WEBVTT - SK Hynix, Micron Join $1 Trillion Market Cap Club 0:00:02.520 --> 0:00:13.360 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a 0:00:13.400 --> 0:00:17.160 lie from coast to coast with Caroline Hide in New 0:00:17.239 --> 0:00:19.760 York and v lovel in San Francisco. 0:00:22.760 --> 0:00:24.400 This is Bloomberg Tech coming up. 0:00:24.440 --> 0:00:27.080 Mike Cron and Eske Heinez joined the one trillion dollar 0:00:27.120 --> 0:00:29.680 market Cap Club All about the Memory Plus. 0:00:29.760 --> 0:00:33.960 Taiwanese prosecutors suspect three individuals of smuggling in video chips 0:00:33.960 --> 0:00:35.839 to China through Japan. 0:00:36.440 --> 0:00:37.040 And we speak. 0:00:41.200 --> 0:00:44.879 Bloomberg Tech is a live from coast to coast with 0:00:45.040 --> 0:00:48.880 Caroline Hide in New York and V lovel in San Francisco. 0:00:51.840 --> 0:00:53.479 This is Bloomberg Tech coming up. 0:00:53.520 --> 0:00:56.200 Mike Cron and Eske Heinez joined the one trillion dollar 0:00:56.240 --> 0:00:58.840 market Cap Club All about the Memory Plus. 0:00:58.840 --> 0:01:03.040 Taiwanese prosecutors expect three individuals of smuggling in video chips 0:01:03.040 --> 0:01:04.240 to China through. 0:01:04.120 --> 0:01:07.040 Japan, and we speak with the x price founder and 0:01:07.120 --> 0:01:12.840 early SpaceX investor Peter Demandis's SpaceX celebrates a major starship milestone. 0:01:13.000 --> 0:01:15.399 And meanwhile, we still think about what space is doing 0:01:15.440 --> 0:01:17.720 to the public markets, but more broadly, the public markets 0:01:17.760 --> 0:01:18.360 just taking. 0:01:18.120 --> 0:01:18.880 A bit of a breather. 0:01:19.000 --> 0:01:22.080 Today we're looking at what howpillion terms of semiconductors in particular, 0:01:22.319 --> 0:01:24.959 it has been a fiery ride hire In the last 0:01:24.959 --> 0:01:27.480 five training days, we'd added thirteen percent of this benchmark. 0:01:27.520 --> 0:01:30.000 Today we pulled back a little bit, but there are 0:01:30.080 --> 0:01:32.760 notable players within the chip sector that you've got to 0:01:32.840 --> 0:01:35.320 keep your eyes trained on. It's all about the power 0:01:35.360 --> 0:01:37.600 the muscle of high bandwidth memory, and of course it's 0:01:37.640 --> 0:01:40.639 sent Micron storing. We're still holding onto the day's games 0:01:40.840 --> 0:01:42.559 rock three tens of percent, but it was all about 0:01:42.600 --> 0:01:45.320 yesterday's market moves and those that happened in Asia as 0:01:45.319 --> 0:01:45.720 well ed. 0:01:47.280 --> 0:01:50.480 That brings us to today's big number one trillion dollars 0:01:50.520 --> 0:01:53.600 in climbing memoryship giants s k Heinex and Micron have 0:01:53.760 --> 0:01:56.760 now joined the one trillion dollar market cap club and 0:01:56.800 --> 0:02:00.160 see continued momentum is investors pile into some of the 0:02:00.200 --> 0:02:03.080 companies the powering the AI boom. Let's get more with 0:02:03.080 --> 0:02:06.520 Bloomberg Equities reporter Ryan Vacelica. It's been a number of 0:02:06.640 --> 0:02:09.880 days now where we've been trying to look at what's happening. Ryan, 0:02:09.960 --> 0:02:13.080 with the memory names of particular, Micron was the case 0:02:13.080 --> 0:02:15.400 study because of that ubs note which you can remind 0:02:15.440 --> 0:02:19.080 us of, but generally speaking, what is happening across memory, 0:02:19.120 --> 0:02:21.480 not just in US markets, but of course in Korean 0:02:21.520 --> 0:02:23.480 markets as well well. 0:02:23.480 --> 0:02:27.440 There's been a huge and growing appreciation of how central 0:02:27.560 --> 0:02:32.079 high bandwidth memory is to the overall AI infrastructure build out. 0:02:32.320 --> 0:02:37.760 These companies have seen absolutely massive demand and absolutely massive growth. 