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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: us live on YouTube Now.

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Speaker 2: Folks, it's not only the conversation of the day. I

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Speaker 2: think it's sort of the conversation of the week. It's

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Speaker 2: a holiday lengthened work week. It's sort of weird. And

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Speaker 2: then there's after Laurie Kelvicina joins us out of US

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Speaker 2: Equity Strategy RBC. She says, to play to when you

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Speaker 2: have to participate, what do markets do after Thanksgiving? We

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Speaker 2: used to shut down November fifteenth, we got an M

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Speaker 2: and a boom Wall Street's mental What do you foresee

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Speaker 2: to the end of the year in terms of oomph?

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Speaker 3: So question Tom, and I think, as we you know,

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Speaker 3: we are sitting here this morning, the futures are up

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Speaker 3: a little bit. We had a good Friday, We had

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Speaker 3: a very stream. He did, he did, And look, I

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Speaker 3: mean anecdotally, it sounds like they're a fair number of

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Speaker 3: people who wanted to take some time off this week.

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Speaker 4: That aren't getting it.

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Speaker 3: So I think people are at a minimum, are going

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Speaker 3: to be cranky when they get back after December. But

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Speaker 3: I think the reality is that there have been a

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Speaker 3: lot of things causing stress in this market, maybe not

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Speaker 3: any single one of them enormous stress, but it all

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Speaker 3: kind of adds up. I think the FED was one

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Speaker 3: of those, frankly, because we had seen expectations for cuts

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Speaker 3: taken out, and when you've seen that happen in recent years,

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Speaker 3: you know, kind of going back to late twenty twenty two,

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Speaker 3: that tends to trip up the stock market, and when

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Speaker 3: we put cuts back in, it tends to help the

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Speaker 3: stock market. So I have no idea what they're going

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Speaker 3: to say. I know that RBC's rate strategist has been

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Speaker 3: in the December skip camp, and then he thinks they

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Speaker 3: resume next year. So my guess is the drama is

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Speaker 3: not yet over. But we also know that valuations have

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Speaker 3: been a problem since August, and we've seen, you know,

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Speaker 3: f y two valuations sort of bumping up against ceilings.

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Speaker 3: We're going to cycle into new earnings at some point,

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Speaker 3: but right now companies don't want to talk a whole

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Speaker 3: lot about twenty twenty six, So I think it's.

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Speaker 2: Also do you want to talk about until.

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Speaker 4: I don't think so either.

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Speaker 3: I mean, I will say, you know, the consumer companies

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Speaker 3: are coming up. You know, we've got a few more

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Speaker 3: this week. They're kind of trickling in. It was kind

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Speaker 3: of hit or missed last week. There were some good ones,

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Speaker 3: there were some not so good ones. You know, it

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Speaker 3: does seem like there are certain retailers who are winning

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Speaker 3: with all cohorts of consumers that have more value conscious offerings.

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Speaker 3: So I think companies are still managing through pretty well.

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Speaker 3: But this feels very unsettled, to be honest, coming back

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Speaker 3: post Thanksgiving.

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Speaker 5: So I know you guys at RBC have your twenty

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Speaker 5: twenty six outlook here, what are the themes that you're going

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Speaker 5: to be focused on for twenty cox Well, you.

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Speaker 3: Know, we actually we did sort of an early cut

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Speaker 3: back in September of you know, this is what we're

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Speaker 3: seeing for the second half, you know, kind of a

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Speaker 3: second half September type target. We haven't done, you know,

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Speaker 3: sort of here's the big burrimo.

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Speaker 4: For you know, the one that everyone right at the

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Speaker 4: end of.

