CNBC's Deirdre Bosa previews earnings next week from Netflix and Tesla. Cathie Wood, Ark Invest CEO, to discusses the A.I. space, ARK’s ETF hitting an 11-month high and what stocks she is watching in the tech space. Emil Michael, former Uber chief business officer, discusses the recent stock pop, competition in the space and more. Plus, Hollywood on strike and venture capital loans disappear.

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Welcome to a special edition of Tech Check in what we get.

We're ending on a down note, the Nasdaq closing lower by a percentage.

But the rest of the week, it was a 1 big rip higher outperforming the down the S&P 500 as it has been all year.

Big Tech, the XLK, smaller more speculative stocks, software, semis, e-com, they all ended the week higher and we're headed right into the next big catalyst.

Next week we will get earnings from Netflix and Tesla.

Tech companies will start to reveal what the second quarter was like for business, what the outlook is for the rest of the year.

We've got software budgets, consumer spending, and of course AI.

How much It actually contributed to the bottom line.

Right now we are digging into Cathie Wood's flagship ARK Innovation ETF, also rebounding this year.

AI mania, falling inflation, easing recession fears, that is all powering speculative tech.

Outperforming even mega caps like Microsoft, Alphabet, and Apple, fueled by top 2 holdings Tesla and Coinbase, which have doubled this year or more.

Most of ARK's other disruptive tech funds with a similar or even better performance.

There's ARKW that targets next-generation Internet.

There's also ARKF focusing on fintech and blockchain, both of those rallying more than 60% this year.

But, and this is a big 1, that Markey ARK fund Still hasn't come close to the highs of the pandemic.

It was, of course, the poster child of the tech boom during that period, but it has cratered over the last couple of years.

It was 1 of the worst performing equity funds of 22, dragged down by losses in Roku, Zoom, Shopify.

Just a few days ago, Wood also sold nearly $12 million worth of Coinbase, right as shares of the crypto exchange reached a yearly high, and of course, missed out on that jaw-dropping rally in NVIDIA, which she exited entirely in early January in that flagship fund.

Joining us now is Cathy Wood herself, CEO of ARK Invest.

Walk us through that decision, that process, why you judged that name to be overvalued right as it was taking off.

So we started our research on artificial intelligence, actually when we were studying the possibility of autonomous vehicles way back in

that's on the split basis, $5, Now it's closing in on

So we wrote it all the way up until mid 300s, mid to high 300s in the flagship.

Sold it because we saw the inventory problem brewing, that was a good call, got back in in the fourth quarter when it cratered, and then it just took off after CHAP-GBT, while all of our other stocks, many of them AI-driven, I would say most of them actually, were still very, very weak.

And just to give you an example, Tesla, I mean, NVIDIA was at 25 times revenues, while Twilio, which we think is gonna be a huge beneficiary of AI, was at 2 times revenue.

So we were making a valuation judgment call.

And we also kept it in our narrow, more narrowly focused portfolios, but cut, took profits there as well.

What makes Twilio sort of a better player to have in your portfolio or your ETF right now than an NVIDIA.

Well I think a lot of people understand that NVIDIA is just an incredible play on A.I.

I don't think many people know that Twilio if you use Uber then the communication around Uber is powered by Twilio.

So Twilio has roughly a trillion consumer business interactions per year.

Now, who are going to be the winners in AI?

It is going to be companies with visionary management, good distribution, global in this case, and proprietary data.

Twilio has data on business to consumer communications that no 1 else has.

We think the secret sauce and the real beneficiaries of AI are going to be those with proprietary data.

More data on real world driving miles than all the other auto companies and tech companies focused on autonomous in the world.

When you compare a Tesla or a Twilio, though, Tesla is at a different scale.

As you said, what makes Twilio so disruptive?

As you said, yes, it's acting as sort of intermediary for Uber drivers, let's say, and their customers, a number of other companies.

But what makes it an artificial intelligence winner specifically?

So it is able to take the data, let's use Twilio's data, on Uber.

And if you'll notice, Uber has introduced many, many new services and advertising.

And with this data, it is able to target consumers, basically sending them data, advertising, offers to buy at this restaurant or get a delivery from that restaurant.

Probably in a much more targeted way than most most companies that are in between the consumer and businesses.

I'm still, you know, I want to go back to NVIDIA though, right?

I see the proposition there maybe, and perhaps investors do more clearly as well, judging by how much it has been up.

Were you surprised by the monster quarter that NVIDIA put out in May when it wasn't just talking about artificial intelligence as something in the future, as kind of we are with some of these other names, but it's actually going to book revenue this year related to this huge platform shift.

So what makes you think sort of an NVIDIA at the time was overvalued when you have, you know, Zoom video, for example, a call that it could reach half a trillion dollars?

So if you look at NVIDIA, It is 1 of the magnificent 7.

And the excitement around chatGBT was such that this was the obvious play.

It has been the check the box AI company for a while now.

However, whenever I hear the word shortage around anything, and you're hearing shortages around GPUs for AI computing power, I step back and say, okay, there's probably double ordering.

This was true of everything during COVID and it was a great call, an inventory call during COVID.

I think we're going to see the same thing here.

