WEBVTT - Walmart Boosts Outlook While Warning That Higher Costs Loom 

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<v Speaker 2>One of the names companies that reported numbers was Walmart

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<v Speaker 2>came out some pretty darn good numbers in a stock

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<v Speaker 2>market likes it.

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<v Speaker 3>Likes it.

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<v Speaker 2>Stock is up five point seven percent today, It's up

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<v Speaker 2>about eighteen percent a year today. Let's check in with

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<v Speaker 2>Jen Bartash as she covers all the retailers for Bloomberg Intelligence. So, Jen,

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<v Speaker 2>what did you hear from Walmart with their earnings release?

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<v Speaker 4>Yeah, it's you know, Walmart had another good quarter, and

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<v Speaker 4>I think that it's very easy to attribute a lot

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<v Speaker 4>of their success to just the value seeking behavior of

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<v Speaker 4>consumers in this environment. But I think that would also

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<v Speaker 4>be overlooking a lot of the investments they've made in

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<v Speaker 4>things like convenience that is really spurring the e commerce growth.

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<v Speaker 4>And that was really a notable takeaway from today's earnings release.

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<v Speaker 5>Yeah, that e commerce aspect helps draw on higher income shoppers,

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<v Speaker 5>So it's a larger pool of customers at Walmart now

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<v Speaker 5>has access to and in our Bloomberg News reporting we

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<v Speaker 5>indicate that the digital offerings now include luxury items like

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<v Speaker 5>pre owned to Chanel bags. I had no idea that

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<v Speaker 5>that kind of self was available on Walmart dot com.

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<v Speaker 4>Well, you know, Walmart has done a lot to really

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<v Speaker 4>expand its marketplace, and that includes bringing in items that

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<v Speaker 4>you know will appeal to that higher income consumer, you know.

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<v Speaker 4>And the tactic behind all of this is that the

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<v Speaker 4>more people are integrated with e commerce in going to stores,

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<v Speaker 4>they become sticky and they become loyal customers, so that

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<v Speaker 4>when the macroeconomic backdrop fades, it really increases Walmart's ability

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<v Speaker 4>to hang onto these customers going forward, and that just

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<v Speaker 4>drives future growth. So it's a really interesting play out

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<v Speaker 4>of how they're applying that tactic, Jen.

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<v Speaker 5>I also want to get your take on Walmart transferring

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<v Speaker 5>is listing to the NASAC that's going to happen on

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<v Speaker 5>December ninth, and that of course is to reflect as

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<v Speaker 5>focused on being a tech forward company. But I'm wondering,

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<v Speaker 5>I mean, how much of this is really just about

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<v Speaker 5>being included in the Nazak one hundred and therefore the

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<v Speaker 5>QQQ etl Oh.

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<v Speaker 4>Yeah, there's certainly part of that scarlet where you know,

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<v Speaker 4>that's that's probably part of the motivation. I think that

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<v Speaker 4>there is you know, obviously there's a perception with regards

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<v Speaker 4>to being perceived more as a tech company, which Walmart

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<v Speaker 4>in all truthfulness has evolved into a tech company, especially

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<v Speaker 4>amongst other retailers. By being listed at NASDAK, you know,

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<v Speaker 4>long term, maybe it helps the evaluation, you know, just

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<v Speaker 4>in terms of having that perception of being more in

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<v Speaker 4>you know, aligned with peers. You know, Amazon is listed

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<v Speaker 4>on NASDAK, things like that. So I think that there's

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<v Speaker 4>a lot of those components together combined, are really behind the.

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<v Speaker 2>Move Jen Nobody arguably has a better finger on the

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<v Speaker 2>pulse of the consumer than Walmart.

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<v Speaker 6>What are they saying these days?

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<v Speaker 4>Actually they seem relatively optimistic. You know, they talk about

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<v Speaker 4>you know, spending holding study for kind of that middle

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<v Speaker 4>income consumer, high end consumers seem to be spending pretty freely.

