Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast with Caroline Hide in New York
Speaker 1: and ever Low in sentrances, go.
Speaker 2: This is Bloomberg Tech coming up. Netflix gives a lackluster
Speaker 2: forecast for the second quarter, while chairman and co founder
Speaker 2: Red Hastings steps down after twenty nine years at the company.
Speaker 3: Plus, the US government plans to make a version of
Speaker 3: anthropics Mythos model available to major federal agencies to tackle
Speaker 3: cyber risks, despite the ongoing legal feud with.
Speaker 4: The Pentagon and Sequoia.
Speaker 2: Capital raises seven billion for its latest expansion fund, targeting
Speaker 2: AI giants like Open Ai and Anthropic. We have details
Speaker 2: later in the hour.
Speaker 3: Such a great scoop ed that you've got. Meanwhile, let's
Speaker 3: forget what the markets are doing. Extraordinary moves and once
Speaker 3: again it's because we get an extraordinary barrage of news
Speaker 3: when it comes to the Middle Eastern conflict, the straight
Speaker 3: of war moves promised to be open for commercial vessels
Speaker 3: at least. Oil absolutely tumbles down some twelve percent as
Speaker 3: hopes that suddenly we'll get supply chain eases coming. We're
Speaker 3: off by twelve percent. Now at one point it was
Speaker 3: a record move for Brent. I'm looking at therefore still
Speaker 3: a record high for the NASDAK one hundred up one.
Speaker 5: Point three percent.
Speaker 3: This is another almost thirty we're seeing just trillions added
Speaker 3: over the course of the last few trading days. I
Speaker 3: want to look at what's happening in terms of the
Speaker 3: last thirteen days. This is the longest streak that we've
Speaker 3: seen in years. We're currently up some sixteen percent at
Speaker 3: the moment ed. It is notable the amount of games
Speaker 3: that we see in the Nasdaq, how long they have
Speaker 3: been for and even today despite one key drag on
Speaker 3: the market, that you're looking.
Speaker 2: At thirteen days for the first time since twenty thirteen.
Speaker 2: The technology story is in the markets. Microsoft is up
Speaker 2: two and a half percent this Friday, but on the week,
Speaker 2: it's heading for its best week since two thousand and seven.
Speaker 2: There's no one single story or catalyst out there, but
Speaker 2: there's just momentum generally. Intel Similarly, we've been talking about
Speaker 2: Intel being an outperformer even in spite of the war
Speaker 2: in Iran and how that's impacted chip supply chains. It's
Speaker 2: a stock trading at its highest level since two thousand.
Speaker 2: Where there is a story is in Netflix and Netflix's
Speaker 2: earnings essentially, the outlook for the current period. The second
Speaker 2: quarter not that good, and the stock is currently down
Speaker 2: eight and a half percent, its worst day as it
Speaker 2: stands since October. At one point in the session, we're
Speaker 2: even deeper declines. And then there's the overhang of the
Speaker 2: Warner Brothers Discovery deal that didn't happen. And then Read Hastings,
Speaker 2: the co founder and now chairman who's been with this
Speaker 2: company for twenty nine years, is stepping down. Let's summarize
Speaker 2: Bloomberg's Lucas Shaw, who leads the screen Time team, is
Speaker 2: with us.
Speaker 4: Let's start with that overhang.
Speaker 2: I guess one of the reasons that the first quarter
Speaker 2: results look good is that they got to pay a
Speaker 2: breakup fee from Paramount, so factor that in, but I
Speaker 2: think that that is the story. There's just this hang
Speaker 2: of what life looked like after walking away from the
Speaker 2: Warner Brothers Discovery deal.
Speaker 6: Well, walking away from the deal has been the short
Speaker 6: term up until earning has been really good for the stock.
Speaker 6: Right the stock was up quite a bit over the
Speaker 6: last few weeks. Investors did not like the Warner Brothers deal.
Speaker 6: They were worried about how much Netflix was paying. They
Speaker 6: were worried about what it would mean for the company.
Speaker 6: But it also fed sort of, I think, expectations that
Speaker 6: the forecast this year would be revised in a positive way,
Speaker 6: and instead, even though Netflix had a better first quarter
Speaker 6: than they expected in terms of subscriber growth and revenue,
Speaker 6: they maintain the estimates, and they warned that actually profit
Speaker 6: and margin would be down a little bit in the
Speaker 6: second quarter because of increased spending on programming.
Speaker 3: So maybe the market got ahead of itself. Where did
Speaker 3: they get impacted by Read Hastings? How much is that
Speaker 3: a concern that this looming large figure co founder is
Speaker 3: going to be stepping and looking more at philanthropy.
Speaker 6: Yeah. Hard to quantify, of course, because it's not like
Speaker 6: the investors will saying, well, I sold for this reason
Speaker 6: and I sold for that reason. But look, it has
Speaker 6: to be a factor. On the one hand, Read Hastings
Speaker 6: has been telegraphing his departure for a long time. In
Speaker 6: twenty twenty he names ten surround Us as co CEO.
Speaker 6: In twenty twenty three, he steps down as CEO and
Speaker 6: becomes executive chairman. Then he becomes just chairman. He's been
Speaker 6: signaling that he's going to thraw from this business because
Speaker 6: he feels like he's done his job. At the same time,
Speaker 6: this is the guy who led the company for most
Speaker 6: of its existence, did a tremendous job, and so his
Speaker 6: departure is going to worry people.
Speaker 2: Just to point out that Read Hastings is also a
Speaker 2: board member of Bloomberg Inc. And Bloomberg LP, the parent
Speaker 2: company of Bloomberg Media, the parent company of this network, Lucas.
Speaker 2: There's a lot of choice right now. I watch Netflix.
Speaker 2: I'm watching The Night Agent. I think it's very good.
Speaker 2: You might watch HBO Max, you might be Disney Place
Speaker 2: or Hulu. Did we learn anything about Netflix's content slate strategy?
Speaker 2: You know, they've been pushing into live, pushing into games.
Speaker 2: It's not really clear to me, like what what happens
Speaker 2: next on that front.
Speaker 6: They're staying the course for the time being. At least
Speaker 6: they're sort of reiterating we're confident in what we're doing.
Speaker 6: We're yes, they are. They're moving into some new areas
Speaker 6: video podcasting, live programming, and gaming. Where the three that
Speaker 6: they signaled both in their letter to shareholders and in
Speaker 6: the call I don't think those have immediate or dramatic
Speaker 6: impacts on the business. Podcasting is not registering in a
Speaker 6: big way yet. Live is probably the most significant, but
Speaker 6: they are being very selective about what live programming that
Speaker 6: they do. And video gaming they would acknowledge has has
Speaker 6: been amiss so far, but they feel like they're starting
Speaker 6: to develop a more comprehensive strategy for the most part.
