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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: Good morning, I'm Nathan Hager and I'm Karen Moscow. Here

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Speaker 2: are the stories we're following today.

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Speaker 3: Well, Karen, let's begin with blowout earnings from a pair

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Speaker 3: of tech heavyweights, Microsoft and Meta Platforms.

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Speaker 4: Let's begin with Microsoft.

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Speaker 3: Those shares are trading it at all time high and

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Speaker 3: if that holds, the tech giant would become the second

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Speaker 3: company in the world to reach a four.

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Speaker 4: Trillion dollar valuation.

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Speaker 3: Microsoft's latest results confirm it is leading in artificial intelligence

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Speaker 3: with a thirty nine percent rise in sales for its

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Speaker 3: cloud business. Dan Ives is Global head of Tech Research

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Speaker 3: at Webbush Securities.

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Speaker 4: Massive beat on cloud.

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Speaker 5: You see more and more of these use cases, these hyperscalers,

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Speaker 5: those are the best indicators.

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Speaker 6: That just shows where the next spending in AI is gone.

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Speaker 4: And that's why right now, if you're a tech.

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Speaker 2: Bear, you're in hibernation mode.

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Speaker 4: In that cave and you can't find AI in the spreadsheet.

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Speaker 3: Dan Ives, a Webbush has raised his twelve month price

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Speaker 3: target on Microsoft to six hundred and twenty five dollars.

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Speaker 3: Right now, the shares are up more than eight percent

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Speaker 3: in the pre market trading around five hundred and fifty

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Speaker 3: six dollars a share.

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Speaker 2: Well, Nathan Shares a Meta they're also a surging They're

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Speaker 2: up almost twelve percent in early trading. The Facebook parent

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Speaker 2: reporter results at beat estimates. Metta is also taking advantage

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Speaker 2: of strong advertising and stepping up spending next year, executives

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Speaker 2: saying now is the time to seize on investment opportunities

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Speaker 2: in AI. Man Deep Singh is senior Tech analyst for

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Speaker 2: Bloomberg Intelligence.

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Speaker 7: There is a sequential acceleration in ad impressions as well

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Speaker 7: as at pricing growth, and to my mind, that is

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Speaker 7: a sign of them applying AI to boost engagement. Obviously,

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Speaker 7: the user growth has been almost the same every quarter,

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Speaker 7: you know, four to five percent, So the fact that

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Speaker 7: impressions grew eleven percent is a sign that people are

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Speaker 7: spending more time on their family of apps.

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Speaker 2: Man Deep Singh at Bloomberg Intelligences Meta is also forecasting

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Speaker 2: third order revenue that beat Wall Street estimates.

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Speaker 7: Well.

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Speaker 3: Karen, One big tech stock is not participating in the rally.

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Speaker 3: This morning, Shares of Qualcomm are down more than five

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Speaker 3: percent in the pre market. The biggest maker of chips

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Speaker 3: that run smartphones, reported at lackluster growth. That's feeling concerns

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Speaker 3: that tariffs will take a toll on Qualcomm and the

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Speaker 3: broader chip industry.

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Speaker 2: Well up next, Nathan, we get more earnings from big

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Speaker 2: tech after the bell results come in from Apple and Amazon.

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Speaker 2: Bloomberg's Time Busby tells us what to expect from the

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Speaker 2: iPhone maker.

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Speaker 8: Despite this period traditionally being one of the slowest of

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Speaker 8: the year before it releases new products for the holidays.

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Speaker 8: The iPhone maker is projected to report modest sales growth

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Speaker 8: after adjusting some of its manufacturing to allset the impact

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Speaker 8: of the Trump tariffs. But Wallstreet is expecting continued sluggish

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Speaker 8: demand for gadgets like its TV set top boxes and

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Speaker 8: the Vision Pro mixed reality headset, and investors will want

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Speaker 8: to hear more about its AI strategy after more of

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Speaker 8: its AI talent was recently poached by Meta. Bloomberg consensus

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Speaker 8: calls for revenue of eighty nine point three billion on

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Speaker 8: Ernix per share of a dollar forty three Tom buzzby

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Speaker 8: Bloomberg Radio.

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Speaker 4: Okay, Tom, thank you know.

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Speaker 3: When it comes to auto earnings, shares of Ford are

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Speaker 3: down more than one percent in early training. The automaker's

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Speaker 3: warning profit. We'll see a sharp drop on the fallout

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Speaker 3: from President Trump's tariffs. We spoke with Ford Motor CEO

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Speaker 3: Jim Farley.

