WEBVTT - Arm's IPO and Dell Shares Soar 0:00:01.240 --> 0:00:01.960 From Mahard. 0:00:02.120 --> 0:00:06.520 We're Innovation, Money and Power Collie in Silicon Valley, NBN. 0:00:06.880 --> 0:00:11.399 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:25.239 --> 0:00:28.280 Ahmed Ludlow in San Francisco. Caroline hides off today. This 0:00:28.560 --> 0:00:31.840 is Bloomberg Technology coming up on the program. ARM prepares 0:00:31.880 --> 0:00:34.520 for its IPO with a roadshow slated for next week. 0:00:34.720 --> 0:00:37.600 We'll discuss with our team, and we also speak to 0:00:37.640 --> 0:00:41.320 Ross Gerber of Gerber Kawasaki Plus full earnings coverage ahead. 0:00:41.360 --> 0:00:44.400 Dell saurs to a record high on a PC recovery, 0:00:44.680 --> 0:00:48.880 while broadcons slumps amid a disappointing forecast. We talk AI 0:00:49.360 --> 0:00:52.839 in earnings, and Tesla ravamps the Model three and slashes 0:00:52.880 --> 0:00:55.880 pricing for its premium vehicles in an all out push 0:00:56.080 --> 0:00:59.480 to boost sales. Will bring you those details one future 0:00:59.480 --> 0:01:02.200 company that they end up in public markets ARM. It's 0:01:02.240 --> 0:01:04.880 one of the most anticipated stock listings of the year 0:01:05.120 --> 0:01:07.560 and now ARMS looking to set a date for its 0:01:07.600 --> 0:01:10.560 IPO with a roadshow kicking off after the Labor Day 0:01:10.560 --> 0:01:14.600 holiday in the US. With the latest details, Bloomberg's Leanna Blaker, 0:01:14.840 --> 0:01:17.080 who leads M and A coverage for US. Okay, so 0:01:17.120 --> 0:01:19.240 I think we have a date for pricing and the roadshow. 0:01:19.240 --> 0:01:19.679 What do we know? 0:01:19.880 --> 0:01:22.560 So the date is going to be September thirteenth for 0:01:22.760 --> 0:01:25.480 the pricing of the ipeo, that's the actual IPO, but 0:01:25.600 --> 0:01:28.399 trading isn't expected to start until the next day, which 0:01:28.440 --> 0:01:31.000 is September fourteenth. So this is right around the corner. 0:01:31.360 --> 0:01:34.720 And while ARM is aiming to list on those dates, 0:01:34.840 --> 0:01:38.640 it could always move. The timeline for IPOs is always 0:01:38.720 --> 0:01:42.360 uncertain and it really depends on how meetings with investors go. 0:01:42.520 --> 0:01:45.800 Those meetings will start next week when the road show launches. 0:01:46.000 --> 0:01:49.720 The first signal of the roadshow launching will be early Tuesday. 0:01:49.760 --> 0:01:52.560 We're expecting a filing to come out for ARMED to 0:01:52.760 --> 0:01:55.800 update its perspectives, and it'll publish for the first time 0:01:55.880 --> 0:01:58.640 a price range of where they'll be marketing shares. 0:02:00.120 --> 0:02:02.440 We talk on Blue Bow Technology about ARM is kind 0:02:02.440 --> 0:02:07.400 of the starting gun for a series of technology IPOs 0:02:07.440 --> 0:02:11.400 that we're anticipating. But also the size and scope of 0:02:11.440 --> 0:02:13.880 this is important. What are the numbers that we think 0:02:13.919 --> 0:02:15.919 in terms of money being raised in valuation? 0:02:17.120 --> 0:02:19.919 We reported yesterday for the first time that Soft Bank 0:02:20.120 --> 0:02:22.240 is sort of scaling back how much they're going to 0:02:22.320 --> 0:02:25.160 raise this isn't because of the prospects of the company. 0:02:25.240 --> 0:02:28.200 In fact, they're very bullish on the company. And Matt 0:02:28.200 --> 0:02:31.520 sayoshis the SoftBank CEO, does not want to part with 0:02:31.600 --> 0:02:34.800 more than ten percent of ARM. They one hundred percent 0:02:34.840 --> 0:02:37.720 of ARM. And originally the Vision Fund, which you might 0:02:37.760 --> 0:02:40.520 remember is that vicious fund that lost a lot of 0:02:40.520 --> 0:02:43.359 money through the startupfents. They had owned twenty five percent 0:02:43.400 --> 0:02:47.040 stake in ARM. Recently that steak was sold back to Saftbank. 