0:02:38.080 --> 0:02:41.480 I think Micron's revenue nearly tripled last quarter, which was 0:02:41.600 --> 0:02:43.800 I think the fastest piece of growth going back to 0:02:43.840 --> 0:02:47.440 I think the nineteen nineties. So absolutely just staggering levels 0:02:47.480 --> 0:02:50.639 demand for these types of chips, all of which are 0:02:50.639 --> 0:02:53.320 being used in the AI infrastructure, and that is really 0:02:53.360 --> 0:02:56.680 translating in a pretty direct way to the stock prices. 0:02:56.720 --> 0:02:59.680 I think Micron is up more than seventy percent in 0:02:59.760 --> 0:03:02.840 May by itself, which is the biggest one month jump 0:03:03.040 --> 0:03:05.840 since December nineteen eighty seven. Just to give you a 0:03:05.919 --> 0:03:08.359 sense of just how quickly these stocks are moving. 0:03:08.200 --> 0:03:12.800 Up, let's look at about sk Heinex how much it 0:03:12.840 --> 0:03:15.440 moved up in the May number as well. They've almost 0:03:15.440 --> 0:03:18.120 moved in lockstep, both of them up seventy percent in 0:03:18.160 --> 0:03:20.680 the month of May. Sk high Inex Micron both at 0:03:20.720 --> 0:03:23.399 more than two hundred percent so far year to date, 0:03:23.440 --> 0:03:26.200 but what's notable is both of them are posting quarterly 0:03:26.520 --> 0:03:28.280 revenue increases of. 0:03:28.320 --> 0:03:29.880 More than two hundred percent. 0:03:30.200 --> 0:03:32.520 So in many ways, Ammas out there seemed to be saying, look, 0:03:32.560 --> 0:03:34.280 these are still actually fundamentally cheap. 0:03:36.160 --> 0:03:38.800 Yeah, the levels of growth that these companies are seeing 0:03:38.840 --> 0:03:41.960 is absolutely astronomical. And I can also add in sand Disk, 0:03:42.000 --> 0:03:44.720 Western Digital, Seagate, all the memory in storage space are 0:03:44.720 --> 0:03:48.480 just seeing absolutely huge demand. The evaluation picture is a 0:03:48.520 --> 0:03:50.520 little bit tricky though. In fact, we have a story 0:03:50.520 --> 0:03:52.440 coming out tomorrow, but I'll give you a sneak preview. 0:03:52.840 --> 0:03:57.360 Micron multiple is trading under ten right now, ten times 0:03:57.360 --> 0:04:00.760 forward earnings. That is extremely low, especially for company growing 0:04:00.800 --> 0:04:05.080 this quickly. However, because memory has historically been quite cyclical, 0:04:05.400 --> 0:04:08.680 there are some concerns that this low multiple might be 0:04:08.720 --> 0:04:12.280 an indication of peak earnings. I've actually had someone say 0:04:12.280 --> 0:04:14.480 to me that he would feel more comfortable if Micron 0:04:14.600 --> 0:04:17.040 was really expensive right now, because I would indicate maybe 0:04:17.040 --> 0:04:19.400 a trough level in earnings that are about to go ahead, 0:04:19.680 --> 0:04:21.760 leading the stock up with it. So right now you 0:04:21.760 --> 0:04:24.920 can certainly say that Micron is inexpensive. The question is 0:04:24.920 --> 0:04:29.279 is AI changing the cyclical nature of memory overall? That 0:04:29.320 --> 0:04:31.960 we are in some kind of new paradigm where maybe 0:04:32.000 --> 0:04:34.320 Micron actually is as cheap as it looks, and this 0:04:34.480 --> 0:04:37.039 isn't some kind of contrarian warning light. 0:04:38.080 --> 0:04:42.360 I'll answer that Ryan, Yes, because in high bandwidth memory 0:04:42.400 --> 0:04:47.279 and the design of the SEC the chiplet, it's directly 0:04:47.320 --> 0:04:48.560 embedded into the GPU. 0:04:48.600 --> 0:04:50.279 And what's so crazy about all of this. 0:04:51.279 --> 0:04:55.280 We're talking a lot about supply constraints, a shortage of GPUs, 0:04:55.600 --> 0:04:57.680 but it's not because of the GPU die. It's not 0:04:57.680 --> 0:05:00.440 because in video can't get enough of them necessarily. It's 0:05:00.520 --> 0:05:04.400 the corresponding high bandwidth memories. Not there unpack what UBS 0:05:04.400 --> 0:05:06.520 said in its note about that, particularly on the valuation. 