WEBVTT - Fizzling Tech Rally and Affirm's Revenue Beat 0:00:01.440 --> 0:00:05.120 From the heart where Innovation, money and power Collie in 0:00:05.200 --> 0:00:06.720 Silicon Valley, NBN. 0:00:07.040 --> 0:00:11.559 This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 0:00:24.360 --> 0:00:27.360 And Caroline Heidet Bloomberg's world headquarters in New York and 0:00:27.440 --> 0:00:29.200 Iurmed Lovelow here in San Francisco. 0:00:29.280 --> 0:00:31.240 This is Bloomberg Technology. 0:00:30.880 --> 0:00:34.280 Coming up the tech rally ed is it exhausted? Strategists 0:00:34.280 --> 0:00:37.519 sour on the sector amid a muted reaction to Nvidia's results. 0:00:37.840 --> 0:00:40.600 Will break down the outlook of mid Jackson. 0:00:40.200 --> 0:00:44.120 Hall plus by now pay later company a firm beach 0:00:44.200 --> 0:00:47.280 revenue estimates in its fourth quarter results. There is an 0:00:47.360 --> 0:00:50.480 insane share reaction. We will speak to the CEO, Max 0:00:50.560 --> 0:00:51.120 Left Chin. 0:00:51.440 --> 0:00:54.080 And China's major one falls after warning that growth in 0:00:54.120 --> 0:00:56.959 its core meal delivery business it's going to slow. Mid 0:00:57.000 --> 0:01:00.800 economic turbulence. Will have that and so much more throughout 0:01:00.800 --> 0:01:04.520 this hour. But first let's check in the Powell result. 0:01:04.640 --> 0:01:05.720 And actually he. 0:01:05.720 --> 0:01:08.880 Manages to stick to his usual party line, no great surprises, 0:01:08.920 --> 0:01:11.039 A hawkish tone coming from the Fed chair over in 0:01:11.120 --> 0:01:13.240 Jackson Hole. We're looking at the NASDAK just off about 0:01:13.240 --> 0:01:15.000 a tenth of a percent. As we see bond wheels 0:01:15.080 --> 0:01:17.160 just push on the higher side, particularly at the front end, 0:01:17.160 --> 0:01:19.320 we're up about four basis points, maybe a bit less 0:01:19.319 --> 0:01:21.920 on the longer end of the tenure, but notably a 0:01:21.920 --> 0:01:23.800 little bit more of a hawkish tone, but not one 0:01:23.800 --> 0:01:26.440 that up ends the market entirely. Ed, I'm looking at 0:01:26.440 --> 0:01:28.720 bitcoin just off by about three tenths of percent. Dollar 0:01:28.760 --> 0:01:30.679 did track a little bit higher throughout that speech. But 0:01:30.760 --> 0:01:32.399 moving on to what the picture of the week has 0:01:32.440 --> 0:01:36.000 been because amid this volatility, amid these warriors of China, 0:01:36.040 --> 0:01:38.880 amid the macro sentiment turning sour, in fact, we hold 0:01:38.880 --> 0:01:41.039 onto gains through the Nasdaq one hundred. 0:01:41.120 --> 0:01:43.160 Throughout the five days, we're up six tens of percent. 0:01:43.200 --> 0:01:45.920 Remember the heavy heights we lifted into a head of 0:01:46.040 --> 0:01:47.680 Nvidia and posted videos results. 0:01:47.680 --> 0:01:49.840 But some of that's been starting to fade a little bit. 0:01:49.840 --> 0:01:53.080 But still a week again, Zed you got the micro Yeah. 0:01:52.960 --> 0:01:55.280 I would say that it's definitely pow that's impacting the 0:01:55.320 --> 0:01:56.200 technology sector. 0:01:56.200 --> 0:01:57.680 But we still have earning stories. 0:01:57.720 --> 0:02:01.680 Marvel Technology, a chip maker, we discuss less networking and 0:02:01.840 --> 0:02:05.280 hard disk controller maker down eight percent, biggest drop since 0:02:05.400 --> 0:02:07.160 last year, lowest level since May. 0:02:07.640 --> 0:02:09.320 An AI relevant story. 0:02:09.040 --> 0:02:11.040 That the profit outlook for this quarter was in line 0:02:11.040 --> 0:02:13.280 with estimates, and the street was basically like meth you know. 0:02:13.320 --> 0:02:14.040 And they've moved on. 0:02:14.120 --> 0:02:17.720 But it's interesting the psychological change for the market around AI. 0:02:18.240 --> 0:02:19.520 This is unbelievable. 0:02:19.800 --> 0:02:23.359 I don't do this often, but affirm you know has rebounded. 