0:02:47.120 --> 0:02:49.519 So because the Vision Fund is no longer a seller 0:02:49.520 --> 0:02:51.480 in this IPO, they were expected to be a seller, 0:02:51.520 --> 0:02:53.880 but they no longer are, soft Bank to hold on 0:02:53.919 --> 0:02:57.160 score shares. So for that reason, ARM is going to 0:02:57.320 --> 0:03:00.880 raise potentially between five and seven billion, which is lower 0:03:00.919 --> 0:03:03.160 than the amount we originally published, which was eight to 0:03:03.240 --> 0:03:07.080 ten billion. So it's a bit complicated, but the main 0:03:07.120 --> 0:03:09.480 point is that SoftBank is going to cash out here 0:03:09.600 --> 0:03:11.320 with a lot of proceeds, but not as much as 0:03:11.320 --> 0:03:12.239 we originally thought. 0:03:13.280 --> 0:03:15.240 It is complicated, but it is the one that we 0:03:15.280 --> 0:03:18.560 are watching in the world of technology. Bloombos Leanna Baker 0:03:18.600 --> 0:03:20.760 giving us all of the latest details and after this 0:03:20.840 --> 0:03:23.400 long weekend here in the US, we are waiting for 0:03:23.480 --> 0:03:26.799 some movement on arm right. Joining us next Ross GERBA, President, 0:03:27.080 --> 0:03:31.240 CEO and co founder of Gerber Kawasaki. Ross is you 0:03:31.240 --> 0:03:34.200 and I were talking off camera an astonishingly busy week. 0:03:34.880 --> 0:03:36.680 I want to start on that job's data, and we 0:03:36.720 --> 0:03:41.360 always frame it as such, jobs data. What will the 0:03:41.400 --> 0:03:44.200 FED do and how does that impact the technology sector? 0:03:44.920 --> 0:03:46.560 Was your reaction to the numbers this morning? 0:03:47.560 --> 0:03:49.800 Well, you know, I still I've been saying this for 0:03:49.840 --> 0:03:53.200 so long. The FED is done. I mean, all they're 0:03:53.240 --> 0:03:56.800 going to do is create more imbalances in our economy 0:03:57.080 --> 0:04:01.160 by really attacking just a few industries That's all rates do. 0:04:01.920 --> 0:04:03.760 And when you look at what's happening with housing in 0:04:03.800 --> 0:04:06.640 the banking sector and the risks of the FED continuing 0:04:06.680 --> 0:04:09.880 to raise rates and the tremendous losses the FED is 0:04:09.960 --> 0:04:13.360 now taking on its own portfolio that the taxpayers are paying, 0:04:13.760 --> 0:04:16.560 you know, it really doesn't make sense. All the numbers 0:04:16.600 --> 0:04:19.440 are trending in the right direction. We have completely restrictive 0:04:19.520 --> 0:04:23.159 rates right now. Businesses can't borrow, individuals can't buy houses. 0:04:23.200 --> 0:04:25.760 They're having kids that can't move up. You know, it's 0:04:25.760 --> 0:04:28.760 certainly affecting the economy, and many companies are done hiring. 0:04:29.080 --> 0:04:31.640 You know, they're just done hiring for now, and so 0:04:32.160 --> 0:04:32.920 we're seeing a. 0:04:32.920 --> 0:04:33.920 Very good environment. 0:04:33.960 --> 0:04:36.760 If the FED just lays off right here and lets 0:04:36.800 --> 0:04:39.720 things work itself out, I think the next move is 0:04:39.760 --> 0:04:41.000 lower for the FED next year. 0:04:41.839 --> 0:04:42.400 You know, Russ. 0:04:42.560 --> 0:04:45.960 The story of twenty twenty three has been artificial intelligence 0:04:46.080 --> 0:04:48.960 driving this equity market higher. And there are specific names 0:04:48.960 --> 0:04:51.640 you and I will get into, but the Fed's always 0:04:51.640 --> 0:04:55.040 been there in the background. When you're assessing your investment 0:04:55.080 --> 0:04:58.480 priorities and investment thesis, which are you focused on more 0:04:58.839 --> 0:05:03.280 the opportunity and all the impacts of higher rates on valuations. 