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Speaker 5: Well, we're working with the administration is to take that.

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Speaker 4: Layered tariff use. The authors have their own tear.

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Speaker 3: Plus or subject to all these other tariffs.

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Speaker 5: We're working with Commerce and the Trump administration to minimize

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Speaker 5: our tariff expense so that we can get more competitive.

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Speaker 3: Ford's CEO, Jim Farley says adjusted earnings could fall as

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Speaker 3: much as thirty six percent. That's due in part to

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Speaker 3: a net tariff impact of two billion dollars. That's about

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Speaker 3: five hundred million more than the company previously expected.

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Speaker 2: Well, Nathan, let's turn to the economy. Now, the Federal

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Speaker 2: Reserve to be specific, Despite pressure from the White House,

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Speaker 2: the Fed kept its key interest rate unchanged yesterday. Is

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Speaker 2: Central Banks said growth moderated early this year and that

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Speaker 2: uncertainty remains elevated. Here's how Vecher J. Powell put it.

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Speaker 9: Changes to government policies continue to evolve and their effects

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Speaker 9: on the economy remain uncertain. Higher tariffs have begun to

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Speaker 9: show through more clearly to prices of some goods, but

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Speaker 9: their overall effects on economic activity and inflation remain to

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Speaker 9: be seen.

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Speaker 2: Vetcher J. Powell also answered questions about two members of

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Speaker 2: the Monetary Policy Committee dissenting. It's the first time that's

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Speaker 2: happened in over thirty years. Governors Michelle Bowman and Christopher

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Speaker 2: Waller both voted for a quarter point rate cut.

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Speaker 3: Well Now, Karen details on a hot and cold relationship

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Speaker 3: between wall Street and the White House. JP Morgan Chase CEO,

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Speaker 3: Jamie Diamond and President Trump are talking again. Bloomberg's John

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Speaker 3: Tucker joins us in New York with the details. It's

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Speaker 3: been a while, John, Good morning. Yeah, it's kind of

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Speaker 3: warming up once again. We're now learning that Diamond met

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Speaker 3: with President Trump at the Oval Office last week to

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Speaker 3: talk about the economy, trade, and financial regulation. Mister Trump

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Speaker 3: picked Diamonds bring on the prospect of lowering interest rates,

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Speaker 3: and they also touched on the administration's pushed to impose tariffs.

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Speaker 3: The renewed dialogue Ashley began in June after years of tension.

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Speaker 3: You'll recall back in twenty twenty three, Trump called Diamond

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Speaker 3: highly overrated. If the Diamond urged business leaders to back

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Speaker 3: Nikki Haley in the Republican primary, he also accused JP

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Speaker 3: Morgan of discriminating against conservatives. When the President's April tariff

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Speaker 3: announcements sent markets plunging, Diamond set a trade war risk

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Speaker 3: plunging the economy into recession. Well, the President did take notice.

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Speaker 3: He reportedly cited Diamond's comments as reason for pausing the tariffs.

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Speaker 3: In New York Ime, John Tucker Bloomberg.

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Speaker 2: Radio, All right, John, thank you now to the latest

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Speaker 2: on trade. With one day to go until his tariff deadline,

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Speaker 2: President Trump has made a flurry of deals and demands.

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Speaker 2: Last night, he announced a fifteen percent tariff on South

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Speaker 2: Korean imports, including cars, that matches the rate Japan agreed

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Speaker 2: to last week, and beget more with Bloomberg's Denny Thomas

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Speaker 2: and Seoul.

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Speaker 10: Seul has been bagging behind in all these street talks

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Speaker 10: because of the political chaos had here, and as we

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Speaker 10: were hitting up to this August to US deadline, it

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Speaker 10: was it was pretty uncertain whether we would reach it

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Speaker 10: data not.

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Speaker 2: And Bloomberg's Denny Thomas reports the agreement also includes a

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Speaker 2: three hundred and fifty billion dollar fund for South Korea

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Speaker 2: to invest in the US.

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Speaker 4: And the South Korea Deal.

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Speaker 3: Karen comes after news on India, President Trump says he'll

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Speaker 3: impost twenty five percent tariffs on that country's exports, even

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Speaker 3: though that country was one of the first to engage

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Speaker 3: in trade talks of the US. Nisa Biswal is a

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Speaker 3: partner at the Asia Group.

