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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg

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Speaker 1: Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: The newest company to get into the energy sphere of

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Speaker 2: admittedly in nuclear energy, is the Trump Media and Technology Group.

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Speaker 2: DJT is the ticker, of course, and it's President Trump's company.

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Speaker 2: Basically social media company because it owns truth social but

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Speaker 2: they are now in nuclear fusion. So we want to

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Speaker 2: understand what's going on here. Simon Casey is Bloomberg News

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Speaker 2: is managing editor for Energy and Commodities. Simon Trump Media

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Speaker 2: and Technology is now a nuclear fusion company.

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Speaker 3: How does this work?

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Speaker 4: Yeah, I didn't think anybody had this on that bingo

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Speaker 4: cod this morning. We certainly didn't. It appears they are

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Speaker 4: fusion company as much as they're social media company or

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Speaker 4: a crypto company. Now they're merging with a company called TAE.

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Speaker 4: It's a far as we can see, a credible fusion player.

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Speaker 4: They've been around for over two decades. They've raised money

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Speaker 4: from the likes of Gold and sacks from Google and

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Speaker 4: various other big investors. I think Chevron. Chevron, the old

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Speaker 4: company's venture capital arm, has put money in as well.

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Speaker 5: This deal gives them.

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Speaker 4: I believe, something in the region of two hundred million

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Speaker 4: dollars of a cash infusion to continue their work for DJT.

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Speaker 4: They are touting this as a pivot to the exciting

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Speaker 4: world of nuclear fusion, which is the future of cheap, affordable,

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Speaker 4: abundant energy for everybody, and that's been the dream for decades.

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Speaker 4: Of course, there was a breakthrough in twenty twenty two

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Speaker 4: where fusion was actually created for a brief moment in

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Speaker 4: a laboratory. It's Lawrence with a multi laboratory, and that

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Speaker 4: was a fairly significant achievement. And it's been recreated since,

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Speaker 4: but only sort of sporadically and not at commercial scale.

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Speaker 4: We're a long way off, you know. It's it's it's

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Speaker 4: very technically challenging to do this, let alone commercially.

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Speaker 5: I'll ask the elephant in the room question, where are

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Speaker 5: we in conflicts of interest with this president and this

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Speaker 5: administration and investments in business and that type of thing.

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Speaker 5: Where's the market kind of evolved to? This is this

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Speaker 5: is before the Trump administration. This stuff, I would say,

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Speaker 5: rarely happened.

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Speaker 4: It almost I struggle to remember it happening. Now It's commonplace,

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Speaker 4: isn't it. And you know, we let's be clear, the

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Speaker 4: Trump administration has a very very robust I would say,

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Speaker 4: very sort of clearly outlined energy agenda and energy dominance agenda.

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Speaker 4: They are profoss or fuel. They also support the nuclear industry,

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Speaker 4: and the nuclear industry has taken has gained a lot

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Speaker 4: of momentum since that discussion discovery I mentioned in twenty

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Speaker 4: twenty two. But since Trump has come in, he's been

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Speaker 4: very support of the nuclear industry to build new nuclear reactors. Look,

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Speaker 4: we have serious issues here in this country with nuclear,

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Speaker 4: with power demand from the AI industry and how we're

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Speaker 4: going to service that demand and keeping a lid on prices.

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Speaker 4: The Energy Secretary, Chris Riot is also very pro nuclear,

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Speaker 4: being very vocal on that front. But yeah, it's it's, it's,

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Speaker 4: it's it's kind of amazing. Nevertheless, to see this kind

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Speaker 4: of deal this morning.

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Speaker 5: Well, just looking at the dees function for DJT twelve employees,

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Speaker 5: that's I guess in the trailing twelve months three point

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Speaker 5: seven million of revenue one point three billion of cash

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Speaker 5: though nine hundred and fifty million of total debt. So

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Speaker 5: what does Donald Trump company, Trump Media and Technology Group cooperation?

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Speaker 5: What is that? What did they really bring to this

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Speaker 5: deal other than maybe some cash?