0:02:23.400 --> 0:02:26.320 There was a pretty normal earnings call. We'll get into 0:02:26.320 --> 0:02:28.800 the numbers with the CEO. It's up twenty eight percent. 0:02:29.320 --> 0:02:31.480 I don't normally do this, but I went on HRH 0:02:31.520 --> 0:02:34.560 on the Bloomberg terminal. It's a four standard deviations move. 0:02:34.960 --> 0:02:38.000 It's only happened once, so there is a big question 0:02:38.000 --> 0:02:38.320 of what. 0:02:38.400 --> 0:02:39.080 Is going on there. 0:02:39.160 --> 0:02:41.639 It is a popular name on Wall Street bets. Maybe 0:02:41.639 --> 0:02:43.760 that's a part of the story. We'll ask the CEO. 0:02:44.200 --> 0:02:47.679 Then I go back to Nvidia. The enthusiasm from Nvidia 0:02:47.800 --> 0:02:50.440 posts its earnings, which we know on this show we 0:02:50.440 --> 0:02:53.200 talked about them knocking out the park. We're now down 0:02:53.240 --> 0:02:54.959 four percent and it's caught up with the rest of 0:02:55.000 --> 0:02:57.520 the market. Maybe it's a kind of sell the news 0:02:57.880 --> 0:03:01.040 a day late kind of story, but that's pretty credible turnaround. 0:03:01.240 --> 0:03:03.520 Everyone has kind of said, you know what, let's move 0:03:03.560 --> 0:03:05.120 on from the Nvideo and AI story. 0:03:05.639 --> 0:03:08.240 Yeah, are they ready to and really We've had plenty 0:03:08.280 --> 0:03:11.680 of names big market analysis coming out just wondering whether 0:03:11.720 --> 0:03:14.720 this market rally is exhausted. Let's get Katherin Rooney Vera's take, 0:03:14.880 --> 0:03:18.040 chief market Struateturist over at stone xt Group and Kevin 0:03:18.560 --> 0:03:21.080 we've heard from the likes, for example of Mike Wilson 0:03:21.080 --> 0:03:24.600 over at August Stanley, just talking about how this signal, 0:03:24.760 --> 0:03:28.280 the fact that in video failed to boost really the 0:03:28.360 --> 0:03:32.400 overall market is a technical signal that this rally is exhausted. 0:03:32.680 --> 0:03:35.080 Are you, for one agreeing with that or not? 0:03:36.160 --> 0:03:37.960 Well, when you look at the chart of videos back 0:03:38.000 --> 0:03:40.920 to its seven year forward pe multiples, so that also 0:03:41.000 --> 0:03:44.400 tells us something at Stone Exit with our treating dusk desks, 0:03:44.400 --> 0:03:49.160 we have seen an increased interest since the past three 0:03:49.200 --> 0:03:52.000 weeks since I came out recommending the protection on the 0:03:52.040 --> 0:03:57.120 triple Q option with puts, either put spreads or naked puts. 0:03:57.400 --> 0:04:01.680 That has been remarkably profitable and our clients have benefited 0:04:02.040 --> 0:04:05.920 from that perspective. And that was because Caroline, we thought 0:04:05.960 --> 0:04:10.840 that tech was overdone with almost your date fifty basis 0:04:10.880 --> 0:04:16.400 points appreciation at that point. Now in the macro context, 0:04:16.600 --> 0:04:20.240 with the FED trying to persuade markets to believe it 0:04:20.680 --> 0:04:23.360 that it's not going to change its two percent target, 0:04:23.680 --> 0:04:26.160 that it's serious about its two percent target, that has 0:04:26.200 --> 0:04:29.800 a strict interpretation of its dual mandate. That to me 0:04:29.960 --> 0:04:33.240 says that twenty twenty four is unlikely to be as 0:04:33.360 --> 0:04:36.080 much of a boom for this sector as we saw 0:04:36.120 --> 0:04:37.760 it in twenty twenty three. 0:04:38.640 --> 0:04:40.720 You know, we're just a couple of hours postpoal. 0:04:40.839 --> 0:04:43.000 So where we've left it is that it's too early 0:04:43.040 --> 0:04:45.960 to declare victory on inflation. They're going to be careful 0:04:45.960 --> 0:04:49.640 about raising rates, but I think the conclusion is higher rates, 0:04:49.880 --> 0:04:53.640 steady for longer. To your mind, Catherine, how does that 0:04:53.680 --> 0:04:56.440 relate to the technology sector, How do we price that 0:04:56.560 --> 0:04:59.960 into the tech sector in public markets? 