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Speaker 11: For the President to come in with a very hardball

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Speaker 11: tactic of announcing twenty five percent tariffs as well as

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Speaker 11: penalties for you know, Russian oil and gas and sports,

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Speaker 11: et cetera, I think is a little bit surprising, and

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Speaker 11: certainly to our Indian friends, they're kind of shocked because

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Speaker 11: they thought that they were working in good faith and we're.

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Speaker 2: Close to having a deal.

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Speaker 4: Nisha biswell with the Asia Group.

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Speaker 3: President Trump says India's tariffs are among the highest in

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Speaker 3: the world, but his team is still conducting talks, so

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Speaker 3: there could be more to come on that front.

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Speaker 2: Meantime, Nathan Commerce Secretary Howard Lutnek says the US has

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Speaker 2: made deals with Thailand and Cambodia. Those details came in

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Speaker 2: an interview with Fox News. He didn't elaborate on those agreements.

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Speaker 2: President Trump had used trade talks to urge both countries

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Speaker 2: to agree to a ceasefire. In recent days, the US

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Speaker 2: has also signed a trade deal with Pakistan. And here's

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Speaker 2: Pakistan's finance minister.

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Speaker 8: I think we have a come long way for way

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Speaker 8: we were and where we are today.

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Speaker 10: In terms of our overall strategic partnership between Pakistan and

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Speaker 10: the United.

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Speaker 2: States, and Pakistan's finance minister says it's trade deal with

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Speaker 2: the US will boost Pakistan's oil reserves.

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Speaker 3: Still caring, a deal with Mexico and Canada remains elusive. Today,

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Speaker 3: President Trump plans to speak with Mexico's President Claudia Shinbaum

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Speaker 3: as she looks to avoid a thirty percent tariff. Shinbaum

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Speaker 3: met yesterday with Republican Congressman Don Bacon and Democrat Rokana.

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Speaker 3: They came away optimistic about the two countries expanding trade

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Speaker 3: and security cooperation. At the same time, President Trump is

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Speaker 3: warning it's getting harder to make a deal with Canada.

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Speaker 3: He posted as much on social media after Canadian Prime

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Speaker 3: Minister Markcarney announced that he'll recognize a Palestinian state at

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Speaker 3: the UN Summit in September.

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Speaker 2: Well, Nathan back here in the US, Dangerous weather is

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Speaker 2: in focus again today. The Northeast heat wave is receding,

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Speaker 2: but a new weather threat is on the way heavy

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Speaker 2: rain and flash flooding in Bloomberg meteor relogist Craig Allen

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Speaker 2: has the details.

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Speaker 6: There is a category three out of four threat for

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Speaker 6: excessive rainfall running right up from Washington, d c. Up

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Speaker 6: ninety five through Baltimore, Philadelphia to about the New York

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Speaker 6: City area and the worst of the rain will be

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Speaker 6: falling during the late Thursday afternoon into Thursday evening commute,

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Speaker 6: and possibly even into Friday morning. This threat, if it materializes,

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Speaker 6: will impact eighteen thousand square miles and the possibility of

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Speaker 6: over twenty two million people impacted by this rainfall for

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Speaker 6: the late afternoon and next twenty four hours.

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Speaker 2: And that's Bloomberg meteorologist Craig Allen, who says thunderstorms could

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Speaker 2: accompany the rain, resulting in as much as two two

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Speaker 2: inches of rainfall per hour.

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Speaker 3: And a political story to end this one, Karen former

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Speaker 3: Vice President Kamala Harris says she will not run for

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Speaker 3: California governor next year.

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Speaker 4: There had been speculations she would.

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Speaker 3: Analys say it leaves open the possibility Harris mounts a

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Speaker 3: third run for the White House in twenty twenty eight.

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Speaker 2: Time now for a look at some of the other

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Speaker 2: stories making news in New York and around the world.

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Speaker 2: And for that we're joined by Bloomberg's Michael Barr.

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Speaker 4: Michael, good Morning, Good morning, Karen.

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Speaker 12: Authorities say the man who killed four people at a

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Speaker 12: Manhattan office building bought the rifle he used in the

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Speaker 12: attack and the car he drove across the country from

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Speaker 12: his supervisor at a Las Vegas casino. Police say Shane

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Speaker 12: Tomorrow fatally shot four people on Monday before killing himself.

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Speaker 12: New York Governor Kathy.