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Speaker 4: The name, I guess, the ticker. Yeah, it's It's, It's,

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Speaker 4: It's so a large extent, it is a memestock, I

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Speaker 4: think it's fair to say. And with a cash pile,

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Speaker 4: and if they can use some of that cash pile

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Speaker 4: to fund nuclear research and development, and maybe that's a

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Speaker 4: sensible use of that cash.

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Speaker 3: Yeah. Name recognition goes a long way.

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Speaker 2: In twenty twenty five, in twenty twenty six, Simon, how

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Speaker 2: big is the investable universe of nuclear companies right now?

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Speaker 4: That's a good question. I mean that in terms of

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Speaker 4: fusion companies, I think this is the first, This will

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Speaker 4: be the first company fusion developer that's actually listed on

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Speaker 4: a stock exchange. So there's a handful of these companies,

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Speaker 4: some of them on the East coast here, there's a

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Speaker 4: big there's a cluster around the Boston area, and they're

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Speaker 4: all privately held apart from this one. In terms of

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Speaker 4: other nuclear stocks, there's a handful of them. There's a

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Speaker 4: company called Fermi which has got had a lot of

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Speaker 4: interest recently, which is trying to develop a campus down

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Speaker 4: in West Texas that would include AI data centers and

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Speaker 4: potentially a new nuclear reactor to power those that data center.

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Speaker 4: That's a very ambitious project. Then you have a handful,

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Speaker 4: as I say, of other companies that are developed trying

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Speaker 4: to develop small, medium sized nuclear reactors. And this is

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Speaker 4: the other thing that the Trump administration is very keen

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Speaker 4: on to to kind of lower the cost of entry,

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Speaker 4: if you like, into the nuclear industry.

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Speaker 5: What can you tell us about the timetable associated with

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Speaker 5: commercially deploying utility scale fusion power companies?

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Speaker 4: So well, if we're talking fusion, it hasn't been proved

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Speaker 4: at commercial scale, so we're probably talking decades before I

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Speaker 4: would say it's fair.

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Speaker 5: So I'm just looking at the Bloomberg reporting and it's

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Speaker 5: the combined company plans to begin construction next construction next

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Speaker 5: year on the world's first utility scale fusion power plants.

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Speaker 5: So that's going to take a long time to construct that.

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Speaker 4: I mean, we don't even know if it can work

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Speaker 4: at a commercial scale. Now they can, they can pour

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Speaker 4: the concrete and build the foundations. Nothing to stop them

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Speaker 4: doing that, and.

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Speaker 5: This sounds like a multi billion dollar type of plant

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Speaker 5: for these things.

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Speaker 4: Potentially, no one's ever built one before, so I don't

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Speaker 4: we don't really know. I mean we know that, you know,

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Speaker 4: conventional fission reactors, which have been around since the end

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Speaker 4: of the Second World War. They take the last one

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Speaker 4: built in this country went over budget and it was

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Speaker 4: about over ten billion dollars.

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Speaker 3: I believe who's going to provide the financing on all that?

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Speaker 4: I think if it can work at scale, then you

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Speaker 4: might a lot of more investors might take a look

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Speaker 4: at this, including mainstream investors. But it's so it's so

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Speaker 4: sort of hypothetical at the moment, it's almost impossible to

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Speaker 4: say what is the return on investment going.

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Speaker 2: To be for something like it's early innings, not even

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Speaker 2: first inning them very early.

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Speaker 4: I mean, the sort of the well worn joke it's

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Speaker 4: not even funny anymore, that nuclear fusion. It's the future,

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Speaker 4: and it's always been. It's the future thirty years out

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Speaker 4: and it always will be thirty years out. That's kind

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Speaker 4: of where we've always been. It exists in the textbooks,

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Speaker 4: it now exists in the laboratory, which, don't get me wrong,

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Speaker 4: is a big step forward, but transferring that, you know,

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Speaker 4: creating nuclear fusion for a fraction of a second and

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Speaker 4: then evolving that to where it's on all the time

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Speaker 4: and being able to power a town or a city

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Speaker 4: is a quantum leap.

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Speaker 5: SMR Small modular reactors. Yes, how that seems like pretty

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Speaker 5: cool technology to me, but that's still years out.

