WEBVTT - SCOTUS Abortion Ruling, Walgreens and Micron Earnings 0:00:02.920 --> 0:00:10.840 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.840 --> 0:00:15.000 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:15.040 --> 0:00:17.520 Eastern on Apple car Playing and Broid Auto with the 0:00:17.520 --> 0:00:21.400 Bloomberg Business App. Listen on demand wherever you get your podcasts, 0:00:21.640 --> 0:00:24.480 or watch us live on YouTube. 0:00:25.120 --> 0:00:25.439 Hold on. 0:00:25.520 --> 0:00:28.880 We got a Supreme Court ruling. The Supreme Court allows 0:00:29.000 --> 0:00:33.320 emergency abortions in Idaho for now. And this was the 0:00:33.320 --> 0:00:37.239 case that if the woman's life was not in danger 0:00:37.920 --> 0:00:42.320 but was compromised, would it be legal for a doctor 0:00:42.960 --> 0:00:45.600 to wind up performing that abortion. It looks like the 0:00:45.680 --> 0:00:50.000 Supreme Court allows emergency abortions in Idaho for now. June 0:00:50.000 --> 0:00:52.040 Grasso is still sitting with us in the studio, June, 0:00:52.320 --> 0:00:52.960 give me your take. 0:00:53.320 --> 0:00:56.040 So this is a sort of kick the can down 0:00:56.120 --> 0:00:59.760 the road decision, because what they're saying is that the 0:00:59.800 --> 0:01:04.600 case was improvidently granted. So it's dismissed because improvnently granted, 0:01:04.640 --> 0:01:06.960 we call it a dig, and that means that we 0:01:06.959 --> 0:01:09.320 shouldn't have taken the case in the first place. And 0:01:09.360 --> 0:01:13.360 the justices were split three three three, So the three 0:01:13.440 --> 0:01:19.120 liberals thought that the federal law supersedes the Idaho state law. 0:01:19.520 --> 0:01:22.680 The three concurrences, which were the justices in the middle. 0:01:22.760 --> 0:01:24.640 This really shows you the setup of the court. The 0:01:24.800 --> 0:01:29.640 justice in the middle, the Chief Justice, Barrett and Kavanaugh 0:01:30.160 --> 0:01:32.559 said we you know, we shouldn't go forward with this case. 0:01:32.560 --> 0:01:34.720 We should send it back. But they didn't. They didn't 0:01:34.800 --> 0:01:38.120 endorse any particular theory. They said, this case has changed 0:01:38.120 --> 0:01:41.960 since we got it, and the three in dissent Alito 0:01:42.080 --> 0:01:46.320 Thomas van Gorsich said, no, the state should have the 0:01:46.440 --> 0:01:50.200 right to say that you can't have abortions unless it's 0:01:50.360 --> 0:01:51.640 the mother's life is in danger. 0:01:51.800 --> 0:01:53.240 So the setup was really weird. 0:01:53.480 --> 0:01:57.080 Now it goes back to the Ninth Circuit and there's 0:01:57.120 --> 0:01:59.920 more litigation. This could come up again, and the issue 0:02:00.360 --> 0:02:04.440 will come up again, probably because Texas has a similar law, 0:02:04.480 --> 0:02:08.560 and the Fifth Circuit, which is so conservative, has not allowed, 0:02:09.000 --> 0:02:12.279 you know, has not allowed the federal law to supersede 0:02:12.280 --> 0:02:16.079 the state law. So Justice Skatanji Brown Jackson wrote, really, 0:02:16.120 --> 0:02:21.360 I thought compelling concurrence saying that you know, we're not 0:02:21.560 --> 0:02:26.280 making decisions here, we're just kicking. She actually said, we're punting, yeah, punting. 0:02:26.600 --> 0:02:29.880 And meanwhile, the people like doctors and women don't know 0:02:29.919 --> 0:02:31.880 what the rules are because we're not making okay. 0:02:31.919 --> 0:02:32.480 So that was my question. 