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Speaker 13: Hokle there's nothing that can justify, you know, the intentionality

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Speaker 13: behind someone who travels across many states, you know, loads

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Speaker 13: up his vehicle with a weapon of mass destruction, intent

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Speaker 13: on slaughtering people. Also, he knew exactly what he was doing.

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Speaker 12: And the first of victims was laid to rest yesterday.

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Speaker 12: Julia Hyman, who worked for Roudent Management, was twenty seven

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Speaker 12: years old. Today, funeral services will take place for the

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Speaker 12: NYPD officer killed in the attack, Didero Islam. About two

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Speaker 12: dozen people were taken to the hospital after a Delta

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Speaker 12: Airlines flight encountered severe turbulence that forced it to make

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Speaker 12: an emergency landing in Minneapolis. The airline says Delta Flight

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Speaker 12: fifty six was heading from Salt Lake City to Amsterdam.

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Speaker 12: Russia attack Key with a barrage of drones and missiles overnight,

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Speaker 12: in defiance of President Donald Trump's calls for the Kremlin

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Speaker 12: to reach a truce with the Ukraine. The bombardment killed

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Speaker 12: at least six people, including a child, and injured more

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Speaker 12: than fifty. Pressure is increasing globally to end the war

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Speaker 12: in Gaza. More than twenty Arab and Muslim countries have

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Speaker 12: issued a joint call condemning Hamas for the October seventh

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Speaker 12: terror attacks on Israel and calling for the group to disarm. Meanwhile,

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Speaker 12: you and officials say the worst case scenario of starvation

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Speaker 12: in Gaza is taking place. Scott Paul is the director

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Speaker 12: of Peace and Security at Oxfam America.

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Speaker 14: These Billie authorities need to unlock this in every step

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Speaker 14: of the way if they want.

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Speaker 13: To prevent this this famine from being formally declared and

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Speaker 13: this crisis from deepening to unfathomable levels.

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Speaker 12: Scott Paul with the global confederation ox FAM that works

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Speaker 12: to end poverty and injustice. Global News twenty four hours

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Speaker 12: a day and whenever you want it with the Bloomberg

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Speaker 12: News Now Michael Barr, and this is Bloomberg. Karen.

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Speaker 2: All right, Michael Barr, thank you time now for the

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Speaker 2: Bloomberg Sports Update, brought to you by Flushing Bank. Can here,

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Speaker 2: Sean Stanshower, John can Learning.

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Speaker 4: Good morning.

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Speaker 14: There the baseball trade deadline six o'clock today. The Mets

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Speaker 14: just traded for two relief pitchers and the Yankees out

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Speaker 14: of the reserve outfield.

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Speaker 4: Y'reing the Yanks then host of the rais.

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Speaker 14: There was one run scored in the first seven and

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Speaker 14: a half it is, and then eight runs were.

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Speaker 4: Scored in the next three and a half.

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Speaker 14: Three times. The Yankees tied the game with a Trent

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Speaker 14: Christiaan momron of the eighth and Anthony Volpi homer with

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Speaker 14: one out of the ninth, and a Cody Bellinger RBI

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Speaker 14: triple in the tenth. The game went to the eleventh inning.

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Speaker 4: At Sampa Bay.

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Speaker 14: Bach put the winning run a third in the new

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Speaker 14: Yankee Ryan McMahon was at the plee.

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Speaker 8: Now now they don't have the butt and that forces

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Speaker 8: the Rays to bring the infield in all one this

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Speaker 8: year too. It five by Kaluka hellt it go over his.

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Speaker 4: Head and the Yankees win.

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Speaker 6: Chess Chiz will score. McMahon with the walk off signal

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Speaker 6: had the Yankees and a lil Game win just one

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Speaker 6: of eleven in his boss score.

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Speaker 4: Five to four.

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Speaker 14: Means network Yankees four games behind Toronto, who won nine

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Speaker 14: to eight in Baltimore. The Red Sox game behind the

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Speaker 14: Yanks a thirteen to one route in Minnesota. The Mets

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Speaker 14: in San Diego had just three heads lost five nothings

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Speaker 14: of the road trips, so the Mets sweep the Giants

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Speaker 14: and then get swept by the Padres.

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Speaker 4: Mets stage just ahead.

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Speaker 14: The Phillies lost biggest trade of the day Arizona, since

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Speaker 14: slugging third basement Uhennio Suarez to Seattle, where he played before.

