WEBVTT - Closing Bell: Super Micro Closes Higher, Qualcomm and Alphabet Report Earnings

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News.

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<v Speaker 2>This is the closing bell on this stock movers report

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<v Speaker 2>the company's making moves at the close of US trading

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<v Speaker 2>with Carol Masser, Tim Stenovek Romaine Bostik, and Katie Greifel.

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<v Speaker 3>All Right, so, finishing off our best and worst levels

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<v Speaker 3>of the session, taking a quick look at the big caps,

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<v Speaker 3>the S and P five hundred, KTI three hundred and

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<v Speaker 3>sixty three names gaining ground today, one hundred and thirty

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<v Speaker 3>nine to the downside.

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<v Speaker 4>Yeah, it's interesting. There are more gainers than losers in

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<v Speaker 4>this market, and you can see that at the sector

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<v Speaker 4>level as well, as told by our friend the Circle,

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<v Speaker 4>Big Tech. That's the reason why down about one point

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<v Speaker 4>nine percent. As a sector that's going to be a

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<v Speaker 4>giant weight lower on the overall index. Communication services, consumer

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<v Speaker 4>discretionary also not having too great of a day in

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<v Speaker 4>terms of what did perform today, Energy hire by more

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<v Speaker 4>than two percent, Materials, real estate, and healthcare. Of course,

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<v Speaker 4>we know it was a big day for Eli Lilly Carrol.

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<v Speaker 3>All right, let me get to two of the top

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<v Speaker 3>gainers in the S and P five hundred, super Micro

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<v Speaker 3>up fourteen percent in today's session, or just shy of

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<v Speaker 3>fourteen percent, certainly a now performer, this one jumping on

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<v Speaker 3>a strong outlook. Company gave a forecast for sales in

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<v Speaker 3>the current quarter that signals strong demand for its gear

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<v Speaker 3>to run AI data centers. So a lot of optimism there,

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<v Speaker 3>and I just want to flip on over quickly to

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<v Speaker 3>Eli Lilly again top performer in the s and P

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<v Speaker 3>five hundred to gain of ten percent, provided an upbeat

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<v Speaker 3>sales forecast for the year today. So some outperformance there.

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<v Speaker 3>And we've got Qualcomm crossing.

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<v Speaker 1>Yeah, Qualcomb rning is just crossing the wire, the chip

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<v Speaker 1>maker basically saying that for the first quarter, the fiscal

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<v Speaker 1>first quarter adjusted EPs did beat three dollars and fifty

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<v Speaker 1>cents a share the street for looking for three forty

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<v Speaker 1>one twelve point twenty five billion dollars in revenue, basically

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<v Speaker 1>in line with street estimates for the current quarter. The

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<v Speaker 1>forecast adjusted EPs for the second quarter two dollars and

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<v Speaker 1>forty five cents. That's light. The street was looking for

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<v Speaker 1>two to sixty five And on the revenue side, the

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<v Speaker 1>company says look for about ten point two to eleven

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<v Speaker 1>billion dollars in revenue. Those shares right now down about

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<v Speaker 1>six percent.

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<v Speaker 4>All right, let's get to alphabet here as well. Alphabet

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<v Speaker 4>here's one of the big headlines. Twenty twenty six Capex

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<v Speaker 4>seen between one hundred and seventy five billion to one

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<v Speaker 4>hundred and eighty five billion. The estimate was for one

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<v Speaker 4>hundred and nineteen point five billion dollars, so certainly ahead

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<v Speaker 4>of those estimates there. In terms of fourth quarter revenue,

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<v Speaker 4>it looks like that beat estimates, coming in at one

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<v Speaker 4>hundred and thirteen point eight three billion dollars. The estimate

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<v Speaker 4>had been for just above one hundred and eleven billion dollars. Here,

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<v Speaker 4>Operating income also actually coming in a little bit lighter

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<v Speaker 4>than expectations thirty five point nine billion dollars. The estimate

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<v Speaker 4>had been for thirty six point nine five billion dollars.

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<v Speaker 4>And one more before we move on, fourth quarter Google

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<v Speaker 4>Cloud revenue coming in at seventeen point sixty six billion dollars.