0:05:00.000 --> 0:05:03.000 It seems that the markets have not priced in that reality. 0:05:03.080 --> 0:05:06.919 Market's still priced in easing next year. So that tells 0:05:07.040 --> 0:05:12.920 us that currently priced into multiples is the best case scenario. 0:05:13.040 --> 0:05:15.880 So the soft landing, which is of course two percent 0:05:16.200 --> 0:05:21.800 inflation target attainment with no economic contraction, I think is 0:05:21.920 --> 0:05:25.960 unlikely to manifest unless the Fed does, in fact, either 0:05:26.080 --> 0:05:31.640 implicitly or explicitly change it's two percent average target. So 0:05:31.760 --> 0:05:34.039 if it's serious about that target, and it does have 0:05:34.080 --> 0:05:37.240 a strict interpretation of said target, then I think that 0:05:37.720 --> 0:05:40.680 twenty twenty four could be a difficult one for tech, 0:05:40.720 --> 0:05:44.480 and I would expect that the most intrast rate sensitive 0:05:44.600 --> 0:05:49.480 sector such as tech, such as consumer communications and consumer 0:05:49.560 --> 0:05:53.320 discretionary would have a tougher time. So I do like 0:05:53.320 --> 0:05:55.640 I think utilities is up today. Now, I think that 0:05:55.680 --> 0:05:59.279 we have to be more defensively positioned. I like cash, 0:05:59.360 --> 0:06:02.600 I like goal, I like sectors that are defensive going 0:06:02.600 --> 0:06:04.520 into twenty twenty four because the fen's going to be 0:06:04.520 --> 0:06:06.920 in a tough spot. Either go for that two percent 0:06:07.000 --> 0:06:09.200 target and maybe even have to hype further, which has 0:06:09.240 --> 0:06:12.920 been my long health contention, or change it explicitly or implicitly. 0:06:13.480 --> 0:06:15.920 I want to go back to this micro narrative though, 0:06:15.960 --> 0:06:20.120 because you paint a really clear macro picture. But there 0:06:20.120 --> 0:06:24.320 has been this almost ability for tech to outshine because 0:06:24.360 --> 0:06:27.800 of the productivity boost manufacturing into artificial intelligence. Now I 0:06:27.839 --> 0:06:29.840 know that that's been questioned the moment. I just want 0:06:29.880 --> 0:06:31.880 to go to what Steve Slsnak had to say on 0:06:31.920 --> 0:06:35.039 Blueberg Television a little bit earlier about well, the concern 0:06:35.120 --> 0:06:37.880 about lack of institutional buyers at this moment, just take 0:06:37.920 --> 0:06:39.320 a listen, Catherine. 0:06:39.400 --> 0:06:42.960 You didn't get the institutional follow through that I think 0:06:43.000 --> 0:06:45.720 you got, you know, from the from the first round 0:06:45.720 --> 0:06:48.400 of buying, and without follow through and with perhaps a 0:06:48.400 --> 0:06:52.320 little profit taking, you know, you up you end up 0:06:52.320 --> 0:06:55.840 with a messy, messy, kind of blah day that you had, 0:06:56.080 --> 0:06:57.440 that you ended up with yesterday. 0:06:57.720 --> 0:06:59.600 So I just returned back to it a little bit. 0:07:00.200 --> 0:07:02.960 Are there any names that are still the magnificent seven, 0:07:03.040 --> 0:07:05.360 for example, going to tread water because of AI? 0:07:05.480 --> 0:07:07.119 Or is that done? 0:07:07.839 --> 0:07:08.039 No? 0:07:08.160 --> 0:07:12.000 AI certainly has a long longevity and long path therein, 0:07:12.160 --> 0:07:14.280 but a lot has already been baked in in this 0:07:14.320 --> 0:07:18.880 euphoric AI. Now markets tried to price in ahead of 0:07:18.880 --> 0:07:20.320 time what's going to happen in the next five years. 0:07:20.320 --> 0:07:23.960 It's already been priced in, so AI has to deliver now. 0:07:24.640 --> 0:07:28.559 Certainly it is positive for productivity, but my concern, perhaps 0:07:28.600 --> 0:07:33.239 reverting back to that inflation story, is productivity at current 0:07:33.360 --> 0:07:37.160 levels would have to accelerate meaningfully in the near term. 0:07:37.280 --> 0:07:40.720 That means that AI would have to really deliver in 0:07:40.800 --> 0:07:45.920 the next year to really compensate for four percent inflation. 