0:05:04.520 --> 0:05:09.440 Well, you've got two really competing forces here, with rates 0:05:09.480 --> 0:05:12.239 being super attractive. Like clients coming in to our firm, 0:05:12.320 --> 0:05:14.039 you know, it's very easy for me to make them 0:05:14.080 --> 0:05:17.360 five six seven eight percent by buying bonds, and from 0:05:17.360 --> 0:05:19.400 any clients, that's the return they're shooting for. 0:05:19.480 --> 0:05:20.480 So it's kind of. 0:05:20.440 --> 0:05:23.479 Great if you're conservative and older and we haven't seen 0:05:23.560 --> 0:05:25.600 rates like this in over twenty years. But on the 0:05:25.640 --> 0:05:28.240 other hand, the maximum return I see making on these 0:05:28.240 --> 0:05:31.000 bonds is let's say five six seven eight percent right 0:05:31.480 --> 0:05:34.320 where equity is over the long term of average ten 0:05:34.360 --> 0:05:36.360 percent a year in the s and P five hundred, 0:05:36.640 --> 0:05:39.480 where if we own the NASTAC small caps or things 0:05:39.520 --> 0:05:41.919 like my fund GK, which are really growth oriented and 0:05:41.960 --> 0:05:45.160 concentrated funds, we can expect much higher rates to return. 0:05:45.440 --> 0:05:47.680 So if the Feds at the top of the rate 0:05:47.760 --> 0:05:51.839 raising cycle and we've already valued in this effect on 0:05:52.160 --> 0:05:55.560 you know, the market and valuations and the next really 0:05:55.600 --> 0:05:57.880 move for rates or to stay the same or lower. 0:05:58.200 --> 0:06:00.880 We expect, you know, earning will drive the. 0:06:00.839 --> 0:06:02.960 Next move in markets. It's not going to be like 0:06:03.000 --> 0:06:04.479 a Pe expansion. 0:06:04.560 --> 0:06:06.680 And I think that's what investors have to understand for 0:06:06.720 --> 0:06:10.480 the market to move higher, earnings asked to move higher, 0:06:10.600 --> 0:06:12.840 and same with individual securities as well. 0:06:13.480 --> 0:06:15.240 All right, Ross, let's go from the macro to the 0:06:15.279 --> 0:06:16.840 micro and have a bit of fun. I want to 0:06:16.880 --> 0:06:18.800 talk to you about in Nvidia. You've had a lot 0:06:18.839 --> 0:06:23.520 to say about that name and in particular its associational 0:06:23.600 --> 0:06:26.280 relevance to Tesla and a comparison between the two. 0:06:26.400 --> 0:06:27.640 Take it away was your thesis? 0:06:28.640 --> 0:06:32.560 So my thesis is that Tesla and Autonomy was where 0:06:32.640 --> 0:06:35.800 in Nvidia and Tesla originally met. So Tesla used to 0:06:35.920 --> 0:06:38.680 use video chips and building their autonomy systems and the 0:06:38.720 --> 0:06:41.800 model less back in the day, and Tesla started making 0:06:41.920 --> 0:06:44.360 their own chips, are designing their own chips because in 0:06:44.440 --> 0:06:47.360 Video is like, we're not going to design GPUs specifically 0:06:47.400 --> 0:06:49.440 for Tesla, so Tesla's like, all right, we'll do it. 0:06:49.800 --> 0:06:52.880 So over the years, the two companies have, you know, 0:06:52.960 --> 0:06:57.400 really not competed, but continued to develop hardware and software 0:06:57.720 --> 0:07:01.640 for autonomy. And with that, many of the in Vidio 0:07:01.720 --> 0:07:05.040 GPUs were used in crypto and then cloud and now AI. 0:07:05.480 --> 0:07:08.280 So for the first time we see a convergence of 0:07:08.480 --> 0:07:12.280 actual applications, which is gener of AI, check GPT and 0:07:12.320 --> 0:07:15.800 then autonomy full self driving, and we have these applications 0:07:16.040 --> 0:07:19.960 and it's just driven this massive investment from all the 0:07:20.000 --> 0:07:23.840 major tech companies to upgrade their databases and their systems 0:07:24.040 --> 0:07:25.080 to being intelligent. 