Speaker 6: You look at the twenty billion dollars nineteen billion dollars
Speaker 6: they're going to spend this year, and it's on the
Speaker 6: same kind of scripted programming they've done for for a
Speaker 6: long time now.
Speaker 3: Lucas sure as always brilliant to have you leaders screen time.
Speaker 5: We appreciate it.
Speaker 3: Let's get more on Netflix with Alicia Reese when we're
Speaker 3: Security Senior vice president of equity Research. You've actually got
Speaker 3: an outperform rating on the stock one hundred and eighteen
Speaker 3: dollars twelve month price target actually raised a little bit
Speaker 3: from one hundred and fifteen, So the confidence. Alicia talked
Speaker 3: to us about where the confidence comes from.
Speaker 7: Yeah, I think the ads strategy is what is being
Speaker 7: underappreciated here domestically. I think they had to put a
Speaker 7: lot into content in the second quarter to offset or
Speaker 7: you know, just give the user reason to for resilience
Speaker 7: on the on the subscriber, subscriber the premium tiers, but
Speaker 7: those who are not convinced could easily go to the
Speaker 7: AD tier. And we've seen with our survey work over
Speaker 7: the years a lot of resilience around that since they
Speaker 7: introduced the AD tier. I think there's a lot of
Speaker 7: reason for people to stay when they give, when they
Speaker 7: post all of that content. And you know, to lucas
Speaker 7: this point, you know, podcasting hasn't been a huge mark
Speaker 7: so far, but you know, Netflix did point out that
Speaker 7: a lot of their users are coming on during the
Speaker 7: day when they wouldn't normally come on, and so that
Speaker 7: is incremental engagement. I think it's useful to have as
Speaker 7: much incremental engagement as they possibly can as they raise price.
Speaker 7: I do think it will be incremental here in with
Speaker 7: the price increases domestically, perhaps not in Europe. There is
Speaker 7: some legal pushback right now on the price increases in
Speaker 7: a few countries and could potentially be in the continent.
Speaker 7: I think, you know, the AD tier is really you
Speaker 7: know that the piece that is underappreciated here. There's so
Speaker 7: much opportunity for them to expand, and as they increase price,
Speaker 7: some people and quite a few people tend to get
Speaker 7: pushed over to the ad tier, and with Netflix's low
Speaker 7: ad load and higher CPMs and potentially growing CPMs, they
Speaker 7: can benefit pretty handsomely in the back half of the year, Ansia.
Speaker 3: Can you go through geographically for US a little bit,
Speaker 3: because perhaps we're underwhelmed in terms of first or pushing
Speaker 3: forward first go to US. Canada was actually a slightly
Speaker 3: slower growth and anticipated, but Asia doing well, Europe doing well,
Speaker 3: that in America doing well.
Speaker 5: Is there's still the growth there.
Speaker 7: Yeah, I think it's really important to note that, you know,
Speaker 7: because of the geographic diversity, their results are you know,
Speaker 7: pretty steady overall. The World Baseball Classic was a huge
Speaker 7: hit in Japan, but it didn't seem like there is
Speaker 7: a lot of churn. Soon after, there was a lot
Speaker 7: of content that people in the region found really favorable
Speaker 7: and so they kept on the service. And Netflix noted
Speaker 7: their AD tier being, you know, having a little bit
Speaker 7: more heft in the region because of that increased subscriber growth.
Speaker 7: So that's something that we had not factored in. The
Speaker 7: average revenue per member is quite low in APAC, and
Speaker 7: I think advertising in Japan and elsewhere in the region
Speaker 7: could really boost results. You can wasn't as strong as
Speaker 7: we had expected it to be in the first quarter,
Speaker 7: but you know, there was a range, and it was
Speaker 7: really within the range. Our survey work, you know, just
Speaker 7: suggested that it was pretty standard part for the course.
Speaker 7: Nothing you know, huge, a miss or a beat, but
Speaker 7: you know, you do have some decent trends in Europe,
Speaker 7: you know, absent the price increases as well. So I think,
Speaker 7: you know, overall regionally they're quite healthy and they'll continue
Speaker 7: to be. But there is you know, nothing domestically that
Speaker 7: helped them hit it out of the park this quarter.
Speaker 2: There's a line in the Bloomberg story Alicia wall Street
Speaker 2: is looking for signs Netflix can keep subscribers engaged, and
Speaker 2: Netflix has not disclosed subscribers since the first quarter of
Speaker 2: twenty twenty five. It focuses on engagement time spent. And
Speaker 2: so you've gone over a number of interesting telltale signs
Speaker 2: of how you assess the health of the company going forward.
Speaker 2: What is the metric that proves definitively that Netflix is
Speaker 2: taking time and eyeballs in a world where you have
Speaker 2: a lot of choice, and it's not just about streaming
Speaker 2: platforms in that battle.
Speaker 7: Well, it doesn't matter whether they're on the premium tier
Speaker 7: or the ad tier, so long as you know, Netflix
Speaker 7: is extracting increasing revenue off of these users, and engagement
Speaker 7: is clearly an important sign. But so you're looking at
Speaker 7: a combination of revenue whether they're getting, you know, the
Speaker 7: highest subscription price, or whether they're on the ad tier
Speaker 7: and engaging significantly with the content and providing a lot
Speaker 7: more value to advertisers and therefore revenue to Netflix. And
Speaker 7: if they're able to do that at a reasonable cost
Speaker 7: of content, the profitability will continue to climb and free
Speaker 7: cash fow will continue to climb, and that's what we've
Speaker 7: been seeing, and so for us, that's a huge positive.
Speaker 7: In the second quarter, surely there's going to be a
Speaker 7: lot of content memorization, a lot more content on the service,
Speaker 7: but in the back half that's going to even out
Speaker 7: and they'll be able to hit those full year targets
Speaker 7: and probably exceed them.
Speaker 2: Netflix ask Wall Street judge us on traditional financial metrics.
Speaker 2: The stocks down nine percent, on track for its bigges
Speaker 2: stroops since October, but at one point down twelve percent,
Speaker 2: biggest drop since twenty twenty two Wall Streets judging on
Speaker 2: the financial metrics. Alisha Reesa Webersh, thank you very much.
Speaker 2: Now coming up in the program, and thropics Mythos model
Speaker 2: was among the top concerns for global leaders at the
Speaker 2: IMF Spring meeting. We're going to get the latest on
Speaker 2: the cyber concerns buzzing around DC at s NEPs. This
Speaker 2: is bloombog Tech Andthropic CEO Dario m. O'Day is set
Speaker 2: to meet with White House Chief of Staff Susie Wilds today.