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Speaker 14: Asuarez has thirty six home runs. The Mets got submariner

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Speaker 14: Tyler Rogers from the Giants. His identical twin brother was

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Speaker 14: also dealt by the Reds to the Pirates, and the

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Speaker 14: Mets also acquired another reliever, Ryan Helsley from Minnesota. Mets

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Speaker 14: said that he's still looking for a center fielder. The Yankees,

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Speaker 14: with the pickup of Austin Slater from the White Sox,

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Speaker 14: have now added three position.

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Speaker 4: Players but no pitchers. They could also use help in.

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Speaker 14: Their Bullpen at WNBA rematch of last year's finals in Minnesota.

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Speaker 14: The Lakes beat the Liberty one hundred to ninety three

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Speaker 14: Minnesota a league best twenty three and five.

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Speaker 4: John Stashawa, Bloomberg Sports Karen Tacle.

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Speaker 2: All right, John, thank you. On Bloomberg Daybreak is brought

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Speaker 1: Coast to coast on Bloomberg Radio, nationwide on Sirius XM,

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Speaker 1: and around the world on Bloomberg dot Com and the

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Speaker 1: Bloomberg Business app. This is Bloomberg Daybreak.

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Speaker 3: Good morning, I'm Nathan Hager on a really good morning

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Speaker 3: for big tech. Following big results and the latest earnings reports.

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Speaker 3: Both Microsoft and Meta platforms are surging pre market after

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Speaker 3: results suggesting the arms race and artificial intelligence spending maybe

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Speaker 3: starting to pay off. Joining us now as someone who's

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Speaker 3: been sounding the drumbeat on the promise of Ai Dan Ives,

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Speaker 3: Global head of Tech Research at Webbush Securities, you must

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Speaker 3: be feeling really good this morning, Dan, and I want

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Speaker 3: to start right off with your latest note on Microsoft.

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Speaker 3: You're raising your price target on the stock to six

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Speaker 3: twenty five. Microsoft's already poised to become another four trillion

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Speaker 3: dollar company this morning. What gets Microsoft to five trillion

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Speaker 3: in your view?

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Speaker 4: Good morning?

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Speaker 5: Yeah, good morning. Look me, I mean me and you

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Speaker 5: have to us for years. I think this is a

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Speaker 5: watershed moment, not just some Microsoft for Meta and what

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Speaker 5: it means for big tech when it comes to the

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Speaker 5: AI revolution hitting its next stiege or growth. Look, Microsoft,

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Speaker 5: I believe Microsoft and Nvidia will be five trillion dollars

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Speaker 5: mark caps in twenty twenty six. We are just starting

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Speaker 5: this next stage of the AI revolution.

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Speaker 3: We saw thirty nine percent sales jump, in particular for

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Speaker 3: Azure Cloud. A big piece of this as well, is

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Speaker 3: that kind of growth sustainable, those kinds of solid double

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Speaker 3: digit sales returns.

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Speaker 5: Look, these are jaw dropping numbers. I mean when you

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Speaker 5: think about Cloud and even some of the strength that

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Speaker 5: we are expecting coming in, it's one where enterprises are

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Speaker 5: lining up with Microsoft given what we're seeing in AI now, Look,

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Speaker 5: will that eventually moderate? Of course, what this essentially means

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Speaker 5: is Microsoft is was creating another company within Microsoft in

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Speaker 5: terms of AI that I believe right now, you know

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Speaker 5: they're kind of leading the race when it comes to cloud,

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Speaker 5: ahead of Amazon of course, you know Google.

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Speaker 3: In terms of what enterprise customers are getting out of

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Speaker 3: that race. Of course, we've seen the strides they've made

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Speaker 3: with Microsoft Copilot. What other use cases do you see

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Speaker 3: Microsoft putting out there for a broader market?

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Speaker 5: Look, I think it's across verticals. I mean that's why

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Speaker 5: you're seeing customers line up and look at Microsoft there

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Speaker 5: now for cap backs. Originally you're an eighty billion, now

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Speaker 5: you're one hundred and twenty million. So as they're expanding,

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Speaker 5: as you saw Alphabet do the same saying this arms

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Speaker 5: race is just starting. But I said, like, look, this

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Speaker 5: is a Scottish shoff for a quarter from Microsoft, but

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Speaker 5: it's not the end. It's actually the beginning of the second, third,

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Speaker 5: fourth derivatives playing out for AI and then bullish for tech.

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Speaker 3: So do you see Microsoft sort of building a moat

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Speaker 3: around what it's doing with AI or could some of

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Speaker 3: its competitors chip away at what they're doing?