0:05:06.640 --> 0:05:09.560 It said, one reason with doubling our price target is 0:05:09.560 --> 0:05:11.720 we think that people will start to appreciate that. 0:05:12.720 --> 0:05:15.320 Yeah, so UBS came out, I think that actually tripled 0:05:15.360 --> 0:05:17.520 their price target. I think the estmate was that this 0:05:17.560 --> 0:05:20.479 would eventually be a one point eight trillion dollar company. 0:05:20.520 --> 0:05:23.360 So even though we've seen some huge gains in the stocks, 0:05:23.440 --> 0:05:25.920 UBS expects the upside. It sees a lot more additional 0:05:26.040 --> 0:05:28.840 upside from here. What it said was that Micron really 0:05:28.880 --> 0:05:31.800 deserves to have a multiple that's on par with Nvidia, 0:05:32.080 --> 0:05:33.719 and I think it said it was looking for maybe 0:05:33.800 --> 0:05:38.039 fifteen times estimated earnings, whereasas historically it gave it a 0:05:38.240 --> 0:05:41.480 five times estimated earnings multiple. So they are saying that 0:05:41.520 --> 0:05:45.039 Micron should be worth three times what it used to 0:05:45.279 --> 0:05:47.599 consider a fair valuation for the stock. That is a 0:05:47.760 --> 0:05:52.279 really significant change here, and it really is causing people 0:05:52.320 --> 0:05:55.200 to reevaluate. How should we be valuating these companies, How 0:05:55.200 --> 0:05:57.919 should we be considering the nature of the market, the 0:05:58.040 --> 0:06:00.560 nature of this demand, and what is that mean for 0:06:00.600 --> 0:06:02.760 growth going forward? Right now it's up in the air, 0:06:02.800 --> 0:06:06.240 But so far people seem extremely optimistic and extremely positive. 0:06:07.480 --> 0:06:10.280 Well broadly, we're seeing at the moment ry not a 0:06:10.320 --> 0:06:13.599 single cell rating on either of these stocks. Despite that 0:06:13.680 --> 0:06:15.760 more than two hundred percent crescendo so far this year. 0:06:15.800 --> 0:06:16.640 We appreciate you. 0:06:17.040 --> 0:06:20.680 As investors are pushing memory chants like Skhinex, like Microntu 0:06:20.720 --> 0:06:25.160 record valuations. The race for advanced semiconductors also raises new 0:06:25.160 --> 0:06:30.240 concerns of export controls. So Taiwanese prosecutors suspect three individuals 0:06:30.480 --> 0:06:34.320 smuggled Nvidia AI chips to China through Japan. So, according 0:06:34.320 --> 0:06:36.320 to sources, some more we go to Blomboth Senior Tech 0:06:36.440 --> 0:06:38.680 editor Mike Sheppard to join us. This is once again 0:06:38.720 --> 0:06:42.480 about super micro computer. This is about servers that are 0:06:42.520 --> 0:06:44.599 somehow winding their way to China. 0:06:45.920 --> 0:06:46.480 Well, that's right. 0:06:46.600 --> 0:06:51.480 These three individuals are suspected of having falsified documents indicating 0:06:51.480 --> 0:06:55.760 that the final destination for these devices was Japan, when 0:06:55.800 --> 0:06:59.760 in fact, according to authorities, the ultimate buyer was in China. 0:06:59.800 --> 0:07:00.479 So place. 0:07:00.680 --> 0:07:04.440 Now, authorities managed to seize about fifty of these servers 0:07:04.480 --> 0:07:07.600 before they were actually shipped, but it looks like at 0:07:07.680 --> 0:07:10.600 least one shipment got through according to the reporting by 0:07:10.640 --> 0:07:14.080 our colleagues Mackenzie Hawkins and Debbie Wu, who have been 0:07:14.200 --> 0:07:17.080 all over this story from the start. Now, Caro, the 0:07:17.160 --> 0:07:20.200 twist in this case is Japan. When we have been 0:07:20.320 --> 0:07:22.880 reporting on and talking about some of the other chip 0:07:23.080 --> 0:07:27.360 smuggling cases involving in Nvidia's hardware and products, they've typically 0:07:27.400 --> 0:07:31.000 gone through some of the Southeast Asian economies like Thailand 0:07:31.040 --> 0:07:34.920 and Singapore, and we haven't seen Japan really factor into this. 0:07:35.040 --> 0:07:37.600 Japan has actually seen it's more of a place where 0:07:37.680 --> 0:07:42.280 Chinese companies can rent computing power legally. It's a practice 0:07:42.280 --> 0:07:46.160 that falls within the bounds permissible bounds of US export 0:07:46.240 --> 0:07:50.320 controls through data centers in Japan, Chinese companies can simply 0:07:50.440 --> 0:07:53.680 access all that AI compute simply by paying a rental 0:07:53.720 --> 0:07:55.840 fee chev real quick. 