Speaker 4: That's according to reports.
Speaker 2: The meeting comes as the company's powerful AI model Mythos
Speaker 2: continues to raise concerns with public and private leaders over
Speaker 2: its cybersecurity capabilities. And let's not forget and Thropic is
Speaker 2: still feuding with the Pentagon over how the military uses
Speaker 2: its AI tools. Let's get the latest with Bloomberg's Mike Shephard,
Speaker 2: who's in Washington. I think we start with the reported meeting,
Speaker 2: but right now there is constant headlines about anthrop relationship
Speaker 2: with the federal government.
Speaker 7: Ed.
Speaker 8: This is a little bit of a twist in the
Speaker 8: whole saga. You know, since the beginning of the year,
Speaker 8: we've seen this increasing few between Anthropic, the developer of Claude,
Speaker 8: and now Mythos over what degree of safeguard should be
Speaker 8: included in its product, and it culminated in that Pentagon
Speaker 8: declaration of the company and its systems as a supply
Speaker 8: chain risk and prompting a company lawsuit to get that
Speaker 8: designation overturned. Really an extraordinary turn of events, and yet
Speaker 8: now the technology has forced another and this is the
Speaker 8: prospect that its newest product, Mythos, could be so powerful
Speaker 8: and so good at identifying cyber vulnerabilities that it can't
Speaker 8: be released widely beyond a handful of technology firms and
Speaker 8: Wall Street banks that really have that kind of trust
Speaker 8: and also would need to be able to vet their
Speaker 8: own systems. In a way, this really kind of brings
Speaker 8: us closer to the remote possibility that has been talked
Speaker 8: about by policy makers and others for years that there
Speaker 8: could be a devastating cyber attack that takes out critical
Speaker 8: infrastructure or disrupts the financial system.
Speaker 5: Mike, what have those in Washington?
Speaker 3: What are those close to the administration made of this
Speaker 3: sort of contradictory relationship going on at the moment. The
Speaker 3: fact that they're trying to freeze them out from a
Speaker 3: supply chain headache risk in one sense, I mean an
Speaker 3: extraordinary step taken. And on the flip side, outside of
Speaker 3: the Pentagon, they seem to be working with a Treasury department,
Speaker 3: and we understand would eventually be working with other federal agencies.
Speaker 8: Well, this really is the question of the moment, and
Speaker 8: it seems to be that they are looking past the
Speaker 8: conflict that they're having between the company and the Pentagon
Speaker 8: for the moment, simply because they need to.
Speaker 4: The urgency of it.
Speaker 8: Requires that the Treasury Department not only engage and test
Speaker 8: the system on its own networks to make sure that
Speaker 8: there are no vulnerabilities. Ever, remember the Treasury handles all
Speaker 8: manner of payments to US citizens, social Security, you name it,
Speaker 8: and then also performs critical market functions that could be
Speaker 8: disrupted if hackers were able to penetrate those networks. So
Speaker 8: they really have an agenda, and so do many other agencies.
Speaker 8: So for the White House to line up access which
Speaker 8: it currently does not have to METHOS for all these
Speaker 8: agencies is something seen as important and it is putting
Speaker 8: in the backseat. This whole question of whether the Pentagon
Speaker 8: should be insisting their anthropic drop its demands for safeguards
Speaker 8: on its products and military use.
Speaker 4: Bloomberg's Mike Shepherd and DC with the reporting. Thank you.
Speaker 2: Carra just point out that over the last seven days
Speaker 2: a number of Anthropic executives have gone on stage or
Speaker 2: done interviews and they've basically explained that they want to
Speaker 2: have it both ways. They're saying, yeah, we are standing
Speaker 2: with these principles against the Pentagon because we believe in it,
Speaker 2: but we know that the government needs to have access
Speaker 2: to and understand the most powerful model. That's basically the
Speaker 2: lineally pragmatic. They're trying to be pragmatic, and at the
Speaker 2: end of the day they are now based on our reporting,
Speaker 2: taking action on that and saying to government, have had it.
Speaker 5: And isn't it interesting.
Speaker 3: At the same time, we've got the UK and Europe
Speaker 3: desperate to get their hands on this technology as well
Speaker 3: and calling for steps to be taking. We learned, of
Speaker 3: course in that interview with Tom McKenzie and the Anthropic
Speaker 3: UK lead or North of Europe lead, the UK will
Speaker 3: be getting it soon.
Speaker 5: Look, you've got to learn more. There's plenty to discuss.
Speaker 5: Let's talk about how.
Speaker 3: We've got a Bloomberg Live Q and a coming up
Speaker 3: a little bit later today on Anthropics Mythos coming up,
Speaker 3: We're now going to be speaking to the AVEX CEO,
Speaker 3: Roger Wells. So the company makes its public market debut.
Speaker 3: This is a Bloomberg Tech.
Speaker 2: Madison Air made a strong debut on the public market's
Speaker 2: pulling off the largest US industrial ip since nineteen ninety nine.
Speaker 2: I spoke with CEO Jill Wyant about the company's strategy
Speaker 2: and how is data center business took shape.
Speaker 4: Listen to this.
Speaker 5: So we've been at this for a while.
Speaker 9: You know, the data center business was born out of
Speaker 9: our customer handling business, which has done this for a
Speaker 9: combined three hundred and fifty years. So we did not
Speaker 9: start doing this last week or last quarter. We've had
Speaker 9: a triple source supply chain. We've had ninety nine to
Speaker 9: one hundred percent delivery rates for the hyperscalers and the
Speaker 9: co locators we've been serving for years, and we are
Speaker 9: there to care for and optimize and ensure those assets
Speaker 9: perform at their best. We are differentiated, we are winning,
Speaker 9: and I think the best part of that story and
Speaker 9: it's all within a very balanced set of end markets.
Speaker 9: We are not a data center peer play. We give
Speaker 9: investors great exposure to the obvious opportunity there while at
Speaker 9: the same time growing nicely in other advanced high performance
Speaker 9: environments in the macroeconomy where air impacts customer outcomes.
Speaker 4: Away from the stock market.
Speaker 2: You know, a focus of the Bloomberg Tech audience is
Speaker 2: the role of debt in all of these projects. Let's
Speaker 2: call it the reindustrialization of America. I think, correct me
Speaker 2: if I'm wrong. You know, coming out of this IPO,
Speaker 2: the debtloads, I think it looks like about three billion
Speaker 2: dollars for you. What's the strategy do you see with
Speaker 2: time paying that down? That coming down quickly? Or your
Speaker 2: sanguine on the load and how you work it?
