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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence podcast. Catch us live weekdays at ten am

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Speaker 1: heasterne on, Apple, Cocklay and Android Auto with the Bloomberg

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Speaker 1: Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: Right now, we want to go back to our Interactive

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Speaker 2: Broker studio and bring in one of our very own experts,

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Speaker 2: and he is, of course the expert on Micron, and

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Speaker 2: we want to talk about Micron because the stock is

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Speaker 2: lower today despite a beat and raised quarter. We do

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Speaker 2: have with us Jake Silverman of Bloomberg Intelligence. He's a

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Speaker 2: semiconductor analyst, and Jake, I wonder how much of this

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Speaker 2: disappointing price action today is tied to the fact that

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Speaker 2: the stock has had a blistering run in twenty twenty five,

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Speaker 2: more than doubling in value.

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Speaker 3: Yeah.

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Speaker 4: No, I think it has a lot to do with

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Speaker 4: just very high expectations coming into the quarter. You know,

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Speaker 4: the stock being up ninety five percent year today going

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Speaker 4: into the report last night just had a lot.

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Speaker 3: To do with it.

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Speaker 4: But overall, look, I mean the fundamentals of the business

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Speaker 4: remained very strong. I think the commentary on the call

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Speaker 4: last night for management was very positive, and so I

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Speaker 4: think we're going to continue to see an up cycle

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Speaker 4: and memory at least for the near term.

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Speaker 5: So what is the call here, what's the street looking

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Speaker 5: for for this name? Again, A stock's just as you mentioned,

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Speaker 5: ripped this year up ninety four percent year today. What's

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Speaker 5: the call here?

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Speaker 4: Yeah, No, I mean, I think investors are really looking

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Speaker 4: at high bandwidth memory, they're looking at AI, they're looking

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Speaker 4: at data center related revenue. In the last fiscal year,

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Speaker 4: data center related revenue was fifty to six percent of sales.

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Speaker 4: So as demand continues for that, we also have to

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Speaker 4: keep in mind that you know, there's traditional products as

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Speaker 4: well that are an important part of the business that

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Speaker 4: includes smartphones and PCs. Investors really want to see continued

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Speaker 4: pricing strength. And as demand continues to grow for high

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Speaker 4: bandwidth memory, which is very important for AI, and as

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Speaker 4: capacity for that shifts over. Sorry, because capacity shifts over

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Speaker 4: to high bandwidth memory, it can further constrains the supply

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Speaker 4: because it has lower yields, it has larger die sizes,

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Speaker 4: so there's only so much capacity industry, and it's shifting

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Speaker 4: over in favor of AI. And that's just constraining supply

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Speaker 4: for traditional products, which given the supply and demand, the

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Speaker 4: importance of supplying demand balancing the industry, it would suggest

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Speaker 4: that as long as demand for AI continues to grow,

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Speaker 4: we'll see further pricing increases.

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Speaker 2: So that's a lot of conditions. I mean, you talk

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Speaker 2: about memory chips, which Micron is the biggest US maker of.

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Speaker 2: We know that this business is kind of famous or

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Speaker 2: infamous really for merging between booms and busts, and that

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Speaker 2: results in these price wings to compensate for the previous

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Speaker 2: you know, plethora of chips or diarth of chips. How

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Speaker 2: does the AI revolution change this dynamic?

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Speaker 6: Yeah?

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Speaker 4: No, And as I said before, really I want to

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Speaker 4: put emphasis on the fact that high bandwid memory demand

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Speaker 4: can strain the supply for other products, specifically with DRAM.

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Speaker 4: But DRAM now accounts for about eighty percent of sales

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Speaker 4: for the company, so it's vastly more important than what

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Speaker 4: we're seeing in NAND. But the other twenty percent of

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Speaker 4: sales in NAND, we're also seeing strength for enterprise solid

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Speaker 4: state drives, which are also important for AI. So yeah, look,

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Speaker 4: I mean I think historically we've seen cycles up cycles,

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Speaker 4: tend to last somewhere between seven to ten quarters, but

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Speaker 4: we're now extending beyond that. I mean, we're looking at,

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Speaker 4: based on the guidance last night, at least twelve quarters,

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Speaker 4: and then based on the potential for further increases in pricing,

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Speaker 4: it could extend all the way through the next fiscal

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Speaker 4: year at a minimum. So yeah, I mean, really, it's

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Speaker 4: just kind of an almost unprecedented situation, or at least not

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Speaker 4: something that we've seen in a very long time, and

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Speaker 4: it really just comes from structural tailments from AI, both

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Speaker 4: on demand, which is improving pricing via different products like

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Speaker 4: high bandwith memory, but also just because like I said before,

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Speaker 4: it's just constraining overall supply, and that's not just unique

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Speaker 4: to Micron, that's true for both ESK, Heinex, and Samsung

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Speaker 4: as well, and the three of them account for the

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Speaker 4: vast majority of DRAM demand in the industry and NAND

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Speaker 4: as well.

