1 00:00:02,520 --> 00:00:09,000 Speaker 1: Bloomberg Audio Studios, podcasts, radio news, The. 2 00:00:08,880 --> 00:00:13,160 Speaker 2: Stock Movers podcast, your roundup of companies making moves in 3 00:00:13,200 --> 00:00:16,439 Speaker 2: the stock market harnessing the power of Bloomberg Data. 4 00:00:17,640 --> 00:00:19,599 Speaker 3: Let's take a look at the stocks on the move today, 5 00:00:19,600 --> 00:00:22,279 Speaker 3: Ampass when alongside Isabelle Leeam were joined by our old 6 00:00:22,280 --> 00:00:25,799 Speaker 3: friend Anna Ragrana, senior tech anast to Bloomberg Intelligence, Honor. 7 00:00:25,960 --> 00:00:27,720 Speaker 3: A lot of news is going to be coming our 8 00:00:27,800 --> 00:00:30,720 Speaker 3: way from your tech space. I'm going to start with Microsoft. 9 00:00:31,000 --> 00:00:33,200 Speaker 3: Can you give us a summary of UPDATEA. What's happening 10 00:00:33,240 --> 00:00:37,360 Speaker 3: with this software cyber breach here? Doesn't seem to be 11 00:00:37,360 --> 00:00:40,600 Speaker 3: impacting the stock that much? What's Microsoft saying? If anything? 12 00:00:40,960 --> 00:00:42,960 Speaker 4: I think the news is out and frankly, you know, 13 00:00:43,280 --> 00:00:46,920 Speaker 4: apart from the one big breach last year where Crowdstride 14 00:00:46,920 --> 00:00:50,520 Speaker 4: really got heard, these breaches typically don't have that big 15 00:00:50,520 --> 00:00:53,120 Speaker 4: on an impact on the stock, frankly because you know, 16 00:00:53,159 --> 00:00:57,400 Speaker 4: it's a small portion of the one particular application, and 17 00:00:57,640 --> 00:00:59,600 Speaker 4: you know, I think the news story is far bigger 18 00:00:59,640 --> 00:01:01,800 Speaker 4: than what it has an impact on the stock. In fact, 19 00:01:01,840 --> 00:01:04,720 Speaker 4: if anything, people will be more inclined to buy Microsoft 20 00:01:04,800 --> 00:01:07,679 Speaker 4: security products to protect themselves down the road. They would 21 00:01:07,680 --> 00:01:10,119 Speaker 4: be more inclined to move more workloads to the cloud 22 00:01:10,160 --> 00:01:13,039 Speaker 4: to make sure that the you know, the online version 23 00:01:13,080 --> 00:01:15,319 Speaker 4: of the software was not impacted. So if you know, 24 00:01:15,600 --> 00:01:19,000 Speaker 4: it just sells by itself, some of the security products 25 00:01:19,040 --> 00:01:22,360 Speaker 4: and these beaches obviously not a good headline for the company, 26 00:01:22,400 --> 00:01:24,480 Speaker 4: but you know, these things do happen quite a bit. 27 00:01:25,120 --> 00:01:27,160 Speaker 1: How is the cloud business looking like these days? I 28 00:01:27,200 --> 00:01:29,000 Speaker 1: feel like it's one of the main drivers of growth 29 00:01:29,000 --> 00:01:31,720 Speaker 1: through many companies, from Amazon to Microsoft as we're talking 30 00:01:31,760 --> 00:01:34,080 Speaker 1: about to most of the big tech giants. Is it 31 00:01:34,160 --> 00:01:36,720 Speaker 1: competition becoming more fierce than is there a leader emerging 32 00:01:36,760 --> 00:01:37,319 Speaker 1: in this space? 