0:07:46.080 --> 0:07:49.240 In other words, productivity is not sufficient at the current 0:07:49.440 --> 0:07:54.120 growth rate over to make up for four percent inflation, 0:07:54.560 --> 0:07:58.360 so inflation stays around. AI is not there yet, and 0:07:58.400 --> 0:08:01.160 the Fed is going to have to stay on hold 0:08:01.160 --> 0:08:04.520 for the entirety of next year. Again negative tech or 0:08:04.680 --> 0:08:08.280 potentially even hype, because inflation is very likely to reaccelerate 0:08:08.560 --> 0:08:11.160 under the scenario of soft inflation. This is an economy 0:08:11.200 --> 0:08:14.880 based on consumption. The consumer is strong, real wagers are positive, 0:08:14.880 --> 0:08:17.680 and they're trending higher. That is not a good environment 0:08:18.000 --> 0:08:23.000 either for yes it's two percent target, or for rates 0:08:23.240 --> 0:08:23.800 coming down. 0:08:24.680 --> 0:08:27.040 You know, Caroline, I sit here on a Friday morning 0:08:27.240 --> 0:08:28.760 asking myself what happened? 0:08:29.200 --> 0:08:30.080 What weird week? 0:08:30.200 --> 0:08:34.880 Twenty four hours ago, JP from Franklin Equity Group told 0:08:34.960 --> 0:08:38.040 us that the nvideo results were like The Godfather Too, 0:08:38.640 --> 0:08:42.240 where the sequel is as good as the original, but 0:08:42.440 --> 0:08:45.000 on a two day basis the stocks down four percent. 0:08:45.280 --> 0:08:46.960 It's like it never even happened. 0:08:47.320 --> 0:08:49.959 Yeah, or you got it in within that And remember 0:08:50.000 --> 0:08:52.640 how far we've charged high more than two hundred percent 0:08:52.679 --> 0:08:56.200 gain on this name throughout the year, the key outperformer 0:08:56.240 --> 0:08:58.480 of choice. Maybe it is just this moment to profit 0:08:58.520 --> 0:09:01.520 take but I mean to that end, Catherine, it's really 0:09:01.559 --> 0:09:04.600 fascinating that you say sort of AI has got to deliver. 0:09:04.720 --> 0:09:07.080 Well, it kind of has been, at least in video. 0:09:07.160 --> 0:09:10.079 I mean, we've got currently earnings expectations to twenty twenty 0:09:10.400 --> 0:09:13.000 for their fiscal twenty twenty four, one hundred and seventy 0:09:13.080 --> 0:09:15.240 one percent growth for the next quarter that we're currently 0:09:15.240 --> 0:09:17.840 in one hundred and seventy eight percent revenue, so doubling 0:09:18.000 --> 0:09:20.800 even out until their first quarter of twenty twenty five 0:09:20.840 --> 0:09:23.960 their fiscal. So it certain what more do you need 0:09:23.960 --> 0:09:26.680 to see improof in the pudding that really AI is 0:09:26.720 --> 0:09:29.079 here and is driving revenue for not just in video. 0:09:29.960 --> 0:09:31.880 Yeah, I would have to see it flow through into 0:09:31.920 --> 0:09:34.600 the productivity numbers. So we have to get that boost 0:09:34.720 --> 0:09:37.280 in US productivity in a meaningful way. Remember, in the 0:09:37.280 --> 0:09:40.480 past six quarters, productivity was only positive three of them. 0:09:40.559 --> 0:09:43.319 So yes, the last quarter, I'm not mistaken, around three 0:09:43.360 --> 0:09:47.760 point seven percent annualized was positive. But I would like 0:09:47.800 --> 0:09:52.079 to see AI play into the real economy. Caroline, AI 0:09:52.120 --> 0:09:54.240 everyone's talking about it. You know, you go into the 0:09:54.320 --> 0:09:58.720 corporate earnings and guidance, and corporations are well intended, but 0:09:58.840 --> 0:10:01.839 maybe not all of them are deploying it. So I 0:10:01.880 --> 0:10:07.280 think deploying takes time, and certainly we're pricing that in today, 0:10:07.679 --> 0:10:10.320 but it has to flow through to the real economy 0:10:10.320 --> 0:10:13.040 of course, at the next five years to offset inflation. 