Speaker 9: Well, about a one hundred one hundred percent of the
Speaker 9: IPO proceeds we were used to retire debt. So now
Speaker 9: I don't know the exact calculation. I've been talking to
Speaker 9: a lot of folks today about green shoe execution. But
Speaker 9: really we should come out of that IPO about three
Speaker 9: and a half times trailing on a leverage basis, and
Speaker 9: then we continue to do what we do, which is
Speaker 9: grow our business and generate cash flow and expand our EBITA,
Speaker 9: which should allow us to exit twenty twenty six below
Speaker 9: three times levered on a trailing basis. Again, we run
Speaker 9: that play into next year, and we should be south
Speaker 9: of two point five times levered, as I say, before
Speaker 9: New Year's eve, well before New Year's Eve in twenty
Speaker 9: twenty seven. And really then it just comes back to
Speaker 9: the same play we've always been running. Grade sales, higher
Speaker 9: margins are EBITDA margins enterprise wide at twenty six and
Speaker 9: a half percent or eight hundred to one thousand basis
Speaker 9: points better than the most of the competition we see
Speaker 9: out there. Our team is very focused and robust around
Speaker 9: converting that to free cash flow. We have an asset
Speaker 9: light model where we whereby we can make our growth
Speaker 9: investments while remaining at a low single digit capex, and
Speaker 9: we have an owner's mindset across the company, so good
Speaker 9: discipline use of cash. So we feel good about that,
Speaker 9: you know, getting that balance sheet to the point where
Speaker 9: investors consistently told us they wanted to be, and then
Speaker 9: that just opens up more optionality and flexibility.
Speaker 10: For us going forward.
Speaker 3: Madisoneo to Yan sticking with IPOs Shares, a military drone
Speaker 3: maker AVEX. I'll have to begin trading today. The companies
Speaker 3: raised three hundred and twenty million dollars. The shares pricing
Speaker 3: twenty dollars each, near the top of its projected range,
Speaker 3: has beat now with Roger Wells, he's AVEX CEO, and
Speaker 3: a big day for the business. What's interesting is what
Speaker 3: you use the money for. Therefore, what will three hundred
Speaker 3: and twenty million dollars by.
Speaker 11: Yeah, so our primary use of proceeds is going to
Speaker 11: be to buy down debt and create networking capital that
Speaker 11: we can really use to scale the business and accelerate growth.
Speaker 2: Just so you know, Roger Bloomberg's reporting that these shares
Speaker 2: are indicated to open somewhere twenty three to twenty five
Speaker 2: dollars apiece. You priced at twenty it was twelve times
Speaker 2: over subscribed. So I don't know how that makes you
Speaker 2: makes you feel. But the basics of it are, you're
Speaker 2: a drone company, and you're a company that, in line
Speaker 2: with the rest of industry, is looking at the battlefield
Speaker 2: you might move deeper into warfare.
Speaker 4: Explain the strategy.
Speaker 11: Yeah, So, first off, we couldn't be more excited with
Speaker 11: where we landed. A lot of investor excitement and interest
Speaker 11: in the products, technologies, and solutions that AVX is moving
Speaker 11: into the market. We are a company that builds autonomous,
Speaker 11: multi mission, multi domain systems that are battlefield proven. By
Speaker 11: the time we get to the end of fiscal year
Speaker 11: twenty six, we will have delivered over nine thousand system
Speaker 11: to Ukraine and really proven the capabilities that we bring.
Speaker 11: We will continue to focus in on bringing kinetic solutions
Speaker 11: that are designed to meet the needs of our customers
Speaker 11: long range precision strike voider ammunitions and launched effects.
Speaker 3: More broadly, when you say that these are being used,
Speaker 3: how do we see the scale rampop and how dependent
Speaker 3: do you remain on government contracts from the United States.
Speaker 4: Yeah. Look, I think the.
Speaker 11: Activities we've seen in Ukraine and more recently in Oran
Speaker 11: just validate the fact that autonomous unmanned systems are going
Speaker 11: to be a part of modern warfare now and long
Speaker 11: into the future. We feel like we're well positioned with
Speaker 11: significant backlog over eight billion dollars as it stands today,
Speaker 11: and really also validated by the fact that the fiscal
Speaker 11: year twenty seven budget request came in over fifty billion
Speaker 11: dollars for exactly the same types of systems that we
Speaker 11: bring to the market into our customers. So we see
Speaker 11: a lot of growth in this area of the market
Speaker 11: and a broad adoption of this type of technology.
Speaker 4: Have you done the math on that, Roja?
Speaker 2: So when the full year twenty seven defense budget gets done,
Speaker 2: how much of that you could capture?
Speaker 11: Yeah, I think we're well positioned and well aligned with
Speaker 11: evolving requirements. Obviously, we're working very closely with our customers
Speaker 11: to ensure that we are able to bring scaled systems
Speaker 11: that are affordable and on the timeline that's operationally relevant.
Speaker 11: So we're constantly working with them to make sure that
Speaker 11: we're meeting their demand.
Speaker 3: Roger, There's been a lot of exuberance, shall I say,
Speaker 3: hype around defense tech names, and a lot of them
Speaker 3: make drones, and I'm interested as to how you continue
Speaker 3: to build a USP narrative here. What makes you different
Speaker 3: than the other drone companies?
Speaker 11: Yeah, Look, I think we really focus in on a
Speaker 11: differentiated technology stack that allows our systems to be highly
Speaker 11: competitive on the modern battlefield. We're able to execute in
Speaker 11: highly contested environments where GPS is denied, communications jammed, electronic
Speaker 11: warfare is being pervasively devoid quite technical sophisticated adversaries, and
Speaker 11: that technology differentiation is really how we distinguish ourselves and
Speaker 11: how we continue to bring top talent.
Speaker 4: To the AVX team.
Speaker 2: Avex indicated it's open twenty three to twenty five dollars,
Speaker 2: priced at twenty dollars in an IPO that Bloomberg reports
Speaker 2: was more than twelve times oversubscribed. Roger Wells is Avex's CEO,
Speaker 2: Thank you very much. Coming up on the program. Shares
Speaker 2: of Netflix dropped pretty sharply as well, after posting disappointing
Speaker 2: second quarter earnings forecast. There's also a big departure. Someone
Speaker 2: with a long history of that company will have it next.
Speaker 4: It's halftime. This is Bloomberg Tech.
Speaker 5: Welcome back to Bloomberg Tech.
