Speaker 1: You're gonna get right to this right now, Dan, I
Speaker 1: have shows us some Wedbush here all over the media.
Speaker 1: Of course, as we go into the mag eight Frenzy
Speaker 1: Warren't buffet. He's part of the mag eate right now,
Speaker 1: sixty five buys on Nvidio eight holds no sols like
Speaker 1: you don't follow in video. You got a thug at
Speaker 1: Webbush that follows it.
Speaker 2: Right, Yeah, So our view and Nvidio, you know, we
Speaker 2: have one hundred and thirty eight hour probably start bult
Speaker 2: cases one seventy five.
Speaker 1: Bernstein went to one fifty this morning, and.
Speaker 2: I think this is just a star. I mean, look,
Speaker 2: I think this by the end of the day or
Speaker 2: even the next twenty four hours, this is a stock
Speaker 2: that should be in the green based on everything we
Speaker 2: saw from Godfather of Ai Jensen the video.
Speaker 1: Pull get one more in here and I will so
Speaker 1: good at that.
Speaker 3: So, Dan, give us a sense. What did you hear
Speaker 3: from nvidio last night? They beat numbers? Maybe the guidance
Speaker 3: wasn't where the street was expecting, But what did you
Speaker 3: really take away from Nvidia last night?
Speaker 2: So three things? One demand, because the question is is
Speaker 2: they're double ordering. What is enterprise demands actually accelerating. And
Speaker 2: there's no better perch in terms of everything we're seeing
Speaker 2: from AI than what Jensen sees. To Blackwell, all the
Speaker 2: fears right, the worries is a gendle. They essentially put
Speaker 2: those fears to rest, and that was so important.
Speaker 1: Okay, you know I'm the only one that does Matthews
Speaker 1: do not all this fancy dan eyes talk. You take
Speaker 1: the ten billion share bibic of Apple, they've been doing
Speaker 1: it for years, divided by free cash flow. You take
Speaker 1: a fifty billion statistic divided by invidious free cash flow.
Speaker 1: To me, it was a ginormous announcement. Everybody's saying it's
Speaker 1: not a big deal. Was a share buy back a
Speaker 1: big deal?
Speaker 2: It's a monster deal. And also this also goes to
Speaker 2: a company. You go back six months ago, out year,
Speaker 2: by twenty five, twenty six, two dollars in earnings. Now
Speaker 2: it's gonna be five to six hours.
Speaker 1: I'm extended time here this morning with Dani's were welcome
Speaker 1: you all around the world on YouTube and Android, Android
Speaker 1: auto Apple car play as well. Okay, I go to Apple,
Speaker 1: I go to the famed aggregation of Tom Secunda in
Speaker 1: the Bloomberg news, and I'm just gonna read these Paul
Speaker 1: quick mashable. Apple music playlists now transferable to YouTube music.
Speaker 1: University of Wisconsin deny new trial as that go after somebody.
Speaker 1: Apple orders ten percent more iPhones than last year. Apple
Speaker 1: iPhone seventeen rumored to arrive at the Sweeney House before
Speaker 1: September fifteenth. And on the last headline, Dan Ives on
Speaker 1: Bloomberg Right now, I mean, here's the news out of
Speaker 1: Tokyo shock. There's more iPhone orders. How do you translate that?
Speaker 2: I mean, this is the start of an AI driven
Speaker 2: super psych with iPhone sixteen. I think it's gonna be
Speaker 2: historical period. Look, we've talked about a lot on the show.
Speaker 2: Three hundred million of one point five billion iPhones, including Sweeney,
Speaker 2: haven't upgraded in four plus years AI. Twenty five percent
Speaker 2: of the world is going to access AI through an
Speaker 2: Apple device. The consumer revolution all starts.
Speaker 1: Stop it a push against you, Tom Keen and Paul Sweeney.
Speaker 1: Don't give a damn about AI. Just want an iPhone
Speaker 1: to know where our kids are. What's a big deal
Speaker 1: about AI If Paul Sweeney's not gonna use it?
Speaker 2: So that's today. If you look at the app There's
Speaker 2: gonna be hundreds of apps built on Apple Intelligence that
Speaker 2: are gonna be AI driven as well as this open AI.
Speaker 2: It's good. It's essentially gonna be a personal assistant that
Speaker 2: really from a data perspective, understands paul sway understands, can
Speaker 2: understand your habits. This is gonna change. This is how
Speaker 2: most consumers are now going to interact with AI.