0:10:13.679 --> 0:10:17.240 And na VIDIA very interesting and I think seven reverting 0:10:17.280 --> 0:10:20.120 back to its seven year multiple is great. 0:10:20.120 --> 0:10:20.959 I'm not saying, you. 0:10:20.920 --> 0:10:22.880 Know, sell all of your tech sectors, but what I 0:10:22.920 --> 0:10:27.560 am saying is that volatility to protect those positions is 0:10:27.640 --> 0:10:31.880 relatively historically cheap, So why not deploy it rather than 0:10:31.960 --> 0:10:35.720 go into a potentially volatile twenty twenty four. You know, 0:10:35.800 --> 0:10:37.800 for lack of a better word, Nick, if you want 0:10:37.800 --> 0:10:38.559 to be protected. 0:10:39.800 --> 0:10:41.880 You know, I'm so glad you asked that, Caroline, because 0:10:41.880 --> 0:10:44.400 we're at the tail end of earning season and it's 0:10:44.440 --> 0:10:46.600 almost September, and we'll be back in the next one 0:10:46.640 --> 0:10:49.520 and you wonder, do we go through the same expectation 0:10:49.679 --> 0:10:52.200 from an AI driven growth cycle that we did in 0:10:52.240 --> 0:10:55.719 the last three months? Extraordinary, Cafrine ruoneybera happy Friday to you, 0:10:55.840 --> 0:10:58.760 chief market strategist. As stonext Group good Way. 0:11:05.679 --> 0:11:08.360 A firm out with its earnings after the value yesterday 0:11:08.400 --> 0:11:10.679 and what a market reaction on the back of it. 0:11:11.000 --> 0:11:13.480 GMV ultimate transactions. 0:11:12.880 --> 0:11:15.280 Being made basically rising some twenty five percent. It's managing 0:11:15.320 --> 0:11:18.319 to bet on profitability as well, really guiding us and 0:11:18.600 --> 0:11:21.360 for a forward looking expectation that really many analysts felt 0:11:21.360 --> 0:11:22.000 was very solid. 0:11:22.000 --> 0:11:24.040 Here, look at the market reaction. Yes, you're up twenty 0:11:24.040 --> 0:11:24.480 eight percent. 0:11:24.559 --> 0:11:26.640 Now, I know, Eddie, you've been talking all about how 0:11:26.679 --> 0:11:29.559 many standard deviation moves this actually is. It is an 0:11:29.720 --> 0:11:32.200 enormous move, but actually he brings us back to where 0:11:32.200 --> 0:11:34.760 shares we're trading at back at the beginning of the month. 0:11:34.880 --> 0:11:36.679 So it just shows you the volatility that we've had 0:11:36.720 --> 0:11:39.520 amid rising interest rates. We've got to dig into all 0:11:39.559 --> 0:11:41.320 of this with Max Levchin, who of course is the 0:11:41.320 --> 0:11:44.360 CEO of a firm, and well notable move on your stock, 0:11:44.520 --> 0:11:47.600 notable reaction from some of the analysts tell us about 0:11:47.640 --> 0:11:50.240 how sustainable this is this transaction pickup? 0:11:50.320 --> 0:11:52.199 Does that last into the next quarter. 0:11:53.800 --> 0:11:54.040 Book. 0:11:54.040 --> 0:11:57.040 We did release scats for next quarter, so we're feeling 0:11:57.040 --> 0:12:01.440 thoroughly optimistic, as you can tell in the numbers. You know, 0:12:01.640 --> 0:12:04.640 as much as I'm enjoying the stock market reaction, we're 0:12:04.760 --> 0:12:07.679 very focused on the long term. So our goal here 0:12:07.840 --> 0:12:11.360 within a firm is to keep scaling. We're very excited 0:12:11.360 --> 0:12:13.319 to be able to deliver some excellent results this quarter. 0:12:13.520 --> 0:12:15.840 The fiscal year, we beat across the metrics, and so 0:12:16.480 --> 0:12:19.360 we'll just keep on doing what we're doing. We are 0:12:19.880 --> 0:12:23.720 definitely energized by the growth and in particular the growth 0:12:23.840 --> 0:12:26.040 of the card product. We work very hard for quite 0:12:26.040 --> 0:12:29.520 some time to deliver just the really innovative product with 0:12:29.760 --> 0:12:33.199 this firm card, and it's finally showing real signs of stickiness. 0:12:33.200 --> 0:12:34.800 And just very excited about that. 0:12:36.040 --> 0:12:36.360 Max. 0:12:36.400 --> 0:12:40.199 We note the guidance you know, listened in on the call. 0:12:40.800 --> 0:12:43.880 You know, respectfully, nothing out of the ordinary. Your stock's 0:12:43.920 --> 0:12:46.360 up twenty nine percent. Why do you think the stock 0:12:46.480 --> 0:12:47.720 is up so strongly? 