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Speaker 4: That is again probably years out because it's technically challenging,

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Speaker 4: but it does exist. I mean, we use them in

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Speaker 4: nuclear submarines and aircraft carriers, so there's nothing to stop

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Speaker 4: you taking one of those out of out of a

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Speaker 4: ship and having it on land. The challenge there is

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Speaker 4: actually possibly more regulatory, and again that's something that Trump

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Speaker 4: administration is actually trying to address in terms of permitting

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Speaker 4: reform and so forth. So there are companies listed that

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Speaker 4: are developing these things. We haven't seen one yet that's

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Speaker 4: been sort of produced and it's been proven it can

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Speaker 4: be manufactured at scale, but it's more it's more achievable.

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Speaker 5: I would say, stay with us. More from Bloomberg Intelligence

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Speaker 5: coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business App, listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: Paul, I think we need to take a closer look

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Speaker 2: at Micron given the roaring comeback gets made this year.

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Speaker 2: I mean, memory chip maker. That's an old school product,

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Speaker 2: but it's having its day. Let's bring in Jake Silverman,

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Speaker 2: Bloomberg Intelligence Semiconductor analysts to recap these results. Jake, let's

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Speaker 2: start just with the big massive gain Micron has seen

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Speaker 2: this year, up two hundred percent. What were investors pricing

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Speaker 2: in and did they get what they wanted with today?

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Speaker 3: With yesterday's earnings report, Yeah, I.

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Speaker 6: Think investors were expecting a little bit more of a

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Speaker 6: subdued outlook for the first physical sorry, second fiscal quarter,

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Speaker 6: primarily just due to typical little bit of conservatism for management,

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Speaker 6: but also you know, the February ended quarter tends to

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Speaker 6: be a little bit more seasonally weak. You get December

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Speaker 6: portion of that, but usually consumer products PCs and smartphones

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Speaker 6: tend to see a little bit of a squad decline

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Speaker 6: just off of strong holiday seasonality. We all kind of

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Speaker 6: knew that pricing was going to be the most important

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Speaker 6: factor going into the quarter, And obviously demand from AI

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Speaker 6: is pretty strong, but there are areas like high bandwidth

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Speaker 6: memory where they're actually Micron is actually somewhat constrained in

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Speaker 6: terms of their ability to supply, just simply because they

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Speaker 6: haven't invested in that much additional capacity and.

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Speaker 7: They need to improve yields.

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Speaker 6: And they're transitioning over from HBM three to E to four,

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Speaker 6: which is to support Nvidia's next architecture and other customers.

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Speaker 6: So there's a few factors going on here that I

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Speaker 6: think had investors a little bit more maybe conservative, in

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Speaker 6: terms of what they were expecting.

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Speaker 5: I don't know a lot about SEMy conductors, and I

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Speaker 5: want to keep it that way, But what I do

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Speaker 5: know is it's a cyclical business. Has this AI spending

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Speaker 5: thing kind of even out the cycles or just throw

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Speaker 5: the cycles out the window.

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Speaker 7: It's a little unprecedented.

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Speaker 6: I don't think that we're necessarily at that point where

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Speaker 6: we can say that there aren't going to be cycles,

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Speaker 6: or at least not in the next I don't know,

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Speaker 6: call it five ten years something like that. Typically, what

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Speaker 6: we see with memory, I'll just focus on that Specifically,

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Speaker 6: we send tend to see something like seven to ten

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Speaker 6: quarters about two years plus of upcycles, and then what

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Speaker 6: happens from there is that we tend to see some

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Speaker 6: sort of cyclical decline, and that really is because of

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Speaker 6: supply ending up being a little bit more, a little

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Speaker 6: bit more supply growth relative to demand growth. AI is

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Speaker 6: structurally limiting some of that. We're seeing AI inferencing demand

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Speaker 6: being really strong. That's both for DRAM and land. At

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Speaker 6: this point, DRAM is more important for Micron. It's a

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Speaker 6: much more it's a much larger percentage of their sales

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Speaker 6: and that's where high bandwidth memory is included in their revenue.

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Speaker 7: And so.

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Speaker 6: What this does to the cycle, it's definitely extending it.