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<v Speaker 4>A little bit of concern about some of the lower

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<v Speaker 4>end consumer, but it does seem to be sort of

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<v Speaker 4>evening out. And so when they were looking forward to

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<v Speaker 4>the holiday season, which is you know, the most important

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<v Speaker 4>thing with regards to the retailers that I cover, they

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<v Speaker 4>seem cautiously optimistic that there will be a pretty good

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<v Speaker 4>holiday season this year. We do think that they're going

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<v Speaker 4>to people will prioritize spending on kids. That's usually what

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<v Speaker 4>happens first if they're holding back in other parts of

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<v Speaker 4>their of their budget. But all all, you know, all

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<v Speaker 4>indicators right now seem that we're headed towards a reasonably

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<v Speaker 4>solid holiday season.

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<v Speaker 5>You know, Jen, we tend to look at Walmart as

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<v Speaker 5>a shortcut for the consumer. But if this strong performance

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<v Speaker 5>is really more result of strategy and execution over the

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<v Speaker 5>longer term, how much of a read does it really

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<v Speaker 5>provide on the state of consumer spending beyond the fact

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<v Speaker 5>that Walmart has become this exceptionally well run, tech forward company.

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<v Speaker 5>I mean, you just look at Target, for instance, which

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<v Speaker 5>has a lower outlook.

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<v Speaker 4>No, it's a good point, Scarlet. I mean, I think

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<v Speaker 4>the thing is that nearly every household has some sort

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<v Speaker 4>of interaction with Walmart during the course of a year,

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<v Speaker 4>you know, whether it's in terms of frequency or not.

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<v Speaker 4>And so Walmart has really evolved their ability to capture

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<v Speaker 4>data about the customers that are spending in stores even

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<v Speaker 4>though they don't have a formal loyalty program, and so

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<v Speaker 4>they really do have that insight into sort of the

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<v Speaker 4>motivations behind customers where they stand. You know, I think

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<v Speaker 4>one of the interesting things with regards to just focus

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<v Speaker 4>and discipline. Walmart talked today about apparel sales and their

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<v Speaker 4>comparable sales for apparel was up five percent every month

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<v Speaker 4>of the third quarter, and when you could trust that

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<v Speaker 4>to Target, who reported yesterday they're still struggling with some

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<v Speaker 4>of their discretionary categories. So it seems to be a

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<v Speaker 4>story of execute and not only the consumer spending right

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<v Speaker 4>where they are.

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<v Speaker 6>Stay with us. More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

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<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

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<v Speaker 2>Let's get back to this Nvidia story. Certainly a big,

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<v Speaker 2>big player in this story in the market. Kun John

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<v Speaker 2>Sobani joins us. He's a senior analyst. He covers the

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<v Speaker 2>semi conductor companies for Bloomberg Intelligency Spased out there in

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<v Speaker 2>San Francisco, Kujo, and I'm sure you've had the opportunity

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<v Speaker 2>to a now only look at the numbers, listen to

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<v Speaker 2>the conference call, but talk to institutional investor clients. What's

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<v Speaker 2>the narrative coming out of this earnings release?

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<v Speaker 7>Yeah, I mean this was one of the more bullish

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<v Speaker 7>earnings we've seen from this name in a while, not

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<v Speaker 7>just on the numbers of the three Q four Q guide,

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<v Speaker 7>which they blew past even the lofty spyside targets, but

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<v Speaker 7>just beyond that, the long term the twenty six sort

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<v Speaker 7>of and going into twenty seven demands signals that they showed,

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<v Speaker 7>namely the half a trillion of the pipeline, which we

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<v Speaker 7>think now is a conservative number given the number of

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<v Speaker 7>deals they have announced. If supply keeps on coming up

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<v Speaker 7>as it has, and if their customers continue executing on

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<v Speaker 7>these bills without any missteps, we think they are a

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<v Speaker 7>significant upside to the current street numbers.

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<v Speaker 5>Yeah, just looking through the numbers, clearly a beaten race report,

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<v Speaker 5>but you know, the scale at which it can be

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<v Speaker 5>in race is impressive. Although within the third quarter numbers,

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<v Speaker 5>I did see that chips using gaming PCs missed analysts estimates,

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<v Speaker 5>and I know that that's a shrinking part of the business,

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<v Speaker 5>or at least it's not as big a part of

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<v Speaker 5>the business, given that the data center is where the

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<v Speaker 5>growth is really at. Are there any flaws in this

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<v Speaker 5>earning support con John?