Speaker 3: We are checking in on these markets because it's an
Speaker 3: extraordinary day. From geopolitics, it looks as though the straight
Speaker 3: ofform moves is open according to Iran courses as we
Speaker 3: move towards closer end to conflict of the world hopes.
Speaker 3: But we're down by nine point six percent if you're
Speaker 3: looking at oil, we've jumped a head a little bit.
Speaker 5: So let's go back to the Nasdaq one hundred record high. Yeah,
Speaker 5: down ten percent on Brent.
Speaker 2: Tech is unstoppable in spite of the war in Iran,
Speaker 2: so many headlines, so Iran's foreign minister confirms the straightform
Speaker 2: Moves is open. By the way, the straightfor Moves is
Speaker 2: a body of water in the Gulf and lots of
Speaker 2: ships carrying oil pass through it.
Speaker 4: More than oil, more than oil.
Speaker 5: Everything's need for check.
Speaker 2: But that's why you see that that big drop in Brent.
Speaker 2: You know that the oil, I guess will start flowing
Speaker 2: a little bit more. And then you know, broadly speaking,
Speaker 2: you know tech is the focus for a lot of
Speaker 2: investors right now. And within that, you know that bucket
Speaker 2: of the Nasdaq one hundred for the first time, a
Speaker 2: thirteen day streak since twenty thirteen.
Speaker 4: I think, yeah, twenty thirteen.
Speaker 5: To go back that long.
Speaker 3: The sentiment risk on sentiment to remain just by all
Speaker 3: the jupilitical headlines. But let's go to the AI headlines
Speaker 3: that continue to drive this market and look for some.
Speaker 5: It's positive, for others it's negative.
Speaker 3: Figment down off by six point four percent as we
Speaker 3: get well reality check, that's still AI might be disrupting
Speaker 3: the world of software this time. Claude Design is what's
Speaker 3: coming out and topic just relentless with the amount of announcements.
Speaker 6: Yeah.
Speaker 2: So look at that chart, the squiggly line. But the
Speaker 2: drop just after eleven Eastern is because the headline hit Anthropic,
Speaker 2: confirming that Claude Design is being launched and released. It
Speaker 2: had been reported in the press earlier in the week,
Speaker 2: which also had hit Figma. But that's a pretty sharp
Speaker 2: reaction of AI displacing a platform that does design.
Speaker 3: Create polish visual work like designs, prototype slides, one pages
Speaker 3: and more.
Speaker 5: Lanodobe as well for example.
Speaker 2: Yeah, storry is not going to go away. Let's get
Speaker 2: back to Netflix. And Netflix is under pressure and the
Speaker 2: stockdown almost ten percent, on track for its biggest drop
Speaker 2: since October. I believe at one point on track for
Speaker 2: its biggest drop since twenty twenty two. The reactions to
Speaker 2: the numbers and a big departure. Keitha rang A, then
Speaker 2: a Bloomberg intelligent intelligence, says in her React research. Netflix
Speaker 2: maintaining its full year outlook despite avoiding M and A
Speaker 2: costs may concern investors, but reflects a cautious approach. Peter
Speaker 2: joins us, Now you know a lot of your colleagues
Speaker 2: and peers in the markets on the street pointed out
Speaker 2: that they kind of wanted to see Netflix raise the
Speaker 2: full year guidance. You know, was there an expectation of that, Like,
Speaker 2: why were we going into to the print thinking maybe
Speaker 2: they'll tell us things are better than they are.
Speaker 12: Yeah, there was definitely a lot of you know, elevated
Speaker 12: expectations going into the print ed. So you know that
Speaker 12: they just hiked prices in the US, and I think
Speaker 12: that definitely fed into that optimism.
Speaker 5: There was also the.
Speaker 12: Thing of you know, the M and A integration cost
Speaker 12: basically going away after they dropped the Warner bid, and
Speaker 12: so you know, I think investors just naturally assumed that
Speaker 12: they would take up their operating margin, which they did
Speaker 12: not do. So, you know, this was just your classic
Speaker 12: case of when results were definitely good, but that's just
Speaker 12: not good enough, given that the street was expecting a
Speaker 12: whole lot more case it.
Speaker 3: Therefore, what holds back margin growth revenue still looking regive good,
Speaker 3: perhaps a little more tepid than the street had anticipated,
Speaker 3: is consumer sentiment.
Speaker 5: The one being hit is it, Well, they.
Speaker 3: Still have to deploy cash within their content because look,
Speaker 3: they're not getting Warner Brothers discovery content anymore.
Speaker 12: Yeah, No, that's a great point, Caroline, and it's exactly that.
Speaker 12: So it is elevated content spending this year. So historically
Speaker 12: what we've seen for Netflix is content amortization in about
Speaker 12: the six to seven percent growth range. This year, it
Speaker 12: is actually jumping pretty significantly, so it's going to be
Speaker 12: up ten percent. They've guided to cash content costs of
Speaker 12: roughly twenty billion dollars, so that's you know, a pretty
Speaker 12: significant step up from prior years, and that's what is
Speaker 12: really kind of working its way into that kind the
Speaker 12: tepid operating margin guidance. We're going to see the biggest
Speaker 12: step up happen in the second quarter. And this is
Speaker 12: really just Netflix kind of as you just pointed out, Caroline,
Speaker 12: this is just them diversifying their content portfolio, kind of
Speaker 12: making all of these new investments into live content, into
Speaker 12: you know, some of these sports games, if you will,
Speaker 12: video podcasts, all of that, and that is really casting them.
Speaker 12: But it's you know, it's them just playing both offense
Speaker 12: and defense.
Speaker 3: Rangon Avan, it's so good to have you on. Thank
Speaker 3: you from Boomberg Intelligence Ed.
Speaker 5: What have we got?
Speaker 2: Yeah, many more news stories in the world of tech,
Speaker 2: and it's time for talking Tech first Up. Chinese regulators
Speaker 2: have find leading delivery platforms in the country, including those
Speaker 2: from Ali, Barba, Pinduo Duo, and May Twan. For failing
Speaker 2: to screen unqualified merchants, authorities imposed five hundred and twenty
Speaker 2: eight million dollars in fines and seizures, the largest since
Speaker 2: China's twenty fifteen food safety law update. Plus TV shopping
Speaker 2: network QVC has filed for bankruptcy. It's part of a
Speaker 2: plan of the Struggle multimedia retailer to cut more than
Speaker 2: five billion dollars of debt. In a statement, the company
Speaker 2: said it had more than a billion dollars in cash
Speaker 2: at the end of twenty twenty five to fund ongoing operations.