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Speaker 6: It's elongating what we would expect, and it's making it

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Speaker 6: a lot more difficult for investors, I think, to capture

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Speaker 6: what will be the ultimate peak of the cycle. But

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Speaker 6: on the other hand, we have to look at what's

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Speaker 6: happening with pricing. If customers like PC, smartphone, automotive run

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Speaker 6: the gamut, if they can't get supply, someone need to

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Speaker 6: meet that, which means that Micron or their peers are

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Speaker 6: going to at some point need to expand capacity.

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Speaker 7: They're kind of working on it.

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Speaker 6: They hinted at it with the additional capex increases for

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Speaker 6: the fiscal twenty six gone up from eighteen to twenty billion.

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Speaker 6: But it's just a question of how fast and to

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Speaker 6: what magnitude can they actually increase capacity.

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Speaker 2: Right, And I'm glad you bring that up because we

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Speaker 2: know that the industry's shifting production to the more advanced

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Speaker 2: technology for AA data centers and therefore there's a short

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Speaker 2: account this less sophisticated memory chips for PCs. Doesn't that

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Speaker 2: mean that Micron has the upper hand when it comes

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Speaker 2: to Dell or HP and they can call the shots more.

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Speaker 2: I mean, what does a Dell What does an HP do?

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Speaker 2: Then if they can't get what they need.

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Speaker 7: Yeah, it's complicated.

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Speaker 6: So Micron has to decide how they want to allocate

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Speaker 6: that capacity that they have, whether that goes to PC.

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Speaker 6: I think that when you're a larger customer like Dell HP,

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Speaker 6: you kind of have to just take the product at

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Speaker 6: the price that.

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Speaker 7: Micron is offering it now.

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Speaker 6: I do think if you can buy in large volumes,

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Speaker 6: you can you know, mitigate some of those price increases,

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Speaker 6: But at the end of the day, you're kind of

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Speaker 6: you're being dictated by the market demand. The market forces

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Speaker 6: but also when prices have declined in the past, PC

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Speaker 6: makers have also benefited from that. So if there is

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Speaker 6: a cyclical decline, which I expect to happen at some point,

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Speaker 6: they'll also benefit from a decline in memory pricing as well.

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Speaker 5: Where does Micron manufactures chips?

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Speaker 6: Yeah, so it's primarily in Taiwan, but also in Japan

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Speaker 6: as well, and they have some They have a fab

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Speaker 6: in Manassas, Virginia, but they're also expanding now to Boise, Idaho,

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Speaker 6: and they're eventually going to bring a fab online in

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Speaker 6: New York.

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Speaker 7: So it's pretty gen Where in New Yorkers we know Clay,

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Speaker 7: New York.

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Speaker 3: Where's Clay, New York.

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Speaker 5: I'm gonna say Upstate Coelle.

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Speaker 3: Upstate Okay, yeah, so not not near us.

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Speaker 5: No, Upstate. There's you know, I didn't know there's Upstate,

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Speaker 5: and I think there's mid State for some people call it.

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Speaker 2: Well everyone in Manhattan thinks Upstate is like Westchester, so right.

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Speaker 5: Yes, but I learned this during the pandemic. There's different

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Speaker 5: regions of the state of New York and I have to

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Speaker 5: go google that now.

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Speaker 7: I wasn't aware of that.

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Speaker 2: Well, you're a New Jersey guy, so there's just a

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Speaker 2: city and then that's it.

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Speaker 5: That's exactly exactly right. Stay with us. More from Bloomberg

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Speaker 5: Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 5: Activist investor Elie Investment Management has built a stake of

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Speaker 5: more than one billion dollars in Lululemon Athletica. The stock

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Speaker 5: is up six and a half percent to but I

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Speaker 5: think the problem is it's down forty two percent year

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Speaker 5: to date. So let's see see what's going on over

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Speaker 5: there at Lulu. Putum Goyle Senior, a US e commerce

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Speaker 5: and retail analyst Bloomberg Intelligence. She's based down there in

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Speaker 5: for instance, she joins us, put them what's going on

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Speaker 5: with Lulu Lemon? What's the problem here? And what do

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Speaker 5: you think Elliott believes it can do to fix it?

