Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of
Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: Live from New York. This is Bloomberg Technology coming up.
Speaker 2: The CEO of IBM joins the show has Big Blue
Speaker 2: promises to help simplify and scale enterprise ai plas Paneteeric
Speaker 2: tumbles despite raising its revenue forecast, My earnings fail to
Speaker 2: live up to its current valuation, and Tesla under pressure
Speaker 2: as monthly sales continue falling hard across Europe. The first
Speaker 2: we check in on these markets on tenter hooks. We
Speaker 2: have the FED coming out tomorrow lightly holding rates, but
Speaker 2: could we get a more hawkish commentary coming out of
Speaker 2: the Fed chair. That's what Bloueberg Intelligence is expecting. Then,
Speaker 2: as that one hundred sevent tens percent, as we hear
Speaker 2: Treasury Secretary Scott Besson giving evidence on the hill as well,
Speaker 2: will get to analysis that in a moment, but we're
Speaker 2: still down by seven tens percent. More broadly, as we
Speaker 2: have anxiety around trade, move on to the individual movers,
Speaker 2: one of the key stocks that tugs us lower by
Speaker 2: twelve percent palented. Look, it's still the best performer on
Speaker 2: then as that one hundred so far this year, but
Speaker 2: the forward looking guidance is not enough to substantiate a
Speaker 2: extraordinary valuation. We'll dig into that stock a little bit
Speaker 2: later in the show. IBM currently trading flat, managing to
Speaker 2: outperform the rest of the market, as it has done
Speaker 2: so far this year, will get out to think their
Speaker 2: annual event where they unveil yet more software to basically
Speaker 2: align AI to make sense of all your AI agent offerings.
Speaker 2: Will have Arvin Krishner in but a moment. But first
Speaker 2: we go to US Treasury Secretary Scott Besson testifying in
Speaker 2: front of the House Appropriations Committee, speaking on efficiency, on
Speaker 2: budget cuts and the state of the US economy. Please
Speaker 2: to welcome Tyler Kendall joining from outside the White House.
Speaker 2: And it does seem to be pushing on those what's
Speaker 2: really been touched here so far? Tyler?
Speaker 3: Yeah, Hey, Caroline, Well, this is an oversight hearing, so
Speaker 3: it was widely expected that lawmakers were going to push
Speaker 3: him on dose. The Treasury Secretary said that it's the
Speaker 3: Department of Government Efficiency, not the Department of government extinction,
Speaker 3: and that he does intend to keep the treasury up
Speaker 3: and running to the best of his ability and with
Speaker 3: the most capabilities as possible, but did note that he
Speaker 3: has already cut two billion dollars from the IRS without
Speaker 3: any disruption. Beyond that, though, he did get into some
Speaker 3: tariff policy. Grilled by these lawmakers who want more clarity
Speaker 3: when it comes to what the trade strategy looks like ahead,
Speaker 3: he did say that as of now, the US has
Speaker 3: not engaged in negotiations with China, but reiterated what we've
Speaker 3: often heard from this administration, which is that we could
Speaker 3: expect some of those preliminary framework agreements to come as
Speaker 3: soon as this week. He also sort of outlined somewhat
Speaker 3: of a timeline here. He said that ultimate we could
Speaker 3: see eighty excuse me, eighty to ninety percent of our
Speaker 3: fifteen top trading partners clinch deals by the end of
Speaker 3: this year. When asked about the impacts that these tariffs
Speaker 3: can have on the economy, considering that Scott Bessett really
Speaker 3: has been at the forefront of trying to defend this
Speaker 3: administration's economic policies, he said he's not concerned about a
Speaker 3: US recession and that he's looking forward to the Q
Speaker 3: one GDP numbers being revised, but as Bloomberg Economics cautions,
Speaker 3: that doesn't necessarily mean that they are going to be
Speaker 3: revised up. And then lastly, I will end on this
Speaker 3: because this is very important here. We were wondering if
Speaker 3: we were going to get a firmer xitate a date
Speaker 3: when the US government could default on its debt, because
Speaker 3: that is seen as sort of that hardline number that
Speaker 3: lawmakers are up against to pass the reconciliation package that
Speaker 3: this administration is really banking on to get more cash
Speaker 3: into consumers pockets quickly. When it comes to their tax
Speaker 3: cut agenda, he said it's forthcoming, but that he cannot
Speaker 3: give lawmakers that updated number as of now because they
Speaker 3: are still sorting through the tax receipts from April.
Speaker 2: A macro perspective and Tyler Kendall, thanks so much. That's
Speaker 2: what's going on on the hill. Simultaneously, We've going to
Speaker 2: go to what's happening with IBM, and please to welcome
Speaker 2: the CEO of Vin Krishno, who is coming from the
Speaker 2: company's think conference and annual event. And Arvin, I'm just
Speaker 2: excited to hear really from you. The pace of change
Speaker 2: that's happening with agentic AI. I think you put out
Speaker 2: there that in three years time there's going to be
Speaker 2: one billion apps. It is so noisy, it is cluttered.
Speaker 2: How are you may managing to streamline it for your customers?
Speaker 4: Look first, I think that number is the really interesting number.
Speaker 4: A billion new applications using AI for a third of
Speaker 4: them using agentic AI. And the way that we are
Speaker 4: approaching it is, how do we make it easy for
Speaker 4: our customers leverage their own data, insert their own data
Speaker 4: into the models, and then leverage it to make the enterprise.