0:07:25.280 --> 0:07:27.440 And they have to buy in Vidia chips to do this. 0:07:27.600 --> 0:07:31.880 So I think both companies represent the best of American innovation, 0:07:32.320 --> 0:07:36.480 technology and opportunity over the next decade. So boy, I'm 0:07:36.520 --> 0:07:38.960 super bullish on these two companies. There are two of 0:07:39.000 --> 0:07:41.800 my top three holdings in my fun GK, and I 0:07:41.800 --> 0:07:45.040 think investors, even though these valuations are very high, have 0:07:45.120 --> 0:07:46.840 to think out over the next five to ten years. 0:07:46.840 --> 0:07:49.640 Wh's really going to drive growth in our economy And 0:07:49.640 --> 0:07:52.840 it's always been technology, and AI is a tremendous leap 0:07:53.120 --> 0:07:54.400 forward in technology. 0:07:55.320 --> 0:07:59.040 You know, if you think about specific technology or specific products. 0:07:59.120 --> 0:08:01.320 We've talked a lot about the H one N one 0:08:01.440 --> 0:08:05.240 hundred GPU series this year for obvious reasons. They are 0:08:05.720 --> 0:08:09.920 the chip of choice or the tensacle GPU of choice 0:08:10.000 --> 0:08:15.080 for AI. Less about Dojo and Tesla's own proprietary silicon. 0:08:15.760 --> 0:08:18.520 Do you still assign a lot of the potential for 0:08:18.600 --> 0:08:20.680 Tesla on that competence in silicon? 0:08:21.600 --> 0:08:24.320 Absolutely? And I think that's in the valuation of Tesla 0:08:24.360 --> 0:08:26.600 because obviously if it was an EV maker, you look 0:08:26.600 --> 0:08:29.720 at Rivian, which is a great EV maker, its valuation 0:08:29.880 --> 0:08:32.079 is you know, five percent of Teslas. So when you 0:08:32.120 --> 0:08:35.440 when you think about why is Tesla such a valuable company, 0:08:35.640 --> 0:08:38.440 it's because of its technology and that does center a 0:08:38.480 --> 0:08:42.600 lot around AI Dojo chips. They're really machine learning and 0:08:42.640 --> 0:08:46.520 ability to now train the cars through AI clusters. They 0:08:46.600 --> 0:08:48.880 just bought a huge in video, you know, H one 0:08:48.920 --> 0:08:52.640 hundred cluster of Really they're not really chipped or like 0:08:52.640 --> 0:08:56.400 these massive machines actually that you add into your database. 0:08:56.440 --> 0:08:59.640 So when you look at a company like Salesforce, which 0:08:59.640 --> 0:09:02.439 had a great numbers. And I use Salesforce at my company, 0:09:02.640 --> 0:09:05.480 and you start adding AI to this platform, it's going 0:09:05.559 --> 0:09:08.679 to be like a game changer for Salesforce and it's users. 0:09:08.720 --> 0:09:11.360 So I think that there's so many companies in Big 0:09:11.400 --> 0:09:14.680 TAC that can benefit from this, and Nvidia and ultimately 0:09:14.760 --> 0:09:18.760 Tesla are the roads to get reaching these efficiencies through 0:09:19.360 --> 0:09:20.520 AI and autonomy. 0:09:21.120 --> 0:09:22.959 Yeah, we told in the show to speak about how 0:09:23.040 --> 0:09:25.280 Salesforce has pricing power as well. Right, they could charge 0:09:25.360 --> 0:09:26.920 seventy five hundred per years. 0:09:26.760 --> 0:09:29.439 That we spend so much. Yeah, we spend so much. 0:09:30.960 --> 0:09:32.240 We're short in time, and I want to get to 0:09:32.280 --> 0:09:35.000 Disney and Charter because Disney's name that you hold and 0:09:35.080 --> 0:09:35.840 follow closely. 0:09:36.480 --> 0:09:37.800 What do you make of that spat? 0:09:38.920 --> 0:09:41.800 Well, you know, I feel like being a Disney long 0:09:41.880 --> 0:09:43.880 term share older, you feel like you're getting kicked in 0:09:43.920 --> 0:09:45.880 the head over and over again. But this is really 0:09:45.920 --> 0:09:48.240 about why do I watch cable TV. I actually am 0:09:48.280 --> 0:09:50.120 a Spectrum user. I was about to tweet them and 0:09:50.160 --> 0:09:52.360 say pay the damn fee because the only reason I 0:09:52.400 --> 0:09:55.480 watch Spectrum is for sports, and so it's absurd that 0:09:55.880 --> 0:09:59.040 you're cutting off sports from your you know, subs when 0:09:59.040 --> 0:10:02.000 cable's dying, and the only reason people watch cable is 0:10:02.040 --> 