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Speaker 3: The year, partially because we had done that early one,

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Speaker 3: but we had been saying seventy one hundred for sort

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Speaker 3: of a mid to second half twenty twenty six kind

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Speaker 3: of number. And I would say our messaging hasn't changed,

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Speaker 3: which was that we have thought for quite some time

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Speaker 3: the market was way overdue for kind of a five

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Speaker 3: to ten percent garden variety type pullback. We finally crossed

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Speaker 3: the five percent threshold on Thursday. That's very good news

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Speaker 3: because I'd rather get this out of the way now

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Speaker 3: than have it overhanging the market early next year. And

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Speaker 3: the way we've put it is, we think stocks can

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Speaker 3: do well next year, but we do think we have

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Speaker 3: some stuff to work through to get there. And the

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Speaker 3: good news is we finally started working through those things.

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Speaker 5: But we've got arguably strong earnings environment. Second third quarter

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Speaker 5: earnings were very good. We've got presumably a FED that's

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Speaker 5: in a easing mode. Are those two things in and

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Speaker 5: of themselves enough to move the market hired?

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Speaker 2: Well?

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Speaker 3: Well, this is the interesting sort of part of the

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Speaker 3: FED conversation from an equity market perspective, right, which is.

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Speaker 4: You know, two or three more cuts, right.

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Speaker 3: I mean, that's good and that's helpful, but it's not

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Speaker 3: like we're at the beginning of something big and long lasting.

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Speaker 3: If you look at most forecasts around the street, right,

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Speaker 3: this is kind of a modest adjustment cutting, you know,

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Speaker 3: type cycle that most folks are talking about. I do

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Speaker 3: think earning's growth is extremely important. I think that's what's

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Speaker 3: been powering markets.

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Speaker 2: Can you model it out first Q one twenty twenty six.

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Speaker 4: In the first quarter?

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Speaker 3: I think that, you know, we I think January is

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Speaker 3: going to be sort of a pivotal time, to be honest, Tom,

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Speaker 3: when companies really kind of unveil the twenty twenty six

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Speaker 3: out looks. And we keep seeing that in commentary, right,

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Speaker 3: Analysts who dare to ask the question are getting brushed back,

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Speaker 3: and companies are saying we'll get back to you in

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Speaker 3: January or February. I don't think anyone's really going to care,

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Speaker 3: honestly about four Q results by the time January February

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Speaker 3: rolls around.

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Speaker 2: Interesting at Lori Kelvicina, we continue with the RBC at

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Speaker 2: Capital Markets. I went and nerd early in the show.

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Speaker 2: I'm going to do it again with the lawyer Paul.

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Speaker 2: Can we go back to memory John Maloney Tacoma, remember

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Speaker 2: telling to Coo, Okay, there was an invention, believe it

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Speaker 2: or not, in the sixth exists didn't exist. Enterprise value

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Speaker 2: to EBITDA. I'm this weekend, I saw essays, essays, essays

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Speaker 2: of this ratio of debt cash stock is compared to

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Speaker 2: the income statement somewhere any income statement plus depreciation amortization.

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Speaker 2: Do you have a conviction that, in the cacophity we're

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Speaker 2: living now, you can use a modern ratio like EV

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Speaker 2: to EBITDA.

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Speaker 4: So you know, it's funny Tom.

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Speaker 3: A number of years back, I actually surveyed all of

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Speaker 3: my analysts about what valuation metrics they thought were appropriate

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Speaker 3: for their industries, and I made them give me two.

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Speaker 3: And I did find that a lot of the tech

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Speaker 3: related analysts gave me.

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Speaker 4: EV related metrics.

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Speaker 3: That was really where it tended to be limited, to

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Speaker 3: be honest, And then the thing that everybody sort of

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Speaker 3: agreed on it may not have been their first indicator.

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Speaker 3: In fact, it usually wasn't their first indicator, but forward pe.

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Speaker 3: So I tend to still be a forward pe person

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Speaker 3: because I think, you know, when you're comparing industries, you're

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Speaker 3: comparing sectors, you're comparing size segments, you need something that's

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Speaker 3: more universally applicable.

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Speaker 5: All right, let's stay with the earnings theme. Here, are

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Speaker 5: the earnings strong enough to support this market and to

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Speaker 5: drive it higher?

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Speaker 2: Right now?

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Speaker 4: Do you think so?