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<v Speaker 4>The estimate had been for sixteen point two billion dollars.

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<v Speaker 4>You can see the shares lower currently by about three

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<v Speaker 4>percent as traders parse through this.

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<v Speaker 5>Yeah, Katy, I know you said that CAPEX number, but

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<v Speaker 5>it's worth repeating. One seventy five to one eighty five

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<v Speaker 5>billion is what the company sees for twenty twenty six.

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<v Speaker 5>The estimate was for one hundred and nineteen and a

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<v Speaker 5>half billion dollars. Hey, I do want to move on

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<v Speaker 5>over to ARM Holding shares in the after hours of

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<v Speaker 5>ARM Holdings down more than ten percent as we speak.

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<v Speaker 5>Third quarter adjusted operating income came in above estimates. Third

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<v Speaker 5>quarter total revenue came in above estimates at one point

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<v Speaker 5>twenty four billion dollars. Third quarter adjusted net revenue coming

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<v Speaker 5>in at four hundred and fifty seven beating estimates. I'm

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<v Speaker 5>just looking for the outlook here. We're getting some not

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<v Speaker 5>quite seeing an outlook at this point. Oh, here we go.

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<v Speaker 5>Fourth quarter revenue one point four to seven billion to

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<v Speaker 5>one point four eight billion dollars. That's ahead of estimates

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<v Speaker 5>of one point four to three billion dollars. Shares in

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<v Speaker 5>the after hours of ARM Holdings down ten point four percent.

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<v Speaker 3>Yeah, all right, so ARM taking a hit here in

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<v Speaker 3>the after hours. Let's bring up the numbers for Alphabet

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<v Speaker 3>once more, because that stock we saw under some pressure.

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<v Speaker 3>I got to go back to the capex expenditures right

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<v Speaker 3>right now, Shares of Alphabet are down six and a

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<v Speaker 3>half percent here seeing twenty twenty six, Capex one hundred

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<v Speaker 3>and seventy five billion to one hundred and eighty five

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<v Speaker 3>billion dollars. The Street estimate way below that at one

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<v Speaker 3>hundred and nineteen point five billion. Again, some questions maybe

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<v Speaker 3>among investors these companies in terms of valuations to spend,

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<v Speaker 3>you know, looking for the ROI on this, I'm just

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<v Speaker 3>going to Gemini monthly active users. Of course, Gemini their

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<v Speaker 3>AI tool seven hundred and fifty million monthly active users.

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<v Speaker 3>We're seeing that, so I.

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<v Speaker 5>Want to know how they measure that though, like Romane,

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<v Speaker 5>is that is that people who are using Gemini as

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<v Speaker 5>a standalone app or is that people who are like

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<v Speaker 5>me who are using it as part of Google. That's

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<v Speaker 5>a good question because it's integrated now across platforms. You

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<v Speaker 5>can do this from you can use this in Gmail now.

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<v Speaker 1>Yeah, and it is a good question. And I mean,

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<v Speaker 1>we'll try to get some answers a little bit later

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<v Speaker 1>out of some of our guests on the clothes who

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<v Speaker 1>might have that. But it gets to this idea too

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<v Speaker 1>as to how we're measuring sort the future growth. And

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<v Speaker 1>one thing I want to go back to is the

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<v Speaker 1>cost side. I mean, I know Capex is the big focus.

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<v Speaker 1>But you talk about a company growing revenue at about

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<v Speaker 1>a fifteen percent clip costs overall are also basically matching

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<v Speaker 1>that as well. And of course when you dive deeper

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<v Speaker 1>into the actual capex and research development costs, that goes

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<v Speaker 1>up even higher. Now, obviously there's a promise of something there,

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<v Speaker 1>and if you believe what's underbrige I is saying in

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<v Speaker 1>the earning statement here, he does see phenomenal growth for

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<v Speaker 1>that Gemini, for the new Gemini rollout, and maybe that

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<v Speaker 1>becomes a salve tim with regards to that cost spend.