0:10:05.719 for sports pretty much. So you know, we're in this 0:10:05.840 --> 0:10:10.120 new period of time between linear TV and cable and 0:10:10.160 --> 0:10:13.800 this you know, convergence of streaming and this battle for 0:10:13.920 --> 0:10:16.800 who's paying for what and where and it's just playing out. 0:10:16.800 --> 0:10:19.600 But any end spectrum will pay because people only want 0:10:19.600 --> 0:10:21.960 to watch sports, you know, I mean, that's bottom line. 0:10:22.040 --> 0:10:25.000 That and Taylor Swift Russ. 0:10:25.040 --> 0:10:27.400 You are a private investor in the entity known as 0:10:27.640 --> 0:10:32.200 X formerly known as Twitter. I reported yesterday that specifically 0:10:32.240 --> 0:10:36.240 the biometric data policy update only applies to premium subscribers. 0:10:36.800 --> 0:10:39.920 It involves a government issued ID with a selfie or 0:10:40.200 --> 0:10:40.920 a double. 0:10:40.760 --> 0:10:42.040 Verification through picture. 0:10:42.600 --> 0:10:45.599 The response I got on the X platform was astonishing. 0:10:45.840 --> 0:10:48.040 What do you, as an investor and user of X 0:10:48.440 --> 0:10:51.040 make of that privacy policy update? 0:10:52.720 --> 0:10:54.960 Well, you know, you can argue two sides of this 0:10:55.040 --> 0:10:58.320 coin with almost every decision X makes. You know, I 0:10:58.320 --> 0:11:02.000 think part of it is great, you know, like profiles 0:11:02.000 --> 0:11:06.480 should actually correspond to an actual human and checking the 0:11:06.559 --> 0:11:09.480 current verification system, in my mind, doesn't really work. 0:11:09.760 --> 0:11:12.440 You know, It's kind of good, but not great. 0:11:12.760 --> 0:11:14.800 This is very similar to what the bitcoin companies were 0:11:14.800 --> 0:11:16.560 doing when you were signing up is you'd have to 0:11:16.559 --> 0:11:18.400 do the same thing and send a picture of yourself 0:11:18.600 --> 0:11:21.280 with your ID and that would verify you for taxes 0:11:21.320 --> 0:11:23.440 and all this kind of stuff. So this isn't an 0:11:23.520 --> 0:11:26.600 uncommon thing for people in the digital world to do. 0:11:27.240 --> 0:11:30.800 I think, for a social media platform and one that's 0:11:30.800 --> 0:11:34.240 building an AI platform, it's a little bit big brotherish 0:11:34.240 --> 0:11:36.920 and scary that now I'm trusting Elon with all my 0:11:36.960 --> 0:11:39.640 biometric data and I can totally get the pushback as well. 0:11:39.720 --> 0:11:41.800 So you know, there's a plus and the minus to 0:11:41.880 --> 0:11:44.200 this thing. I don't know how quick I am to 0:11:44.280 --> 0:11:48.200 upload my driver's license to Twitter yet, you know, so 0:11:49.000 --> 0:11:51.160 I get it, you know. So I think some of 0:11:51.240 --> 0:11:53.080 these things that's really meant to make the purity of 0:11:53.080 --> 0:11:56.319 the platform better. But at the same respect, people aren't 0:11:56.400 --> 0:11:59.640 that excited to give away biometric data to Twitter, either, you. 0:11:59.679 --> 0:12:04.000 Know or ex Ross Gerber, president, CEO and co founder 0:12:04.000 --> 0:12:07.200 of I Think. I threw a dozen different names and 0:12:07.280 --> 0:12:09.840 stories at you. What a fast start to the show. 0:12:09.880 --> 0:12:21.480 Thank you very much. Much more ahead. This is Bloomberg Technology. 0:12:23.559 --> 0:12:25.840 The big news is we go back to the technology 0:12:25.880 --> 0:12:30.319 sector overnight being Tesla. Tesla revamping the Model three sedan 0:12:30.440 --> 0:12:34.600 with sleeker looks and longer range while slashing prices of 0:12:34.640 --> 0:12:37.760 its premium vehicles in an all out push to boost 0:12:37.760 --> 0:12:39.880 its own sales. For more, I'm delighted to be joined 0:12:39.920 --> 0:12:42.640 on set by Bloomberg Stan a whole now that refresh 0:12:42.720 --> 0:12:45.200 Model three we start there, but that's only in China 0:12:45.280 --> 0:12:47.640 and I think Europe, not yet here in the US. 0:12:47.880 --> 0:12:48.080 Yeah. 0:12:48.200 --> 0:12:50.480 What was funny was last night I kept like refreshing 0:12:50.520 --> 0:12:52.680 the Tesla you know, web page to see if it 0:12:52.720 --> 0:12:55.040 was in the US. But no, it's just China and Europe, 0:12:55.080 --> 0:12:57.640 which makes sense. They retooled the China factory first. 