0:02:32.560 --> 0:02:34.240 So if I'm a doctor in Idaho and I have 0:02:34.280 --> 0:02:35.919 a woman that comes to me in the emergency room 0:02:35.960 --> 0:02:39.160 who is ill that I can help with an abortion, 0:02:39.240 --> 0:02:41.480 but she's not dying, can I do it or not? 0:02:41.560 --> 0:02:43.960 Now you can do it. You couldn't do it yesterday, 0:02:43.960 --> 0:02:44.720 and you can do it today. 0:02:44.760 --> 0:02:46.760 Now you can do it today and maybe not in 0:02:46.800 --> 0:02:47.200 a month. 0:02:47.280 --> 0:02:49.640 And that was one of the things that the Justice 0:02:49.720 --> 0:02:53.160 Kagan wrote about that there has been so much, so 0:02:53.200 --> 0:02:55.680 many problems on the ground. Women have had to be 0:02:55.880 --> 0:02:59.640 flown out because doctors this is criminal penalties for doctors 0:03:00.040 --> 0:03:03.400 five years. So doctors were afraid to make the decision 0:03:03.840 --> 0:03:05.520 is this woman, you know, is there life in. 0:03:06.520 --> 0:03:07.280 Jeopardy or not? 0:03:07.600 --> 0:03:09.079 Or women had to wait until they went into like 0:03:09.120 --> 0:03:11.000 septic shike in order to get the trade. 0:03:11.080 --> 0:03:14.960 Even Justice Barrett, who you know is uh is very 0:03:15.080 --> 0:03:19.800 you know, very conservative on the issue of abortion, talked 0:03:19.800 --> 0:03:22.840 about that what about sepsis and things so and what 0:03:22.960 --> 0:03:25.000 was funny in the in the in the arguments where 0:03:25.040 --> 0:03:27.400 the women on the court were so much in tune, 0:03:27.400 --> 0:03:30.600 which was with what was happening on the ground, And 0:03:30.760 --> 0:03:34.040 you know, here where you have Alito, Well, he's talking 0:03:34.040 --> 0:03:37.320 about the there's a there's two words in the statute 0:03:37.400 --> 0:03:39.600 unborn child, and if you put it in context, it 0:03:39.640 --> 0:03:43.200 doesn't mean the feetus should But he his dissent is 0:03:43.280 --> 0:03:47.640 all about you know, it says unborn child. So it's 0:03:47.680 --> 0:03:49.720 it's more along the lines of what he wrote in 0:03:49.760 --> 0:03:50.560 the Dobbs decision. 0:03:51.000 --> 0:03:51.720 That's all I'll say. 0:03:51.840 --> 0:03:55.760 What's what's the next next thing from the courts on 0:03:56.040 --> 0:03:59.280 this abortion issue is? I mean, there are other cases 0:03:59.320 --> 0:04:01.760 because I mean this one as it kicked the can 0:04:01.800 --> 0:04:04.520 down the road. It's a punting type scenario. So it 0:04:04.640 --> 0:04:06.640 just it feels like we're just gonna be bouncing back 0:04:06.680 --> 0:04:09.760 and forth between the states and the federal And. 0:04:09.680 --> 0:04:12.520 That's why anyone who thought that, you know, what. 0:04:12.640 --> 0:04:16.320 Justice Kavanaugh wrote in the Dobbs decision was, Okay, we're 0:04:16.360 --> 0:04:18.599 done with this now. Abortion the issue is for the 0:04:18.680 --> 0:04:24.039 states and there are that's just too simple and it 0:04:24.080 --> 0:04:26.280 doesn't it doesn't work in real life. So here two 0:04:26.360 --> 0:04:29.040 years after that, we have you know, two cases having 0:04:29.080 --> 0:04:31.800 to dealing with this, and both of them, if you 0:04:31.839 --> 0:04:33.920 think about it, both of them kicked the can down 0:04:33.960 --> 0:04:36.440 the road. Because the myth of pristone case. They went 0:04:36.480 --> 0:04:39.440 off on the procedural issue of standing. So that's coming back. 0:04:39.240 --> 0:04:41.800 To oh