33 00:01:37,760 --> 00:01:40,800 Speaker 4: See, the leader was always Aws, but frankly speaking, over 34 00:01:40,840 --> 00:01:43,520 Speaker 4: the last two years, Microsoft has really narrowed the gap 35 00:01:43,760 --> 00:01:46,960 Speaker 4: because of its open Ai relationship. They're the only company 36 00:01:47,000 --> 00:01:50,520 Speaker 4: who's really seeing the biggest benefit of you know, all 37 00:01:50,600 --> 00:01:53,560 Speaker 4: the searchers we're doing in chat GPT because open Ai 38 00:01:53,680 --> 00:01:57,960 Speaker 4: runs primarily on Microsoft's cloud network. So when they report 39 00:01:58,040 --> 00:02:00,560 Speaker 4: next week, we are expecting a big number coming out 40 00:02:00,560 --> 00:02:03,640 Speaker 4: of that AI contribution. So Microsoft, I think, is the 41 00:02:03,640 --> 00:02:07,120 Speaker 4: bigger benefitiary right now amongst all the bigger vendors. 42 00:02:07,920 --> 00:02:11,079 Speaker 3: You know, it's interesting, is it worth investors ranking kind 43 00:02:11,120 --> 00:02:12,799 Speaker 3: of who are the big cloud players? Who are the 44 00:02:12,800 --> 00:02:15,040 Speaker 3: big AI players? Is it worth it or is it 45 00:02:15,080 --> 00:02:17,280 Speaker 3: better just to say, you know, AI is going to 46 00:02:17,600 --> 00:02:19,720 Speaker 3: kind of be all over the tech stack and then 47 00:02:19,840 --> 00:02:21,320 Speaker 3: I just got to be long tech. How do you 48 00:02:21,320 --> 00:02:25,600 Speaker 3: think about really getting quality exposure to that theme. 49 00:02:26,200 --> 00:02:28,040 Speaker 4: Yeah, when you look at cloud, I think all of 50 00:02:28,320 --> 00:02:31,200 Speaker 4: the top four vendors will flourish and flourish well when 51 00:02:31,240 --> 00:02:36,160 Speaker 4: that would be Aws, Microsoft, Google and then Oracle after that, 52 00:02:36,200 --> 00:02:38,400 Speaker 4: so all four will make a lot of money. Then 53 00:02:38,440 --> 00:02:41,680 Speaker 4: you want to dissect each one of them. Within this group, 54 00:02:41,880 --> 00:02:44,919 Speaker 4: Microsoft is the one that's seeing the current derect benefit 55 00:02:45,160 --> 00:02:48,480 Speaker 4: and that's because of opening. The other two whether it's 56 00:02:48,560 --> 00:02:51,959 Speaker 4: Amazon or Google will start to see more and more 57 00:02:52,040 --> 00:02:55,240 Speaker 4: revenue flow in because of the applications people are building 58 00:02:55,320 --> 00:02:58,400 Speaker 4: on their cloud platform. And then lastly on the Oracle side, 59 00:02:58,440 --> 00:03:01,200 Speaker 4: they are benefiting in another part of cloud, which is 60 00:03:01,240 --> 00:03:03,840 Speaker 4: more on the infrastructure side where they're getting a lot 61 00:03:03,880 --> 00:03:06,840 Speaker 4: of money or you know, future funding from open Ai 62 00:03:06,919 --> 00:03:09,480 Speaker 4: to create their data centers to help train the bottle. 63 00:03:09,520 --> 00:03:12,040 Speaker 4: So each one is slightly different, but I would say 64 00:03:12,040 --> 00:03:14,680 Speaker 4: as as you mentioned, the total basket you know should 65 00:03:14,720 --> 00:03:15,600 Speaker 4: do well over time. 66 00:03:16,160 --> 00:03:18,320 Speaker 1: You cover tech and next week is a big week 67 00:03:18,400 --> 00:03:22,040 Speaker 1: for those companies and beyond tech. Bmots are expected to 68 00:03:22,040 --> 00:03:25,080 Speaker 1: deliver nearly fifteen percent of profit growth and robust demand 69 00:03:25,120 --> 00:03:28,320 Speaker 1: for AI, and that's compared to the virtually no growth 70 00:03:28,320 --> 00:03:29,960 Speaker 1: for the rest of the four hundred and nine or 71 00:03:29,960 --> 00:03:32,639 Speaker 1: three stocks. Are you watching anything and a specific company 72 00:03:32,680 --> 00:03:35,400 Speaker 1: you're excited about and you mentioned you're looking at cloud, 73 00:03:35,440 --> 00:03:38,160 Speaker 1: But is there anything else that is factoring in your outlook? 