0:07:55.920 --> 0:07:58.960 Nvidia didn't respond to a requests for comment on this story. 0:07:59.040 --> 0:08:02.680 But Jensenmong is Taiwan right now, and I believe somebody 0:08:02.720 --> 0:08:05.480 asked him broadly about this issue very quick. 0:08:05.480 --> 0:08:08.640 What did he say, Well, he was asked over the 0:08:08.640 --> 0:08:12.840 weekend after those three individuals were detained whether super Micro 0:08:13.080 --> 0:08:17.040 needed to do more to rein in some of the 0:08:17.240 --> 0:08:20.640 concerns about chip smuggling, and he said, look, they need 0:08:20.640 --> 0:08:22.960 to perhaps tighten up the ship when it comes to 0:08:23.040 --> 0:08:27.120 compliance and oversight of their customers. And this is a 0:08:27.240 --> 0:08:30.480 rare thing for the Nvidia CEO to say about one 0:08:30.520 --> 0:08:34.800 of the company's partners, super Micro, and neither company, of course, 0:08:34.840 --> 0:08:37.439 it's important to note, has been accused of any wrongdoing 0:08:37.440 --> 0:08:41.480 in these or other cases. But they insisted that their 0:08:41.640 --> 0:08:44.600 compliance is up up to par and that they are 0:08:44.640 --> 0:08:46.800 doing more to strengthen it in the wake of the 0:08:46.920 --> 0:08:49.800 charges that were filed against one of its co founders 0:08:49.840 --> 0:08:50.720 earlier this year. 0:08:51.160 --> 0:08:53.559 An unfolding story one you're all across. We so appreciate it. 0:08:53.600 --> 0:08:56.679 Bloomberg's Mike Shephard. There, Look, we can continue to talk 0:08:56.720 --> 0:08:58.559 to your politics and how it impacts the market, and 0:08:58.559 --> 0:09:00.800 we continue to talk about US tech stocks that are 0:09:00.840 --> 0:09:03.600 holding onto me and record highs with a whole lot 0:09:03.600 --> 0:09:05.520 of enthusiasm for the AI trade. 0:09:06.000 --> 0:09:07.240 But there's some pressure out of that. 0:09:07.320 --> 0:09:09.240 Let's talk about it when that's Tegna CEO se I 0:09:09.240 --> 0:09:11.960 have left Tegna Investments and just pivoting back to how 0:09:12.000 --> 0:09:15.559 we started a story that Micron and sk Heinex and 0:09:15.600 --> 0:09:18.120 now in the trillon dollar club that we're still seeing 0:09:18.240 --> 0:09:23.360 AI infrastructure bottlenecks. Nancy, Is this just continuing to feed 0:09:23.440 --> 0:09:24.840 your optimism around the sector. 0:09:26.040 --> 0:09:29.640 Yeah, I mean, Carolyn, we're we're ready for a correction 0:09:29.840 --> 0:09:32.720 because we get one about once a year, and this 0:09:32.800 --> 0:09:35.000 has been pretty frothy. But when you go back and 0:09:35.040 --> 0:09:37.560 look when there's been an eight week run like this, 0:09:38.160 --> 0:09:41.360 historically stocks are up over twelve around twelve percent a 0:09:41.440 --> 0:09:44.280 year later, and that's Bespoke's work, not mine. 0:09:44.400 --> 0:09:47.640 So I think you have to be you have to 0:09:47.679 --> 0:09:48.280 be nimble. 0:09:48.480 --> 0:09:51.959 And you know, we added to Micron at three sixty 0:09:52.040 --> 0:09:55.440 six just a few months ago and felt late and 0:09:55.520 --> 0:09:59.680 of course we weren't, at least not for the moment. 0:10:00.120 --> 0:10:02.200 What you have to do is be diligent about trimming 0:10:02.240 --> 0:10:05.160 things back, and that is what we've been doing, you know, 0:10:05.240 --> 0:10:10.520 taking some gains, sitting and waiting, reallocating to names that 0:10:10.600 --> 0:10:13.280 we think, you know, will continue to benefit. But yeah, 0:10:13.360 --> 0:10:16.720 this is a productivity driven ball market. 