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Speaker 8: The problem is that they've had plenty of execution missteps

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Speaker 8: over the past two years, led directly to product innovation,

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Speaker 8: and as a search for a new leader, the candidate

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Speaker 8: that he's outlined seems like a strong one. You know,

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Speaker 8: she's led a turnaround or helply to turnaround at Ralph

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Speaker 8: Lauren in the past, that coach both iconic brands that

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Speaker 8: struggled in that time, and she helped lead that turnaround.

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Speaker 8: So I think Lula Lemon roll a different turnaround. She

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Speaker 8: has the track record if she is at the lead

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Speaker 8: to really help drive this turnaround.

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Speaker 2: Punam tell us a little bit more about the role

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Speaker 2: of Chip Wilson. He founded Lululemon and he's been making

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Speaker 2: comments really agitating for change, accusing Calvin McDonald of killing

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Speaker 2: innovation and some serious strategic missteps. But he is not

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Speaker 2: part of management at Lulu Lemon. So why does this

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Speaker 2: voice carry such weight?

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Speaker 8: I mean, he was the founder, right, He did find

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Speaker 8: this brand, he did grow this brand very quickly into

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Speaker 8: a strong, loved, well known brand, and I think the

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Speaker 8: brand emerged by having great product. Like if you think

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Speaker 8: about Lulu Lemon in the past, it was all about product.

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Speaker 8: You could not find Lululemon product or something like it

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Speaker 8: anywhere else. Leggings that made you feel good, leggings that performed.

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Speaker 8: That's how they made their mark. And the question is

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Speaker 8: what's next? Have they been able to innovate fast enough

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Speaker 8: to prevent competition from encroaching that space. And the answer

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Speaker 8: is no. And that's the struggle that they're having right now.

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Speaker 5: Is it just a question of money, putting more money

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Speaker 5: into I don't know, research and development of leggings. I

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Speaker 5: don't know how that works.

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Speaker 8: I think it's execution right. It's about staying ahead of

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Speaker 8: trends and really innovating faster than competition. Clearly today with

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Speaker 8: AI and up their mediums, there is the ability for

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Speaker 8: a competition to come on faster. But that said, Little

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Speaker 8: Lemon was ahead of the game and they've kind of

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Speaker 8: fallen behind. So they do need someone who knows the

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Speaker 8: product story and can lead a product let turnaround.

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Speaker 5: Stay with us. More from Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 5: More earnings out there, this time from our friends at

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Speaker 5: Darden Restaurants put out some I think surprisingly pretty good

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Speaker 5: news out there. On the Rachel Flour she covers the

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Speaker 5: restaurants for Bloomberg New She joints us here in our studio, Rachel,

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Speaker 5: what do we hear from Darden today?

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Speaker 9: Yeah, so the company has done well today. It saw

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Speaker 9: the same store sales rise. It actually raised sales forecast,

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Speaker 9: and stock is up as much as four point five

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Speaker 9: percent today, which is the biggest game in almost seven months.

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Speaker 9: And I mean while sales are up, though, it's profits

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Speaker 9: have kind of taken a hit because of high beef prices.

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Speaker 9: You know, we've been hearing about that. That has affected

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Speaker 9: their earnings for a little bit. But now they do

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Speaker 9: expect beef prices to hopefully come down in the near future.

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Speaker 5: Okay, I guess they're fast casual is kind of their stuff.

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Speaker 5: So like the I'm sitting down, I've got a waitress'm

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Speaker 5: doing on that stuff. But it's it's talk to us

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Speaker 5: about their brands and what they're saying about their brands.

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Speaker 9: Sure, yeah, so I guess they will call themselves a

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Speaker 9: bit more more casual dining and a fast casual. I

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Speaker 9: guess you know this this industry has yeah terms, but yeah,

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Speaker 9: they actually kind of saying that. It's it's just still

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Speaker 9: been pretty pretty resilient you know, their target audience are

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Speaker 9: these like middle and high income customers, and those haven't

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Speaker 9: been so much affected by the economy. Maybe they're a

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Speaker 9: bit more worried, but they that hasn't really stopped them

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Speaker 9: from spending. And you know, they see these restaurants as

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Speaker 9: kind of a treat to them. And you know, for

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Speaker 9: many consumers too, I think they're starting to see these

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Speaker 9: restaurants like Olive Garden and Longhound Stakhouse as a place

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Speaker 9: where they can kind of get pretty good food for

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Speaker 9: you know, a pretty good price right now, especially when

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Speaker 9: you see places that Cover and Chipotle, which those are

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Speaker 9: your fast casual places, and you know they're pretty expensive

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Speaker 9: now with inflation, and so the comparison is you know,

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Speaker 9: like as a consumer, you know, why not just pay

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Speaker 9: a little bit more and I can get a better

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Speaker 9: experience and an Olive Garden.

