CNBC's Deirdre Bosa previews earnings next week from Microsoft, Alphabet and Meta. Bosa also spoke exclusively with Lyft's new CEO, David Risher, as he gets set to wrap up his first 100 days in office.

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And welcome, welcome to a special Friday edition of Tech Check.

Today, the Dow closed in the green for the 10th day in a row.

It's the longest rally in 6 years, but tech?

Tech has cooled off this week And just ahead of the mega cap earnings parade, we've got Google, Microsoft, Meta, Intel.

Like last quarter at the Magic Bullet, it may be artificial intelligence, but simply mentioning AI a few times on your earnings call, or maybe many times.

We're now in a new show me the money era.

NVIDIA was 1 of the last tech giants to report last time around.

You might remember its monster surge showing investors AI is here, and it's going to book revenue a lot of it this year.

So even though we are still in such early innings, companies, they are already charging for products.

Microsoft announcing earlier this week that it would be charging for its AI tools and shares promptly hit an all-time high.

Pretty steep price and very different than the era of tech when products like Gmail were given away for free.

When analysts estimate it could generate some $14 billion in new revenue a year for Microsoft, It's important that investors see that monetization.

7 companies, you may know them as the Magnificent 7, they are carrying the market right now, making up an eye-watering 30% of the S&P 500, driven by expectations for AI and how it will generate new business.

3 of them report next week, and because expectations are so high, even a wobble from any 1 of them could shake the entire market.

Rory O'Driscoll of Scale Venture Partners, Neelay Patel of The Verge, and our own Steve Kovach.

Few can do what NVIDIA did, and that is book actual billions in extra revenue on this AI shift.

Should investors get ready for some disappointment?

You know, the really interesting thing about Nvidia is how much risk they took building out this capacity before the AI boom.

So I think you're really seeing the upside of that risk pay off.

I think the question for all of these companies now that Microsoft pricing is really interesting.

So I think we're all seeing, OK, these products are inherently useful such that we can already put prices on them.

How much can we charge in an era where there's this much competition?

That's gonna come all the way back to Nvidia.

Yeah I mean $30 per user per month yeah at the high end see go back $14 billion potentially but how certain is that they're not gonna be booking this when they report next week?

And look, they don't even have a date on when this is going to be broadly available.

Right now, they're only testing that co-pilot we're talking about with the Microsoft 365 suite, a very small group of their current enterprise customers.

And look, they're not even talking about selling it to schools yet for the very obvious chat GPT cheating reasons.

But there's another thing to look at too, Deirdre, as we go into Microsoft's earnings next quarter.

It's not just about selling these copilots or other AI tools, it's also a cloud play because, look, Microsoft also the same day they announced that pricing plan, they announced this deal with Facebook that their large language model, the Lama, the open source 1 is going to run on Azure, it's going to run on Windows.

So Microsoft is also saying, our cloud is here for other AI development open to play.

But Microsoft is playing it on both sides.

So more opportunity to book some revenue and thus profit.

Rory, By the way, thank you for being with me

You operate in a world of venture capital, so you are investing many times before there's even any revenue.

You don't want to get these stocks once they've already booked this money, right?

Sure, well, I mean, depends on where you're investing.

I mean, I think first of all, to talk about the public stocks, I think what NVIDIA is going through is a quantum step different than everyone else.

No 1 else is going to report a 40 percent increase in Q1Q revenue because of AI.

NVIDIA is a monopoly provider of this the core ingredient that makes all this AI work, the chip that makes the magic happen, right?

Will they be in a wonderful business for the next 37 years to justify the stock price?

But even Microsoft, who probably is the next best position large cap company, it's going to be a quantum step different.

As someone, Steve said, they're not going to sell 40% more.

They might get a few people trying this office product in the next couple of quarters.

What will move the needle is they're a very well run business.

And then maybe there's the Microsoft the Amazons the Googles that.

But let's say they're closer to booking this revenue than the Palantir's and the C3 AIs and some of that next level down tech companies.

I think that point about NVIDIA being a monopoly provider is really smart.

At the end of the day, NVIDIA took the big risk early and now they're it, they're what you get.

You know, we have heard many stories about Companies essentially trying to buy their way into monopoly positions left in Uber come to mind right.

Big venture back companies that basically bought themselves at a monopolies how durable is not please and profitable as properties are.

And the big difference between I think AI and every other tech level that I've ever talked to you about Deidre is everyone knows it's useful.

You like you can charge for this at rates that make sense to consumers that make sense to businesses because the productivity gain is there in a way that I know NFTs or even 5G wasn't there.

And I think that piece of the puzzle is still undervalued in the market.

I don't think Microsoft are gonna get that money this quarter, but eventually they will, because AI is absolutely useful.