0:10:16.840 --> 0:10:18.800 I think it will continue for some time. 0:10:19.160 --> 0:10:21.679 We will probably get a correction that will be yet 0:10:21.720 --> 0:10:25.160 another opportunity like deep Seek was, like the first quarter 0:10:25.240 --> 0:10:27.200 of this year was. But you want to stick with 0:10:27.240 --> 0:10:30.480 the high quality names and you want it. You don't 0:10:30.559 --> 0:10:33.760 want to chase the latest because the hedge funds are 0:10:33.760 --> 0:10:36.520 going to pivot here pretty quickly, and we saw that 0:10:36.600 --> 0:10:39.040 from hardware to software and now back to hardware. 0:10:40.160 --> 0:10:42.080 Nancy, I'm going to show you a chart, and for 0:10:42.080 --> 0:10:44.199 those that listen to Bloomberg Tech as a podcast, it's 0:10:44.200 --> 0:10:47.040 a squiggly line that shows a very sharp up with trajectory. 0:10:47.480 --> 0:10:50.160 From the end of March to present day. We've gone 0:10:50.200 --> 0:10:54.440 from about twenty two five hundred points to almost thirty thousand. Yes, 0:10:54.640 --> 0:10:56.720 if you tell anyone I quoted points on the I'll 0:10:56.760 --> 0:10:59.560 deny it. You just said that you're ready for a 0:10:59.559 --> 0:11:04.920 correction in the Micron story was about ubs almost tripling 0:11:04.920 --> 0:11:05.880 its price target. 0:11:06.120 --> 0:11:08.440 How are you going to play Micron in a correction environment? 0:11:09.440 --> 0:11:11.440 Yeah, I mean we are going to be trimming it 0:11:11.440 --> 0:11:14.079 here shortly and we will likely add back to it. 0:11:14.760 --> 0:11:17.520 Beware of people that tell you, you know, old tech 0:11:17.640 --> 0:11:21.840 is dead or software is dead, because these companies find ways. 0:11:22.360 --> 0:11:24.920 I understand this is more of a demand issue, but 0:11:25.320 --> 0:11:28.200 they do find ways to pivot, and so I think 0:11:28.240 --> 0:11:31.480 what you want to be doing is taking some gains 0:11:31.520 --> 0:11:34.720 when you can and then looking for opportunities when the 0:11:34.760 --> 0:11:38.920 market pulls back. We called for a bottom on April fourth. 0:11:39.480 --> 0:11:41.839 I mean, that's not really our business, but we did. 0:11:42.080 --> 0:11:44.600 We were a little bit late, but that is how 0:11:44.640 --> 0:11:48.120 this market has been moving. And so it's quickly and 0:11:48.160 --> 0:11:51.679 it's rapid, and it's violent to the upside. 0:11:51.800 --> 0:11:53.800 And so don't. 0:11:53.520 --> 0:11:58.520 Confuse that with you know, being a genius, because what 0:11:58.600 --> 0:12:00.640 the market giveth, it will also take it the way. 0:12:00.880 --> 0:12:03.280 So you just want to remain nimble. 0:12:03.400 --> 0:12:06.800 Remaining nimble and thinking about what your long term bet 0:12:06.880 --> 0:12:09.640 saw Like Nancy, you always bring us our twelve best 0:12:09.640 --> 0:12:13.040 ideas portfolio, and within that is some software is service 0:12:13.080 --> 0:12:16.080 now for example, and boy of those names been beaten up, 0:12:16.080 --> 0:12:17.840 but they have clawed their way back from some of 0:12:17.840 --> 0:12:18.360 the bottoms. 0:12:18.360 --> 0:12:22.000 But tonight we get we get it called salesforce numbers. 0:12:22.360 --> 0:12:27.160 Will that fundamentally show that these AI related disruptible names 0:12:27.200 --> 0:12:28.079 can hang on in there? 0:12:29.160 --> 0:12:32.040 I think so, Caroline. It's an important report to be sure. 0:12:32.720 --> 0:12:35.560 And you know what we've done is we've within our 0:12:35.600 --> 0:12:37.800 twelve best We have a six for twenty six that's 0:12:37.920 --> 0:12:41.480 up forty percent this year and includes names like CrowdStrike. 0:12:42.160 --> 0:12:44.320 Last year we had service Now in that five for 0:12:44.400 --> 0:12:47.520 twenty five and it did abysmally, but the portfolio is 0:12:47.559 --> 0:12:51.199 still outperformed. So that is what you have to think about, 0:12:51.280 --> 0:12:53.360 is that the right name is Microsoft going to be 0:12:53.400 --> 0:12:53.840 a winner? 