Speaker 3: China. What's the latest on China? My concern always in
Speaker 3: the back of my mind is that the average Chinese
Speaker 3: consumer is saying, I'm just not buying American. Is that
Speaker 3: an issue for Apple in terms of market share?
Speaker 2: I mean, as someone that spends time in the region,
Speaker 2: the average Chinese consumer wants the best product in the world,
Speaker 2: which is an Apple device. So I'm not saying that
Speaker 2: there aren't some geopolitical headwinds. We're actually seeing more tail
Speaker 2: wins out of China, especially iPhone sixteen. You have one
Speaker 2: hundred million iPhones that are basically having upgrade four years,
Speaker 2: So I think any headwinds there starting now come down.
Speaker 2: That's why I cook ninety percent CEO ten percent politician.
Speaker 3: Right, Yeah, it's smart. How about India? We were just
Speaker 3: I was just talking about this with somebody at the
Speaker 3: club last night. Tom at the bar, we were talking
Speaker 3: iPhones in India. How that came about? I have no
Speaker 3: idea you at the club last night. There's no club
Speaker 3: that would take or would I want to be in
Speaker 3: that club?
Speaker 2: Or were you at the watch party for a video?
Speaker 1: Yes, wisan Thal was that whatever?
Speaker 2: I thought Sweeney was going to be at that watch
Speaker 2: But I.
Speaker 1: At least day trading office couch at the cottage. I
Speaker 1: can only say my club last night, I was a club.
Speaker 1: Do the dishes club? India?
Speaker 3: What's the opportunity there for Apple in India? Don't they
Speaker 3: have to have a lower price phone in that market?
Speaker 2: But in India you've actually had a rising middle class,
Speaker 2: and I think if you that's always been a tough
Speaker 2: market for Apple. Three percent iPhones we think called by
Speaker 2: the next two years it's gonna be ten to twelve
Speaker 2: percent overall iPhones. India is actually gonna be robust for Apple,
Speaker 2: especially on different price points.
Speaker 1: How many iPhones are purchased a wise one on a
Speaker 1: plan from a phone company and not where somebody spends
Speaker 1: eight hundred or one thousand dollars on the toy.
Speaker 2: I mean, it's a huge number. I mean, it's a
Speaker 2: huge number. And if you look at the carrier discounts
Speaker 2: that's gonna come and this is the big thing.
Speaker 1: Do you have information on them? You'd like to break
Speaker 1: on Bloomberg.
Speaker 2: So everything we're seeing, we think it was gonna essentially
Speaker 2: be unprecedented types of promotion from especially US carriers at
Speaker 2: and just because this is the time in other words,
Speaker 2: when you think about five G when that came out,
Speaker 2: and now essentially AI, this is really gonna be the
Speaker 2: opportunity in terms of carrier discounts and what really starts
Speaker 2: to about maturity on a smartphone cycle. This is now
Speaker 2: that consumer AI revolution that actually will go through Cooper
Speaker 2: Tino and we think that's how we have a four
Speaker 2: trillion dollar mark cap as you know going to early
Speaker 2: next year.
Speaker 1: Do you have some of the parts on Apple you
Speaker 1: can update?
Speaker 2: Yeah, so we have one point seven trillion is what
Speaker 2: what I view is the services value. And when you
Speaker 2: sort of some of the parts that that's something where
Speaker 2: you know, you got a one hundred billion a rev
Speaker 2: growing mid teens, free cash margins are double the hardware business.
Speaker 2: You combine it, it's over four trillion. I think bull
Speaker 2: cases ultimately you know over over three.
Speaker 3: Hundred Microsoft, which I know you've been very bullish on Microsoft.
Speaker 3: What's the thought these days?
Speaker 2: You look in a video's call last night, you also
Speaker 2: buy Microsoft because Nadella and Redmud are weeding. Then on
Speaker 2: the software side, you look at open Ai. They're really
Speaker 2: dominating in that amount rushmore. That's where Nadella is along
Speaker 2: with Jensen.
Speaker 1: Does Blackwell compete with Azure or do they cohabitate They're complementary.
Speaker 1: Thing about I don't understand that exploits.
Speaker 2: So essentially Blackwell is almost the architecture, the foundation of
Speaker 2: a house. Microsoft is the actual house. The actual rooms
Speaker 2: will be different software players, service now you know called
Speaker 2: salesforce and others. What protects the house, cybersecurity names like
Speaker 2: pale out though and others. Look, I continue to think
Speaker 2: in Vidia today it's Lebron in high school. That's essentially
Speaker 2: where they are. Lebron in high school, in Vidia, that's
Speaker 2: where they are.