0:12:50.240 --> 0:12:53.840 If I knew how to predict market movements of my 0:12:53.880 --> 0:12:56.120 own stock or any other stock, I'm sure I would 0:12:56.360 --> 0:12:58.400 have a different job. I just know how to build 0:12:58.440 --> 0:13:00.720 good products and write software, and that's what I'm going 0:13:00.760 --> 0:13:01.000 to do. 0:13:02.640 --> 0:13:03.880 Nice answer, I love that. 0:13:03.920 --> 0:13:05.720 But talk to us a little bit about that card 0:13:05.760 --> 0:13:08.120 you let us there, and the fact that people consumers 0:13:08.160 --> 0:13:10.360 in this moment are looking for different ways to be 0:13:10.360 --> 0:13:12.480 able to pay. Of course, they're able to pay in 0:13:12.520 --> 0:13:14.840 a normal debit transaction, but also then decide after the 0:13:14.880 --> 0:13:16.600 match whether or not they're going to be. 0:13:16.520 --> 0:13:17.599 Paying in installments. 0:13:17.760 --> 0:13:20.040 How is that pick up growing across the United States 0:13:20.080 --> 0:13:22.240 and North America. 0:13:22.559 --> 0:13:24.439 So there's a real generational shift. 0:13:24.559 --> 0:13:26.600 I think the notion of just put it on your 0:13:26.600 --> 0:13:29.800 plastic think about it later something that worked for the 0:13:29.840 --> 0:13:33.280 generation that came perhaps before mine, but the ones that 0:13:33.280 --> 0:13:37.640 are coming after mine are very differently minded. They do 0:13:37.920 --> 0:13:40.520 like to know when they're done paying off the things 0:13:40.559 --> 0:13:43.839 they borrowed for. And this idea of packaging it all 0:13:43.880 --> 0:13:46.400 into a single card where you have a very crisp 0:13:46.520 --> 0:13:49.360 choice between paying now or paying over time, having the 0:13:49.360 --> 0:13:52.200 opportunity to make the decision a priori or after the transaction, 0:13:52.240 --> 0:13:54.080 which is what our card allows you to do, and 0:13:54.120 --> 0:13:55.800 not having to learn too many new concepts. 0:13:55.880 --> 0:13:58.000 It's just really really powerful by not pay later. 0:13:58.320 --> 0:14:00.400 Of the last ten years we kind of started, the movement, 0:14:01.000 --> 0:14:04.920 really penetrated the younger generations, and yet still it's less 0:14:04.920 --> 0:14:05.280 than one. 0:14:05.200 --> 0:14:06.640 Percent of total addressable market. 0:14:06.920 --> 0:14:09.360 But no one's ever packaged it into a single elegant 0:14:09.440 --> 0:14:12.920 card that just allows you to transact the exact same 0:14:12.960 --> 0:14:14.839 way you always do, be it at a grocery store 0:14:14.920 --> 0:14:18.120 or online or where we're in between, and have full 0:14:18.200 --> 0:14:20.880 access to both buy now pay later functionality and a 0:14:20.920 --> 0:14:23.360 simple pay now functionality and that's what this card is, 0:14:23.440 --> 0:14:25.360 and the demand is great. So we can see that 0:14:25.640 --> 0:14:28.560 consumers are using a firm in store almost an order 0:14:28.560 --> 0:14:29.800 of magnitude more with. 0:14:29.840 --> 0:14:31.440 The card than before they get it. 0:14:31.760 --> 0:14:34.880 The transaction frequency is quality three x between the card 0:14:34.920 --> 0:14:37.840 and non card, and so it's just clearly the product 0:14:37.840 --> 0:14:39.280 market fit that we've been looking for. 0:14:40.640 --> 0:14:44.240 Max, your CFO, Michael Limford acknowledged that actually twenty twenty 0:14:44.240 --> 0:14:46.960 three has been really hard for a firm, that clearly 0:14:47.000 --> 0:14:50.520 things have improved and got better into the second half 0:14:50.560 --> 0:14:54.000 of this calendar year. What specifically has changed either in 0:14:54.040 --> 0:14:56.560 the environment, in the consumer or in your product? 