Speaker 2: And Open AI is rolling out an early version of
Speaker 2: a new AI model designed to accelerate drug discovery to
Speaker 2: chat tob tea maker says it's gpt Rosalin model targets
Speaker 2: life sciences research that will initially be offered as a
Speaker 2: limited preview to select business customers.
Speaker 3: CORCT the promise of healthcare is big when it comes
Speaker 3: to AI. Meanwhile, you're coming up with a big set
Speaker 3: of investment towards AI, potentially SEQUOIA capital raising seven billion
Speaker 3: dollars for its latest expansion fund under this new leadership.
Speaker 5: Were on that next, this is Bloomberg Tech.
Speaker 2: Bloomberg reporting that Sequoia Capital, one of the largest and
Speaker 2: most prominent venture capital firms, has raised seven billion dollars
Speaker 2: for its latest expansion fund. It will target AI giants
Speaker 2: like AI an Anthropic and the Dasher Mascarain has break
Speaker 2: the story joins us now. So like Sequoia raises funds
Speaker 2: relatively often, I would say, but what we're hearing is
Speaker 2: like that, this is a big raise seven billion. It's
Speaker 2: very clear focus later stage mature companies.
Speaker 4: What else do we need to know? Yeah?
Speaker 13: Absolutely, I mean, listen, this is the first fund raise
Speaker 13: we've seen since there's been a leadership change and at Sequoia,
Speaker 13: So this is something that we've been tracking very closely.
Speaker 13: What is it going to look like under a new
Speaker 13: leadership with Pat Grady and Alfred Lynn at the top
Speaker 13: of the firm they came in at the end of
Speaker 13: last year. Right now, it looks like a lot more investing.
Speaker 13: This is about double the size of the last expansion
Speaker 13: fund that Sequoya raised in twenty twenty two and comes
Speaker 13: in addition to two point five billion raised for its
Speaker 13: seed through growth investing last year.
Speaker 5: So just a lot more capital.
Speaker 3: And we're sort of seeing that written Nage, aren't we,
Speaker 3: Clenn Perkins Thrive. We know that others are in the
Speaker 3: market potentially raising you highlight capital, potentially general catalysts as well,
Speaker 3: and all of them having to raise bigger and bigger
Speaker 3: funds because they need to write bigger and bigger checks
Speaker 3: to the bigger and bigger startups.
Speaker 13: Absolutely, I think right now there's a dynamic in venture
Speaker 13: capital where if you're a platform fund, you can't just
Speaker 13: be able to play in one stage. And so with
Speaker 13: this new capital with Sequoia, it's fur their latest stage
Speaker 13: investments and it remarks back to some of their most
Speaker 13: successful investments with which closed last month and a thirty
Speaker 13: two billion sale to Alphabet was something that Sequoia backed
Speaker 13: at the earlier stages but continue to double down on.
Speaker 13: We've said that about Thrive, we're seeing that now about Iconic,
Speaker 13: a firm that I profiled today, backing Anthropic again and again.
Speaker 13: And so it's the new normal for funds to be
Speaker 13: having to add billions to their balance sheet.
Speaker 2: Okay, so Natasha, let's let's show our audience who's leading
Speaker 2: this firm right the co stewards they're called not co CEOs,
Speaker 2: not co managing partners, co stewards. There they are on
Speaker 2: the left of your screen that read yeah, and they
Speaker 2: clearly have sartorial direction and synergy as well. But Alfred
Speaker 2: Lynn on the left Pat Grady on the right, just
Speaker 2: give the backstory of when they came in, the changes
Speaker 2: Sequoia made and set the scene for this new era
Speaker 2: at what is a very important and big bench affirm.
Speaker 4: Yeah.
Speaker 13: Absolutely so last year roll Off both handed the reins
Speaker 13: over to Alfred Lynn and Pat Grady. Now, Alfred Lynn
Speaker 13: was known as someone that was helping lead Sequoia's early
Speaker 13: stage practice. Pat Grady is someone that was known as
Speaker 13: leading Sequoya's later stage practice. Now we're seeing them both
Speaker 13: really be hand in hand and co lead the firm together.
Speaker 4: And there's a few more changes.
Speaker 13: So we've reported on some shake ups on the early
Speaker 13: stage side of the house. We've also seen some people
Speaker 13: come back to Sequoias fold. So most prominently we saw Douglioni,
Speaker 13: the former senior stewart, so former top leader of the firm,
Speaker 13: come back into an active investing world. And we've also
Speaker 13: seen them beep out their growth stage investing ranks, so
Speaker 13: a lot of changes and that's why really the New
Speaker 13: Capital Hall is something we were so desperate to get
Speaker 13: to the bottom up because we have just been wondering
Speaker 13: if we're going to see Sequoia refocus or we're using
Speaker 13: them expand. And for now you definitely can tell that
Speaker 13: what Alfred and pats top priority will be will be expansion.
Speaker 5: And to the bottom of it you got within.
Speaker 3: Natasha Mascarona is always great reporting on the benure space.
Speaker 5: We appreciate it.
Speaker 3: Let's stick with that benure space because well, we just
Speaker 3: posted actually for VC record chattering two hundred and sixty
Speaker 3: seven billion dollars in the quarter.
Speaker 5: But the data shows that.
Speaker 3: The landscape is almost entirely consumed by the aiarms race.
Speaker 3: We don't want to call it that in this scenario,
Speaker 3: it's a race. Well, the rest of the ecosystem is
Speaker 3: effectively frozen because of geopolitical uncertainties. Joining us now is
Speaker 3: one of the architects of the support. Carl Stamford, director
Speaker 3: of Venture Capital Research, over at pitchbook KYL, It's extraordinary
Speaker 3: how much money is being raised, but how much money
Speaker 3: is being spent on just a few companies.
Speaker 14: Yeah, it really is right, and to your point of
Speaker 14: the data looking really great, and it does, but it
Speaker 14: really depends on where you're at. Nine percent out of
Speaker 14: the capital went to deals of one hundred million ar larger,
Speaker 14: so about one hundred and eighty five you had seventy
Speaker 14: three percent of that go to five companies, all AI.
Speaker 14: And if you include data bricks in there, you have
Speaker 14: investors that want exposure and LPs that want exposure to AI.
Speaker 14: And so what's getting left behind is the non AI companies,
Speaker 14: whether it be your traditional enterprise SaaS it was hot
Speaker 14: in twenty twenty one, or you know, different business models
Speaker 14: that are just not harnessing or not AIAI native like everyone.
Speaker 5: Wants, everyone wants. So what happens is a tale of
Speaker 5: totally two cities.