0:12:54.160 --> 0:12:54.640 I think so. 0:12:55.000 --> 0:12:57.720 I'm more concerned about Salesforce, which we don't own. 0:12:58.000 --> 0:13:02.600 We exited Adobe for obvious reasons a while back, and 0:13:02.640 --> 0:13:05.640 I think that's what you have to consider who will win. 0:13:06.000 --> 0:13:09.240 And I do think if you own the platform, you'll 0:13:09.280 --> 0:13:11.720 be a beneficiary of AI. And I do think service 0:13:11.800 --> 0:13:15.560 now is well positioned, despite how difficult of a name 0:13:15.600 --> 0:13:17.800 it has been to own s. 0:13:18.080 --> 0:13:21.080 We're in this period now where we've gone through earning season, 0:13:21.120 --> 0:13:24.840 including through in video, So we're not now fixed on 0:13:24.840 --> 0:13:27.200 the Kapex figures. Maybe we still are in videos set 0:13:27.200 --> 0:13:30.360 its piece what happens in this interim period, like what 0:13:30.480 --> 0:13:33.280 is the catalyst in either direction for the market. 0:13:33.960 --> 0:13:36.760 That's the right question ed. I think that is why 0:13:36.800 --> 0:13:40.360 we think we may be right for a correction. 0:13:41.000 --> 0:13:43.480 What will happen is we will turn our attention the 0:13:43.480 --> 0:13:46.520 market's fickle, and then we'll start focusing on the Fed. 0:13:46.640 --> 0:13:50.040 We'll go back to is Horn moves open and there 0:13:50.040 --> 0:13:53.200 will be hand ringing, and I think that will drive 0:13:53.280 --> 0:13:56.839 the narrative because it's too early for the midterms. So 0:13:57.400 --> 0:14:01.319 we are putting in place some protection for our clients 0:14:01.800 --> 0:14:05.480 and it may be money not well spent if the 0:14:05.480 --> 0:14:09.240 market continues to accelerate, but it never does go straight up, 0:14:09.320 --> 0:14:09.959 So I think. 0:14:09.800 --> 0:14:12.200 You want to pay attention to FED speak. 0:14:12.640 --> 0:14:15.040 I hope there's less of it as we move forward 0:14:15.040 --> 0:14:17.199 from here. I mean that is a promise that Kevin 0:14:17.200 --> 0:14:20.640 worsh made, and let the FED do their job and 0:14:20.680 --> 0:14:23.600 then and there will also be on inflation watch, which 0:14:23.640 --> 0:14:26.600 which I think is actually not the bigger problem that 0:14:26.640 --> 0:14:29.560 we face from an economic standpoint. 0:14:29.600 --> 0:14:32.040 But there are many who disagree. 0:14:31.640 --> 0:14:33.320 With me on that what about it wrong. 0:14:34.640 --> 0:14:37.000 Yeah, I mean I think I think that's problematic on 0:14:37.040 --> 0:14:38.840 so many levels. But you know, we're getting all the 0:14:38.880 --> 0:14:41.000 peace talk, but we haven't seen a lot of progress. 0:14:41.080 --> 0:14:45.120 So I think for most investors the question is when 0:14:45.160 --> 0:14:48.200 does when do the straits of straight of horror moves open. 0:14:48.600 --> 0:14:51.120 When that happens, then I think you'll see a melt up. 0:14:51.120 --> 0:14:54.400 But until then you'll see a lot of hand ringing 0:14:54.480 --> 0:14:57.240 and that you know, that is what markets do, and 0:14:57.280 --> 0:14:59.880 that is what the algos and the hedge funds exacts 0:15:00.440 --> 0:15:04.080 in the near term. So volatility, remember, friend of long 0:15:04.160 --> 0:15:06.239 term investor, use it to your advantage. 0:15:06.360 --> 0:15:10.920 Because earnings growth has been amazing. We've also seen guidance raised. 0:15:11.360 --> 0:15:13.720 We've been steadfast in the tech trade for the last 0:15:13.720 --> 0:15:16.520 three years while many wrote it off. So we're pretty 0:15:16.520 --> 0:15:19.320 happy with you know, the way our portfolios have performed 0:15:19.360 --> 0:15:20.200 as a result of that. 0:15:21.280 --> 0:15:24.640 Nancy Tegler of Laffetango Investments back on v tech, Thank 0:15:24.680 --> 0:15:26.760 you very much. Now coming up, we're going to speak 0:15:26.760 --> 0:15:31.000 with the X Prize founder Peter Demandez as SpaceX celebrates 0:15:31.040 --> 0:15:33.040 a major starship milestone. 