yeah, all right, Jude, we really appreciate it. 0:04:41.880 --> 0:04:43.960 Thank you so much. Jene Grasso, no doubt we'll be 0:04:43.960 --> 0:04:46.040 sitting here with me. Will pause at the beach. She'll 0:04:46.080 --> 0:04:48.719 be here with me tomorrow at ten am. I was 0:04:48.760 --> 0:04:51.200 just introducing Nathan Dean as we got this ruling. He's 0:04:51.200 --> 0:04:53.600 senior policy analyst over at Bloomberg Intelligence, and I was 0:04:53.640 --> 0:04:57.479 asking Nathan about the presidential debate tonight. Who sits in 0:04:57.480 --> 0:04:59.400 the White House and who is in the Senate is 0:04:59.440 --> 0:05:02.880 critical for who is on the Supreme Court, for example, 0:05:02.960 --> 0:05:04.520 and these kind of decisions make it all the more 0:05:04.520 --> 0:05:06.799 important on who's going to be sitting in the White House. 0:05:07.120 --> 0:05:10.520 The expectation game is key. How have President Trump and 0:05:10.640 --> 0:05:15.440 President Biden set the expectations going into tonight at nine pm? 0:05:16.160 --> 0:05:19.320 So I think every candidate it goes into a presidential debate, 0:05:19.360 --> 0:05:21.240 going back to the last fifteen years, always tries to 0:05:21.360 --> 0:05:24.880 underperform or at least announce in advance that they're going to, 0:05:25.040 --> 0:05:28.360 you know, keep expectations low, because then if they perform well, 0:05:28.400 --> 0:05:30.920 then it just seems that much greater. But there's really 0:05:30.920 --> 0:05:33.560 two things that we are telling our investors or clients 0:05:33.600 --> 0:05:36.080 to look at to is. The first is just the 0:05:36.080 --> 0:05:38.880 fear of the headline risk. You know, assuming that there 0:05:38.880 --> 0:05:42.280 are policy debates tonight. At the debate, you know, if 0:05:42.320 --> 0:05:44.359 you see something like President Trump double down on his 0:05:44.440 --> 0:05:47.039 statement of a sixty percent tariff on all goods coming 0:05:47.040 --> 0:05:49.559 from China, well that's already been baked into the market, 0:05:49.560 --> 0:05:52.960 But anticipate a headline risk tomorrow. The other thing is 0:05:52.960 --> 0:05:55.520 is that any statement from either President by nor President 0:05:55.560 --> 0:05:57.880 Trump is saying I'm going to do this or I'm 0:05:57.880 --> 0:06:00.440 going to do that, always just remember to put how 0:06:00.520 --> 0:06:02.080 is this going to get through Washington? 0:06:02.160 --> 0:06:02.520 Had on? 0:06:02.839 --> 0:06:06.039 Is it going to be executive order, regulation, legislation? And 0:06:06.120 --> 0:06:09.279 a lot of times that statement just doesn't actually equate 0:06:09.360 --> 0:06:12.000 to the reality of the situation where they can say 0:06:12.040 --> 0:06:14.839 lots of things, but depending on how the Congress plays 0:06:14.880 --> 0:06:17.760 out and how the regulators play out, ultimately the impact 0:06:17.800 --> 0:06:18.679 could be much less. 0:06:19.640 --> 0:06:22.719 What do you think investors should focus on the most 0:06:22.839 --> 0:06:25.320 in this debate here? Policy wise? 0:06:26.120 --> 0:06:28.760 So there's two things. The first is the geopolitical aspect, 0:06:28.880 --> 0:06:31.440 because the power of the presidency is a lot more 0:06:31.520 --> 0:06:35.320 powerful when it comes to geopolitical, national security, and trade. 