Speaker 5: A lot more productive.
Speaker 4: That's what we're after building, and that's what we've just
Speaker 4: announced with our watsonex orchestrate with agentic capabilities, including one
Speaker 4: hundred and fifty new agents, some from us and some
Speaker 4: from our partners.
Speaker 2: One hundred and fifty agents sounds an extraordinary number of it.
Speaker 2: And look, you've got a big book of business already
Speaker 2: when it comes to Generative AI six billion dollars in growing.
Speaker 2: But how much are you seeing the CEOs you serve
Speaker 2: pushing back on overwhelm. How are you managing to help
Speaker 2: them navigate what feels like, in some ways a less
Speaker 2: than productive environment for the amount that they're investing in
Speaker 2: generat to AI.
Speaker 4: Look, I think that what CEOs are concerned about is
Speaker 4: that now that you have gone the era of experimentation,
Speaker 4: as I call.
Speaker 5: It, is over. Now people are looking for business value
Speaker 5: on AI.
Speaker 4: As they're doing that, they've discovered that about twenty five
Speaker 4: percent of the time these projects are paying off very
Speaker 4: well for them. So learn from that twenty five and
Speaker 4: then figure out what are they inhabitors and the other
Speaker 4: seventy five and take those out and those are invariably
Speaker 4: this fragmentation.
Speaker 5: In the environment. So how do you have a more
Speaker 5: integrated environment.
Speaker 4: You've got to make sure that there is value in
Speaker 4: the AI projects.
Speaker 5: Don't just do an experiment and leave it on the shelf.
Speaker 4: You've got to scale it and deploy it across the enterprise.
Speaker 4: So how do you integrate? How do you create the
Speaker 4: right hybrid environment. That's what we're helping them with. And
Speaker 4: then we believe that twenty five we'll go all the
Speaker 4: way up to fifty or seventy five, at which point
Speaker 4: that's a great return for the CEOs.
Speaker 2: That software that you're unveiling, those consulting offerings that you
Speaker 2: continue to provide of in at the moment. How much
Speaker 2: is that bearing fruit in this current environment? How willing
Speaker 2: are these CEOs to experiment and move on from experimentation
Speaker 2: when we've got a really uncertain economy on our hands.
Speaker 4: Look, I'm a more of an optimist on the uses
Speaker 4: of technology in the current environment than a pessimist. And
Speaker 4: why do I say that? So when you have supply
Speaker 4: chain issues, you have cost issues, you have productivity issues,
Speaker 4: technology becomes an answer to help you scale the business
Speaker 4: without having to add a lot of physical cost into
Speaker 4: the business. So I find the appetite of the CEOs
Speaker 4: is quite high to spend on technology as long as
Speaker 4: they can see a return that is our college short
Speaker 4: to medium term meaning six months, twelve months, eighteen months.
Speaker 4: I find people leaning in very heavily, and I think
Speaker 4: that's why you see enterprise tech spending has remained robust
Speaker 4: despite all of these issues that could be talked about.
Speaker 2: What about government in the moment? Scott Beson getting grilled
Speaker 2: on a hill at the moment around DOGE and that
Speaker 2: has had implications for your own business. I think it's
Speaker 2: about fifteen contracts we understand having canceled, are more to come?
Speaker 2: Are you seeing an end to that cancelation process.
Speaker 4: I actually choose not to get worried about doors. I
Speaker 4: think that the areas where we have very robust contracts,
Speaker 4: when we're helping the VA process claims, we help the
Speaker 4: GSA on expense management, we help the DoD on payroll,
Speaker 4: those remained very robust, and I don't believe that those
Speaker 4: will come under any significant attack. Areas which do come
Speaker 4: under attack are much more what I call discretionary, or
Speaker 4: are much more time and material or labor augmentation based.
Speaker 5: Those may come under attack. It actually does not worry
Speaker 5: in me.
Speaker 4: I believe that even if those come under attack, there
Speaker 4: is more than enough offset from the areas that are
Speaker 4: more critical interesting.
Speaker 2: So basically any cancelations will be outweighed by business that
Speaker 2: you potentially can win. Within the government as well.
Speaker 4: I believe that from having talked to very senior members
Speaker 4: of the administration, there is a huge appetite to use
Speaker 4: technology to modernize government and to help make government itself
Speaker 4: more efficient. You can't achieve efficiency just based on cost cutting.
Speaker 4: You actually also will have to invest in technology, and
Speaker 4: I believe, and not just my belief from having spoken
Speaker 4: to them, they have an appetite to.
Speaker 2: Do that, I'll tell you where there's appetite traffic controls
Speaker 2: and Trump himself talking about maybe raythean IBM coming in
Speaker 2: to help solve some of the real anxieties we've got
Speaker 2: just a loss of radar over happening in Newark? Is
Speaker 2: that progressing? Ovin? And you able to share on how
Speaker 2: any sort of contract might shape up.
Speaker 4: Look, I don't want to talk about any specific contract
Speaker 4: or any specific agency, but I think what he just
Speaker 4: pointed out is a great example where technology will be
Speaker 4: part of the answer. Better integration, better computing capabilities, better
Speaker 4: communication capabilities, all of those will play a role because
Speaker 4: right now we are living on not exactly but essentially.