0:12:58.040 --> 0:13:00.360 Okay, we've been waiting on that one. 0:13:00.440 --> 0:13:03.520 I think more of a surprise, potentially was the continuing 0:13:03.640 --> 0:13:09.040 downward price of Model ESNX, the most expensive a Tesla's offering. 0:13:09.040 --> 0:13:10.280 What do we know about that? 0:13:10.440 --> 0:13:12.559 So the sn X are really like a tiny share 0:13:12.559 --> 0:13:15.439 of Tesla's overall sales, but by slashing the prices, they 0:13:15.480 --> 0:13:18.480 now qualify for the seventy five hundred dollars text credit 0:13:18.640 --> 0:13:22.080 under the Inflation Reduction Act this country in the United States. 0:13:22.160 --> 0:13:25.360 So this isn't all out pushed by Elon to chase volume, 0:13:25.400 --> 0:13:29.280 which he forecasts. You know, he telecast to everyone. 0:13:28.960 --> 0:13:30.640 That that's what he was going to do. Yeah. 0:13:30.640 --> 0:13:33.160 Well, reminder, audience, I think the line from Elon Musk 0:13:33.200 --> 0:13:37.240 has always been that they're willing to sacrifice profit to 0:13:37.320 --> 0:13:38.080 protect growth. 0:13:38.160 --> 0:13:39.160 Just to explain that to us. 0:13:39.400 --> 0:13:43.160 Yeah, so they are willing to sacrifice profit margins or 0:13:43.200 --> 0:13:46.200 gross margins to maintain their market share. 0:13:46.320 --> 0:13:47.560 And it's really put the. 0:13:47.559 --> 0:13:49.800 Other automakers sort of on the back heel, because how 0:13:49.840 --> 0:13:51.120 do you compete with tessel on price? 0:13:51.200 --> 0:13:54.360 Now, I think you and I quickly reflect on the 0:13:54.400 --> 0:13:56.280 kind of big breaking news of this week that we. 0:13:56.240 --> 0:13:57.000 Worked on together. 0:13:57.120 --> 0:14:02.120 That is, Federal process cuts are looking into this procurement 0:14:02.240 --> 0:14:03.920 order we reported a year ago. 0:14:05.720 --> 0:14:07.160 The subpoenas have been issued. 0:14:07.520 --> 0:14:09.760 You know, this is the latest twist and term, but 0:14:09.840 --> 0:14:13.160 it centers around Omi daf Shah. Just explain who Omi 0:14:13.240 --> 0:14:15.160 daf Shar is and why are we talking about him? 0:14:15.760 --> 0:14:15.840 So. 0:14:15.920 --> 0:14:18.440 Omid is one of Elon's top lieutenants, and he's an 0:14:18.480 --> 0:14:20.760 interesting character in that he seems to work at all 0:14:20.760 --> 0:14:23.200 of Elon's companies. He appears to be working at X, 0:14:23.280 --> 0:14:25.240 he worked at Tesla for a long time. He's really 0:14:25.320 --> 0:14:28.480 kind of the architect of Gigafactory Texas. He also at 0:14:28.480 --> 0:14:31.800 one point had a VP role at SpaceX. And even 0:14:31.840 --> 0:14:34.000 though he's at the center of this probe because he 0:14:34.160 --> 0:14:38.400 apparently ordered people at Tesla to order this special glass 0:14:38.440 --> 0:14:41.360 for a house that Elon was thinking of building. 0:14:41.400 --> 0:14:42.640 He is still employed. 0:14:42.960 --> 0:14:45.280 And you know where this feral probe is headed? 0:14:45.440 --> 0:14:46.400 Headed is a big question? 