I mean, the reasons they're gonna charge for it, I mean, you were asking, why are people trying to charge?

It's, first of all, because you can charge, because it's delivering value, it's replacing labor, it's replacing boring tasks.

And then the second thing is it costs money to do this, right?

All these guys are leveraging off the expensive NVIDIA chips, the expensive chat GPT is not free for anyone other than the casual user.

So a lot of these AI products are very computationally intensive to deliver.

You know the magic under the hood can be quite expensive and we're definitely seeing that even at the early stages.

It costs a lot of money to build these companies and as you correctly said the pressure is therefore on to monetize that and get paid.

Well, Steve Kovach, I mean, yes, everyone's excited about generative AI.

It costs a lot of money in terms of that compute power.

But we recently got a report that Apple is looking at its own large language model.

How do we know that this isn't eventually commoditized?

Like a lot of the other bubbles we've talked about.

I mean, we're so excited about enterprise software, right?

In 2021, they were going public and running up to these huge valuations.

How do we know that aspects of generative AI, like these chatbots, aren't going to become commoditized?

I'd argue to a degree it's already commoditized.

Just look at my inbox, all the pitches I get for chat bots and chat GPT clones and so on and so forth.

Go in the app store and type in chat GPT and you'll get a gazillion different results.

But look, When you talk about those magnificent 7.

1 thing that we got to look about going into this earning season starting next week is that forward P.

Expensive the stocks have gotten so you set this up really nicely how we're going into this earning season where they have to show the money.

Well also if they don't show the money we can easily see those stocks come down because of how expensive they've gotten over this AI hype.

But look, only a few names are going to actually be able to show.

To your point about Apple, look, to me it sounds like more of a developer tool.

I don't think they're going to have some kind of supercharged Siri GPT or I think the report said something like Apple GPT is what they're calling it internally.

Obviously, we also know Apple's going to want to do it in a more private way on device, which also means less capability, because if you're doing it on a phone, you can't use those Nvidia chips that are more capable than those mobile processors.

This is 1 of those times where you see a single sentence and you realize it's simply 2 sentences and it's just totally wrong.

I mean, that was the case until NVIDIA said, no, no, no, it's actually here.

got to understand is the value chain, how long it takes before end business customers pay money.

NVIDIA is going first because they make the chip that allows people to make the models.

And someone said, chat GPT have made, you know, open AI have made the chat GPT model.

It's taken them 2 or 3 years to get to that point.

Everyone is furiously trying to catch up.

And there's maybe 567 other people trying to catch up.

And the reason NVIDIA is doing so well, all of those companies, including Microsoft, including Facebook, are spending hundreds of millions of dollars in a catch-up game, but there's no revenue.

And then, hang on a minute, and then 1 level further down, even after you've built a model, then someone's got to wrap it in decent software to sell it to individual businesses.

And that's, you know, at scale, 1, 2 years away.

So going back to my point, I don't know anything about this quarter's earnings seasons, but it's nothing to do with AI.

Spoken like a true venture capitalist, Nilay.

I mean, investors may be thinking about this in a different way.

They they may think that this is no longer secular.

And that's you know what I worry about is that NVIDIA brought this right in front of them and said listen if we can book billions of dollars in revenue why can't you.

Yeah I look I agree that NVIDIA is the tip of the spear here.

You gotta buy the hardware to even run the models.

You know what's very notable here though, and I point this out to every investor thinking about making AI investment at this moment.

It's OpenAI, which is at the heart of this entire boom.

They have not figured out a sustainable, multiple business model that makes all this work.

So NVIDIA is the start of it because they're selling hardware, they can sell you atoms.

They're selling a lot of this outbound capability and they're not gonna see the multiple yet.

Nilay, you said the magic word, unprofitable.

That is something that I've been talking about a lot lately.

The return, let's call it, of speculative tech, Carvana, Coinbase, Opendoor, Robinhood.

These are some of the pandemic darlings that in 2022 were left for dead by investors.

The journal points to crypto and mean stocks as well, says investors.

Delaware Court also just rejecting AMC's deal to convert Ape shares to common stock, sending AMC shares surging after hours, while Ape is sinking.

Rory, I have actually been looking at the fundamentals of companies like Carvana.

And I think it's super hard to opine on some of these public stocks in 2023.

I saw a really nice tweet that just showed the 2 year trajectory for most of these stocks.

It turns out, if something is valued at X and it goes down to 1 10th of X, it's entirely plausible that it'll go back to 2 10ths of X, right?

But if you look it over the spectrum of 2 years, And you said it, Carvana being an interesting example.

So it's basically in the margin of error of the noise.

It's like, the world is awesome, or the world is terrible, it's gonna end on Friday.

Oh, it turns out it's not gonna end until a week next Friday, let's double the stock.

I think there's a lot of noise in the system on some of these companies, like you just said.

