AMD CEO Su on earnings outlook, new Starbucks holiday menu, and Hilton CEO on hotel demand

Yahoo Finance Executive Editor Brian Sozzi tackles the biggest news of the market day, including AMD's (AMD) earnings outlook topping estimates as chip demand soars, what the blue wave in Congress means for a market rally, and how Starbucks (SBUX) plans its business around the holiday season with new products.

Sozzi also goes 1-on-1 with Hilton (HLT) CEO Chris Nassetta to discuss AI's impact on the hospitality industry.

Top of the morning, friends. I'm having a great day already out of the jump because today the new Starbucks holiday menu dropped. More on that in just a second. I don't know what's in the bag, but I know the team picked me up something. And number 2, shout out to the Alpha Space team, getting some uh corporate logos on here.Love that. I love that Royal Caribbean logo, can't get enough of it. Couple of other fun things that caught my eye this morning after really, it was a wild day in markets yesterday, is this, and I just straight up laughed. Are you kidding me? After a rally like we saw yesterday, Micron.Trading at almost under 4x4 earnings. Sandusk, it's almost like these stocks which are powering the AI boom are going out of business. That couldn't be further from the truth. Look what we heard from Apple this week, supply shortages, prices off, these companies are the beneficiaries of the stock.Like I, I can't believe that they're trading at these valuations. Hit me with the next board, guys, cause I can spend another 35 minutes on this. And then shout out to myself, uh, for this post very early this morning. I had a great conversation with Circle, uh, founder and CEO Jeremy Allah. You can check that out right now on the Y'all finds homepage.Here's what he said. Uh, I will paraphrase it. He is very concerned about the risks to the financial system because of AI. Very, very concerned. Go check out this conversation because Jeremy has been a lot right about a lot of things, and after this conversation, I gotta be honest, I left it completely freaked out of my damn mind. Good conversation by Jeremy. Pretty good quarter too from Circle, all things being considered.And I'm going to stay on tech a little bit because it has been an interesting few hours to say the very least. Now the post-election day blue wave continues to rip through markets around the world. Today, it continues.Because are you having fun yet this week? Because I sure am, as you can probably tell already, I'm having so much fun. Here are three long takes. I have all this action. They are in no order of importance. First, Fed Chair Kevin Warsh best spend some time walking the halls of Congress if he doesn't want to be a one-term Fed chair. His term ends in 2030, which will be here before you know it. And the Dems could still be in control of things in terms of the House and the Senate by then. Less committees, Kev.More making friends. 2, a historic opportunity for bipartisanship and taming inflation could be waiting in the wings for 2027. It's almost next year. Think of dialing back in some tariffs, dialing back on the Iran war, all at the same time, we have an inflation fighting focused Federal Reserve. I think this is a key part of the post-election rally and markets we have been seeing. And 3, here's your momentum trade for the week. Thank you in advance. Hyper scalers.Versus chip plays. Wednesday saw a pop in hyperscale stocks like Meta, Google, Amazon on the view of the Blue wave or Blue mania, blue wave, whatever you want to call it, would lead to a curtailing of AI data center builds and less CapE needs by the hyperscalers. As a result of that, chip stocks like Micron and Nvidia got hit on fears odors won't be as strong as it's been hyped for the past 4 years. This trade is continuing today, and it could stay this way as Dems pick up.Their rhetoric on data centers in coming weeks, you know it's coming. You know it's coming. It's gonna probably come on X and various other news sites. Now, staying on tech here because you have seen, I think, something interesting, and I don't want you guys to lose focus of something else that is happening out there in markets. Free cash flow for the hyper hyper scalers remains, I think, still very much top of mind. Don't forget this was a main issue driving markets just like a week and a half ago. Uh, in other words, just before the midterm election.But and this is, this is interesting. Shout to the Kobasi letter team. I always cite their work here on Unleash because this is really good, as a lot of these hyper scalers like Alphabet, Amazon Meta, and Microsoft, as they have pulled back, or I should say invested aggressively in AI infrastructure, they have pulled back on stock buybacks in a very, very large way. Look at this chart. I mean their buybacks in the third quarter, at least according to the Koasi team, $4.4 billion only. Look how much they were buying back just a couple of quarters.Now look, I am no fan historically of stock buybacks. I think they artificially prop up earnings, but these buybacks over the past 4 or 5 years have helped propped up earnings for big tech companies and by extension have helped prop up their stock price. That's just how it's happened. But again, a lot of these hyperscales have pulled back and now get this one. I'll leave you on this one. The share purchases for this group, the hyperscaler Group, according to Koasi's team, have dropped a stunning 90% since the 45.4.$45.9 billion peak recorded in the fourth quarter of 2021. Big tech is pulling back. They are, it's, it's not guaranteed that you have to go out there and buy back your stock. It's not written anywhere. It's just, it just happens. So I think you're seeing a lot of companies and teams tightening the reins on stock buybacks, and we're staying on tech because I had a really awesome conversation with one of the key drivers of the whole tech AI boom, that is AMDCO Dr. Lisa Su, fresh off a big earnings report, fresh off a big outlook. Here's what Lisa had to tell me.