74 00:03:38,600 --> 00:03:40,400 Speaker 4: So there can be two elements of it. One is 75 00:03:40,400 --> 00:03:43,120 Speaker 4: the cloud, the AI side of spending, and the non 76 00:03:43,160 --> 00:03:46,240 Speaker 4: AI side of spending what we saw from SAP and 77 00:03:46,320 --> 00:03:48,960 Speaker 4: infoss and then you know taught all a couple of 78 00:03:49,040 --> 00:03:52,320 Speaker 4: weeks ago, so that the non AI tech spending is 79 00:03:52,440 --> 00:03:55,280 Speaker 4: under pressure. People are not spending as much because they 80 00:03:55,280 --> 00:03:59,440 Speaker 4: are not sure how the tariff related uncertainty is just 81 00:03:59,440 --> 00:04:03,040 Speaker 4: playing out, so they're seeing a delay in closing, closing 82 00:04:03,040 --> 00:04:06,560 Speaker 4: of deals and everything around it. But on the AI side, 83 00:04:06,560 --> 00:04:11,440 Speaker 4: we anticipate strong results from Microsoft, for example, So that's 84 00:04:11,480 --> 00:04:14,280 Speaker 4: there the two dichotomy over there between the two vendors. 85 00:04:14,720 --> 00:04:16,880 Speaker 4: The third thing that we are watching is actually what 86 00:04:16,920 --> 00:04:19,280 Speaker 4: happens on the margin side of things because a lot 87 00:04:19,279 --> 00:04:22,400 Speaker 4: of these companies are investing very heavily in AI. Because 88 00:04:22,400 --> 00:04:24,960 Speaker 4: of that, their margins are going to get squeezed. And 89 00:04:25,040 --> 00:04:27,200 Speaker 4: for that, what we think is going to happen is 90 00:04:27,440 --> 00:04:30,479 Speaker 4: they're going to take reduction in force, either through not 91 00:04:30,680 --> 00:04:33,039 Speaker 4: hiding at the same pace that they have been or 92 00:04:33,080 --> 00:04:36,120 Speaker 4: basically laying off a portion of their workforce in order 93 00:04:36,160 --> 00:04:38,080 Speaker 4: to counter some of that pressure. So those are the 94 00:04:38,120 --> 00:04:40,360 Speaker 4: three themes that we are most interested in right now. 95 00:04:40,480 --> 00:04:44,040 Speaker 3: An Agrana absolutely, thank you appreciate an Orana Tech Analysts 96 00:04:44,040 --> 00:04:47,360 Speaker 3: Bloomberg Intelligence an Agrana mandep seing. Those are our two 97 00:04:47,520 --> 00:04:51,840 Speaker 3: senior tech analysts. They manage our global technology research effort. 98 00:04:52,080 --> 00:04:54,280 Speaker 3: For Bloomberg Intelligence, we have close to I think twenty 99 00:04:54,320 --> 00:04:57,560 Speaker 3: analysts covering technology on a global basis, a lot based 100 00:04:57,560 --> 00:05:00,760 Speaker 3: in Asia, based in the US, and based in Europe. 101 00:05:00,800 --> 00:05:02,279 Speaker 3: And that's the way you have to cover at Folks. 102 00:05:02,320 --> 00:05:05,240 Speaker 3: Tech is an all encompasing sector. It's the biggest part 103 00:05:05,279 --> 00:05:08,359 Speaker 3: of the SMP five hundred and you have to the 104 00:05:08,600 --> 00:05:11,000 Speaker 3: complete coverage, and we do on. 105 00:05:11,000 --> 00:05:11,719 Speaker 2: A global basis. 106 00:05:11,760 --> 00:05:14,320 Speaker 3: I think the best tech research on the street with 107 00:05:14,360 --> 00:05:17,640 Speaker 3: the best data helping them to inform their research. 108 00:05:18,560 --> 00:05:22,920 Speaker 2: The Stockmovers podcast from Bloomberg Radio. 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