Speaker 4: I let's call it a slightly evolved system that was
Speaker 4: built in the nineteen seventies.
Speaker 2: Ovin. What's crucial about air traffic control is accuracy, And
Speaker 2: I know that's almost where everyone's eyes are when it
Speaker 2: comes to a GENTKI when it comes to generative AI
Speaker 2: is the risk of the underlying data being inaccurate and
Speaker 2: how that compounds. How are you managing to tackle that
Speaker 2: sort of area of anxiety and reality.
Speaker 5: I always break the problem down.
Speaker 4: The core of air traffic control has to be built
Speaker 4: on very precise data from pretty accurate data. You're not
Speaker 4: going to go use agentic ai to estimate where a
Speaker 4: plane is. That's going to be based on much more
Speaker 4: physics and hard engineering. Now, could agentic ai come in
Speaker 4: trying to optimize routes in worrying about how do you
Speaker 4: increase the total flow and capacity at an airport? Perhaps,
Speaker 4: but I'm using the word perhaps because there's a lot
Speaker 4: of careful work to be done there.
Speaker 5: But could agentic.
Speaker 4: Ai be used to process claims faster at Social Security
Speaker 4: or the VA? Absolutely, and then you make citizens happier,
Speaker 4: you deliver them services faster at a lower cost. That's
Speaker 4: where I would go first with agent KI.
Speaker 2: And in the private sector, they're looking for accuracy and
Speaker 2: that's something you're offering at the moment. How much is
Speaker 2: you're just seeing the adoption and the use and productive
Speaker 2: use of Agenda KI being limited by that underlying data
Speaker 2: right now? Or is that something that with streamlining already.
Speaker 4: I always advise our clients start with the use cases
Speaker 4: where you can live with some risk, where you do
Speaker 4: not need it to be one hundred percent accurate. So
Speaker 4: if you think about customer service, you think about end
Speaker 4: client experience.
Speaker 5: I think about our internal IT help lists.
Speaker 4: Those are all areas where when you were dealing with people,
Speaker 4: you actually had a ten or fifteen percent errorrate. So
Speaker 4: now that you deal with at AAI, you can actually
Speaker 4: have a lower errate than that, but maybe not perfect,
Speaker 4: but you can still live with it.
Speaker 2: Think is all about innovation. I'm looking at this the
Speaker 2: car behind you. I'm thinking about the way in which
Speaker 2: you're also pushing the agenda, not only when it comes
Speaker 2: to hybrid, when it comes to on prem When you
Speaker 2: think about the innovations you're making on mainframes but quantum
Speaker 2: A You're getting a lot of questions on con right now.
Speaker 2: Scott Beson wants the US to lead in AI but
Speaker 2: also in quantum computing. How is that making a difference
Speaker 2: in your business right now?
Speaker 4: So we are very very pleased with the innovation we
Speaker 4: brought out here. We talked about the AGENTAAI. We just
Speaker 4: mentioned the mainframe. We can do four hundred and fifty
Speaker 4: billion AI inferences per day on the latest mainframe we
Speaker 4: just announced this quarter, the Z seventeen. Think about using
Speaker 4: that in financial systems to help reduce fraud. So that's
Speaker 4: an incredible area of innovation on quantum. Part of the
Speaker 4: reason we announced the huge investment last year and into quantum,
Speaker 4: and we just brought out the quantum system to this
Speaker 4: year is because we are very excited where that will go.
Speaker 5: That's an area in which we believe.
Speaker 4: The US must and can lead on quantum computing, both
Speaker 4: for national security, but also for competitive advantage and for
Speaker 4: growing a business.
Speaker 2: And is that a competitive advantage continue to grow here
Speaker 2: in the United States. You've just unveiled a huge amount
Speaker 2: of investment into the US.
Speaker 4: Yes, So we put one hundred and fifty billion dollars
Speaker 4: here into the US because we believe that if I
Speaker 4: look at AI, I look at hybrid cloud, and I
Speaker 4: look at quantum coming, the growth opportunities are here. So
Speaker 4: we want to invest to take advantage of these opportunities.
Speaker 2: IBM Chairman, President CEO, Arvin Chrishna and live from Think
Speaker 2: We very much appreciate your time today. Now we're also
Speaker 2: watching shares of other providers. One of the partners that
Speaker 2: are insuffering right now is service Now and look it's
Speaker 2: flagship generative AI software product dubbed now Assists. Apparently he's
Speaker 2: going to hit one billion dollars an annual contracted business
Speaker 2: by the next year shares of by six ten percent,
Speaker 2: in line with the rest of the market. More Next,
Speaker 2: this is bloom Meil Technology. Let's get back to the
Speaker 2: state of the market. It's currently under pressure. We're still
Speaker 2: trying to know what the tariff impact is. US Treasury
Speaker 2: Secretary Scott Besson testifying in front of the House Appropriations
Speaker 2: Committee on the Hills, saying there are no signs of
Speaker 2: a recession. I please to welcome Janet mui OBBC Bruin Dolphin,
Speaker 2: head of Market Analysis and look for a tech investor
Speaker 2: right now. The anxiety has been around valuations of big
Speaker 2: tech in this current environment. Do you think that we
Speaker 2: are out of woods in a recessionary environment? Is that
Speaker 2: still too early to call?