I think what we're seeing, Brian, is the following. Um, you know, most companies, if you look at how they plan, they plan on an annual cycle. They say, hey, they're gonna do an annual operating plan. These are the budgets, these are the things that we're gonna do. Um, with AI and the progress that we're making through AI adoption.Uh, throughout the industry, uh, what we're seeing is what used to be, uh, let's call it, you know, fairly static plans are now actually becoming pretty dynamic. Um, you're not realizing how fast the adoption curve is going. You, you actually see an opportunity, like I said, with, you know, MUSE is one of the best examples. I mean, over 10 million people activating in the span of 45 days. I mean, that's pretty.Incredible. Like that's, that's an adoption curve that, uh, you know, probably wasn't in the regular plan, and we're seeing that across a number of applications. And so from our standpoint, uh, we are, uh, very dynamic, you know, we're a tech company that has, um, a lot of resources and the ability to, uh, expand our supply and expand our ability to help our customers, and that's what's led to, you know, tremendous growth, so.Uh, being able to say that my data center business is gonna grow 50% sequentially from Q3 to Q4, uh, it's a big step up and it's a, a testament to how important computing is, um, in the industry today. And, you know, we're looking to double the business, more than double the business and.As we go into next year, uh, we are a data center first company that is, um, our profile, and you know, people need more computing to power all of these applications.

I don't want this to sound like me. I don't want this to appear like I, you know, I've lost my mind because, because I haven't. But is this a starting point when you say your business could double next year and your revenues can go up significantly? Is that just your starting point? If the business is that dynamic, I mean, can we have this conversation a year from now and you will raised guidance a few more times?

Well, it's certainly always our intention to, you know, continue to meet the needs of the business. Um, I look at it as, uh, we are extremely ambitious, Brian, in terms of what we wanna do, what we wanna do with our customers. Um, this is an opportunity for us to be like I want to be the best partner, uh, to, uh, the largest users of compute in the world, and sure, I mean, we, we see lots of opportunity for, you know, continued acceleration of the business. Obviously we have to go through.You know, each quarter, quarter by quarter, but we're planning for success, and I think we've had a decent track record at that.

I'vespent the past month of my life, Lisa, writing about core weave bond yields. I really didn't want to do that. I got sucked into it. I had to do it. I'm writing about companies and hyper scalers having their stocks get hit because of concerns about free cash flow. Is the market right to question the growth of AI?

I, I would say it this way, Brian. I think the market can sometimes be a little bit short-sighted, uh, and look, it, it is what it is. Um, what I look at is, in the long term, if you believe, which I do, I believe, uh, very, you know, deeply thatComputing in many ways equates to intelligence. So the more compute you have, the more intelligent you are, the more intelligent your company is, the more problems you're gonna be able to solve, the more you're gonna accelerate your business. If you believe that foundation, then investing ahead of the curve is the right thing to do cause we're always investing for the long term. Long term being, you know, 3545 years and beyond.And that means you have to make the investments now. So, I think from our standpoint, I've always operated AMD that way. We're always always looking at, you know, what do we see over the horizon? And over the horizon, I see, um, AI and superintelligence becoming more and more essential to every aspect of our lives and every aspect of our business. So I believe in this demand and I very much believe that, uh, you know, many of the investments that are being made throughout the ecosystem are also seeing some of these, you know, same trends.

The occasions around beverage, like some people want zero caffeine, other people need another boost of caffeine, and we can do both, and then you also have the ability now to put functional benefits into it, right? Whether it's protein, collagen, um, you know, there, there's just really exciting ways for us to bringFood to life, um, that's got clean ingredients, uh, hits the right macros for people, and then you pair that with a beverage that gets them excited.

And I, I won't offer apologies very often, but Brian, I'm sorry, I, I can't eat this. It's a little greasy. It smells very good. If this was my younger self, I would definitely indeed have it. Uh, and we're switching gears here from, uh, interesting new foods back to the serious business ofOf doing business. I talked to Hilton CEO Chris earlier on today he was over at the NASDAQ. Why? Because he just shifted his listing or stock from the New York Stock Exchange to the NASDAQ. Here's what Chris had to say.

Listen, we went public back to the, the public markets in 2013. Since then, the company has just seen extraordinary progress. We've tripled the number of brands we have from like 10 to almost 30. We've doubled.The size of the company, we've totally reimagined our tech platform and how we go to market from a technology point of view. One of the things I'm most proud of, we've been recognized more than once for being the best place to work in the world, multiple times, the best place to work in the United States, and importantly, we've been amongst the best performers in the S&P 500 over that time frame. Last I checked, somewhere plus or minus the 90th percentile.And so you would say, you know, what's different, why change anything, but the fact of the matter is, while I'm very proud of all those things and all the progress we've made, it's always when you sit in the seat I sit in about the future, and it's always about keeping ourselves pushing the limits. And as I think about the future, I'm thinking about the next sort of steps up the mountain, so to speak, and growth and innovation.And so my view and our view was being alongside some of the most innovative companies on Earth, some of the fastest growing companies on Earth, on the NASDAQ was a better home for us. So here we are today. We're going to ring the bell, start trading on the NASA,