0:15:33.320 --> 0:15:34.240 This is blombog Tech. 0:15:42.480 --> 0:15:46.840 SpaceX's latest successful starship launch marks a major milestone for 0:15:46.880 --> 0:15:50.640 the company's next generation rocket program and a critical step 0:15:50.680 --> 0:15:53.400 towards the longtime growth strategy that was laid out in 0:15:53.440 --> 0:15:57.040 its recent IPO filing. Also crucial elon Musk, the S 0:15:57.080 --> 0:15:59.840 one made it absolutely clear with an outsized pay package, 0:16:00.080 --> 0:16:03.760 majority voting control for the CEO bloemeg intelligence writing. The 0:16:03.840 --> 0:16:08.240 document highlights some significant governance concerns that still might be 0:16:08.320 --> 0:16:12.280 overshadowed by investor's fear of missing out. FOMO on the 0:16:12.320 --> 0:16:15.600 biggest IPO ever here to talk about it. The importance 0:16:15.640 --> 0:16:18.960 of Starship Musk the perspective of an early SpaceX investor. 0:16:19.080 --> 0:16:21.800 Peter diamandis founder of X Prize, and we're trying again. 0:16:21.840 --> 0:16:24.320 You're on the show Friday, and we had to cut 0:16:24.360 --> 0:16:29.040 our conversation short. But then on Friday night, Starship twelve 0:16:29.120 --> 0:16:32.480 Flight Test Mission V three. Your reaction to it, to 0:16:32.520 --> 0:16:33.280 how that went. 0:16:34.320 --> 0:16:36.720 Well, Listen the fact that it was a brand new vehicle, 0:16:36.880 --> 0:16:42.600 brand new engines, the most advanced engineering ever built by humans. 0:16:43.720 --> 0:16:47.640 It was incredible success. You know what people, if do 0:16:47.640 --> 0:16:52.080 you realize, is that you can't test a rocket a 0:16:52.120 --> 0:16:53.920 little bit at a time. You have to test the 0:16:54.080 --> 0:16:57.440 entire system and the fact that the launch took off 0:16:57.640 --> 0:17:01.440 with its version three of its engines and the entire 0:17:01.520 --> 0:17:07.679 vehicle the largest, most powerful engineering system ever launched by humans. 0:17:08.560 --> 0:17:09.160 It was great. 0:17:09.240 --> 0:17:13.760 We're going to see Starship making incremental flights, getting better 0:17:13.840 --> 0:17:17.600 and better until the time where the entire vehicle is refliable, 0:17:18.000 --> 0:17:20.960 refuelable on orbit and becomes a platform to go to 0:17:21.000 --> 0:17:22.439 the Moon, go to Mars, go beyond. 0:17:24.200 --> 0:17:28.840 Why Starship is also its capability and payload to orbit 0:17:29.200 --> 0:17:32.720 for first starlink and then orbital data center. I wrote 0:17:33.000 --> 0:17:35.240 at the beginning of the week about how clear the 0:17:35.359 --> 0:17:40.280 S one was about the limitation of SpaceX's current access 0:17:40.320 --> 0:17:42.879 to compute and how much it's going to need in 0:17:42.920 --> 0:17:45.800 the future. You then had an exchange with Elon Musk 0:17:45.880 --> 0:17:48.600 I think in the last twenty four hours, right or 0:17:48.640 --> 0:17:51.399 forty eight hours about that exact issue. What was the 0:17:51.440 --> 0:17:53.440 point you were trying to relate to Elon there? 0:17:55.000 --> 0:17:58.399 The point is that he's not just built This is 0:17:58.440 --> 0:18:01.520 not just a rocket company, right, This is a vertically 0:18:01.680 --> 0:18:08.320 integrated satellite network, global broadband, sovereign communications, AI, compute and 0:18:08.480 --> 0:18:13.959 ultimately off planet infrastructure. You know, he is building a 0:18:14.119 --> 0:18:18.040 hyperscaler Uh, not just an AI system, So his ability 0:18:18.040 --> 0:18:22.080 to succeed as a company goes beyond just the you know, 0:18:22.240 --> 0:18:26.040 groc is an AI system. He's providing the infrastructure for 0:18:26.920 --> 0:18:30.879 a large number of the frontier labs out there. You know, 0:18:30.960 --> 0:18:34.199 And what people need to realize about this company is 0:18:34.600 --> 0:18:38.040 it's the It isn't just a little bit ahead of 0:18:38.080 --> 0:18:41.159 the entire launch industry on planet Earth. It's orders of 0:18:41.240 --> 0:18:45.760 magnitude ahead beyond anything else, and everything we hold a 0:18:45.840 --> 0:18:49.359 value on Earth, metals, minerals, energy, real estate is in 0:18:49.400 --> 0:18:53.160 near infinite quantities in space, and so what we're buying 0:18:53.359 --> 0:18:57.080 is the next you know, the global economy, you know, 0:18:57.200 --> 0:18:59.720 two dot oh and three dot O. As we look 0:18:59.760 --> 0:19:02.080 at into SpaceX. 