Speaker 6: Hi, Caroline, thanks for having me. I think it's too
Speaker 6: early to call. But I think the base piece is
Speaker 6: no recession. I think we saw from the latest labor
Speaker 6: market data that the job market is pretty resilient, and
Speaker 6: I think it will take a lot more pain for
Speaker 6: us to go into recession. And I understand you know,
Speaker 6: tariff is creating a lot of anxiety and obviously a
Speaker 6: lot of paralyzers on trade flows and investment decisions, but
Speaker 6: they're also ob sets that are happening, for example of
Speaker 6: significantly law or crisis and potential tax package that is
Speaker 6: going to happen, and I think it's US things are
Speaker 6: looking okay as well. So I think it's premature to
Speaker 6: conclude that there would be a US recession, but obviously
Speaker 6: the stacks are high.
Speaker 2: Much has been said about the US as a government
Speaker 2: and it's buying or indeed pulling back on expenditure around dose.
Speaker 2: We just had the IBM CEO joined the show saying, look,
Speaker 2: he's more than confident that any new business within the
Speaker 2: US government he wins were offset for any contracts cut.
Speaker 2: You've got Palenteer today once ago, once again showing real
Speaker 2: resiliency in their US government offering how much are you
Speaker 2: seeing big tech being able to weather at the moment
Speaker 2: any dial back in government spending but also private sector spending.
Speaker 6: I think what we learned from the latest early AS
Speaker 6: results regarding the big tech is that the capas on
Speaker 6: AI remains unchanged, and in fact, I think there is
Speaker 6: still some pickup in that spending. So I think despite
Speaker 6: the distractions on tariff and the near Trump cyclical outlook,
Speaker 6: I think the longer term, AIV remains undebatable, and I
Speaker 6: think that that's one area where it can really drive productivity.
Speaker 6: And I think this is an area that corporates are
Speaker 6: still very much intended and happy.
Speaker 7: To spend on.
Speaker 6: So I think that long term train is intact, and
Speaker 6: I think despite the recent polls in some investment decisions,
Speaker 6: I think there's some area to be excited still about.
Speaker 2: And it's interesting that, of course that focus on spending
Speaker 2: had really benefited the hardware offering out there of Lane,
Speaker 2: or at least the chip design side, when it was
Speaker 2: twenty twenty four twenty twenty five, the outperformers have been
Speaker 2: software offerings such as IBM, which is up about thirty
Speaker 2: percent year to day, Palenteer that is still the best
Speaker 2: performer on the main benchmarks. Janet, Is it still about
Speaker 2: a software win right now or can you go back
Speaker 2: into the hardware.
Speaker 6: I think in any term, the software side will likely
Speaker 6: still outperform and be investor's preference because from now, if
Speaker 6: you think about it, it's a trade uncertainty that is
Speaker 6: top of mind, and there is some scale back of tariffs,
Speaker 6: but a big question mark remain, and so on that
Speaker 6: side you can argue that the software side is less impacted, right,
Speaker 6: so it's just logical to make that near time conclusion.
Speaker 2: But having said that, I think on the.
Speaker 6: Hardware side, I think the valuations of some of those
Speaker 6: key infrastructure and the chip design stops have come down,
Speaker 6: and I think it's really quite fair in value, to
Speaker 6: be honest. A lot of the concerns of overvaluation has.
Speaker 2: Come back down a lot.
Speaker 6: So it also presents great opportunities for long term investors
Speaker 6: because those are really great companies.
Speaker 2: I'm going to go global with you, Janet, because you're
Speaker 2: based over the pond right now, and I'm interested in
Speaker 2: how tech in Europe is performed because, ASML pin up
Speaker 2: for the industry, it's down a lot this year. Has
Speaker 2: there been buying off Europe and other regions.
Speaker 6: Overall speaking, I think the trend is that we're shifting
Speaker 6: a bit of more vile exposure from US to Europe.
Speaker 6: I think that's fair enough given what's happening at the moment,
Speaker 6: And I think for European tech, you know, for example,
Speaker 6: ASML that you mentioned those are global leaders or in
Speaker 6: fact has a monopoly on the machine that produces all
Speaker 6: these chips. So I think you know there are some
Speaker 6: concerns near term cyclical difficulty, but over the long term
Speaker 6: we're still pretty confident on these cycle leaders.
Speaker 2: And what's so interesting, Janet, with your perspective is you
Speaker 2: can go cross asset for us. This week's been a
Speaker 2: big week for corporate debt sales from big tech. When
Speaker 2: you think about Apple coming after its earnings, we had
Speaker 2: Google yes last week with first time in years. Have
Speaker 2: you seen more more appetite across the full breadth of
Speaker 2: assets when it comes to technology.
Speaker 6: Yeah, if you talk about corporate debt right right now,
Speaker 6: we have a preference on government bond over corporates are
Speaker 6: just purely on the bonus side. Or of course it
Speaker 6: really depends on specific sectors and adiosyncratic issues. But generally speaking,
Speaker 6: we don't think the corporate express reflect the potential recessionarist
Speaker 6: It's not based is for sure, but I think we
Speaker 6: just have to be prepared for either scenario, so we
Speaker 6: if we do go into recession or more economics sold out,
Speaker 6: I think upon bonds would be the place to be
Speaker 6: instead of corporate credit.