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Speaker 4: Yeah, we don't use as.

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Speaker 5: A zero some game, and that's why we're bullish on

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Speaker 5: Amazon and Google, and of course you're in New acad

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Speaker 5: Oracle as well. But on the enterprise that's their backyard,

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Speaker 5: that's where they dominate. And I think the Della and

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Speaker 5: Microsoft they're playing almost another game now than everyone else.

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Speaker 5: And that's what you're seeing in these numbers, execution flawless.

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Speaker 5: They obviously will get wet in the velvet ropes to

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Speaker 5: the Fortune Mark op cloud with the media, but it's

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Speaker 5: just the beginning in terms of the next stage of

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Speaker 5: cloud and AI growth.

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Speaker 3: In terms of what we're seeing out of meta platforms

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Speaker 3: as well, Dan, I wonder what you make of this

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Speaker 3: personal intelligence or personal super intelligence strategy that Mark Zuckerberg's

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Speaker 3: putting out there with his AI vision.

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Speaker 5: I mean, that's how you're going to get to a

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Speaker 5: four digit stock because I think Zuckerberg right now Wartimes

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Speaker 5: CEO focused on really going to full sort of end

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Speaker 5: to end when it comes to the consumer AI revolution.

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Speaker 5: What's amazing about these numbers is just the advertising growth,

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Speaker 5: even the lack of spend there. I mean, this is

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Speaker 5: a company that's transforming right in front of us, and

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Speaker 5: they are going to be front and center as a

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Speaker 5: modernization when it comes to the consumer piece of AI.

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Speaker 4: I love that you call it a lack of spend.

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Speaker 3: I mean, we've seen him putting out, you know, one

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Speaker 3: hundred plus million dollars pay packages for some of these

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Speaker 3: people that he's poached from other companies to join a

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Speaker 3: super intelligence team. He's talking about sixty six to seventy

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Speaker 3: two billion dollars in AI spend. Is that the kind

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Speaker 3: of level that investors can stomach.

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Speaker 5: Look, eventually it will moderate, okay, But but if you

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Speaker 5: look at even just from an investment perspective, in advertising,

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Speaker 5: you just forget about some of those pay packages. I mean,

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Speaker 5: what they're what you're seeing on the advertising growth is

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Speaker 5: is really impressed and in terms of like what they're

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Speaker 5: spending there in capax, and they're different we're seeing in

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Speaker 5: big tech. Look, this is an arms race, and no

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Speaker 5: tech company wants to be on the outside looking in.

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Speaker 5: And that's what's so impressive about what Mett is doing.

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Speaker 5: When Microsoft's doing solid alphabet and I think you'll see

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Speaker 5: what Amazon as well. I mean that this is but

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Speaker 5: it's not just about Max seven. It will spread to

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Speaker 5: the rest of tech.

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Speaker 4: Well.

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Speaker 3: In our last minute or so, let's get to the

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Speaker 3: companies that we are going to be hearing from after

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Speaker 3: the bell today. You mentioned Amazon, We're going to hear

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Speaker 3: from Apple as well. It seems like Apple has been

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Speaker 3: kind of falling behind in terms of where they're going

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Speaker 3: with AI.

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Speaker 4: Yeah.

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Speaker 5: Man, I think that's been the frustration. Right, you have

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Speaker 5: the biggest install based in the world. They need you know,

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Speaker 5: I continue to bleed Perplexity is the accusdition they need

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Speaker 5: to meet. Is not going to happen internally. But I

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Speaker 5: think when it choose to look at Amazon, you can

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Speaker 5: say Amazon a year ago is nowhere now aggressively focused

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Speaker 5: on the AWS and mod tide and when it comes

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Speaker 5: to asapoun cloud because we're talking about what's going to

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Speaker 5: be a tech bullmarker for the next few years, biggest

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Speaker 5: techt theme we've seen in the last forty to fifty

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Speaker 5: years to fourth Industrial Revolution. Apple can't be on the

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Speaker 5: outside looking in.

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Speaker 3: Just quickly you've called for Apple to buy Perplexity and

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Speaker 3: take its AI out from in house. Do you see

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Speaker 3: Tim Cook leaning that way toward an acquis acquisitive stance.

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Speaker 5: Look, you've never done acquisitions really before outside beets, but

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Speaker 5: times are changing. You can't be on a park bench

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Speaker 5: drinking lemonade, while the AI Revolution.

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Speaker 10: Passing you Bay.

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