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Speaker 5: Yeah, Drake, that's kind kind of where I want to go.

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Speaker 5: The competitive landscape period feels like there's again you mentioned

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Speaker 5: kind of three names there is that really kind of

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Speaker 5: what's driving Are those three companies driving this business?

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Speaker 4: Yeah? Yeah, Yeah, So ESK Heinex has really had the

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Speaker 4: lead in high bandwidth memory, Micron has become sort of

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Speaker 4: a very fast follower, and now there's reports that Samsung

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Speaker 4: will be supplying into Nvidia's Blackwell Ultra platform, which might

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Speaker 4: pave the way into Rubin for them as well. So

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Speaker 4: I mean, I think this three company dynamic that we'd

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Speaker 4: seen for a very long time. Obviously you've had some

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Speaker 4: Chinese competitors come on, but this three company dynamic that

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Speaker 4: we so on traditional dram seems to be now shaping

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Speaker 4: up again for high bay with memory. So I think

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Speaker 4: those past, you know, dynamics that we've seen are going

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Speaker 4: to be the dynamics going forward again.

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Speaker 1: Stay with us.

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Speaker 5: More from Bloomberg Intelligence coming up after this.

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

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube Now.

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Speaker 2: Last night, Jimmy Kimmel returned to television a week after

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Speaker 2: the show was suspended by ABC. The late night host said, quote,

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Speaker 2: it was never my intention to make light of the

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Speaker 2: death of a young man he did receive a warm

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Speaker 2: reception from the audience. Kimmel made an impassioned case for

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Speaker 2: free speech. He poked fun at President Donald Trump and

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Speaker 2: the FCC chairman Brendan Carr. He also said that pressuring

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Speaker 2: affiliates to take his show off the air quote is

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Speaker 2: not legal, and quote is not a American this.

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Speaker 5: Show, This show is not important. What is important is

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Speaker 5: that we get to live in a country that allows

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Speaker 5: us to have a show like this. I already thought,

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Speaker 5: Jimmy Kimmel last night on his return to TV, what

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Speaker 5: does this mean for the ABC Television network? What does

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Speaker 5: it mean for the Walt Disney company that owns ABC.

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Speaker 5: Let's check in Withkeitha Ranganath and Cheese. They media analysts

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Speaker 5: at Bloomberg Intelligencies based down there in Princeton. Hey, Keitha,

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Speaker 5: this late night Does it mean anything for the networks anymore?

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Speaker 5: Do they make any money there?

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Speaker 6: They don't make a whole lot of money, pauls not anymore.

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Speaker 6: It's used to be that, you know, late night television

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Speaker 6: would bring in a lot of ratings, would bring in

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Speaker 6: a lot of ad dollars. That has really changed. We've

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Speaker 6: seen we've seen linear TV kind of hemorrhage viewers now

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Speaker 6: over so many years, and late night is no exception.

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Speaker 6: So if you just kind of look at, you know,

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Speaker 6: Jimmy Kimmel's show, for instance, it generates roughly about fifty

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Speaker 6: million dollar AD revenue. Compare that to a few years

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Speaker 6: ago when it used to generate close to about one

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Speaker 6: hundred and fifty million. So definitely AD revenue going down.

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Speaker 6: And most of these late night shows are losing money

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Speaker 6: just given the programming budget for these shows. So not

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Speaker 6: really a needle mover in a financial sense for Disney.

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Speaker 2: Okay, but in a cultural sense, it is because these

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Speaker 2: are shows that define the networks. And so thank you

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Speaker 2: for putting numbers to that, because I think there's a

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Speaker 2: lot of concern or skepticism from certain corners of American

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Speaker 2: communities that question whether Stephen Colbert's show should have been

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Speaker 2: canceled for financial reasons, as CBS asserts it was. KEITHA.