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Speaker 3: You know, there's healthy earnings growth embedded in the consensus

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Speaker 3: expectations for next year when we've modeled it out. We

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Speaker 3: haven't gotten quite as constructive on as consensus, but we've

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Speaker 3: still gott you know, some healthy numbers. I think around

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Speaker 3: like ten percent or so. The reality, though, is that

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Speaker 3: earning sentiment matters just as much as the earnings themselves.

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Speaker 3: And the rate of upward revisions for the broader market

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Speaker 3: peaked in August.

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Speaker 4: We don't have post and video.

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Speaker 3: You know, sort of results yet for that particular indicator

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Speaker 3: that we look at the rate of upward revisions. So

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Speaker 3: what I need to see in coming weeks is as

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Speaker 3: analysts go back and do like all their little modeling,

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Speaker 3: you know, and update all their numbers, do we surpass

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Speaker 3: or return to that August peak? And we just don't

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Speaker 3: know the answer to the question yet. But I think

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Speaker 3: one thing markets are struggling with is the idea that

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Speaker 3: earning sentiment it's okay, it's just not as good as

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Speaker 3: it was.

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Speaker 2: Interesting LORI, we don't care. What we care about is

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Speaker 2: how do you do mashed potatoes Thanksgiving?

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Speaker 3: I'm gonna be honest with you, Tom. I don't cook.

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Speaker 3: I hate I burn everything. I just we we with

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Speaker 3: our Thanksgiving. We go to my in laws and we're

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Speaker 3: responsible for old wine, pies and bread.

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Speaker 4: So and we buy some very nice pies.

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Speaker 2: Why do you make old wine? You like? Cook Wednesday night?

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Speaker 3: I'm gonna be on I don't do this either. I

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Speaker 3: run after the children and let my husband do it.

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Speaker 2: Okay, honest right in front. It's actually a lot like

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Speaker 2: laurd Kelvinsy have a wonderful holiday. Thank you for that

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Speaker 2: brief and particularly the CFA worthiness a e v uh.

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Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am Eastern Listen on Apple,

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Speaker 1: Karplay and Android Otto with the Bloomberg Business app, or

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Speaker 1: watch us live on YouTube.

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Speaker 2: Joining us out Smart and Spain on a Planet. Michael

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Speaker 2: McLoone Bloomberg Intelligence senior, Come out of the Analyst. Tom

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Speaker 2: stopped making fun of bitcoin at thirty thousand. Boom up

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Speaker 2: it went gold, Boom up it went what are you

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Speaker 2: focused on A wise one this morning?

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Speaker 6: Well, I like, I want to tilt over to your

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Speaker 6: term before Tom of bitdog, I think is becoming bit doog.

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Speaker 7: The world's changed for cryptocurrencies.

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Speaker 6: We had this massive pump on the having and the

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Speaker 6: ETF pilot and the Trump administration jumping on board and

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Speaker 6: very well entrenched into space now and it's peaked. It's

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Speaker 6: a classic I think peak bull market peaks on euphoria.

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Speaker 6: The thing is now it's dragging everything lower with it.

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Speaker 6: So as of Friday, the Bloomberg Galaxy Crypto index was

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Speaker 6: down twenty one percent. On the air was up almost

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Speaker 6: a third. Bitcoin is right now down about ten percent year.

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Speaker 6: The key things where's it go next? The key thing

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Speaker 6: I look at is at the same time cryptos are

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Speaker 6: going lower, stock market volatile is just buried.

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Speaker 8: Now.

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Speaker 6: We know the VIX is up, but one hundred and

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Speaker 6: twenty day volatile he's still around eleven percent.

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Speaker 7: That's a very low level. So I think the whole

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Speaker 7: space has.

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Speaker 6: Got more more de risking to go into the end

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Speaker 6: of the year, which is probably the primary risk is

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Speaker 6: there for bitcoin?

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Speaker 5: Does technical analysis work Mike? And if so, was there

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Speaker 5: a support number like I don't know. I just kind

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Speaker 5: of thought support was one hundred thousand, and we blue

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Speaker 5: past that exactly.