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<v Speaker 7>Not really. I mean, look, the gaming is becoming so

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<v Speaker 7>unimportant for analysts that the reliability of the dedictability of

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<v Speaker 7>those numbers against which we're comparing the beat and miss

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<v Speaker 7>for gaming is no longer as reliable. So no real

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<v Speaker 7>face to really point out in this. We did see

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<v Speaker 7>their supply commitments go up quarter work quarter and inventory

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<v Speaker 7>is rising. I don't think that's a negative, while it

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<v Speaker 7>might seem on the face that's just them gearing up

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<v Speaker 7>and getting ready for that next wave to supply the

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<v Speaker 7>chips in the next year.

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<v Speaker 2>So Couldjohn what's the latest and gentsen Wong about how

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<v Speaker 2>he viewsed China going forward?

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<v Speaker 7>Nothing has changed on the China side. They still don't

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<v Speaker 7>assume any revenues when it comes to data center AI

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<v Speaker 7>China GPUs or the H twenty has been shipped into

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<v Speaker 7>They do have the clearance licenses, so they could, but

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<v Speaker 7>it seems because of the geopolitical issues China has basically

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<v Speaker 7>been shut down. For American GPU providers or AS providers

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<v Speaker 7>to be able to ship in the country, there is

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<v Speaker 7>to be honest, no demands. So it seems, you know,

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<v Speaker 7>because of geopolitical issues, the customers in China are not

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<v Speaker 7>just reading and getting up to buy Nvidia chips right now.

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<v Speaker 5>Jensenhang said that he from his vantage point, does not

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<v Speaker 5>see anything like an AI bubble. We see something very different,

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<v Speaker 5>and he says competitive pressures remain fairly low because this

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<v Speaker 5>is a company with more than ninety percent of the

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<v Speaker 5>market for those high end, super fast AI chips. Who

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<v Speaker 5>is the closest competitor if there is one to Nvidia.

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<v Speaker 7>Yeah, in terms of the size of the markets, the

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<v Speaker 7>next closest competitor would be the AIA six chips, So

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<v Speaker 7>Broadcom is one of the biggest providers of AI six chips,

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<v Speaker 7>namely the TPU that Google uses. Another example would be

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<v Speaker 7>Amazon'straanium chips, which are a differenti ACIC designer supplies. So

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<v Speaker 7>in terms of revenues or units. In terms of the market,

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<v Speaker 7>those are the next closest competitors. Within Nvidia's realm which

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<v Speaker 7>it sells merchant gipus, AMD would be the second closest

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<v Speaker 7>competitor in that.

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<v Speaker 6>Stay with us. More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

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<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

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<v Speaker 1>you get your podcasts, or watch us live on YouTube.

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<v Speaker 2>Company news out here Today, Verizon announce the layoffs that

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<v Speaker 2>will shrink the company by as much as twenty percent

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<v Speaker 2>of its non union workforce.

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<v Speaker 6>That's big and they have a big, big footprint in New.

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<v Speaker 2>Jersey from the old Bell Labs in Bell Core days

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<v Speaker 2>and so a lot of riz.

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<v Speaker 6>And employees in the state of New Jersey. So that'll

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<v Speaker 6>be a big issue for them.

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<v Speaker 2>John Butler joins us here senior telecom analysts for Bloomberg Intelligence. John,

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<v Speaker 2>What's what's this job cut announcement from Verizon? What does

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<v Speaker 2>this mean for the company? What are they trying to

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<v Speaker 2>do here?

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<v Speaker 3>So, Paul, as you may know, there's a new CEO

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<v Speaker 3>in town at dad Verizon named Dan Shalman. And I

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<v Speaker 3>believe Shallman is really he's been on the board for years.