0:06:35.480 --> 0:06:39.279 So any statement from President Trump or President Biden on Ukraine, Taiwan, 0:06:39.600 --> 0:06:42.040 tariffs and so forth like that certainly should be paid 0:06:42.040 --> 0:06:43.840 attention to and then put in the back of your 0:06:43.839 --> 0:06:46.120 brain as we get closer to the election, because more 0:06:46.160 --> 0:06:49.480 statements will come. The other is tax related because the 0:06:50.000 --> 0:06:53.159 Trump era at tax cuts from twenty seventeen expire for 0:06:53.240 --> 0:06:56.000 individuals at the end of twenty twenty five. So no 0:06:56.040 --> 0:06:58.720 matter who wins as president, the House in Waste Means 0:06:58.720 --> 0:07:00.960 Committee and the presidency is going to be focused on 0:07:01.080 --> 0:07:03.359 tax next year. Now it's going to be individual and 0:07:03.400 --> 0:07:05.840 I think for most individuals their tax rate is not 0:07:05.880 --> 0:07:08.760 going to go up. But if you are exposed to evs, 0:07:08.920 --> 0:07:11.480 like if you have investments in Rivian or Tesla for example, 0:07:11.680 --> 0:07:14.000 that could come up under a Trump presidency. High net 0:07:14.000 --> 0:07:16.840 worth individuals could see higher taxes under a Biden presidency. 0:07:17.000 --> 0:07:18.800 So next year is definitely going to be about tax 0:07:18.840 --> 0:07:20.280 and somebody to pay attention to tonight. 0:07:20.640 --> 0:07:23.880 Which is so interesting because a lot of the argument 0:07:23.960 --> 0:07:25.560 is like, oh, well, what they say on that campaign 0:07:25.640 --> 0:07:27.920 trail is not going to actually materialize, or it'll be 0:07:27.960 --> 0:07:31.000 sort of you know, muted or won't actually wind up happening, 0:07:31.040 --> 0:07:34.120 which makes it so hard for investors to understand how 0:07:34.160 --> 0:07:38.040 to price any of this. What's your best recommendation here? 0:07:38.920 --> 0:07:41.400 So I view it as just an incremental step. So 0:07:41.480 --> 0:07:43.600 if you think of like the you know, if you 0:07:43.640 --> 0:07:45.920 think that President Trump or President Biden comes out at 0:07:45.920 --> 0:07:48.160 a high level and says like I want to do this, 0:07:48.480 --> 0:07:51.560 but over time, expectations lower, and so forth, you'll get 0:07:51.560 --> 0:07:54.320 additional information as they go through the campaign trail. Look, 0:07:54.520 --> 0:07:57.280 tonight's that Maate is not going to set the stone 0:07:57.280 --> 0:08:00.640 in anything in terms of policy. But statement tonight, plus 0:08:00.680 --> 0:08:02.920 a statement tomorrow, plus a statement at the next debate, 0:08:03.120 --> 0:08:05.480 so forth, you'll begin to get a better picture of 0:08:05.520 --> 0:08:08.160 what ultimately could happen. So I'm not gonna say that 0:08:08.200 --> 0:08:10.240 you know you're gonna see massive headlines tomorrow saying the 0:08:10.280 --> 0:08:12.760 markets are moving based off of this. But you know, 0:08:12.840 --> 0:08:14.520 we've told a lot of our clients. If you have 0:08:14.640 --> 0:08:17.000 an associate that wants to stay up late tonight, have 0:08:17.080 --> 0:08:19.360 the association to take a look at it, watch this, 0:08:19.440 --> 0:08:20.760 and then send you a report in the morning. 0:08:21.360 --> 0:08:23.679 All right, I'll get you can send me my report. 0:08:23.680 --> 0:08:25.840 You've got my email address because I'm not understating I'm 0:08:26.120 --> 0:08:28.760 watching this. I don't think the Yankees are on anyway. 0:08:28.920 --> 0:08:31.600 Nathan Dean off tomorrow, you technically can. 0:08:31.800 --> 0:08:33.959 You're right, You're hey, thank you for pointing that I 0:08:33.960 --> 0:08:35.760 want not have to get up at four twenty. Okay, 0:08:35.840 --> 0:08:39.000 very good, Nathan Dean Senior Polo Sanos for Bloomberg Intelligence. 