Speaker 2: We're coming to the tail end of earnings. We still
Speaker 2: got AMD arm You've of course got the juggernaut that
Speaker 2: is in video, But what are the catalysts for here
Speaker 2: on out at the moment? Is it fundamentals or is
Speaker 2: it still the breakthrough when it comes to tariffs into trade.
Speaker 6: I think for these individual stocks, the fundamentals will be
Speaker 6: absolutely important. I think so far as I mentioned, I
Speaker 6: think the AI capax remains intact, but I think there's
Speaker 6: concerns on post margins obviously, and also there are concerns
Speaker 6: from the Chinese competitors, etc. So I think we have
Speaker 6: to watch the fundamentals. But essentially, I think what if
Speaker 6: for macro investors will still be looking a lot at
Speaker 6: what the FED plans to do, for example, and watch
Speaker 6: out for really the need firm economic data.
Speaker 2: From the US and let's just go there to the FED.
Speaker 2: I mean, know you're expecting any sort of hawkishness or
Speaker 2: a dose of dovishness.
Speaker 6: Coming out of the FED tomorrow, Well, Jabona's I think
Speaker 6: they are likely to stay on hold, and I think
Speaker 6: we shouldn't be overly excited about the potential for shifting
Speaker 6: to more dervishness because I think given the inflation and
Speaker 6: particularly I think consumer inflation expectation is really high at
Speaker 6: the moment, and I think there is a high bar
Speaker 6: for the FED to switch to more dervishness, so I
Speaker 6: wouldn't bet on that.
Speaker 2: Yet, Joanna mu I'll be see Bruin Dolphin. Great to
Speaker 2: have some time with you, thank you very much. Now
Speaker 2: coming up, one of open AI's major stakeholders is the
Speaker 2: biggest holdout because the chatchypt maker tries to restructure. We're
Speaker 2: talking Microsoft next. Meanwhile, keep an eye on what's happening
Speaker 2: with Tesla shares. We have seen yet further sales pressure
Speaker 2: over in Europe. Disastrous numbers coming out of not just
Speaker 2: Sweden and some of the Nordic's Denmark, but also in
Speaker 2: the UK as it finally turns neggad as well. In
Speaker 2: April in a big way. We're off by almost two percent.
Speaker 2: This is technology time now for talking tech and first
Speaker 2: up Palenteer. While shares are really driven lower today, that's
Speaker 2: after its financial results failed to live up to investors
Speaker 2: loftiest expectations. Though the company bumped up it's twenty twenty
Speaker 2: five revenue forecast or about four billion dollars, representing growth
Speaker 2: of some thirty six percent from last year, valuations just
Speaker 2: too high were off by twelve percent. Meanwhile, Google says
Speaker 2: it will appeal a federal ruling to break up it's
Speaker 2: ad manager tech tool that Google is arguing that the
Speaker 2: DOJ's remedies go far beyond the court's narrow ruling. An
Speaker 2: open Ai has agreed to buy Windsurf, an AI assisted
Speaker 2: coding tool formerly known as Codium, for about three billion dollars.
Speaker 2: According to sources, This marks the chatchipt makers a largest
Speaker 2: acquisition to date. That the deal has not yet closed.
Speaker 2: Will have more on open Ai in a moment, But
Speaker 2: now let's check in on these markets because we are
Speaker 2: under pressure sixty ten percent off by the NAST at
Speaker 2: one hundred. We wait with baited breath. What will happen
Speaker 2: with the US Canada meeting in terms of tariffs and
Speaker 2: trade talks? But what will happen with the Federal Reserve
Speaker 2: in terms of the direction of travel for rates? Where
Speaker 2: we get an inflationary sentiment, will get hawkish tone from
Speaker 2: Fed chair Pal tomorrow. We are currently on ten to
Speaker 2: hoaks with bitcoin currently up a quarter of a percent
Speaker 2: ninety four thousand, fourth, one hundred and sixty one. Let's
Speaker 2: talk about door Dash. It's on a bit of a
Speaker 2: buying spree following its earnings beat. It announced two multi
Speaker 2: billion dollar acquisitions, London based delivery company Delivery for about
Speaker 2: four billion dollars and hospitality tech company seven Rooms for
Speaker 2: one point two billion, and the acquisitions will expand door
Speaker 2: dashes reached over forty countries. It's go the inside track
Speaker 2: Blueggs Natalie Lung, and we start on the m and
Speaker 2: A before we go to the fundamentals. Why are they
Speaker 2: suddenly expanding outside the US? Natalie?
Speaker 7: And so it really comes at a time where a
Speaker 7: strong financial position and it thinks it can go into
Speaker 7: the UK and sort of the more urban European markets
Speaker 7: and replicate their playbook that has took them to a
Speaker 7: dominant position in the US where they cover two thirds
Speaker 7: of the market.
Speaker 2: Okay, so they expand globally now in forty countries. That
Speaker 2: adding on the ability to be well booking your restaurant.
Speaker 2: They with seven Rooms that actually already been working alongside
Speaker 2: in partnership and now they made the acquisition. Delivery has
Speaker 2: been bought. The shows are down on the day, though,
Speaker 2: can you just talk about what the fundamentals are telling
Speaker 2: us right now?
Speaker 7: Yeah, So they reported earnings today.
Speaker 8: The two Q order's outlook was a beat the adjusted
Speaker 8: editor outlook was a bit conservative, with the midpoint missing
Speaker 8: analyst estimates due to the ongoing investment into these new
Speaker 8: international markets and businesses, and so analysts would be looking at,
Speaker 8: you know, how.