Speaker 3: Are there an awful lot of people out there who
Speaker 3: are receiving no funds, who are still languishing in down
Speaker 3: rounds or not even to raise funds at all?
Speaker 13: Is that?
Speaker 5: Are there these zombie companies out that car.
Speaker 4: Definitely?
Speaker 14: I mean there's twenty five percent of the unicorns, you
Speaker 14: know about nine hundred unicorns now in the US. Twenty
Speaker 14: five percent of those haven't raised since twenty twenty two
Speaker 14: in a market that's really fast and really hot like
Speaker 14: we're seeing right now. If you were a strong company
Speaker 14: and were leveraged for raising another around, you would do that.
Speaker 14: And so those companies are still trying to find a
Speaker 14: way to you know, maybe they are going to take
Speaker 14: a lower exit or you know, find some way to
Speaker 14: go through us back and reorganize themselves. But there's a
Speaker 14: lot of those companies that were strong and hot in
Speaker 14: the next big company in twenty twenty one and twenty
Speaker 14: two and have not raised sense and those are the
Speaker 14: companies that are really struggling in this market.
Speaker 2: We are we're just reflecting Kyle that the data we're showing,
Speaker 2: the data you guys published is from the first quarter, right,
Speaker 2: and activity has been heavy more recently. You heard the
Speaker 2: reporting from from Natasha and I last night.
Speaker 10: Right.
Speaker 2: Our understanding from sources is Sequoias doing seven billion dollars
Speaker 2: in an expansion to fund but to go after that
Speaker 2: late stage, you know, the AI companies, What do you
Speaker 2: infer from that? You know, the necessity to have capital
Speaker 2: at those levels, I guess, because otherwise you're not buying
Speaker 2: in to the names that we're talking about.
Speaker 14: Yeah, there's a few things that tells me. Right, One,
Speaker 14: companies will continue are going to continue to stay private longer, right,
Speaker 14: And so those vcs that have I have access and
Speaker 14: exposure to companies that are then fifteen years old and
Speaker 14: raising another private round, are going to want to get
Speaker 14: into those companies again and continue to keep their stakes high.
Speaker 14: It also tells me that LPs want that exposure. They
Speaker 14: know these companies are not going to go public in
Speaker 14: the timely fashion that we might have seen five years
Speaker 14: ago or a decade ago, Right, So they want to
Speaker 14: make sure that they have exposure to the anthropics and
Speaker 14: the SpaceX is and the data breaks of the world.
Speaker 14: Maybe not, but in the.
Speaker 2: Future, those companies they're going to probably go public this year, right, Yeah, Yes, that's.
Speaker 4: What I'm saying everything.
Speaker 14: I think that impacts a lot, right. I think One,
Speaker 14: we're looking at those companies as the kind of market
Speaker 14: indicators if the IPO market window is going to be
Speaker 14: fully open this year. We have seen obviously SpaceX confidentially FI.
Speaker 14: We have seen discord filed in January, but hasn't gone
Speaker 14: any movement. There's not really a backlog or a pipeline
Speaker 14: of VC backed IPOs because everyone's waiting for these big
Speaker 14: companies to go public to see what the public investors
Speaker 14: want to support. You see how Figure has traded today
Speaker 14: after Anthropic announced their design studio. That's the world. A
Speaker 14: lot of these VCPAG companies, they're going to go public
Speaker 14: and they're going to not find the support from their
Speaker 14: high valuations and then have to contend with the Anthropic
Speaker 14: and Open AI launching something that's very competitive to their space.
Speaker 2: Carl Stanford, director of Venged Capital Research at pitchbook back
Speaker 2: on Bloomberg Tech, Thank you very much.
Speaker 4: We've just talked about it.
Speaker 2: Private markets are bracing for IPO soon to be public
Speaker 2: markets ahead of what's expected to be the biggest IPO ever,
Speaker 2: SpaceX has moved up a scheduled vesting date for shares
Speaker 2: awarded to employees. According to sources, it may be accelerated
Speaker 2: to assume as next week. Let's get the details with
Speaker 2: Bloomberg Deals. Brian gord I think the point here is
Speaker 2: that an accelerated vesting kind of makes those employees feel
Speaker 2: a little bit better about the mechanics of an IPO
Speaker 2: for them, what they might be able to sell, and
Speaker 2: of course lock up periods, et cetera.
Speaker 10: I think it gives them the comfort I suppose that
Speaker 10: they're part of the journey. And I think, you know,
Speaker 10: given what's going on with Elon generally, I think his
Speaker 10: view is that the employees, the shareholders are all in unison.
Speaker 4: You know, this is very much part of their success.
Speaker 10: So I think, you know, having giving this sort of
Speaker 10: reassurance and confidence to SpaceX employees that they're going to
Speaker 10: be you know, made whole if you will, in terms
Speaker 10: of what they're able to buy or sell, I think
Speaker 10: is you know, massively important just for unity morale around
Speaker 10: what is clearly a massive mega milestone, not just for
Speaker 10: Space Expert for the world or CAVAMOD.
Speaker 3: But I mean, not to put it lightly, this is
Speaker 3: going to be the most extraordinary IPO, the most in
Speaker 3: terms of scale, in terms of what the company itself
Speaker 3: has achieved. But will there be this moment where we're
Speaker 3: starting to worry about how much the current employees can
Speaker 3: can lock in the money. What doesn't mean about the
Speaker 3: time frame how quickly are we going to there for
Speaker 3: b IPO.
Speaker 10: I mean it's crazy to think that, you know, you're
Speaker 10: looking at a day now where the nastack is up
Speaker 10: one point six, one point seven. Everything is falling into place.
Speaker 10: But if you also put you know, this employee, you
Speaker 10: know vesting schedule in the same light that you put
Speaker 10: the thirty percent retail allocation in, I mean, it's all
Speaker 10: kind of I mean, I don't think people fully understand
Speaker 10: the gravity of like this deal in particular, right, I mean,
Speaker 10: thirty percent you know, retail allocation and an IPO as
Speaker 10: large as large as this, they're looking to seventy five
Speaker 10: billion dollars. I mean, that's a significant chunk walking.
Speaker 2: So there's there's a there's a timeline here. So what
Speaker 2: we're reporting is that SpaceX told employees that the vesting
Speaker 2: date would take place in April rather than May.
Speaker 4: But what we're working.
Speaker 2: Toward is June to set out the timeline and the
Speaker 2: mechanics of how we think this IPO is going to work.