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<v Speaker 3>I think he's looked at the organization and believes it's

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<v Speaker 3>a little too heavy, little too bureaucratic. He sees room

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<v Speaker 3>for ample cost cuts, and I think his whole message

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<v Speaker 3>to the employee base is we need to move faster,

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<v Speaker 3>and I think it's very tough to do that with

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<v Speaker 3>a large bureaucracy. I also think he's cutting costs in

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<v Speaker 3>order to free up funds and give them room to

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<v Speaker 3>promote more. I think one of the reasons that Verizon

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<v Speaker 3>has lagged its peers in subscriber growth is they're just

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<v Speaker 3>not matching price promotions out there in the marketplace. And

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<v Speaker 3>I think if they do that carefully wisely, I think

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<v Speaker 3>if they become a little less discipline than they've been

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<v Speaker 3>in promoting, they're going to find that they'll drive higher volumes.

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<v Speaker 3>And you know, I think at the end of the day,

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<v Speaker 3>Wall Street wants to see that that really is a

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<v Speaker 3>report card for the telcos. That's sort of quarterly net

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<v Speaker 3>editions number that all the telcods report.

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<v Speaker 5>And Wall Street is okay with a loss and margin

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<v Speaker 5>or an erosion of margin in order to get those numbers,

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<v Speaker 5>those subscriber numbers, because it sounds like Verizon is getting

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<v Speaker 5>ready to jump into participating in this price war in

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<v Speaker 5>a more robust way than it had been.

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<v Speaker 3>Yeah, good question, Scarlett. I think that's what these job

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<v Speaker 3>cuts are all about. You can maintain margins. If you're

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<v Speaker 3>cutting thirteen percent of the workforce, there's a big cost

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<v Speaker 3>savings there. So you're getting leaner on the expense line,

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<v Speaker 3>which gives you a little more room on the revenue

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<v Speaker 3>line to begin to promote more and really step up

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<v Speaker 3>and match competitors like T Mobile, which continue to be

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<v Speaker 3>aggressive on price. And then at the lower end, of course,

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<v Speaker 3>you've got the cable operators and their wireless brands. They

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<v Speaker 3>have been promoting very hard on price in order to

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<v Speaker 3>drive up their wireless installed base.

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<v Speaker 2>John, I'm guessing if a lot of Verizon Communications investors,

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<v Speaker 2>they're there for the dividend. It's got a yield of

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<v Speaker 2>six point seven percent here. That is a serious yield.

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<v Speaker 6>There.

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<v Speaker 2>Talk to us about their dividend strategy, their commitment to

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<v Speaker 2>the dividend going forward.

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<v Speaker 3>So Showman, when he first joined Verizon reiterated a commitment

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<v Speaker 3>to maintaining the dividend. I think with any carrier, as

0:12:35.400 --> 0:12:39.160
<v Speaker 3>their stock price drops and the effective yield goes up,

0:12:39.240 --> 0:12:44.760
<v Speaker 3>that dividend yield it becomes a target for potentially getting cut. Now,

0:12:44.800 --> 0:12:48.839
<v Speaker 3>the flip side of that is, any telcode that's cut

0:12:48.880 --> 0:12:51.360
<v Speaker 3>its dividend in the past will tell you there is

0:12:51.400 --> 0:12:55.000
<v Speaker 3>a very heavy price to pay for that. You typically

0:12:55.000 --> 0:12:58.640
<v Speaker 3>get a big price correction when you cut that dividend

0:12:59.160 --> 0:13:02.599
<v Speaker 3>because of course, at least with the AT and T

0:13:02.800 --> 0:13:07.520
<v Speaker 3>and Verizon, you're attracting a lot of investors to buying

0:13:07.559 --> 0:13:10.960
<v Speaker 3>this dock based on the yield. So if you cut

0:13:11.000 --> 0:13:14.719
<v Speaker 3>the yield, obviously you're going to lose some of those investors.

0:13:14.800 --> 0:13:19.560
<v Speaker 3>So he's got a tightrope to walk here. Again, you're

0:13:19.960 --> 0:13:24.280
<v Speaker 3>cutting thirteen percent of the organization as a first move.