0:19:02.359 --> 0:19:05.280 Go global, Peter, because I know you can, and we're 0:19:05.320 --> 0:19:08.040 please that you do. There's a lot of hand ringing 0:19:08.080 --> 0:19:12.240 and almost people feeling that every turn, the US uses 0:19:12.320 --> 0:19:15.120 China as the excuse as to why we need less regulation, 0:19:15.200 --> 0:19:17.000 why we need to go full throttle, why we need 0:19:17.040 --> 0:19:19.760 to win quote unquote how much you seeing a space 0:19:19.840 --> 0:19:22.280 race US China and how much a SpaceX managed to 0:19:22.320 --> 0:19:25.760 dominate their visa v not just US competition, you. 0:19:25.800 --> 0:19:29.600 Know, we humans love competition and it drives us forward. 0:19:30.080 --> 0:19:31.879 And so if you think about this, you know, it 0:19:32.080 --> 0:19:35.520 is the US versus the Soviets and the Russians in 0:19:35.600 --> 0:19:38.440 the you know, fifty years ago, we're doing that same 0:19:38.480 --> 0:19:43.680 thing again, but this time it's beyond just a political race. 0:19:44.240 --> 0:19:45.480 It's an economic race. 0:19:46.000 --> 0:19:46.359 Again. 0:19:47.160 --> 0:19:51.879 We're building out huge revenue engines as we're going forward, 0:19:52.680 --> 0:19:55.199 whether it's going to be mining the Moon for resources 0:19:55.280 --> 0:19:58.240 or mining the asteroids for resources. We're also going to 0:19:58.240 --> 0:20:04.119 be building out a level of global compute infrastructure in 0:20:04.320 --> 0:20:07.719 Earth orbit. And again, no one was talking about this 0:20:07.800 --> 0:20:12.359 a year ago, and today every major hyperscaler is we 0:20:12.400 --> 0:20:18.359 see anthropic buying into XAIS or space XAIS data centers 0:20:18.400 --> 0:20:22.040 on Earth. But they're also going to need that's going 0:20:22.080 --> 0:20:22.960 to be given for morbit. 0:20:23.440 --> 0:20:25.520 Look, you're a man who's driven by trying to solve 0:20:25.520 --> 0:20:27.439 the world's most pressing problems. You're also a man who 0:20:27.480 --> 0:20:30.640 happened to have got into SpaceX and Google and other 0:20:30.720 --> 0:20:32.040 key companies very early. 0:20:32.320 --> 0:20:33.640 Well at this moment where people. 0:20:33.480 --> 0:20:36.800 Are questioning how it helps them, how is this being 0:20:36.800 --> 0:20:39.320 democratized in some way? How are we solving the world's 0:20:39.320 --> 0:20:41.760 greatest problems for everyone, not just the few? Peter, How 0:20:41.760 --> 0:20:43.640 are you thinking about that, particularly when we look at 0:20:43.960 --> 0:20:46.600 a listing of a company that is already so valuable. 0:20:46.800 --> 0:20:48.399 Is that much left on the table in terms. 0:20:48.280 --> 0:20:51.160 Of democratization and buying of shares by retail investors? 0:20:51.600 --> 0:20:54.560 Sure, so let's hit the point you made first about 0:20:54.600 --> 0:20:57.800 solving the world's biggest problems. The single most powerful thing 0:20:57.840 --> 0:21:00.840 we humans have is our intelligence. We're about to see 0:21:01.080 --> 0:21:05.639 human intelligence increased by not just ten or one hundredfold, 0:21:05.920 --> 0:21:09.840 a millionfold, a billionfold, right, It's the ability for us 0:21:09.880 --> 0:21:16.000 to discover breakthroughs across physics and chemistry and biology, material sciences. 0:21:16.400 --> 0:21:18.840 All of these things are going to be driven by 0:21:18.920 --> 0:21:22.440