Speaker 7: They're going to you know, invest and spread across these
Speaker 7: markets as they grow in the coming years.
Speaker 2: And just dig in a little bit as to why
Speaker 2: I want to be booking my restaurant via the app
Speaker 2: as well as getting the food sent to me via DoorDash.
Speaker 2: How is that the right sort of allocation of one
Speaker 2: point two billion.
Speaker 5: Yeah.
Speaker 7: For DoorDash, this is really expanding their enterprise offerings for restaurants.
Speaker 7: This is not only a consumer facing reservation platform like
Speaker 7: Rezi or open table, but it's also for restaurants to
Speaker 7: build up loyalty or reach customers more easily, like whether
Speaker 7: they're in restaurants or they're ordering on the DoorDash platform.
Speaker 7: So there's two sides of this here, both consumer facing
Speaker 7: and a B to B side of it.
Speaker 2: Natalie Lung breaking it all down for us, We thank you.
Speaker 2: Let's turn our attentions to another set of earnings that
Speaker 2: seem to underwhelm investors. Shares a palenteer plunging after the
Speaker 2: company presented an earnings outlook that fell short of some
Speaker 2: pretty lofty expectations. I might add palent is one of
Speaker 2: the most popular trades among retail investors too. Let's just
Speaker 2: think about how Smarmer investors reacting to the news. I
Speaker 2: met Cook readers with US retail investor CEO of AK Media.
Speaker 2: About quarter of a million followers you've got across YouTube,
Speaker 2: across x you are very popular for your thoughts on
Speaker 2: the stock among what well Dr carp himself is called
Speaker 2: a retail army. What do you make of the numbers today?
Speaker 9: Hey, Carolyn, thanks for having me on the show. I've
Speaker 9: been covering the company for the better part of five
Speaker 9: years now, and I've been joined with a very passionate
Speaker 9: retail investor base. And there is something that retail saw
Speaker 9: in this stock when it was trading in the single
Speaker 9: digits that Wall Street did not see. Obviously, we've seen
Speaker 9: what has happened since then, and now Wall Street is
Speaker 9: buying it at a higher premium. But maybe that's because
Speaker 9: it deserves a higher premium. I mean, you're talking about
Speaker 9: a company that just did thirty nine percent year of
Speaker 9: year revenue growth, seventy one percent US commercial growth. The
Speaker 9: remaining deal value is up one hundred and twenty seven percent.
Speaker 9: Their US government business is now accelerating to forty five
Speaker 9: percent year of year growth. It's a company doing nine
Speaker 9: hundred million dollar revenue, nearly nine hundred million with less
Speaker 9: than eight hundred customers. I know the valuation is aggressive here,
Speaker 9: but I think the growth is starting to warrant it.
Speaker 2: Just a double click on the market capitalization of two
Speaker 2: hundred and fifty five billion dollars. The stock could run
Speaker 2: what excessively this year? Many would say more than sixty
Speaker 2: percent high, and no wonder we pull back a little bit.
Speaker 2: But I'm interested in your take, perhaps with some of
Speaker 2: the analysts out there. Jeffrey's saying, look, this is really
Speaker 2: a retail trade. I'm not hearing people talking about Palanteer
Speaker 2: and the institutional market in any way. The same amount
Speaker 2: that we're hearing in the retail community is that retail
Speaker 2: resilience there.
Speaker 9: Well, if you look at the institutional and retail ownership split,
Speaker 9: it's fifty to fifty. So this is not Tesla in
Speaker 9: twenty nineteen, where it was seventy thirty. I think there's
Speaker 9: a fifty fifty split. So there's obviously institutional vestures that
Speaker 9: are excited about the name. But in terms of the valuation,
Speaker 9: let's let's take a second and set and step back open.
Speaker 9: AI is worth three hundred billion on the private markets
Speaker 9: and they're not even profitable. AIG said this a month
Speaker 9: ago at their in Best Day, and pound Your quoted
Speaker 9: this in their slide deck in their earnings yesterday. AIG
Speaker 9: expects the adoption of an AI powered underwriting solution leveraging
Speaker 9: AIP Pound's core software offering to double its five year
Speaker 9: revenue cagre from ten percent to twenty percent. Alex Karp,
Speaker 9: the CEO of the company, has been saying that large
Speaker 9: language models largely are becoming commoditized. The implementation of them
Speaker 9: is what matters. I'm not saying the stock is cheap.
Speaker 9: I'm saying the aggressive obviously is the multiples aggressive, but
Speaker 9: it might be warranted because the implementation of AI is
Speaker 9: what really matters, and Pounder is delivering those results.
Speaker 2: I say some area of concern is Europe and indeed
Speaker 2: international expansion. That's going to be the catalyst that maybe
Speaker 2: does start to have people going, oh yeah, it should
Speaker 2: be worth fifty six times is twenty twenty six revenue.
Speaker 2: When are we going to get that international edge in
Speaker 2: the same way that they dominate to the US.
Speaker 9: Well, Alex Karp has said this many times, and he
Speaker 9: said this on the earnings called yesterday. Europe isn't a crisis.
Speaker 9: They are not going to survive, at least their biggest
Speaker 9: companies in the world are not going to survive unless
Speaker 9: they embrace the AI revolution. We are seeing US commercial
Speaker 9: care or at seventy one percent for pound here. That
Speaker 9: is because the United States is embracing the AI revolution.