0:13:24.360 --> 0:13:26.960
<v Speaker 3>I think there are other cost cuts down the road

0:13:28.120 --> 0:13:32.199
<v Speaker 3>and efficients to be efficiencies to be gained in not

0:13:32.240 --> 0:13:36.560
<v Speaker 3>only network operations, but customer care as well, particularly with

0:13:36.640 --> 0:13:40.480
<v Speaker 3>the advent of AI. So my hope is they're going

0:13:40.559 --> 0:13:44.960
<v Speaker 3>to be able to sustain free cash flow, which will

0:13:45.040 --> 0:13:48.320
<v Speaker 3>generate more than enough to sustain that dividend there.

0:13:48.559 --> 0:13:53.480
<v Speaker 5>Okay, So in Dan Schulman's drive to make Verizon a simpler, leaner,

0:13:53.559 --> 0:13:57.640
<v Speaker 5>and scrapier business, how do its competitors T Mobile and

0:13:57.720 --> 0:13:59.800
<v Speaker 5>AT and T respond? Do they respond?

0:14:02.040 --> 0:14:06.360
<v Speaker 3>They always respond Scorelet you know, it's it's it's that

0:14:06.480 --> 0:14:10.520
<v Speaker 3>kind of market. Wireless is a very mature business. It's

0:14:10.559 --> 0:14:14.960
<v Speaker 3>a saturated market. It's a zero sum game, and so

0:14:15.120 --> 0:14:17.480
<v Speaker 3>I think what we've seen from the BIT, all the

0:14:17.520 --> 0:14:21.080
<v Speaker 3>Big three recently is they are willing to promote heavily

0:14:22.320 --> 0:14:26.120
<v Speaker 3>to protect that. BABS for Rising again has been the

0:14:26.240 --> 0:14:30.160
<v Speaker 3>lagger there, but I think Shulman, who's very focused on

0:14:30.240 --> 0:14:33.840
<v Speaker 3>subscriber volumes, is probably going to step up and play

0:14:33.880 --> 0:14:38.160
<v Speaker 3>that game. So that's been the concern among investors that

0:14:38.200 --> 0:14:41.640
<v Speaker 3>it can get ugly very quickly, and frankly I share

0:14:41.720 --> 0:14:46.040
<v Speaker 3>that concern. So I'll have to see what the change

0:14:46.040 --> 0:14:48.640
<v Speaker 3>in direction is going to be at Verizon with regard

0:14:48.720 --> 0:14:52.360
<v Speaker 3>to promotion, But all indications so far is that they're

0:14:52.400 --> 0:14:53.880
<v Speaker 3>getting ready to promote more.

0:14:54.960 --> 0:14:58.080
<v Speaker 6>Say with us more from Bloomberg Intelligence coming up after this.

0:15:02.000 --> 0:15:05.680
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:15:05.760 --> 0:15:09.160
<v Speaker 1>weekdays at ten am Eastern on Applecarplay and Android Auto

0:15:09.240 --> 0:15:12.320
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0:15:12.360 --> 0:15:15.360
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0:15:16.320 --> 0:15:19.000
<v Speaker 5>Let's take a look at what's happening in the biotech

0:15:19.040 --> 0:15:22.600
<v Speaker 5>and pharmaceutical space. There's a big, big M and a deal,

0:15:23.040 --> 0:15:27.200
<v Speaker 5>Abbot Laboratories agreeing to buy the cancer screening company Exact Sciences,

0:15:27.240 --> 0:15:31.400
<v Speaker 5>with a total deal value of about twenty one billion dollars.

0:15:31.720 --> 0:15:32.840
<v Speaker 6>Yeah, pretty large.

0:15:32.920 --> 0:15:36.480
<v Speaker 5>Let's get some perspective now from Matt Hendrickson, Bloomberg Intelligence,

0:15:36.600 --> 0:15:41.760
<v Speaker 5>Senior medtech analyst. So, Matt, I guess this is this

0:15:41.920 --> 0:15:44.320
<v Speaker 5>is a surprise, given that we're looking at Exact Science's

0:15:44.400 --> 0:15:47.880
<v Speaker 5>shares moving quite a bit. This deal price represents a

0:15:47.960 --> 0:15:50.240
<v Speaker 5>fifty one percent premium to its last close.