0:14:46.680 --> 0:14:50.560 Yeah, we replied it reported according to sources that these 0:14:50.560 --> 0:14:53.200 subpoenas are issued and one of the issues centered on 0:14:53.240 --> 0:14:56.960 communications to and from Omi daf Shah and other TESTA executives, 0:14:56.960 --> 0:14:59.760 and we will continue to report on that. Bloomberg, Dana Hole, 0:15:00.040 --> 0:15:01.960 thank you very much. The other top story in the 0:15:02.000 --> 0:15:04.840 tech sector is Dell. Shares of Dell hitting a record 0:15:04.920 --> 0:15:08.360 high today after reporting better than expected sales of personal 0:15:08.360 --> 0:15:11.480 computers and data center hardware, is fueling hopes of a 0:15:11.560 --> 0:15:15.000 recovery in the market for corporate technology. Who's with us? 0:15:15.000 --> 0:15:18.080 Who else? Bloomberg's Brody Ford out in New York. This 0:15:18.320 --> 0:15:23.080 is an astonishing share reaction, Brody, let's start with it. 0:15:23.720 --> 0:15:26.440 What a sell side is at least saying about this. 0:15:27.200 --> 0:15:30.080 We hear that phrase better than feared, and I cannot 0:15:30.160 --> 0:15:33.080 think of a better example than this. I mean, you know, 0:15:33.560 --> 0:15:36.520 sales are down thirteen percent, but we thought. 0:15:36.320 --> 0:15:37.200 It was going to be eighteen. 0:15:37.640 --> 0:15:40.680 This is pretty good, so let's buy the stock, right. So, yeah, 0:15:40.680 --> 0:15:43.520 it's up twenty five percent. And what we're really seeing 0:15:43.560 --> 0:15:47.600 here is that the demand for PCs, particularly business PCs, 0:15:47.640 --> 0:15:51.000 are stabilizing quicker than we thought. As well as getting 0:15:51.000 --> 0:15:53.600 a little up whift on the server. Business companies set 0:15:53.720 --> 0:15:56.800 us do to AI could be doing a better macro environment. 0:15:56.840 --> 0:15:58.760 We all want to tell an AI story, but that's 0:15:58.800 --> 0:16:00.840 part of it as well. So the board. 0:16:01.080 --> 0:16:02.960 Sales were just a little better than we expected. 0:16:02.960 --> 0:16:04.800 You know, we saw HP a couple of days ago 0:16:04.880 --> 0:16:07.880 saying that the recovery is going to take longer than 0:16:07.920 --> 0:16:10.320 we thought, and Dell really took the other side of 0:16:10.360 --> 0:16:11.920 the coin, which I think is surprising a. 0:16:11.880 --> 0:16:12.400 Lot of folks. 0:16:12.520 --> 0:16:15.240 Is often the two results track each other pretty closely. 0:16:15.720 --> 0:16:20.440 Yes, it is not surprising that there is an AI 0:16:20.480 --> 0:16:23.200 discussion in the context of Dell, But you know, what 0:16:23.240 --> 0:16:25.479 they said was, this is a long term tailwind. 0:16:25.920 --> 0:16:27.400 What is the AI story for Dell? 0:16:27.440 --> 0:16:29.760 What is it that Dell does that is relevant to 0:16:30.120 --> 0:16:31.240 ours official intelligence? 0:16:32.080 --> 0:16:35.000 We talk about clouds so much that we forget. Some 0:16:35.080 --> 0:16:37.720 big companies still use servers. They still need servers, and 0:16:37.720 --> 0:16:39.880 Bell sells them, and they sell them with a bunch 0:16:39.920 --> 0:16:42.640 of those nice and video GPUs in there, and they say, hey, 0:16:42.640 --> 0:16:46.000 you want to run some on premise generative AI solutions, 0:16:46.600 --> 0:16:48.800 this is the one for you. And so they said 0:16:48.840 --> 0:16:52.040 that they have two billion dollars in backlocked orders for 0:16:52.080 --> 0:16:55.000 a specific type of server which is marketed to be 0:16:55.080 --> 0:16:55.800 good for AI. 0:16:56.520 --> 0:16:57.800 So essentially they say. 0:16:57.560 --> 0:17:01.440 That long term, more AI workflows, more need for servers, 0:17:01.720 --> 0:17:02.480 more Bell winning. 0:17:03.920 --> 0:17:07.120 All right, Bloomberg's Brady for this week for you here 0:17:07.160 --> 0:17:08.919 on the show, and with plenty of earnings, Thank you 0:17:09.040 --> 0:17:11.280 very much. The other big earning story is in the 0:17:11.359 --> 0:17:15.240 chip sector. Investors were initially kind of underwhelmed with Broadcomms 0:17:15.320 --> 0:17:19.080 results out yesterday. Some analysts weighed in why that might be. 0:17:19.119 --> 0:17:19.639 Have a listen. 0:17:20.440 --> 0:17:21.600 It's not a bad result. 