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Speaker 6: That was the key level, certainly psychological, now, Paul, it

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Speaker 6: has to work. It doesn't know, so it has to work,

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Speaker 6: but it has to matter because, as time always points out,

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Speaker 6: there's no underlying there's no basis. Like I trade crude

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Speaker 6: all futures, I know I'm trading those against crudel, I'll

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Speaker 6: trade treasury bond futures.

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Speaker 7: I know I'm trading those against treasury bonds.

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Speaker 6: In bitcoin, at cryptos, there's no basis except for crypto dollars.

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Speaker 6: So the key level now, I think it's around eighty four.

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Speaker 6: It's been holding eighty four. It's a decent support level.

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Speaker 6: The key resistance is around ninety four. That'd be unchanged

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Speaker 6: on the year and my bias. It's more a greater

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Speaker 6: risk of breaking through eighty four and get towards fifty

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Speaker 6: than going higher.

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Speaker 7: And the key thing about.

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Speaker 6: Fifty is is I love how crypto people say look

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Speaker 6: at the chart, but if you look like an annual

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Speaker 6: chart going back to twenty twenty twenty one, fifty has

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Speaker 6: been a key level for many years.

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Speaker 7: Wow, fifty all right?

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Speaker 5: Gold Gold seems to be holding at that four thousand

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Speaker 5: level here pretty solidly.

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Speaker 2: Mike, is that a good support here?

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Speaker 7: It's becoming a part of it.

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Speaker 6: Gold's been and stare step rally step up to three thousand, hangout,

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Speaker 6: step out the four thousand hangout.

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Speaker 7: The problem is now.

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Speaker 6: It's so extended versus a sixty month moving average. Tom

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Speaker 6: would like this. It's about a three standard deviation move.

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Speaker 6: You have to go back to nineteen eighties. And the

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Speaker 6: key thing that's happening about Gold, it's well exactly, it's

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Speaker 6: never rallied that this type of velocity with stock market

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Speaker 6: one hundred and twenty day volatily this low, that's just

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Speaker 6: never happened. That's what I'm concerned that that volatili might

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Speaker 6: pick up into the year end.

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Speaker 2: Mike, we don't care. Coral Gables, Florida is the real

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Speaker 2: estate market cracked? I mean, real estate never goes down

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Speaker 2: in Coral Gables, right Well, I'm hearing it everywhere.

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Speaker 6: Paul is certainly here recently reduced most buyers, most transactions

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Speaker 6: now are reduced prices. And that's what I get from

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Speaker 6: my colleague on the journals team, which I sit right next.

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Speaker 6: I'm hearing it everywhere. Same with farm land in the Midwest,

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Speaker 6: which I'm very close to. Recent reduced prices are all

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Speaker 6: trying to dropping. They're just not buying lifting offers anymore.

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Speaker 2: One point six million Navari Avenue cozy, two thousand square feet.

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Speaker 2: It's a cross the seahouse. It's cozy three three one

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Speaker 2: three four, all right. I mean, you know they're.

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Speaker 5: Living in some high rise Miami thing with all the high.

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Speaker 2: Then you got to play Miami Vice music exactly.

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Speaker 5: He's not doing the bungalow thing.

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Speaker 2: I okay, you know, I may I may have to

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Speaker 2: do a road trip down there.

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Speaker 5: Yeah, you know, span the Michael take care of us.

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Speaker 2: Michael, put me on the Harley and off we go.

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Speaker 2: Michael mcgloone, thank you so much. I'm a wonderful beginning

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Speaker 2: to the holiday season. McLoone, smarter than the average bar.

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Speaker 5: And all the people warming down to South Florida, all

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Speaker 5: the snow bunnies and some Mike can't get a reservation

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Speaker 5: in his restaurants anymore.

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Speaker 2: We're talking to New York City people, and New Wave

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Speaker 2: going down.

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Speaker 5: Made all the people coming down for the most time,

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Speaker 5: I don't know, can't get a parking spot anymore.

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Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this.