But isn't it shortage of you know the AI chips that everyone wants?

Isn't that part of the bull case for NVIDIA?

They can't produce enough because they're in such high demand.

Yes and what happens when you hear the word shortage?

You have to, you're the purchasing manager, you better have the supply.

And when you don't get it, you double order, you triple order, you quadruple order.

And I'm not saying, this is a cyclical comment.

This is nothing about Nvidia's secular potential.

We think it will face more competition than than many people expect.

Tesla has designed its own AI chip, MetaPlatform's own AI chip, so Google, same, own AI chip.

So it doesn't have the market to itself like I think people think, and it's priced as though it is the 1 beneficiary out there.

When if you look at all of the stocks in our portfolio, the companies have proprietary data that no 1 else has.

So Kathy, is this as good as it gets for Nvidia or are you looking for an opportunity to pick back up some shares?

Sure, if it were to correct, it goes through these massive corrections around inventory gluts and shortages.

But understand, it is a well-understood play on AI at 25 times revenue.

Tesla now probably at 7 times revenue is probably the biggest play out there in terms of the revenue potential.

It's going after the autonomous taxi platform market, which we think is going to be an $8 to $10 trillion market globally by

So we're looking again for those data plays and those with proprietary data.

NVIDIA is focused on hardware, NVIDIA is focused on hardware.

For every dollar of hardware, AI will pull through probably $8 of software.

So again, NVIDIA, really important cornerstone stock has from $5 to

And now people understand it's out in the open.

It's not the hidden gem that it was when we were looking at it as a PC gaming chip company and nothing.

That's how people looked at it, you know, 7, 8 years ago.

And then as a crypto play and now an AI play.

And Kathy, as you said, you were in early.

If you are looking at companies that have proprietary data, and certainly you're not the only person who says so, right?

A lot of folks tell me here in Silicon Valley that it's the gold in this platform shift, the data that is.

Why wouldn't you look to the big tech companies?

Who's got more data than Microsoft, Amazon, Google?

Well, you know, I think that they certainly have a lot of data, but I think that there are some disruptive forces at work.

You know it's either the worst thing that's happened to Google or could be the best if it's lighting a fire but its advertising model is potentially at risk as chat GPT disintermediate search.

Amazon chat GPT could cause disintermediation in e-commerce.

You know, just taking you, if you ask for a type of shoe, you say, I want the, I want it at the lowest cost, lowest shipping costs directly within the next day there's you know your services evolving with chat gpt like that can disintermediate Amazon and just take you to that site and order directly.

So there's a little bit more disruption, I think, in the Magnificent 7 than many people understand.

And Google is searching and building out its answer to that.

But ChatGPT, Kathy, has this partnership with Microsoft.

Microsoft is just another mega cap that's getting all the benefit and chat GPT essentially needed the compute power.

So again, it sort of all paths currently lead back to big tech or is that wrong way of thinking about it?

Well, I just gave you 2 disruptions that we think...

But chat GPT is part of Microsoft, right?

Well, there are political forces at work that are focused on data privacy.

And in Europe, GDPR, the privacy standards there are much tougher and anyone doing business from the US into Europe is going to have to abide by them.

And they are starting to zoom in on AI and privacy and that could throw a wrench into some of these big mega cap plays because they're the targets.

Although we haven't seen investors react to that yet.

Kathy, I want to switch gears a little bit.

Investors stuck with you during losses in

This year, however, you're seeing outflows even as you're rebounding.

So we are asset retention has been spectacular.

We are up more than 50%, some of our funds 60% plus.

So there would be natural profit taking, but there's something else that has happened over the last year.

Our stock developed what traders would call a very nice base, a trading range.

And I think we began to see opportunistic trading in the mid 30s to the mid 40s.

And it seemed to top out regularly in the mid 40s.

And so recently, this week, our flows picked up very nicely because there are traders out there who are looking at ARK stock and says, wow, if it breaks out of this nice long base, it could have a very powerful move here.

And as you can see from the chart, we are still down.

If you look, if you compare ARKK to the NASDAQ 100, you'll see the NASDAQ's, you know, getting close to its all time highs and ARKK, which is full of innovation is much closer to its lows.

So I do think we're beginning to see investors shift from the Nasdaq 100 or Nasdaq take maybe losses or gains there and into our innovation fund because I think the values when it comes to innovation are in our fund.

Let's maybe look at that chart on a longer term basis.

Let's say since ARK's inception in 2014, and I know you invest in disruptive business models, so you take a longer term view, but over that time, ARK has underperformed not just the NASDAQ, but the S&P 500.

How should investors view your proposition, your value proposition to them?

Well, I think they should put into context what has happened in the last 2 years.

Interest rates, the Fed jacked interest rates up 21 fold.

Any long duration asset, and in the world of equities, innovation is going to be the longest duration, all long duration assets were slaughtered last year.

The bond market, now, that's long duration as well, but it's usually a flight to safety vehicle.

The bond market last year had its worst year since sometime in the 1700s.

If that was going to happen to bonds, which are usually flight to safety, just because they were long duration, that was going to happen to ARK in spades, and it did.