0:17:21.800 --> 0:17:23.840 I do think people were hoping for more, just given 0:17:23.920 --> 0:17:28.400 all of the recent hype around AI. That was Stacy Raskon, 0:17:28.480 --> 0:17:32.440 Bernstein's senior analyst on Bloomberg TV's The Close yesterday evening. 0:17:32.520 --> 0:17:34.760 Let's turn to one of our internal experts on the 0:17:34.840 --> 0:17:37.400 chip sect of Bloomberg's Eaan King. You and I talked 0:17:37.440 --> 0:17:39.520 a lot about Broadcom going into it, what the AI 0:17:39.640 --> 0:17:40.440 story would be. 0:17:41.640 --> 0:17:43.200 What was the AI story in the end. 0:17:43.400 --> 0:17:48.440 I mean, the AI story was as promised. The unfortunate thing, though, 0:17:48.560 --> 0:17:52.680 was the how that reflected on the overall company Basically hoptown. 0:17:52.720 --> 0:17:55.240 The CEO said, look, you know, all of our upside 0:17:55.640 --> 0:17:58.639 is coming from this large language model build out that 0:17:58.720 --> 0:18:02.600 we're seeing else kind of flat at best. He described 0:18:02.600 --> 0:18:05.280 it as a soft landing, But obviously the market took 0:18:05.320 --> 0:18:09.080 that as like the overall demand for semiconductors not fantastic. 0:18:09.200 --> 0:18:11.760 Well, what I enjoyed talking to you about, genuinely is 0:18:12.000 --> 0:18:16.240 the technology story, like understanding what each chip maker does 0:18:16.440 --> 0:18:21.199 in the AI supply chain. So explain Broadcom's offering in 0:18:21.240 --> 0:18:22.359 the data center context. 0:18:22.440 --> 0:18:25.160 Yeah, I mean they have two big main plays here. 0:18:25.200 --> 0:18:27.240 The one is that they really dominate the market for 0:18:27.280 --> 0:18:30.400 what are called switches. These are chips that decide where 0:18:30.400 --> 0:18:33.960 the traffic goes. Basically, one computer's got some information needs 0:18:34.000 --> 0:18:35.919 to get to another. The switch chip is going to 0:18:35.960 --> 0:18:39.520 be what makes those incredibly fast decisions to send that. 0:18:39.560 --> 0:18:40.760 Data around to switch it. 0:18:41.200 --> 0:18:43.159 The other play that they have, and that's quite a 0:18:43.160 --> 0:18:44.639 big play as well is Google. 0:18:44.720 --> 0:18:45.600 We've heard about. 0:18:45.359 --> 0:18:47.600 The TPUs, Yes, they're own in house. 0:18:47.600 --> 0:18:48.159 Who makes them? 0:18:48.200 --> 0:18:52.320 Who designs the broad Com. 0:18:50.880 --> 0:18:54.520 The legacy of Broadcom? Well, an important part of his 0:18:54.600 --> 0:18:58.679 business is Apple. Frankly, it makes short distance communications at 0:18:58.720 --> 0:19:02.920 aaka Wi Fi and Bluetooth. If AI is doing well, 0:19:02.960 --> 0:19:06.119 but sales growth is kind of low single digits, what 0:19:06.200 --> 0:19:09.040 does that tell us about the smartphone business? 0:19:09.200 --> 0:19:12.680 Yeah, I mean Hat made an interesting comment yesterday he said, look, 0:19:12.720 --> 0:19:16.399 our wireless division is basically defying gravity. What he was 0:19:16.520 --> 0:19:19.560 meant by that was overall things are just not great. 0:19:19.600 --> 0:19:22.679 As we know, we've seen you know, the numbers. But 0:19:23.400 --> 0:19:26.240 demand is kind of okay for that division. They're going 0:19:26.280 --> 0:19:29.040 to see some growth into this quarter. Where as you know, 0:19:29.080 --> 0:19:31.240 as Mark Gooman has told us, we're going to see 0:19:31.280 --> 0:19:33.040 a new iPhone, We're going to see new products and 0:19:33.080 --> 0:19:37.359 that features some Broadcom chips. But overall, not fantastic, was 0:19:37.400 --> 0:19:38.120 the bottom line? 0:19:38.280 --> 0:19:38.600 All right? 0:19:38.600 --> 0:19:41.439 Bloomberg Zy and King another very busy person this earning 0:19:41.480 --> 0:19:44.120 season in the chip sector. And let's move from what's 0:19:44.200 --> 0:19:47.720