0:08:39.040 --> 0:08:41.959 He's down there in DC for better or worse. That's 0:08:41.960 --> 0:08:44.520 where he's located here. So are you gonna watch the 0:08:44.520 --> 0:08:45.079 debate tonight? 0:08:46.600 --> 0:08:46.840 Yes? 0:08:46.920 --> 0:08:49.800 No, I mean like I don't want to, but like 0:08:49.840 --> 0:08:51.720 I want to, and I feel like I have to. 0:08:51.920 --> 0:08:54.680 Although you know, with the ground rules, no audience, no 0:08:55.000 --> 0:08:56.840 the moot and MIC's, it's not gonna be as much 0:08:56.920 --> 0:08:59.480 drama as it could be, which is why I think 0:08:59.480 --> 0:09:01.719 some people watch it just for the drama. 0:09:01.400 --> 0:09:04.720 Maybe, But I am actually interested, you know, if any 0:09:04.800 --> 0:09:08.079 kind of policy is actually discussed, like if it's gonna 0:09:08.080 --> 0:09:09.040 be barbs thrown back and. 0:09:09.000 --> 0:09:10.800 Forth, I can tell you who the loser is going 0:09:10.880 --> 0:09:13.440 to be intelligent, discourse. 0:09:13.040 --> 0:09:16.800 Intelligent, but like, but you know, I don't know. Yes, 0:09:16.880 --> 0:09:19.400 I'll probably turn it on, okay until we have family 0:09:19.440 --> 0:09:20.040 reading time. 0:09:19.920 --> 0:09:20.800 At around nine thirty. 0:09:20.840 --> 0:09:21.520 Definitely reading. 0:09:21.679 --> 0:09:23.360 I'll give it half an hour. I'll give it half 0:09:23.360 --> 0:09:25.600 an hour, and then we'll circle back before that family reading. 0:09:27.160 --> 0:09:31.040 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:09:31.120 --> 0:09:34.680 weekdays at ten am Eastern on applecar Play and Android 0:09:34.679 --> 0:09:37.839 Auto with the Bloomberg Business. You can also listen live 0:09:37.960 --> 0:09:41.120 on Amazon Alexa from our flagship New York station, Just 0:09:41.200 --> 0:09:46.000 Say Alexa play Bloomberg eleven thirty. 0:09:45.520 --> 0:09:47.800 Alex Deal Paul Sweeney live here in our Bloomberg Interactive 0:09:47.800 --> 0:09:50.320 Brokers studio, or streaming live on YouTube as well. 0:09:50.400 --> 0:09:51.560 So heent over to YouTube dot. 0:09:51.440 --> 0:09:54.800 Com and search Bloomberg Podcast. I'll get a new guy 0:09:55.320 --> 0:09:57.520 in here today, a new guy. We'll see how he does. 0:09:57.600 --> 0:09:59.960 Jake Silverman, Jordans, Sorry, Jake, it's going to be fine. 0:10:01.040 --> 0:10:03.320 It was an analyst Bloomberg Intelligence. I did not hire them, 0:10:03.320 --> 0:10:06.040 so I can't vouch for him. Hire everybody else. He 0:10:06.080 --> 0:10:08.319 comes to the technology Stace. We got a great, great 0:10:08.360 --> 0:10:11.640 technology team all around the world. Everywhere you need tech 0:10:11.679 --> 0:10:14.160 people to be Silicon Valley, Asia, New York, we got 0:10:14.200 --> 0:10:18.880 them as well. Micron Technologies, the largest US maker of 0:10:19.040 --> 0:10:22.400 computer memory chips is John Talker's just reporting dropped after 0:10:22.600 --> 0:10:24.760 it's forecast disappointed investors. 0:10:25.080 --> 0:10:27.040 Uh so we got an issue there about this chip maker. 0:10:27.240 --> 0:10:29.160 Jake, thanks so much for joining us here in studio. 0:10:29.880 --> 0:10:32.440 Give us the Micron technology story. How were their earnings? 