0:14:58.720 --> 0:15:03.280 You know, I think we operate and think and act 0:15:03.840 --> 0:15:10.600 in longer increment than perhaps the impatient stock market wants 0:15:10.680 --> 0:15:16.040 us to. But we refuse to cave to the quarterly game. Instead, 0:15:16.080 --> 0:15:20.920 we think in years and ideally in decades. And we 0:15:21.320 --> 0:15:24.760 started planning for the results of today a year ago 0:15:25.040 --> 0:15:26.520 and the fact that we're able to deliver on them 0:15:26.560 --> 0:15:31.960 now is just a predictable perhaps but a huge response 0:15:32.000 --> 0:15:36.440 and result by our team. The volatility of the interest 0:15:36.480 --> 0:15:40.160 rates all through last year, the fact that they moved 0:15:40.240 --> 0:15:42.880 up as quickly as they did when unexpectedly made it 0:15:42.920 --> 0:15:45.520 difficult for our KAPA markets to decide cap market partners 0:15:45.560 --> 0:15:47.920 to decide how to price our product. Now that things 0:15:47.920 --> 0:15:50.520 are a little bit more stable, we're able to execute 0:15:50.520 --> 0:15:51.080 that much better. 0:15:51.560 --> 0:15:53.880 I'm just going to ask a poker bear one and 0:15:53.880 --> 0:15:56.360 then with Jeffreys coming out saying results are driven by 0:15:56.360 --> 0:15:59.160 a combination of higher interest income and in need lower expenses, 0:15:59.560 --> 0:16:02.520 so nothing to do with technology or growth, what do 0:16:02.560 --> 0:16:03.120 you say to that. 0:16:06.640 --> 0:16:09.720 I think people are welcome to judge our results, but 0:16:09.720 --> 0:16:12.000 they're pretty strong and so I think that that they 0:16:12.040 --> 0:16:15.280 speak for themselves. That said, I spent majority of my 0:16:15.440 --> 0:16:21.200 time worrying about our technology, staying up long hours working 0:16:21.240 --> 0:16:23.200 on the card, making sure the cards scales as well 0:16:23.200 --> 0:16:27.400 as it does, finding efficiencies in every place like customer service, 0:16:27.520 --> 0:16:31.560 to response time or our checkout. The only thing that 0:16:31.600 --> 0:16:34.240 makes this company tick is our excellence and technology. So 0:16:34.320 --> 0:16:38.360 I fundamentally disagree with nothing to do with technology. 0:16:40.320 --> 0:16:42.760 Firm CEO Max Levchin, just wonderful to have you on 0:16:42.800 --> 0:16:45.480 the program post earnings this Friday. Thanks for your time 0:16:45.800 --> 0:16:47.480 and we'll see you against you and I'm sure now 0:16:47.720 --> 0:16:49.880 coming up here on bloom bag technology. Remember when I 0:16:49.960 --> 0:16:52.880 took a fruit rides in way most drivers that was 0:16:52.880 --> 0:16:56.840 me there, I am well, not everyone in the well. 0:16:57.280 --> 0:16:58.960 This speaks to the story because I have to be honest. 0:16:59.040 --> 0:17:01.400 Not everyone in the bay has been a fan of 0:17:01.440 --> 0:17:04.520 autonomous vehicles. We're gonna have more on the growing backlash 0:17:04.560 --> 0:17:07.840 against ROWA taxis coming up next, plus SpaceX hit with 0:17:07.960 --> 0:17:10.560 another lawsuit from the Department of Justice. We're going to 0:17:10.560 --> 0:17:13.280 discuss the details of the suit and how Elon Musk 0:17:13.359 --> 0:17:16.560 and his company are responding. Things that drive on their own, 0:17:16.640 --> 0:17:38.920 things that get launched into space. Everything here on Bloomberg Technology. Okay, 0:17:38.960 --> 0:17:41.919 time for talking tech. First off, Ali Barber's cloud service 0:17:41.960 --> 0:17:45.640 says it is open sourcing it's QUENVL and QUENVL chat 0:17:46.040 --> 0:17:50.200 AI models for computer vision and conversation. The new models 0:17:50.200 --> 0:17:54.040 are intended to help interpret and extract information from visual 0:17:54.119 --> 0:17:57.760 data in both English and in Chinese. One can test 0:17:57.760 --> 0:18:00.320 out the new models on Ali Barber's model Scope or 0:18:00.320 --> 0:18:01.760 an AI platform. 