WEBVTT - Strategy Falls with Bitcoin

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

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

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<v Speaker 3>Thumb Carol Master along with Tim Stanevik. Let's get to

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<v Speaker 3>it with Bloomberg News Equities reporter Alexandra Semenova. Alex, it's

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<v Speaker 3>an interesting market day. I am curious where you're going

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<v Speaker 3>to start here.

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<v Speaker 4>Yeah, well, Tim just mentioned bitcoin, so we have to

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<v Speaker 4>start with micro strategy. It used to be the case

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<v Speaker 4>that holding bitcoin was an easy way for companies to

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<v Speaker 4>make big money very fast, and now with bitcoin down

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<v Speaker 4>about forty five percent from its ties in October, all

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<v Speaker 4>of those same companies are really feeling the hit here.

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<v Speaker 4>Micro strategy, or rather strategy after the rebrand, being a

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<v Speaker 4>part of it. It is the original digital asset treasury company.

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<v Speaker 4>It has weathered, you know, severe sell offs anytime that

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<v Speaker 4>bitcoin has, and right now it's really feeling the brunt

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<v Speaker 4>of this. It used to have a premium of more

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<v Speaker 4>than it's underlying bitcoin holdings. Now it trades a just

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<v Speaker 4>a nine percent premium. And it's also expected to report

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<v Speaker 4>results after the close today, and the expectation is that

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<v Speaker 4>it will report a multi billion dollar loss in the

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<v Speaker 4>value of it's bitcoin given the route that we've seen.

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<v Speaker 4>Looking at the stock, it's down fifteen percent today alone,

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<v Speaker 4>down nearly thirty percent year today, So very brutal for micropok.

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<v Speaker 1>A real company, a real test of this model that

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<v Speaker 1>really inspired so many other companies to go out and

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<v Speaker 1>hoard different crypto assets, whether we're talking about bitcoin or ether,

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<v Speaker 1>this idea of a data digital ass exactly.

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<v Speaker 4>Very so it's become like a direct proxy of Bitcoin's performance.

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<v Speaker 2>Yeah.

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<v Speaker 3>I feel like there's a period to where like almost

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<v Speaker 3>every company was like wait, wait, you know, or we

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<v Speaker 3>start to have these discussions back to they have something

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<v Speaker 3>in terms of crypto or bitcoin on their balance sheet.

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<v Speaker 3>I just want to point out Strategy at its high

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<v Speaker 3>back in twenty twenty four, was almost a four hundred

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<v Speaker 3>and seventy four dollars share stock and now it's at

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<v Speaker 3>one oh nine and change, so unbelievable, quite a drop. Okay,

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<v Speaker 3>Number two.

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<v Speaker 4>Number two is alphabet. This one is an interesting one

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<v Speaker 4>because even though the stock is lower today a lot

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<v Speaker 4>of people were disappointed with that capex number, there's actually

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<v Speaker 4>a lot for investors to be excited about. In this report,

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<v Speaker 4>so the company did top up projections for quarterly revenue,

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<v Speaker 4>and specifically in that Google Cloud unit, its revenue jumps

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<v Speaker 4>forty eight percent to a whopping seventeen point seven billion

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<v Speaker 4>dollars That handily topped Wall Street estimates of about sixteen

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<v Speaker 4>point two billion dollars, so really solid number. There are

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<v Speaker 4>also Gemini its AI model. It is rapidly reaching new users.

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<v Speaker 4>The thing that disappointed investors is that CAPEX number. It

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<v Speaker 4>will reach as much as one hundred and eighty five

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<v Speaker 4>billion dollars, which compares to about one hundred and twenty

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<v Speaker 4>billion dollars that Wall Street analysts were expecting, So that

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<v Speaker 4>is a lot more. And for twenty twenty six, that

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<v Speaker 4>CAPEX spending will total more than what it spent in

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<v Speaker 4>the prior three years combined, So a lot of money.

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<v Speaker 4>But at the same time, COEO Sindar Pachai says that

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<v Speaker 4>these costs are necessary and they're actually seeing that their

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<v Speaker 4>business monetize these AI investments. Obviously he's a little bit biased,

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<v Speaker 4>but we also had Jeffrey's analysts say the same thing,

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<v Speaker 4>that AI is actually paying off for Google.

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<v Speaker 1>I mean, it's pretty amazing to see the growth in

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<v Speaker 1>the active Gemini users going just increasing so much just

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<v Speaker 1>over last quarter, right, and that's for the standalone Gemini app,

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<v Speaker 1>not just for like anyone using its AI features in

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<v Speaker 1>a different platform like in Search or in Gmail or something.

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<v Speaker 2>Yeah.

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<v Speaker 4>Absolutely, and also worth noting that the bar was just

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<v Speaker 4>incredibly high into these big tech companies.

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<v Speaker 3>I think it's also interesting. I mean, this dog bounced

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<v Speaker 3>around so much in the aftermarket when it reported. It's

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<v Speaker 3>been done as much as eight percent or almost eight

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<v Speaker 3>percent today, so it has really come off of those

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<v Speaker 3>lows today in a big way. So it's interesting as

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<v Speaker 3>investors make their way all right from Alphabet to where sd.

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<v Speaker 4>Latter just taking a very very big hit today actually

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<v Speaker 4>seeing it's worst decline on It is down twenty one

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<v Speaker 4>percent right now. This is after Even as the company

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<v Speaker 4>did boost its outlook, it just wasn't enough for investors

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<v Speaker 4>who were expecting more from their turnaround effort under their

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<v Speaker 4>new CEO. The company narrowly beat Wall Street's expectations for

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<v Speaker 4>revenue and adjusted earnings per share in its most recent quarters.

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<v Speaker 4>They actually reported good growth in skincare products, so people

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<v Speaker 4>were buying Lamaire and the ordinary. They were also buying

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<v Speaker 4>up a lot of their fragrances, including tom Ford's perfumes

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<v Speaker 4>and Lalava, which, by the way, is just a testament

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<v Speaker 4>of the strength of the consumer. Because tom Ford Perfumes

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<v Speaker 4>are something like three hundred dollars. It's expensive, but that

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<v Speaker 4>segment did well, and the company also narrowed its outlook

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<v Speaker 4>range for the net revenue growth for the period ending

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<v Speaker 4>in June. It now forecast growth of three percent to

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<v Speaker 4>five percent.

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<v Speaker 2>The Stock Mover's report from Bloomberg Radio. Check back with

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