Speaker 3: So I guess so when we think about this AI
Speaker 3: spending here, the numbers are just almost numbing. That is
Speaker 3: so big. How much of the AI capital spending the
Speaker 3: is it incremental versus just taken away from other tech
Speaker 3: budgets like it or something.
Speaker 2: So I'd say about eight hundred billion of the trillion
Speaker 2: is incremental. Wow, so there's two hundred billion that. Of
Speaker 2: course there's accounnibalization impact and there will be losers on that,
Speaker 2: but it really is incremental, and it just speaks to
Speaker 2: strong get stronger in tech. And then you can say
Speaker 2: about about regulatory. Regulatory is in a minivan going forty
Speaker 2: miles an hour in the right lane, and the technology
Speaker 2: is in a Ferrari key in the Ferrari left leane
Speaker 2: going one hundred miles an hour.
Speaker 1: What is the free cash flow growth of the MAG
Speaker 1: seven when you aggregate them together. There's a secret Exel
Speaker 1: spreadsheet in the basement of the eyves.
Speaker 2: Of free cash for growth of MAG seven is i'd
Speaker 2: say upper teams into potentially.
Speaker 1: Really, you're gonna give me a two zero one.
Speaker 2: I think it could start to now get that high
Speaker 2: till we go into next two three. And that's why, look,
Speaker 2: I get it. The bears continue to you know, they
Speaker 2: sit there with their spreadsheets DCF being negative. Ontack, I'm
Speaker 2: gonna stop there.
Speaker 1: This is too important. You're going to DCF. I asked
Speaker 1: this with Paul yesterday. How do you do with terminal
Speaker 1: value on these juggernuts. This does not see FA one
Speaker 1: on one, but you.
Speaker 2: Have to ultimately trajectory out what the capax looks like,
Speaker 2: what's the incremental dollars and what that ultimately means to
Speaker 2: the WARLD.
Speaker 1: How far out does Dana ives go?
Speaker 2: You basically have to go out six, eight, ten years
Speaker 2: to actually do a tradrest like when you look at
Speaker 2: Microsoft the way that you get four and a half
Speaker 2: five trillion, okay, just for you have to bas gonna
Speaker 2: say how much of percentage of cappacks they're gonna get,
Speaker 2: what demonization, what does the free cash will incrementally look like?
Speaker 2: And that's where all these stories change. But then there's
Speaker 2: other names like a pall and Teer, the Messi of AI.
Speaker 2: It wasn't even on the radar. Now they're Lebron and
Speaker 2: their core AI play.
Speaker 3: Hey, Dan, one of the key action which of your
Speaker 3: research is that you travel the globe. You see people
Speaker 3: all over the place. What's your next trip?
Speaker 2: So you'll be going to Asia on Monday, be there
Speaker 2: for two weeks and look to me, that's where we've
Speaker 2: got That's where we get edged. Because I think a
Speaker 2: lot of investors how they've missed AI Revolution. They try
Speaker 2: to find it on the Metro North Jersey transit on
Speaker 2: the tenth four of their office building in New York.
Speaker 2: Her Sam Frand you gotta travel to see it, And
Speaker 2: I think that, So what.
Speaker 1: Do you see when you go to We see.
Speaker 2: The suppliers, we see the component players. I also think
Speaker 2: by seeing global investors you get a very good sense
Speaker 2: in terms of where things are, and I think it
Speaker 2: just gives you a little more perspective.
Speaker 1: Final, can you convince John Tucker to upgrade this time around?
Speaker 2: No?
Speaker 4: I think I think I think Tucker after going to
Speaker 4: the Inn video watch party last night, that he might
Speaker 4: now potentially upgrade to an iPhone.
Speaker 1: O cursonally Blackwell Ship Where have I heard that name?
Speaker 1: Remember mister Blackwell, the guy who did the best and
Speaker 1: worst stress less? Oh yeah?
Speaker 3: Where?
Speaker 2: I think Kean would be at the top. Kean would
Speaker 2: be at the top, and I'd be and maybe like
Speaker 2: the like other category.
Speaker 1: Mister travels qugely valuable well curse future, mister Rymes, mister
Speaker 1: Munster together today on Bloomberg Surveillance. That's the way that
Speaker 1: we roll