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Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

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Speaker 1: with the Bloomberg Business App. You can also listen live

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Speaker 1: on Amazon Alexa from our flagship New York station, Just

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Speaker 1: say Alexa play Bloomberg eleven thirty.

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Speaker 2: She has been more than patient. Rayan Mittrion is a

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Speaker 2: Callen Family Office schedule to be with us a few

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Speaker 2: days ago, and there was this breaking news of that

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Speaker 2: breaking news, and we had to say see her right now.

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Speaker 2: We celebrate Ryan Mettrion with us. Do you have a

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Speaker 2: clear vision Ryan, for Callen Family Office into next year?

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Speaker 8: We're relatively optimistic. There's a lot to feel good about.

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Speaker 8: I mean, earnings have been incredibly strong, you know, we're

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Speaker 8: just wrapping up the fourth Street quarter of double digit earnings.

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Speaker 2: Growth.

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Speaker 8: Spending has been strong, especially obviously as related to AI,

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Speaker 8: and that has been providing a huge tailwind to stocks.

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Speaker 8: And we have a generally dubbish bed. So all of

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Speaker 8: that helps us to think that we should still continue

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Speaker 8: to see some upside possibility for equities going into next year.

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Speaker 2: How does tech lead tech?

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Speaker 8: I mean, tech has been incredibly strong right over the

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Speaker 8: last couple of years, and we've seen this since the

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Speaker 8: April lows and now we're getting a little bit of volatility,

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Speaker 8: which is healthy, but there continues to be a lot

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Speaker 8: of strength in that sector. I mean, we see these

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Speaker 8: hyperscalers that are spending these incredible amounts of CAPEX to

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Speaker 8: build out their AI infrastructure. That's going to have a

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Speaker 8: huge demand, and really that's such a big part of

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Speaker 8: the market that as long as those companies continue to

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Speaker 8: do well and we see that demand held up, it

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Speaker 8: should continue to help the tech side, don't you?

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Speaker 2: Said Lori Keviscino was the interview of the day. I'm sorry,

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Speaker 2: Ryan's killing it, Paul. I know because this is a

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Speaker 2: tone I hear from people her in the trenches. Her

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Speaker 2: belief and conviction in the market is a lot of

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Speaker 2: what I hear of people.

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Speaker 5: Well, she's a graduate of Vanderbilt, so she's riding high

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Speaker 5: a long with Damian Sassar and the football team at Vanderbilt.

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Speaker 5: But technology ran I'm just looking at your notes, and

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Speaker 5: you laid out so clearly. In Vidia's eight percent of

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Speaker 5: the S and P five hundred and megacap Tech is

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Speaker 5: almost forty percent of the index. So if you're constructive

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Speaker 5: on the market, you got to be constructive on tech.

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Speaker 5: Is that kind of where you guys, are you really do?

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Speaker 8: I mean, because if those companies are struggling, the broader

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Speaker 8: market is going to struggle. Now that being said, we

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Speaker 8: do want to have diversify exposure and we want to have,

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Speaker 8: you know, investments in other areas as well, because these

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Speaker 8: can can move the market so quickly, as we've certainly seen.

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Speaker 8: But you have to have the exposure or you've been

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Speaker 8: missing out.

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Speaker 5: How else do we think about these equity marketchare ran

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Speaker 5: outside of technology? Are there sectors that screenwall for you?

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Speaker 5: Are there factors that screenwall for you?

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Speaker 7: I mean, we want to have we want to.

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Speaker 8: Have exposure exposure broadly. We've certainly seen tech do well.

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Speaker 8: We've certainly seen utilities and industrials do well in their

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Speaker 8: ties to all this data center spending. We want to

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Speaker 8: have exposure to financials is another area. But I mean

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Speaker 8: we want to we want to have exposure on the

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Speaker 8: value side of things. We want to have small cap exposure,

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Speaker 8: and we want to have international exposure. I mean international

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Speaker 8: has really outperformed us so far this year, mostly due

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Speaker 8: to a weeker dollar, but we do want to have

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Speaker 8: exposure in all those areas.