0:15:52.000 --> 0:15:56.400
<v Speaker 8>Yeah, and you know this includes yesterday there Bloomberg News reported,

0:15:56.880 --> 0:15:59.280
<v Speaker 8>you know, some of the initial rumors that there was

0:15:59.280 --> 0:16:02.040
<v Speaker 8>this steel taking place. So the fact that it kind

0:16:02.040 --> 0:16:05.880
<v Speaker 8>of materialized so quickly and with that type of premium

0:16:06.280 --> 0:16:08.880
<v Speaker 8>is a little bit of a surprise, given kind of

0:16:09.040 --> 0:16:12.320
<v Speaker 8>that it started leaking yesterday. But when you look at

0:16:12.320 --> 0:16:15.160
<v Speaker 8>it from a multiple standpoint, you know it's trained. You know,

0:16:15.200 --> 0:16:20.160
<v Speaker 8>it's the sales about seven times Exact Sciences twenty twenty

0:16:20.200 --> 0:16:24.440
<v Speaker 8>five sales. Seems pretty reasonable for the growth that could

0:16:24.480 --> 0:16:26.960
<v Speaker 8>be incorporated into Abbot's overall portfolio.

0:16:28.320 --> 0:16:31.280
<v Speaker 2>And the banker's on the deal, Morgan Stanley, exclusive financial

0:16:31.280 --> 0:16:35.320
<v Speaker 2>advisor to Abbot, fully funding this deal, So that's good

0:16:35.360 --> 0:16:38.480
<v Speaker 2>for them. On the sales side, Centerview Partners and XS

0:16:38.600 --> 0:16:41.840
<v Speaker 2>Capital Partners advising the seller there, so again more M

0:16:41.880 --> 0:16:45.200
<v Speaker 2>and A fees there. I have no idea who Exact

0:16:45.200 --> 0:16:46.960
<v Speaker 2>Sciences is, and I think I speak for most of

0:16:46.960 --> 0:16:49.880
<v Speaker 2>our audience here. Who is Exact Sciences? Why what do

0:16:49.960 --> 0:16:50.200
<v Speaker 2>they do?

0:16:50.600 --> 0:16:52.680
<v Speaker 6>And why does Abbot want to pay such a big price.

0:16:53.560 --> 0:16:56.680
<v Speaker 8>Well, you actually might know of them because they have

0:16:56.840 --> 0:16:59.960
<v Speaker 8>been doing a lot of TV commercials for their cold

0:17:00.160 --> 0:17:01.440
<v Speaker 8>Guard there.

0:17:01.280 --> 0:17:05.399
<v Speaker 6>The Guard people. Yeah, so there we go.

0:17:05.640 --> 0:17:08.679
<v Speaker 8>We so yeah, So it's it's it's you know, it's

0:17:08.760 --> 0:17:10.760
<v Speaker 8>kind of one of those things where they're the ones

0:17:10.800 --> 0:17:15.280
<v Speaker 8>that have been the pioneers and driving the force around

0:17:15.359 --> 0:17:19.879
<v Speaker 8>that take home pre screening tests to kind of just

0:17:20.000 --> 0:17:24.960
<v Speaker 8>help you know the continuum of cancer screening and to

0:17:25.000 --> 0:17:28.399
<v Speaker 8>provide an easier access for that pre screening before you

0:17:28.480 --> 0:17:30.520
<v Speaker 8>have to go into kind of more of the invasive,

0:17:30.840 --> 0:17:33.520
<v Speaker 8>you know, colonoscopies to make sure you know you have

0:17:33.600 --> 0:17:36.840
<v Speaker 8>that a you know, coal rectals cancer risk.

0:17:38.119 --> 0:17:38.359
<v Speaker 1>Is there?

0:17:38.520 --> 0:17:43.280
<v Speaker 6>That thing sat in my closet for like a year, like.

0:17:43.280 --> 0:17:44.760
<v Speaker 5>Oh my god, I know it's one of those things

0:17:44.800 --> 0:17:46.359
<v Speaker 5>you have to do, but you don't want to do

0:17:46.400 --> 0:17:49.359
<v Speaker 5>I have to do it. So that what is there

0:17:49.400 --> 0:17:52.480
<v Speaker 5>any reason to think that regulators may you know, raise

0:17:52.520 --> 0:17:53.800
<v Speaker 5>their hand and say, hold on, let me just take

0:17:53.800 --> 0:17:54.639
<v Speaker 5>a closer look at this.