0:18:01.880 --> 0:18:03.960 Hug and Face. Just on the show yesterday, And. 0:18:03.920 --> 0:18:07.640 India's newest unicorn is winning patrons over with its ultra 0:18:07.720 --> 0:18:12.119 fast grocery delivery service. Despite the nation's gloomy venture funding climate, 0:18:12.240 --> 0:18:14.600 Zepto has managed to raise two hundred million dollars of 0:18:14.640 --> 0:18:17.320 fresh funds at a one point four billion dollar valuation. 0:18:17.400 --> 0:18:21.360 It was founded by two twenty year old Stamford University dropouts, Classic, 0:18:21.680 --> 0:18:25.360 making them the youngest founders of any Indian Unicorn plus 0:18:25.520 --> 0:18:28.560 Cruise and Waimo are facing growing backlash here in San 0:18:28.560 --> 0:18:33.000 Francisco over traffic concerns caused by the robotaxis. A number 0:18:33.000 --> 0:18:35.840 of mishaps have occurred where cars of block traffic gotten 0:18:35.880 --> 0:18:39.320 stuck or even crashed into other objects. Tensions over driver's 0:18:39.400 --> 0:18:42.000 taxis are part of a broader conflict over the future 0:18:42.000 --> 0:18:44.520 of autonomous transport. Big story out from our team in 0:18:44.720 --> 0:18:45.840 SF and around the country. 0:18:45.840 --> 0:18:47.199 Carry check it out in dot com. 0:18:47.280 --> 0:18:49.600 Yeah, let's do a little different form of transport at 0:18:49.680 --> 0:18:52.480 least maybe in the future. And some fighting that's happening 0:18:52.560 --> 0:18:55.720 therein ED. We've got to talk SpaceX, haven't we under 0:18:55.760 --> 0:18:58.520 scrutiny at the moment Justice Apartment for discrimination. 0:18:58.760 --> 0:19:01.160 Now, this is something that's kind of resurfaces from time 0:19:01.200 --> 0:19:01.560 to time. 0:19:01.680 --> 0:19:05.680 This time it's claims that say SpaceX routinely discouraged refugees 0:19:05.760 --> 0:19:08.680 people granted asylum from applying to work at the company. 0:19:08.920 --> 0:19:11.680 I'm really please, say er johnsonbag New's Global Business Space 0:19:11.800 --> 0:19:14.320 editor is hey with us and Eric. I say this 0:19:14.560 --> 0:19:16.879 comes up time and time because it seems to be 0:19:16.880 --> 0:19:19.879 an ongoing narrative that Elon Musk himself pushes back against. 0:19:19.880 --> 0:19:23.240 Is that actually they're unable to hire people who aren't 0:19:23.280 --> 0:19:24.679 permanent residents of the US. 0:19:25.640 --> 0:19:25.840 Right. 0:19:25.880 --> 0:19:28.560 That's the thrust of the lawsuit filed yesterday with an 0:19:28.600 --> 0:19:32.440 administrative judge in Washington. The Department of Justice is alleging 0:19:32.480 --> 0:19:37.160 that for years SpaceX has discriminated against refugees and people 0:19:37.160 --> 0:19:40.679 who have been granted political asylum. You know, it's the 0:19:40.760 --> 0:19:44.160 latest high profile case brought by the Department of Justice 0:19:44.160 --> 0:19:47.520 against not just you know, Elon Musk's portfolio of companies, 0:19:47.520 --> 0:19:53.080 but also companies like Walmart and others who've been alleged 0:19:53.280 --> 0:19:55.920 to have engaged in discriminatory hiring practices. 0:19:57.840 --> 0:20:00.760 Eric, really quick, We've had some operational updates. SpaceX has 0:20:00.760 --> 0:20:02.240 had a lot going on this week, because some of 0:20:02.280 --> 0:20:03.080 it seems delayed. 0:20:03.080 --> 0:20:03.800 What's the latest. 0:20:05.080 --> 0:20:07.760 SpaceX has a lot going on. It's going to conduct 0:20:07.760 --> 0:20:12.480 a static fire engine test potentially later today to test 0:20:12.520 --> 0:20:17.040 its colossal starship rocket engines. You know, I'm sure you 0:20:17.080 --> 0:20:20.680 remember in April it's explosive debut. SpaceX has made a 0:20:20.760 --> 0:20:24.600 number of upgrades to the technology, in particular the launch pad, 0:20:24.640 --> 0:20:28.320 which was decimated by the launch. So they've got a 0:20:28.359 --> 0:20:31.480