competition they subscribe, and with this ecosystem being connected and open it must a multibillion dollar user con super platform. Hey, tim thank you for being with us. What do you think of Public Markets and would epic become a publicly listed company. The air bnb ceo says he has been contacted by some special acquisition companies. The rigors of being a Public Company are really hard. I think the only way epic would consider that is if we got to a point where we had such a reliable and predictability opportunity. Because it is my understanding that especially in the Game Industry there is nothing worse than being a crappy Public Company. I want to ask you about the business mod until games you get marvel super heros, f t fortnite is different. What are you doing to the model around gaming and what is the deeper meaning it is a really exciting time. Previously every brand would build their own game so you would have a industry, if you wanted to play super man, thats all you would get, but they are bringing many brands together and sharing a diverse game environment i think that says a lot about the future of the industry that it should be open and connected. Instead of having an ap store with millions of apps in it, and there are millions today, we should have games open to developers heading in their own content and brands bringing in their own presence i think were going to see a lot more games like this this in the future as you work on this vision, what will your partnership with sony be on that . What does that mean for epic Going Forward . Epic has always been close to sony what were really trying to do in a larger partnership is connect more parts of the business together. They have their upcoming projects and working with sony music on some of the fortnite music efforts and were trying to work more closely together with them and you know, help the sony brand, and theyre about the same thing, right . We both serve consumers and were trying to wring them together and connect our ecosystems better, you know . Sony opening up the flat form was big and we plan to continue to do that to open up even more. You mentioned youre working with Sony Pictures and your tools are being used by a range of studios they were used by disney plus, automotive companies, and architecture firms as they look to do more virtual renderings. That is very important right now when people are stuck at home. How important is this enterprise side of your business and where do you see that going . It is our game focused Computer Graphics got to a level of realism where every other industry became interested in it you have architects, automakers, and now films being produced in realtime using virtual production this is a huge area of growth for epic so it is an order of magnitude larger and were trying to not just be another Enterprise Software vendor selling yet another product. We want to really be a parker in we want to bring them into the world and not only use that internally, but help them reach consumers with realtime versions of their consent as we have been doing on a smaller scale with fortnite so far. Fascinating i hope you will come back and talk to us again and we can learn more about your tools for different businesses as you continue to expand your games as well tim sweeney, thank you for joining us carl back over to you. All right, julia, thanks for that dow down 127 and continues to be weighed down by intel. S p has not seen 3200 since july 13th back in a moment come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. Hey. [narrator] she takes two prescriptions. Kates son jack, takes one too. Kate works hard, and thought she had good insurance. But she still pays too much. Thats no good. So kate downloaded the goodrx app. Now she can compare prescription prices, to find the best discounts. She even beats her insurance price. Good for you kate, good for you. Goodrx, stop paying too much for your prescriptions. Download the free app today. It has been a rough week for biotech. Moderna is down after losing a key patent battle. Well continue to keep a close eye on that stock. Squawk allialley is back in ja moment i dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. Now offering zero commissions on online trades. We charge you less so you have more to invest. Lets go to kate. Arent faa with plaid, it connects about a quarter of u. S. Accounts to fintech apps like venmo. Joining us now is cofounder and ceo of plaid thank you so much for being here thank you so much for having me you guys have really interesting Vantage Point into things like Consumer Spending and fintech apps you shared some data a 300 rise in the amount of people using investing apps. Is that type of growth sustainable in a postcovid world in. Over the past decade, we have seen a massive shift in Financial Services we have gone from banks being something that people interact with in a branch to these days banks being something that people interact with fully digitally. When you look across the financial ecosystem, the Digital Financial application, they have grown so incredibly quickly over the q2 and now early q3. Consumer can no longer walk into a bank branch. They saying i need to down load this application in order to do something in my Financial Life and i expect that to stay. You have grown with these tinteti tin fintech apps. You think of stripe, 36 billion dollar valuation why go visa versus growing independently and maybe going for an ipo first thing, the primary thing that we think about is how do we serve consumers. Our goal is to make money easier for every wone. Through having this access, increasing the quality of product they are getting, increasing the rates better and so forth. We have long been inspired by visa a storied company. As you think about growing more quickly over the coming decades to come, we really are excited to have access to the scale and breadth of visa. Its so much the two companies can do together sflp its interesting that you say you have so much to learn from visa. Im reminded of jamie dimon who said square had innovated where jpmorgan hasnt. Kelly said visa was slow out the chute when it came to fintech. Why do you think traditional players and lenders, they cant make these innovative product themselves do you think the strategy of acquiring start ups who can will continue we look at the last at te alternative and today, banks were not digital today we see banks as being Technology Companies you hear jamie dimon saying the massive investment they made in technology thats come in the form of partnerships and acquisitions as well how do you continue to keep plaids culture when the visa acquisition goes through theres been some missteps this is one of the things i love talk about. I spend so much time inside the company discussing with people we hire. I think culture starts with hiring fantastic people. Hiring them according to a set of principles and value and ensuring you have the Proper Communications and ways to allow these individuals to grow. It starts with the people and you have to scale that from the visa perspective, ive been really inspired as i read over their core values theres so much overlap with the way we think about growing plaid. Postacquisition, things will change but i think will change for the better good morning. I want to understand more about your technology Going Forward and the problems that youre salving. We tend to kind of describe you, explain what you do as extracting data from Financial Institutions but is the challenge Going Forward so much as getting at the data or is it formatting those assets in a way that is standard and making analysis and other operations possible on top of it . Its a great question as we take an industry thats predominantly not been digital and help it shift to becoming digital for the first time and help those waves of innovation, theres a whole lot of work. Plaid, at our core, we help consumers an businesses manage banking has become digital today instead of going into branch, we rely on software to power the Financial System we have about 3,000 Financial Operations at 11,000 banks including jpmorgan, wells fargo, a will the of the biggest banks out there. You can think of us like the power grid as to when someone flips the switch the bulb comes but theres a lot complexity some of those 3,000 customers are fintech lefthand sidendersr ppp, were they able to live up to that . Early on in the ppp process, the sba was saying it was only going to be wall street banks or main street banks that were going to issue the ppp loan pps in the early days that left a lot of businesses not knowing what to do later on the fintech lenders were able to issue the loans what we saw from a lot of those lenders is they were able the move really, really quickly. Its really exciting and very impressive more broadly, one of the big changes that we saw is that treasury and sba are recognizing fintech in a way they didnt before and in way i think will set the stage for a whole lot more kind of fintech and government collaboration Going Forward. Thanks so much for being here john, back to you. Well be right back. Welcome to the Halftime Report our top story, are we at a tech Tipping Point . Some of the biggest names in the nasdaq struggle. Well debate where it means for where your money goes in the weeks ahead. Joining me for the hour on this friday are stephanie link, josh brown, Pete Najarian lets begin with a look at the markets. The dow is down by triple digits growing weakness in tech pete, i begin with you apple is look at