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Speaker 5: So they're they're raising there for your forecast. Is that

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Speaker 5: more on the revenue side or is that costs or

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Speaker 5: what are they doing there?

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Speaker 9: So they actually increase the same store sales, the comparable sales,

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Speaker 9: and so they do expect, you know, consumers to keep coming.

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Speaker 9: You know, they have other tools in their belt to

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Speaker 9: kind of keep drawing consumers like they are smaller, they

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Speaker 9: introduce like smaller portions. They are on uber Eats now.

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Speaker 9: But yeah, they actually maintain their earnings for share guidance

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Speaker 9: just because of commodity prices.

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Speaker 5: So again, what are some of the are you seeing

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Speaker 5: differences within the restaurant industry, you know, the the lower

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Speaker 5: end of the higher end about just sales trends, how

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Speaker 5: their customers are doing there is it a different discussion.

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Speaker 3: I think it's a different discussion.

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Speaker 9: I think we've heard a lot about how a lot

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Speaker 9: of the fast food chains, a lot of the fast

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Speaker 9: casual chains, you know, they're still getting hit by your

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Speaker 9: lower income consumers kind of pulling back, you know, like

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Speaker 9: inflation and commodity prices are highways your casual dining restaurants.

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Speaker 9: You know, they seem to still be pretty resilient. A

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Speaker 9: Chili's is another example. They're still able to draw that consumer,

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Speaker 9: which is are still able to spend a little bit more.

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Speaker 5: So, as a reporter covering the restaurant industry, you got

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Speaker 5: to get out in New York City because we don't

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Speaker 5: have a lot of that stuff. So you gotta travel

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Speaker 5: around the country, right go to where the cracker barrels

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Speaker 5: are and the Chilis are.

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Speaker 9: Yeah, you definitely have to, I think for most of us.

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Speaker 9: I mean in New York City unfortunately, you have to

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Speaker 9: try to get into Times Square just to get that.

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Speaker 3: But I want to get one faster, which is.

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Speaker 7: Not the most fun.

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Speaker 5: Yeah, exactly. So what's the format? You know, what are

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Speaker 5: what's the buzz within the restaurant industry these days? Like

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Speaker 5: maybe the format or is there a new cool company?

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Speaker 5: Like for a while there was shake Shack and all

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Speaker 5: the burger stuff and the smash Burgers and all that stuff.

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Speaker 9: I mean, I think Chili's was the cool company for

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Speaker 9: a bit. You know, they had a really good social media.

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Speaker 9: You know, a lot of the items were going viral.

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Speaker 9: I think with Olive Godden. You know, I think what

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Speaker 9: we've seen today is the popularity of smaller portions seem

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Speaker 9: to be something that consumers uh gravitating towards, you know,

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Speaker 9: especially with some of them, you know, going on we

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Speaker 9: lost drugs, you know, becoming more like half conscious. You know,

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Speaker 9: this might be actually a play for them.

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Speaker 5: Yeah, So was that ever a thing with the GLP

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Speaker 5: one drugs and restaurants ors that faded?

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Speaker 9: I think they're still trying to figure it out. I think,

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Speaker 9: you know, I think we are still trying to figure

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Speaker 9: out too, like how many people are actually really going

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Speaker 9: to go on a drugs?

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Speaker 3: How you know people are going to go off it?

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Speaker 3: So I think they are also watching it.

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Speaker 9: They did say they're slightly affected, like some they're seeing

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Speaker 9: some diners cutback on appetizers and desserts, But they also

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Speaker 9: say that it's mostly alcohol, which that they're pulling back on,

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Speaker 9: which is the longer term tread.

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