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Speaker 2: Uh Riyan mitre On with Ush's partnered Hell and Family Office,

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Speaker 2: I'm curious into the you know, with all the success

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Speaker 2: of this bull market at a family and office, do

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Speaker 2: you have a pressure to over diversify or is it

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Speaker 2: under diversification. We're the more focus, more bet on a

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Speaker 2: given idea. You know, it really depends.

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Speaker 8: We have the ability because we're working with ultra high

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Speaker 8: net worth investors that really have a multi generational focus,

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Speaker 8: so we can be more aggressive, we can take some

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Speaker 8: of those bets because these clients don't necessarily need those

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Speaker 8: funds near term because of the level of wealth that

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Speaker 8: they have. But we do tend to diversify, and we

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Speaker 8: have the ability to get into parts of the market

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Speaker 8: that some traditional investors may not be able to get into.

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Speaker 8: When you're looking at private markets and hedge funds and

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Speaker 8: different types of things that allow us to complement our

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Speaker 8: traditional portfolios. So that's been, you know, something that we

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Speaker 8: can do, but it's I wouldn't say that there's pressure,

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Speaker 8: but there's certainly a lot of opportunity, and we do

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Speaker 8: believe in diversification.

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Speaker 2: I mean, Paul, chastise me because I haven't brought this

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Speaker 2: up today. If you brought in, if you bought in

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Speaker 2: rather to public or private credit, I mean alternative investments

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Speaker 2: or do you guys stay a mile wide of that.

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Speaker 8: No, we certainly have exposure there. I mean, we do

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Speaker 8: have traditional bond allocations. A lot of our investors are

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Speaker 8: in high tax brackets, so a lot of it's in

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Speaker 8: UNI bonds and UNI high yield, but we do we

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Speaker 8: do invest in private credit, and there is a lot

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Speaker 8: of hype around there, and you want to make sure

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Speaker 8: if you're investing, that you're investing with the right firm

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Speaker 8: in the right places because there could be some problems

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Speaker 8: going forward in that area. As with any investment, you

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Speaker 8: just want to make sure that you're with a high

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Speaker 8: quality firm and that because there can be such a

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Speaker 8: divergence in returns between the top and bottom quartile funds

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Speaker 8: in that type of space.

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Speaker 5: Ran your family office clients, what is their appetite for

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Speaker 5: alternative investments?

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Speaker 8: It varies, right, every investor is different, but our typical

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Speaker 8: allocation would include between twenty and twenty five percent in alternatives,

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Speaker 8: and that can be a small amount in hedge funds,

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Speaker 8: some credit oriented strategies or diversified multistrat funds that give

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Speaker 8: us different types of exposures that we can get in

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Speaker 8: the traditional markets, and then rounding that out with private equity,

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Speaker 8: private credit, private real estate.

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Speaker 7: Things like that.

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Speaker 8: I mean, historically you can get a three to five

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Speaker 8: percent premium over traditional equity returns in private equity, and

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Speaker 8: we have seen that it's additive to returns over time.

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Speaker 2: Are you going to Vanderbilt, Tennessee?

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Speaker 4: I mean, right, I wish I was.

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Speaker 8: If ever there was a year, this is the year, right.

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Speaker 7: You have to enjoy it well lasts.

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Speaker 8: So it's been a fun season, that's for sure.

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Speaker 2: Ran, thank you so much. Don't be a stranger. You

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Speaker 2: love to have you back, ryand Mitreon with this Callum

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Speaker 2: Family Office, stay with us. More from Bloomberg Surveillance coming

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Speaker 2: up after this.

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Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on Apple Coarplay and Android

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00:19:10,560 --> 00:19:13,600
Speaker 1: Auto with the Bloomberg Business App. You can also listen

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Speaker 1: live on Amazon Alexa from our flagship New York station,

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Speaker 1: Just say Alexa Play Bloomberg eleven thirty a short visit.

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Speaker 2: Right now with enterag Rana, which should be a long visit.