Speaker 10: Right, so this next week, as soon as next week,
Speaker 10: we could see this resting eight moved up of public filing,
Speaker 10: because they've already confidentially filed. The public filing could come
Speaker 10: we hear as soon as maybe the third week of May,
Speaker 10: which would then put them on track for that fifteen
Speaker 10: day minimum cooling off perio at the SEC mandates, which
Speaker 10: are then then for put them in line for the
Speaker 10: June listing that could come in sort of the second
Speaker 10: week of June, so that's like a matter of weeks.
Speaker 10: So you know, by this time, in a couple of weeks,
Speaker 10: we could be at this thinking like the whole global
Speaker 10: capital market looks entirely different, like not to mention the
Speaker 10: trimming in some of the stocks that's already gone on
Speaker 10: to make way.
Speaker 3: For this, And what the extraordinary is how much money
Speaker 3: has been made in the private markets and how much
Speaker 3: might therefore be made or not in the public markets.
Speaker 5: Bloomberg's Ryan called across this IPO, we thank you.
Speaker 3: Coming up, Apple's longtime marketing executive retires, marking.
Speaker 5: A change of the guard for a series of key
Speaker 5: product lines.
Speaker 3: As a Bloomberg Tech, Iran has agreed to suspend its
Speaker 3: nuclear program indefinitely, according to President Trump. In a phone
Speaker 3: conversation with our own Bloomberg reporter, he said that Iran
Speaker 3: will not receive any frozen funds from the United States.
Speaker 3: This is breaking news from our own Kate Sullivan over
Speaker 3: a Bloomberg. We'll keep you abreast of the latest, but
Speaker 3: He says that the deal between to end the conflict Iran,
Speaker 3: US and Israel, most of their main points are finalized.
Speaker 5: It'll go pretty quickly.
Speaker 3: According to the President of the United States, A S
Speaker 3: and PID a record and Nazak one hundred at a record.
Speaker 5: Brank crude off by ten percent.
Speaker 2: Yeah, the stocks route record and session highs anyway, but
Speaker 2: pushed even a little bit higher on those headlines. Another
Speaker 2: big story we're tracking, Apple's longtime marketing executive Stan Ung
Speaker 2: is retiring after thirty one years with the company. He'd
Speaker 2: been in charge of a series of key product lines
Speaker 2: for the iPhone maker, like the Apple Watch, airpod's health
Speaker 2: and smart home initiatives. Bloomberg Senior Tech editor Dana Warman's
Speaker 2: here with us on set another name leaving the world
Speaker 2: of Apple one maybe people weren't familiar with, but important.
Speaker 4: Nonetheless, Yes, and it.
Speaker 15: Appears to be a friendly departure. But as you said,
Speaker 15: it's of a piece. There have been there's been a
Speaker 15: big changing of the guard across both the Steve Jobs
Speaker 15: era and even to some extent, the Tim Cook era.
Speaker 15: And this is not to say that Tim Cook is
Speaker 15: retiring anytime soon. But Bloomberg has reported really extensively that
Speaker 15: the company is really deeply into its succession planning and
Speaker 15: is preparing a successor. And this feels like just another
Speaker 15: drum beat in a path that is going to culminate
Speaker 15: in Tim Cook himself leaving at some point, again not
Speaker 15: necessarily soon, but at some point not soon.
Speaker 3: Stan is soon. What did he achieve? I mean, he's
Speaker 3: so closely known with the watch but also the iPod.
Speaker 5: The og of at all.
Speaker 15: Yes, absolutely goes back way that way back. And even
Speaker 15: in his LinkedIn post announcing his departure, he said that
Speaker 15: one of the last things he did at Apple on
Speaker 15: the Apple campus was do a workout in the gym
Speaker 15: using his original iPod Classic that he said was still
Speaker 15: working on a pretty good battery. But one thing that
Speaker 15: Mark German did note in his report is that at Apple,
Speaker 15: at least, marketing executives aren't just in charge of the
Speaker 15: advertising of these products, but they have a hand in
Speaker 15: steering the product development itself. So that was interesting to me,
Speaker 15: And that is that's not to say that there won't
Speaker 15: be future airpod's, future Apple watches, and I'm sure that
Speaker 15: there are products in the pipeline for years ahead, but
Speaker 15: that just speaks to the influence that marketing executives at
Speaker 15: that level have at the company.
Speaker 5: Well said in a woman, it's great to have you
Speaker 5: on all things Apple. We thank you.
Speaker 3: There's another story we've got to get to over an
Speaker 3: Intel they're actually hiring Samsung executive Sean hun is about
Speaker 3: to join Intel next month to become general manager of
Speaker 3: the company's foundry services in a bid to help win
Speaker 3: over customers for the foundry business. And it course comes
Speaker 3: as a company is trying to break into the outsourced
Speaker 3: chip manufacturing business currently dominated by TSMC, and with Samsung
Speaker 3: coming in as a second it's important with the reporting
Speaker 3: you've done on the TERRAFAB.
Speaker 2: Yeah, so Intel announced that it's joining must terrafab right,
Speaker 2: and generally the stock story is amazing. Intel is back
Speaker 2: at its highest level since two thousand, extraordinary, and it's
Speaker 2: up for a third straight week, and it's just like
Speaker 2: has momentum. But that is the unproven part customers using
Speaker 2: its chip manufacturing technology. And of course next week we'll
Speaker 2: find out because they have earnings. You know how much
Speaker 2: progress they've made.
Speaker 5: Towards that two thousand to twenty and twenty six.
Speaker 3: What a it has been to be with Intel and
Speaker 3: the fact that basically you're back at where we were
Speaker 3: in twenty twenty, that January high before, of course the
Speaker 3: world came to a standstill, is where Intel was out.
Speaker 3: But what a pummeling the stock got in previous years,
Speaker 3: and then just last year extraordinary up eighty percent, this
Speaker 3: year already up ninety.
Speaker 4: Yeah.
Speaker 2: Look, it's not just about capacity either, you know the
Speaker 2: volume of chips available. It's about what they've always said
Speaker 2: is technology leadership and having the latest processes that can
Speaker 2: produce the best chips at the highest year. The economics
Speaker 2: are brutal, but they just got to come out and say, oh,
Speaker 2: by the way, this is our customer. I'm not going
Speaker 2: to name one for them, but that's the story that
Speaker 2: we're looking for.
Speaker 3: I need the proof points. Meanwhile, that does it for
Speaker 3: this edition of BlueBag Tech.
Speaker 7: ED.
Speaker 5: You're sticking here in New York.
Speaker 2: I do a little New York weekend and we'll be
Speaker 2: back next week here on set. Check out the pod.
Speaker 2: You know exactly where to find it. Iheartspotify and Apple
Speaker 2: and on Bloomberg. This is Bloomberg Tech