They were overloved under love and people are just trying to figure out where they

I mean we talk about yes they've come back this year.

But we're and I were talking about pandemic mountain right.

What we're seeing this year is just a blip at the end of that.

Should investors be worried given that there's still a lot of these names that I just mentioned, they're still nowhere close to where they were in

Yeah, my personal theory is that this all just tracks with inflation, like inflation's down so meme stocks are up and maybe that's just as simple as that.

I think there's a lot of investors out there who like playing these games, they're not looking at the fundamentals and a stock like Ape on Barbenheimer weekend seems like a fun place to park some money and get an exit on Wednesday.

We've got a meme stock going crazy again.

But it's not like we said in terms of valuation.

So big tech is it going to carry the season?

I guess that's what it comes back to because they're the ones that make up the most of this market.

As you like to say often as Apple goes so does the market.

And we will get Apple not next week but the week after.

But again I'm looking at Microsoft and and meta.

Meta is going to give us a really good read on the ad market.

Microsoft's going to give us a good read on their cloud and IT spend and how small businesses are doing.

So we're still going to get a taste of the macro here.

Also I would just add to Nealey's point it does track inflation these meme stocks.

It also tracks the dollar getting a little bit weaker.

So this really the dollar getting weaker really benefits Apple.

Remember last year they had to raise prices on the iPhone in some of their markets because of that dollar exchange rate and so that and this foreign exchange headwind so the any kind of commentary we get from Apple and the rest on how foreign exchange is easing up for them it's gonna be really interesting too.

Stay tuned to our audience, because we're going to be talking more about that a little bit later.

Thank you so much for being here with me, Rory, Nelai, and Steve.

Coming up, whatever happened to the ride-sharing wars?

These days, it's feeling more like a ride-sharing duopoly, kind of like Coke and Pepsi, 2 dominant, pretty interchangeable players, 1 more dominant than the other.

We have an exclusive with Lyft's new CEO, David Risher.

As he gets set to wrap up his first 100 days on the job, we're just getting started on the CNBC special, Taking Stock.

Coming up, don't call it a comeback, Lyft's in need of a Lyft, but can the company hit the gas with a new CEO in the driver's seat?

Plus, dollar dollar bills, y'all, talking the Greenbacks' impact on tech.

And they say everything's bigger in Texas, including manufacturing.

How chips have taken over the Lone Star State when Tech Check returns.

I'm Morgan Brennan, host of CNBC's Closing Bell Overtime and Manifest Space.

With rocket launches marking new milestones, the new space race is on.

Make sure to listen to Manifest Space with me, Morgan Brennan, by following wherever

Back in the day ride sharing competition, it was fierce over and left each raising billions of dollars in the private markets and They were seen as some of the most innovative and disruptive companies in America.

Lyft positioned itself as more of the nice guy, with Uber taking the brunt of the PR and regulatory crises.

It led to that delete Uber hashtag, if you remember.

Lyft gaining market share, and Uber founder and CEO Travis Kalanick eventually stepping down.

Since then though, the gap has only widened.

Look at that, with Uber pulling away as the clear number 1 after growing its food delivery business, Lyft in a far second.

In fact, Lyft's market cap, now under $5 billion, is less than the $7.3 billion it has raised over its lifetime.

So almost 100 days ago, Lyft's co-founders handed over the CEO job to David Rescher, who spent much of his career running a nonprofit.

He held positions at Amazon and Microsoft.

Since then, He has cut prices, announced layoffs.

I sat down with him to discuss what comes next.

So what's telling you that riders are back?

And we've got third-party data out there that's showing, I think when I started, we were at about a 26 share, then 27, then

we're at about 31 right now, so that's great.

It's a little zero-sum when you start talking about it that way.

I think maybe even more interestingly is, from what we can tell, the whole market is growing, which is frankly even better, because again, it suggests people are getting out and about.

I think part of it is we've got better pricing than we had for a while, right, and everybody likes a deal.

1 of the nice things that better pricing does means that you typically get picked up a little faster.

That sounds counterintuitive, but the more riders you have, the more drivers you have, the more drivers you have, the more drivers you have, the faster you get picked up.

And then, for example, we have a product called Wait and Save, which if you haven't used our app for a while, you should.

It allows you to save a little bit of money, and everyone likes a deal.

And About 30% of our rides are wait and save rides, which means that people are liking not just the standard classic, but they're also liking having a little choice and being able to save some money, which in inflationary times really matters.

guys have been more aggressive on pricing.

of the things you told me when we sat here a few months ago and you were just starting, that you wanted to be there.

Won back a few percentage points in terms of market share.

See all Mad Money w/ Jim Cramer transcripts on Applepodcasts

Special Report: Lyft CEO David Risher & Big Tech Earnings 7/21/23