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Speaker 2: Is ABC going to pay some kind of price for

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Speaker 2: allowing Kimmel to go back on air because the president,

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Speaker 2: for instance, alluded to making more money off the company

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Speaker 2: for doing.

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Speaker 6: So, Yeah, it's certainly possible. I mean, we've seen President

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Speaker 6: Trump kind of go after you know, the broadcast networks

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Speaker 6: threatened to kind of revoke licenses, so he goes after anybody.

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Speaker 6: He uses his power, you know, the courts, to attack

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Speaker 6: anybody who says anything unflattering about him. But that's you know,

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Speaker 6: definitely possible from a Disney perspective, though. You have to

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Speaker 6: remember this is a very very diversified company. So yes,

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Speaker 6: ABC is definitely a very important asset. But again, if

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Speaker 6: you put some numbers around this scarlet, it makes up

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Speaker 6: only about they generate. Of Disney itself generates about ninety

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Speaker 6: to one hundred billion dollars in revenue every year. ABC

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Speaker 6: is about five billion, five to six billion in revenue,

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Speaker 6: so it's just about five percent for the company. So again,

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Speaker 6: you know, small potatoes in the context of the company's financials.

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Speaker 6: But yes, you bring up a very important point about

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Speaker 6: culture wars. Unfortunately, I think Disney is in a losing

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Speaker 6: position whichever way, because they're either going to anger you know,

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Speaker 6: the conservatives or or the other end of the spectrum.

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Speaker 6: So it's just tough.

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Speaker 3: Yeah.

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Speaker 5: Hey, Githa, I noted that two of the big TV

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Speaker 5: station groups out there, Sinclair Podcast Group and Next Are

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Speaker 5: they are still not airing Jimmy Kimmel, what's the latest there?

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Speaker 5: Can they do that? Or is there affiliate affiliation agreement

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Speaker 5: with the ABC networks? Now you got to cover it,

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Speaker 5: you got to carry it.

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Speaker 6: So they you know, the FCC does allow, you know,

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Speaker 6: broadcast affiliate groups like next Door in Sinclair to preempt

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Speaker 6: certain programming if it deems fit. So from a legal standpoint, yes,

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Speaker 6: they are.

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Speaker 5: Allowed to do that.

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Speaker 6: Again, we're not sure of the exact contractual language between

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Speaker 6: Disney or next Door or Sinclair, So again, not sure

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Speaker 6: how long that's going to drag out. You know, Disney

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Speaker 6: is a very important partner for both Nexttar and Sinclair.

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Speaker 6: But remember there's much more here at stake than just

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Speaker 6: you know, Disney's affiliation agreement. Next Door is in the

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Speaker 6: midst of a six point two billion dollar deal to

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Speaker 6: acquire tech Now, which is another broadcaster. They do need

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Speaker 6: the FCC's blessing, and so they're you know, kind of

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Speaker 6: trying to really, you know, please the FCC here, if

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Speaker 6: you will, to kind of get a green green light

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Speaker 6: on that deal. Sinclair again a similar situation. There's a

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Speaker 6: whole wave of broadcast consolidation that's supposed to happen and

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Speaker 6: they all want to be on the FCC's right side.

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Speaker 2: Very quickly, Geita. In the days following Kimmel suspension, a

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Speaker 2: number of people canceled or threatened to cancel their Disney

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Speaker 2: Plus streaming services. Do we have a sense that this

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Speaker 2: might get kind of noisy when it comes to the

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Speaker 2: earning supports and the streaming numbers and subscriptions.

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Speaker 6: I mean, we've seen this kind of backlash before happen,

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Speaker 6: you know, in the case of certain programming and you

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Speaker 6: know with Netflix, with other streaming services. Typically we haven't

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Speaker 6: really seen it reflected in the numbers, even though there's

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Speaker 6: a lot of noise around it. So, yes, maybe a

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Speaker 6: little bit of up and down, but I don't think

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Speaker 6: it'll have again any big needle moving effect on the

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Speaker 6: Disney Plus subscriber numbers.

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Speaker 5: All right, Keithan, Well we got you here. I have

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Speaker 5: to ask, do we have any news on succession to

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Speaker 5: Bob Biger?

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Speaker 6: Hmmm, not yet, not yet, Paul. I mean, that's the

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Speaker 6: biggest question always for Disney. He is supposed to retire

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Speaker 6: by the end of twenty twenty six. There is a

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Speaker 6: lot of rumblings that it might be somebody internal, you know,

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Speaker 6: we keep hearing about Dana Walden. Of course, nothing certain

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Speaker 6: just yet.