Speaker 9: Alexcarp also said yesterday that governments across the world outside
Speaker 9: of Europe are starting to increase their at least inquisition
Speaker 9: of Poundter software offerings as well. Pouncer recently just signed
Speaker 9: a massive NATO contract for their Maven platform. I think
Speaker 9: that we are going to start to see a growth
Speaker 9: spurt an s curb in Europe. It might take some
Speaker 9: time because there are still cultural differences, but eventually I
Speaker 9: think that's going to come through. And when that does
Speaker 9: come through, I think that's going to be another catalyst
Speaker 9: for Pounder.
Speaker 2: Ultimately, we've already seen resilience shown with US government contracts
Speaker 2: in the face of DOGE. But is there anything that
Speaker 2: gives you any skepticism about perhaps a pullback and spending from.
Speaker 5: That side, not really.
Speaker 9: I mean, look, it was funny in February when there
Speaker 9: was a Pentagon headline that said the Pentagon's going to
Speaker 9: be cutting defense spending, and as a result, Pounter was
Speaker 9: down ten percent. I think more realistically, if the government
Speaker 9: is going to become more efficient with their spend, you
Speaker 9: need to efficiently allocate that spend. I mean, this is
Speaker 9: one of the most logical things that Karp and schamsankor
Speaker 9: the CTO have been talking about for a while. So
Speaker 9: if we need a better allocation of capital to get
Speaker 9: more transformative results, I would imagine dose would be a
Speaker 9: massive tailwind for Powder versus the headwind, And as a result,
Speaker 9: I think that's why it's commanding its premium. In terms
Speaker 9: of the stock being down fifteen percent right now, this
Speaker 9: is a stock that was up seventy percent from the
Speaker 9: lows in April.
Speaker 2: It's a stock that is up well above.
Speaker 9: Ten x from the lows of twenty twenty two, when
Speaker 9: majority of people like myself actually took a chance on
Speaker 9: Alex Karp, when Wall Street decided that he was crazy.
Speaker 9: So from that perspective, stocks go up and down. I
Speaker 9: think this is a reaction to numbers that maybe weren't
Speaker 9: as good as what the street wanted. But the quarter
Speaker 9: itself was phenomenal in terms of the actual business growth.
Speaker 2: They be They raised for the full year as well,
Speaker 2: and you're right, the stock is still up more than
Speaker 2: forty two percent over the course of the year. It's
Speaker 2: still basically the best performing tech stock throughout what has
Speaker 2: been a pretty should we say volatile state of trade.
Speaker 2: Is from your perspective, going more broadly, this the name
Speaker 2: that retail community still wants to be number one. Where
Speaker 2: else has retail been starting to put their bets when
Speaker 2: it comes to a tech ecosystem?
Speaker 9: Yeah, I think it's palenteer. I think Alex Karp when
Speaker 9: he speaks, people listen. I did philosophy and debate when
Speaker 9: I was in high school and I was a national
Speaker 9: lea competitive debater. I was one of the top three
Speaker 9: speakers in Europe, top seven debaters in the United States
Speaker 9: when I discovered Punter back in twenty twenty one, and
Speaker 9: I saw on their website that they refer to their
Speaker 9: data infrastructure as an ontology and ontology is a philosophical word.
Speaker 9: Doctor Karp has a PhD in philosophy. Doctor Carp wrote
Speaker 9: a book called The Technological Republic. It was a number
Speaker 9: one times New York bestseller. When you talk about a
Speaker 9: retail and what captures their interests, what captured my interest
Speaker 9: was this guy who did not care what anyone said.
Speaker 9: He was going to be himself. He was going to
Speaker 9: say his political beliefs regardless of what happened to the company.
Speaker 9: He had a backbone, is what I'm trying to say.
Speaker 9: And I think because Palund is a backbone. I think
Speaker 9: because Alex Karp is ruthless about explaining what that mission is.
Speaker 9: That's why retail is attracted. The name and the growth
Speaker 9: is there to justify why retail wants to bet on
Speaker 9: a techtok that is actually accelerating in the age of aos.
Speaker 2: Does retail want to bet on anything right now in
Speaker 2: this economic environment? What's the sentiment like more broadly onm.
Speaker 9: It Well, if you look at some of the JP
Speaker 9: Morgan data we got in April and May, May or
Speaker 9: April and March. March had forty billion dollars of net
Speaker 9: inflows from retail. April had about forty two billion dollars
Speaker 9: of net inflows from retail hedge funds actually took down
Speaker 9: their positioning to the MAX seven, the lowest since twenty
Speaker 9: twenty three, and hedge funds a global date of three
Speaker 9: thousand hedge funds showed that they're short positioning on the
Speaker 9: broader smp is at twenty twenty two levels. So this
Speaker 9: is anag game of if retail is right on buying
Speaker 9: the dip and the tear folatility is going to die down,
Speaker 9: which will allow valuations to become more mature, or if
Speaker 9: the hedge funds are going to be right. So far,
Speaker 9: we've recovered everything from the April lows. I mean, I
Speaker 9: could imagine hedge funds saying, oh we missed it, we
Speaker 9: got to get back in, and that creates even more
Speaker 9: fomal and momentum. But retail has been buying the dip
Speaker 9: and I think they will continue to buy the dip,
Speaker 9: especially on pound.