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<v Speaker 5>Yeah, shares of Alphabet following as much as seven and

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<v Speaker 5>a half percent on that higher capex. But some companies

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<v Speaker 5>are beneficiaries of that. If you take a look at

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<v Speaker 5>Nvidia after hours, that's up one percent on this idea

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<v Speaker 5>of Alphabet spending more than expected Katie on capex, right, It's.

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<v Speaker 4>Interesting because Alphabet is the latest example of a big

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<v Speaker 4>tech company coming out and giving a very big CAPEX

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<v Speaker 4>guide and where you're seeing the reaction in shares here though.

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<v Speaker 4>But that's a good news of course for some of

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<v Speaker 4>those companies, such as in video.

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<v Speaker 1>But also think about how much they've ramped up, right,

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<v Speaker 1>I mean, we talk about a company that was spending

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<v Speaker 1>like less than half of this in terms of capbags

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<v Speaker 1>just a year ago, right, And so the question is

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<v Speaker 1>where's the return? Have we seen it already? Are we

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<v Speaker 1>going to see it later this year?

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<v Speaker 3>Well, let me just go to the press release because

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<v Speaker 3>Sunda Puci CEO of Alphabet and Google saying we're seeing

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<v Speaker 3>our AI investments in infrastructure drive revenue and growth across

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<v Speaker 3>the board. And so he says to meet the customer

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<v Speaker 3>demand and capitalize on the growing opportunities. He talks about

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<v Speaker 3>that CAPEX number, But I also think, you know, you

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<v Speaker 3>need to look at, you know, growth across some of

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<v Speaker 3>the other businesses. YouTube's annual revenue surpassing sixty billion across

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<v Speaker 3>ads and subscriptions, so monetizing that they say they now

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<v Speaker 3>have over three hundred and twenty five million paid subscriptions

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<v Speaker 3>across consumer services, and they talk about adoption for Google

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<v Speaker 3>One and YouTube Premium and Google Cloud ending twenty twenty

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<v Speaker 3>five at that annual run rate of over seventy billion,

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<v Speaker 3>representing a wide breadth of customers driven by man for

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<v Speaker 3>AI products. So digging a little bit deeper into this

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<v Speaker 3>on the call will certainly be important chairs a look

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<v Speaker 3>at Alphabet went down about one percent here.

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<v Speaker 1>Yeah, and it gets to this idea too when we

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<v Speaker 1>talk about the AI spen and of course it was

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<v Speaker 1>just a few quarters ago where these companies were being

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<v Speaker 1>rewarded for that capex spend. But we talk about this

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<v Speaker 1>idea too of the outperformance that we've seen in Alphabet,

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<v Speaker 1>and we should point out it's still not a really

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<v Speaker 1>a little barnburner of a stock, but compared to its

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<v Speaker 1>other you know, mag seven brethren here, it has been

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<v Speaker 1>a phenomenal outperform and against the idea that maybe investors

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<v Speaker 1>they're looking at the Microsofts and some of the other

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<v Speaker 1>names in that space and realizing it may be at

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<v Speaker 1>least among the megacaps and maybe Alphabet might actually be

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<v Speaker 1>a bit better of a value proposition.

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<v Speaker 4>And just quickly before we go back to that capex

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<v Speaker 4>figure we were talking about in Video rising and the

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<v Speaker 4>wake of these results Broadcom too. If you take a

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<v Speaker 4>look at the function SPLC on the Bloomberg terminal, when

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<v Speaker 4>you take a look at Alphabet suppliers in video Broadcom

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<v Speaker 4>rate at the top there, so this huge capex forecast

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<v Speaker 4>coming from Alphabet once again, that is great news for

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<v Speaker 4>their suppliers.

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<v Speaker 3>All right, The stock shares of Alphabet still down roughly

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<v Speaker 3>two percent.

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<v Speaker 2>Here in the aftermarket the Stock Movers Report from Bloomberg Radio.

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<v Speaker 2>Check back with us throughout the day for the latest

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<v Speaker 2>roundup of companies making news on Wall Street and for

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<v Speaker 2>the latest market moving headlines. Listen to Bloomberg Radio Live,

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