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Speaker 1: Stay with us.

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Speaker 5: More from Bloomberg Intelligence coming up after this.

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

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Speaker 1: weekdays at ten am easterneed on Apple, Cocklay and Android

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Speaker 5: That new housing starts came in way higher than expected.

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Speaker 2: Fastest patient's early twenty two unexpected surge there.

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Speaker 5: Yeah, absolutely see what's going on out there in the

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Speaker 5: new housing market, Drew reading Bloomberg Intelligence, US home building

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Speaker 5: analyst joins us. He's down there in Princeton, joining us

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Speaker 5: via that zoom thing, Drew. What's going on in the

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Speaker 5: new housing market?

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Speaker 3: Yes, some pretty eye popping numbers today from the Census.

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Speaker 3: Scarlett mentioned the fastest pace since early twenty twenty two,

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Speaker 3: So I think you need to take these numbers with

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Speaker 3: a grain of salt. The report said that sales were

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Speaker 3: up twenty percent from last month plus or minus twenty

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Speaker 3: two percent, so maybe they were down, maybe they were

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Speaker 3: up a whole lot more.

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Speaker 5: This is a this.

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Speaker 3: Is a historically volatle data set, and it does contrast

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Speaker 3: with some of the recent data that we've had our

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Speaker 3: friends over a Zondhu track, about eighty five percent of

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Speaker 3: the new home market said sales were up low single

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Speaker 3: digits in the month, still lower from last year, and

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Speaker 3: if we look at applications to purchase new homes, they

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Speaker 3: were actually down six percent sequentially, which is more of

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Speaker 3: a leading indicator. And on top of that, we heard

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Speaker 3: from last week from the second largest home builder in

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Speaker 3: the market, Lenar, who said that they're having to take

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Speaker 3: their foot off the gas pedal in terms of volume

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Speaker 3: because the market's just not supporting it. They're still having

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Speaker 3: to incentivize buyers. So, you know, we do agree that

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Speaker 3: lower rates will certainly help demand, but we do we

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Speaker 3: think the market snapped back as strong as this report suggests.

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Speaker 2: Probably not okay, So maybe the numbers will need to

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Speaker 2: be revised, and there's a trend here with numbers being

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Speaker 2: needing to be revised. But the no home sales numbers

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Speaker 2: overall reflect contract signings, which usually take place at least

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Speaker 2: a month before the transaction is complete, so it may

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Speaker 2: capture a little bit of the turn in the housing market.

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Speaker 2: Could this be the beginning of I don't want to say,

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Speaker 2: an upswing, but at least stabilization.

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Speaker 5: So I think so.

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Speaker 3: First of all, the pullback and rates during the month

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Speaker 3: of August was about ten basis points. We didn't really

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Speaker 3: see that dramatic shift lower until really in September when

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Speaker 3: rates got into the low six percent range. What's interesting

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Speaker 3: is that since the FED cut rates are actually up

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Speaker 3: twenty five basis points to about six point four percent,

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Speaker 3: which is kind of similar to what we saw the

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Speaker 3: last time the cut rates is the FED cut and

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Speaker 3: mortgage rates increased. Like I said, I do think that

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Speaker 3: lower rates are certainly going to help that marginal home buyer.

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Speaker 3: But at the same time, you know, when we talk

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Speaker 3: about housing, rates certainly get all of the attention because

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Speaker 3: of affordability constraints were under but I think you to

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Speaker 3: also focus on the labor market. We've had some pretty

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Speaker 3: large job revisions recently. We actually showed net loss in June,

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Speaker 3: and if you look at some of the survey data,

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Speaker 3: consumers out there have a growing concern about unemployment rates

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Speaker 3: over the next twelve months, and for those that do

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Speaker 3: lose a job, the expectation that they're going to be

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Speaker 3: able to find a new one within you know, the

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Speaker 3: next couple of months is not very strong. So one

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Speaker 3: of the things that we've heard repeatedly from the builders

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Speaker 3: is this lack of confidence which is holding buyers back.

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Speaker 3: So on the margin rates certainly help affordability, they don't

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Speaker 3: solve the problem. So we think it helps buyers on

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Speaker 3: the margin, but again I don't. I don't think broadly speaking,

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Speaker 3: this returns us back to, you know, a more normalized

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Speaker 3: level of transactions.

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