The market is starting to look to the other side of the interest rate increase.

And they're starting to look at inflation, which is crumbling.

I know that a lot of people use the word sticky, but you look at the leading- And core.

You look at the leading indicators of inflation, they are coming down rapidly.

And we do believe we're going to see deflation, which we're already seeing it in many places, but even in the broader-based indices, and the Fed will have to adjust, And we'll be on the other side of the horror show we just went through.

Cathy, you've been talking about deflation for a long time, though.

And some would argue many, though, missed, including the Fed itself, the rise in inflation and how sticky it has been.

So What makes you think now is any different?

Why should investors believe you this time when sort of you, but many others as well, have been wrong about it?

When we were in COVID, we were talking about inventory shortages that would cause supply chain problems and the inflation that would come from that.

Sure, we didn't know about Russia's invasion of Ukraine, but I think when history is the judge, and it will be, that history will judge the inflation we went through as a mass, as a result of a massive supply shock to the system.

And they will look at the comparison, not to the 70s, which I know Larry Summers and Mohamed El-Erian and others have used that analogy.

We went through a pandemic back then, the Spanish flu.

We were on the gold standard, so money supply had to fall as inflation went up.

dropped to minus 15 in June of 1921, and we moved into the roaring 20s.

Massive innovation, Telephone, electricity, automobile.

This period is much more like that period than like the 70s.

It will look at the inflation chart, which went like this, and is going like this now.

And it will seem like it happened in a flash, even though going through it feels like we're in slow motion.

I was on threads, as many people these days are, and I was looking up quickly, you have an account, so does ARK Invest, but you haven't threaded anything yet, if that's the right terminology.

And what do you think its proposition is over Twitter, if any?

So I won't be using it, but our marketing team, I'm sure, will be using it.

And I think because the more productive social network for us at Arc is Twitter.

I mean, the knowledge workers, the innovators we want to talk to are on Twitter, and we've established relationships with them.

And so I can't imagine switching from Twitter.

That doesn't mean threads will be a failure.

It's just going to be something different.

Cathy I'm going to take 1 quick 1 last in any regrets over the last few years.

The trade that you missed or made the regret perhaps.

Well you know I think and many people will say oh you must have regretted missing Nvidia as you did Deirdre up front.

We're managing a portfolio, and when we see 1 valuation skyrocket and other valuations that should be responding to the same thing, artificial intelligence getting crushed, we know what to do with that.

What I wish that the media had focused on is how loud we were about NVIDIA starting nearly 10 years ago in 2014.

We said NVIDIA, NVIDIA, every time we came on your show in video when it moved.

Kathy was as always great to have you on thank you and we'll

Coming up Hollywood on strike Actors joining the writers on the picket line.

A complete shutdown of film and TV productions underway.

Shares of Warner Brothers, Discovery, Disney and Netflix.

We're just getting started on the CNBC special, Taking Stock.

Will Hollywood labor strife leave profits on the cutting room floor?

Back in its IPO price, can Uber leave Lyft in its rear view?

How the debt capital of Venture City has become Restopolis.

Today's news can feel like uncharted waters, but more often than you'd think, we're not the first generation to confront what we're dealing with today.

We're just the first generation to make a podcast about it,

I'm Isaac Davy Aronson each week we'll bring you a story from history

that helps with something in the headlines today.

Rachel Maddow presents deja news with Isaac Davy Aronson and MSNBC podcast search for deja news wherever you're listening and follow.

Welcome back president Biden throwing his support behind the screen actors Guild's decision to strike Just a few months after more than 11, 000 film and television writers went on strike, actors have joined the stoppage in the first tandem strike since

And that effectively grinds all Hollywood production to a halt.

Comes amid a bunch of changes in the filmmaking industry as studios have shifted capital to streaming and restructured all while navigating a post-COVID recovery.

Disney CEO Bob Iger even says that the old ways of doing business are no longer sustainable.

There's a level of expectation that they have that is just not realistic.

And they are adding to a set of challenges that this business is already facing that is quite frankly very disruptive.

Some of the key demands from the Writers Guild critique the so-called mini rooms that have become popular with streaming companies and look to set standards for streaming residuals.

AI also a key factor in both negotiations.

The Alliance of Motion Picture and Television Producers saying it offered the actors union a quote groundbreaking AI proposal that quote protects performers digital likenesses however Sags chief negotiator Duncan Crabtree Ireland rebutting that the proposal would have compensated Background actors for just 1 day of work in exchange for the rights to their likeness, quote, for the rest of eternity with no compensation.

All of this coming amid a broader wave of labor strikes and negotiations across North America, disruptions over here on the West Coast ports to Starbucks workers striking over the use of pride decor and we are awaiting the upcoming decision on the Teamsters Which according to a labor think-tank could be the costliest strike to the US in?

Decade that contract between the Teamsters and UPS expires on July 31st so a lot of action in labor movements.

Coming up we are taking a look at a stock that has been accelerating this year up more than 80% year to date so what is it what's behind that move we're taking a ride next you're watching tech check live from CNBC's 1 Market, we're right back after this.

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Special Report: Tech Earnings, Venture Debt & Hollywood on Strike 7/14/23