0:17:56.880 --> 0:17:59.159
<v Speaker 8>I mean, I'm sure they will, you know, cross their

0:17:59.240 --> 0:18:02.439
<v Speaker 8>t's and dot their eyes. But just in general, with

0:18:02.560 --> 0:18:07.240
<v Speaker 8>medtech acquisitions, it's usually a pretty straightforward unless there's a

0:18:07.280 --> 0:18:10.840
<v Speaker 8>clear you know, one of the market maybe going to

0:18:11.280 --> 0:18:14.240
<v Speaker 8>you know, one company, and in this case, the there's

0:18:14.400 --> 0:18:16.960
<v Speaker 8>enough competition where I don't think that should be a

0:18:17.080 --> 0:18:19.720
<v Speaker 8>hurdle for Abbot or Exact Sciences.

0:18:20.080 --> 0:18:21.080
<v Speaker 6>And for such a big deal.

0:18:21.119 --> 0:18:23.000
<v Speaker 2>I mean, Abbot stock is only down about one and

0:18:23.000 --> 0:18:26.000
<v Speaker 2>a half percent today on the news. So presumably is

0:18:26.240 --> 0:18:28.600
<v Speaker 2>this a deal you think is a good deal for Abbit?

0:18:30.000 --> 0:18:32.679
<v Speaker 8>Yes, I think it checks off a lot of boxes.

0:18:32.920 --> 0:18:37.520
<v Speaker 8>Potentially for Abbot one. It's once it becomes fully integrated

0:18:37.560 --> 0:18:40.840
<v Speaker 8>and starts contributing to organic growth, it should be a

0:18:40.960 --> 0:18:45.439
<v Speaker 8>creative to that organic growth that Abbot already has. I mean,

0:18:45.440 --> 0:18:48.040
<v Speaker 8>they're already for a company that is you know, forty

0:18:48.040 --> 0:18:51.080
<v Speaker 8>almost forty five billion in sales, they're generating seven and

0:18:51.080 --> 0:18:55.320
<v Speaker 8>a half percent organic sales growth. Exact Sciences comes in

0:18:55.400 --> 0:18:57.879
<v Speaker 8>with double digit sales growth, so that that's going to

0:18:57.920 --> 0:18:59.639
<v Speaker 8>be a creative for them in the long run. You

0:18:59.680 --> 0:19:02.480
<v Speaker 8>can also look at the gross margin profile. Abbott, you know,

0:19:02.600 --> 0:19:05.800
<v Speaker 8>is around a fifty six fifty seven percent gross margin profile.

0:19:06.359 --> 0:19:09.399
<v Speaker 8>Exact Sciences comes in at seventy two, improving to seventy

0:19:09.400 --> 0:19:12.080
<v Speaker 8>three percent based off of consensus in twenty twenty six.

0:19:13.080 --> 0:19:16.320
<v Speaker 8>And then lastly, you look at the expenses that Exact

0:19:16.400 --> 0:19:20.119
<v Speaker 8>Sciences has because you know there's still you know, whether

0:19:20.359 --> 0:19:23.840
<v Speaker 8>it's the merging growth story, so they're still investing a

0:19:23.880 --> 0:19:28.000
<v Speaker 8>lot in their SG and a kind of commercial profile

0:19:28.520 --> 0:19:32.360
<v Speaker 8>to help generate these growth We kind of expect Abbot

0:19:32.359 --> 0:19:34.679
<v Speaker 8>to come in and be able to slash some of

0:19:34.720 --> 0:19:36.600
<v Speaker 8>that SG and A costs to be able to make

0:19:36.640 --> 0:19:39.880
<v Speaker 8>it more profitable overall for the Abbot once it kind

0:19:39.880 --> 0:19:41.320
<v Speaker 8>of gets fully integrated.

0:19:42.800 --> 0:19:47.520
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