Speaker 2: Here see if they do today and the end of trade.
Speaker 2: Amic kuk Grajo, we thank you for your time. CEO
Speaker 2: of AK Media now shares a Teza lower today as
Speaker 2: sales continuing to slide across Europe for the month of April.
Speaker 2: That this is despite the company rolling out an updated
Speaker 2: version of its popular Model YSUV. Let's get out Craigterdell
Speaker 2: for more, because many blamed basically the lack of a
Speaker 2: fresh item to be able to buying into the fact
Speaker 2: that they had to put on ice and production. But
Speaker 2: now we get the tell that actually, even with a new,
Speaker 2: updated Model Y, people are still not buying.
Speaker 10: Yeah, that's right. I think that was you know, kind
Speaker 10: of the big excuse that you could throw out in
Speaker 10: the first quarter was that we had this changeover for
Speaker 10: the Model HY that was going to inevitably lead to
Speaker 10: some boss production. And you know, that sort of changeover
Speaker 10: is you know, fairly common in the industry. It's maybe
Speaker 10: what was unique for Tesla's that the Model Y is
Speaker 10: just so important to the company, accounts for such a
Speaker 10: huge portion of their volume, and for them to have
Speaker 10: to take their production lines down at each of the
Speaker 10: factories that they where they make the Model Hy, which
Speaker 10: is in all of their assembly plants around the globe,
Speaker 10: that is a big deal for them. But you know,
Speaker 10: by the time you know, March rolls around, you have
Speaker 10: the Model Y starting to spool back up, and you know,
Speaker 10: deliveries of that refreshed model Why starting in early March
Speaker 10: and so getting into April for sales to be this
Speaker 10: dramatically down is a troubling sign if you're a Tesla investor, and.
Speaker 2: Dramatic to say the least, Sweden of by eighty one percent,
Speaker 2: UK off by sixty two percent. What are real numbers?
Speaker 2: Are we talking here? How few cars are being purchased?
Speaker 10: So in the UK it was just over five hundred
Speaker 10: units that they moved, So this is a really dramatic
Speaker 10: drop for the company. I think you know this.
Speaker 5: This is a case here.
Speaker 10: In Europe where you still see very patchy take up
Speaker 10: of electric vehicles right where you know, some smaller markets
Speaker 10: you have a huge takeup. I would point to to
Speaker 10: Norway being this sort of bright example, you know, to
Speaker 10: the positive, but in other markets, evs are taking quite
Speaker 10: a while to accelerate. And you know, Germany and the UK,
Speaker 10: you know, have have sort of traded places in terms
Speaker 10: of being far and away the biggest within within Europe.
Speaker 10: And for for those countries to be included among you know,
Speaker 10: some of these countries where we're seeing really dramatic declines
Speaker 10: is troubling because that's where all the volume is in
Speaker 10: this region.
Speaker 2: And the elephant in the room is masks political reputation.
Speaker 2: Thus far in Europe, that's what's crimping demand.
Speaker 10: I think that's something that's you know, very much. What
Speaker 10: is sort of top of mind for for people following
Speaker 10: these developments is how much is he hurting the brand's standing,
Speaker 10: because I think another important bit of context is the
Speaker 10: European market is just a heck of a lot more
Speaker 10: competitive than the US is. Where you know, a lot
Speaker 10: of European companies were bracing for this year being a
Speaker 10: much tougher compliance year. CO two regulations were you know,
Speaker 10: scheduled to take this another sort of step up where
Speaker 10: you had to meet lower CO two standard for your fleet.
Speaker 10: It looks like the manufacturers are going to get some
Speaker 10: relief that on that front. But you know, it's sort
Speaker 10: of already the case that we're seeing the fruits of
Speaker 10: all the efforts of trying to meet those numbers. So
Speaker 10: you know, a lot of product has come to market.
Speaker 10: You have Chinese companies coming to market even in spite
Speaker 10: of tariffs, so Tesla has a lot more competition than they.
Speaker 2: Have interested in the world. We thank you so much,
Speaker 2: and all things Tesla now breaking news. We do see
Speaker 2: President Trump welcoming to the White House, of course, the
Speaker 2: new leader of Canada, Mark Carney. It was but a
Speaker 2: week after he won the national election, promising voters he
Speaker 2: is the man to guide Canada through the economic termil
Speaker 2: of the trade war, protect the company against aggression from
Speaker 2: the White House as they see it, Exports in Canada
Speaker 2: plummeting as it would seem from the tariffs. Thus far
Speaker 2: so currently have seeing that continuation of dialogue between Mark
Speaker 2: Carney and President Trump. But now let's return to the
Speaker 2: markets that are on ten to hooks because of trade,
Speaker 2: because of tariffs, because of what this very meeting wants
Speaker 2: to be delving into between the two leaders. And we
Speaker 2: have some earnings after the break as well. To keep
Speaker 2: your eyes on AMD of by one and a half percent,
Speaker 2: key chip maker. What will they say about AI demand?
Speaker 2: Can they too manage to shake off some of the
Speaker 2: anxiety as we saw with Microsoft and Meta last week.
Speaker 2: ARM also chip designer of by four tenths percent. Watch
Speaker 2: it after the bell from New York. This is Blueberg
Speaker 2: Technology