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Speaker 2: He is definitive on cloud, definitive on what these companies

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Speaker 2: are doing, and a RAG Over the weekend, the consensus

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Speaker 2: view was Google Gemini three was a home run over

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Speaker 2: the Fenway Wall, over the Turnpike, over the cask and

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Speaker 2: Flagon helping a home run for Google was Gemini three. Now,

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Speaker 2: I think it's a big deal.

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Speaker 9: I mean, you could see the stock of the acting

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Speaker 9: today and one of the things we talk about in

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Speaker 9: our notes today is that Apple is actually going to

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Speaker 9: use one of their models for CD upcoming release. I

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Speaker 9: think that's a very good deal for Apple. They don't

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Speaker 9: even have to pay as much. I mean they're going

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Speaker 9: to pay probably around a billion dollars a year for it.

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Speaker 9: And you know that's so it is very clear now

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Speaker 9: that it's not going to be Open AI taking everything.

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Speaker 9: It is going to be spread across multiple models, and

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Speaker 9: I think that's I think the big takeaway for all

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Speaker 9: of us is this the.

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Speaker 2: Apple AI play.

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Speaker 5: Then Ana raghas is to partner up with existing players

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Speaker 5: and say that's it, that's our play.

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Speaker 2: Yeah, and Paul, we just say, you know.

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Speaker 9: One of the notes that we published today basically shows

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Speaker 9: that Apple's capital expenditures as a percentage of sale is

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Speaker 9: merely at three percent, compared to Microsoft at forty percent.

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Speaker 9: And what Apple is saying is, you guys, fight it

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Speaker 9: out and tell me who has the best model. I'm

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Speaker 9: going to just use it in the end and I'll

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Speaker 9: pay you, you know, if you're lucky.

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Speaker 5: All right, So what's the next data point you're looking

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Speaker 5: for on this AI play? We had the really good

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Speaker 5: numbers out of in Vidia. What's the next when you

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Speaker 5: talk to your institutional investor clients, what's the next kind

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Speaker 5: of data point milepost for you guys.

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Speaker 9: I think one of the things we have to do

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Speaker 9: is look at the application of AI models across all verticals,

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Speaker 9: different sectors.

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Speaker 2: What are they doing.

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Speaker 9: What is the final game for banks, for hospitals, Because

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Speaker 9: everybody understands the AI infrastructure play and what's happening over there,

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Speaker 9: but what is the use case? And that's where I

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Speaker 9: think the digestion is going to take some time, whether

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Speaker 9: it's all of twenty six or maybe twenty six and

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Speaker 9: twenty seven.

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Speaker 2: So what are you watching for into the end of

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Speaker 2: the year, into the first weeks of January and are

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Speaker 2: within this AI like, where is the revenue going to

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Speaker 2: come from? Is that a study you're having with your team.

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Speaker 9: Yeah, so the revenue is going to come from enterprise

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Speaker 9: applications so big you could say Fortune two thousand companies,

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Speaker 9: when they're going to take their applications their core business

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Speaker 9: and add more AI capabilities within that. That's you know,

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Speaker 9: But the thing is, unlike just going out and getting

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Speaker 9: a consumer app there is usually going to be a

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Speaker 9: a long tail or a while when enterprises add that

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Speaker 9: particular capability. Now, I think throughout the year we're going

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Speaker 9: to see moderate pickup in those applications. The big question

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Speaker 9: right now is what happens to the air infrastructure build

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Speaker 9: And one of the things we have been talking about is,

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Speaker 9: you know, when it comes to the hyperskale cloud provider,

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Speaker 9: whether that's Amazon, Microsoft, or Google, we're really not that

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Speaker 9: concerned about them overbuilding. But because even if let's say

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Speaker 9: they overbuild and they don't have to do anything for

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Speaker 9: the next one or two years, their core business will

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Speaker 9: take care of that build of infrastructure. That's not true

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Speaker 9: for somebody like an OpenAI me.

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Speaker 2: No longer visit in RUG around, Thank you so much

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Speaker 2: with Bloomberg Intelligence just world class technology analysis.

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Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,

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