WEBVTT - Cloudflare and CoreWeave Slip; IREN-Nvidia Partnership

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, The.

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

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

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<v Speaker 1>Let's take a look at some stocks on the move today.

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<v Speaker 1>I'm Nathan Hager, joined by Bloomberg's a Beer abu Omar.

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<v Speaker 1>On another positive morning for the market broadly, but you're

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<v Speaker 1>starting us off with some downers on earnings.

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<v Speaker 2>A beer.

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<v Speaker 1>What happened with cloud Flair?

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<v Speaker 3>Good morning, Yeah, good morning, Nathan. So you're right. I mean,

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<v Speaker 3>the broader picture is still positive when it comes to

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<v Speaker 3>overall market performance and what is happening on earnings, but

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<v Speaker 3>it's not a good day for software. So cloud Flair

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<v Speaker 3>is now dropping over seventeen percent in the pre trade.

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<v Speaker 3>And this is again an earning story. It is forecasting

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<v Speaker 3>revenue for the second quarter where the guidance is missing

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<v Speaker 3>average analyst estimate. So it's seeing revenue at around sixty

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<v Speaker 3>sixty four million to sixty five now the estimate is

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<v Speaker 3>just a little bit north of that. It's seeing some

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<v Speaker 3>charges as well that are at about one hundred and

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<v Speaker 3>forty million to about one hundred and fifty million. But

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<v Speaker 3>perhaps what was really interesting here is something that we're

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<v Speaker 3>seeing happening to a lot of these stech companies. So

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<v Speaker 3>cloud Flare is planning on cutting more than eleven hundred

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<v Speaker 3>jobs globally, that is about a fifth of its workforce. Now.

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<v Speaker 3>The CEO, Matthew Prince, put out a letter where he

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<v Speaker 3>said that the usage of AI has increased by more

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<v Speaker 3>than six hundred percent in the last three months alone,

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<v Speaker 3>and that is one of those reasons that led to

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<v Speaker 3>the layoffs that we're going to be seeing. So not

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<v Speaker 3>a great day again, falling over seventeen percent at this point.

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<v Speaker 1>So is that a similar story that we're hearing from

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<v Speaker 1>core Weave and other software company that reported earnings and

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<v Speaker 1>is now dropping in the early trade.

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<v Speaker 3>Yeah, pretty much. I mean it is dropping over six

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<v Speaker 3>percent now. Now. One thing that core Weave differs from

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<v Speaker 3>a cloud Flare from is that its revenue is actually

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<v Speaker 3>not missing that much. So it is it has reported

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<v Speaker 3>revenue that is north of two billion versus nine hundred

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<v Speaker 3>and eighty two million on an annual basis. The estimate

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<v Speaker 3>was just a little bit under two billion dollars. But

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<v Speaker 3>essentially it is giving a disappointing forecast for the current quarter,

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<v Speaker 3>and this is sparking these wider concerns about slowing growth,

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<v Speaker 3>especially at a time when the company is spending quite

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<v Speaker 3>heavily to bolster its ongoing operations. So it is forecasting

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<v Speaker 3>that revenue for the second quarter will range, as I mentioned,

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<v Speaker 3>from two point four or five around two point five

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<v Speaker 3>billion to two point six billion dollars. That's what they

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<v Speaker 3>said during the earnings called that we heard on Thursday.

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<v Speaker 1>All right, well that's some of the downside. Let's turn

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<v Speaker 1>to the positivity on this Friday. One of the biggest

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<v Speaker 1>gainers this morning is Iron What's going on with them?

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<v Speaker 3>Yeah, so look Iron, I mean that the news there

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<v Speaker 3>is this deal within video right, and Vidia said it

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<v Speaker 3>was investing as much as two point one billion dollars

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<v Speaker 3>in this data center developer, quite a big theme this year.

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<v Speaker 3>So it is gaining over eight percent in the pre

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<v Speaker 3>trade market. And this is part of a broader partnership

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<v Speaker 3>that we're seeing between the two companies, and it's aimed

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<v Speaker 3>at bolstering or accelerating the construction of AI infrastructure. Now,

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<v Speaker 3>Iron has agreed to issue in VideA a five year

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<v Speaker 3>right to purchase as many as thirty million shares, and

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<v Speaker 3>that is at an exercise price of seventy dollars. It

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<v Speaker 3>is also expected to announce a three point four billion

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<v Speaker 3>dollar AI cloud contract within video, so both companies reacting

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<v Speaker 3>quite well when it comes to this news, Iron gaining

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<v Speaker 3>as much as eight percent in the pre trade, VideA

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<v Speaker 3>not doing as well. It's up nearly eight percent this morning.

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<v Speaker 2>The stock movers from Bloomberg Radio. Check back with us

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