0:10:32.559 --> 0:10:33.840 Why is this TOC trading word is? 0:10:34.000 --> 0:10:35.960 Yeah, thanks so much for having me on. Yeah. So 0:10:36.920 --> 0:10:40.360 three Q was a beat, but the stocks up. 0:10:40.280 --> 0:10:43.000 Over sixty percent or prior to earnings, was up over 0:10:43.040 --> 0:10:45.520 sixty percent a year today. So coming into the quarter, 0:10:45.640 --> 0:10:50.440 expectations were fairly high. And so when we've seen a 0:10:50.480 --> 0:10:54.880 beaten raise beaten rays. As pricing has improved, supply has 0:10:54.920 --> 0:10:58.600 been pretty tight intentionally by all of the memory suppliers 0:10:58.840 --> 0:11:01.920 over the last year or so because there was a 0:11:01.960 --> 0:11:05.319 severe demand reduction back in twenty twenty three, and now 0:11:05.320 --> 0:11:09.280 as we're looking into twenty twenty four, supply is tight, 0:11:09.520 --> 0:11:13.439 demand has stabilized now is beginning to recover quarter to quarter. 0:11:13.840 --> 0:11:18.520 So investors, the market was really expecting another beaten Rays. 0:11:18.600 --> 0:11:22.120 I think coming into three Q with the outlook being 0:11:22.160 --> 0:11:25.120 related to four Q so being a sort of inline 0:11:25.120 --> 0:11:28.120 guide at least on revenue, I think was pretty disappointing. 0:11:28.160 --> 0:11:30.600 And you also have the AI aspect, which I think 0:11:30.679 --> 0:11:33.520 adds to a little bit of that multiple expansion that 0:11:33.559 --> 0:11:35.440 we're seeing, and so I think that that plays a 0:11:35.440 --> 0:11:36.840 part into those expectations. 0:11:36.880 --> 0:11:39.240 So well, if we just separate for a second, if 0:11:39.280 --> 0:11:42.160 we can, like you have the AI growth story, which 0:11:42.320 --> 0:11:45.280 still was delivering on all cylinders from Micron, and then 0:11:45.280 --> 0:11:47.640 there's the actual boring stuff like the things that go 0:11:47.679 --> 0:11:50.479 into your phone and your computer and things like that. 0:11:50.480 --> 0:11:55.439 That market has been has troughed. But the pickup is 0:11:55.520 --> 0:11:57.960 when the question is do we learn anything about when 0:11:57.960 --> 0:11:59.960 we might see a real recovery in that, because my 0:12:00.080 --> 0:12:01.120 front still needs. 0:12:00.920 --> 0:12:01.480 That, right. 0:12:01.640 --> 0:12:03.880 Yeah, So that was actually what was more important about 0:12:03.960 --> 0:12:07.680 the tight supply story from twenty twenty three up until 0:12:07.720 --> 0:12:09.680 now and then continuing through the rest of this year 0:12:09.679 --> 0:12:11.960 and probably in the next year as well. The AI 0:12:12.040 --> 0:12:14.959 part of the story was pretty nascent up until more recently, 0:12:14.960 --> 0:12:17.640 and we're still only now starting to see AI revenue 0:12:17.679 --> 0:12:21.960 actually inflect high bandwidth memory revenue for HBM THREEE, their 0:12:22.000 --> 0:12:25.160 product that's being sold into in Nvidia's H two hundred GPU, 0:12:25.520 --> 0:12:27.679 that's only that was only about a little more than 0:12:28.200 --> 0:12:32.559 one hundred million this quarter, So there's other AI products 0:12:32.559 --> 0:12:35.120 as well, but yeah, we're starting to see demand. I 0:12:35.160 --> 0:12:40.440 think stabilizing for smartphones, PCs, traditional servers, and we're expecting 0:12:40.480 --> 0:12:43.199 some growth throughout the rest of this year, primarily on 0:12:43.240 --> 0:12:46.280 the back of seasonal demand. So yeah, I think that 0:12:46.320 --> 0:12:48.920 those are definitely areas that investors are certainly going to 0:12:48.920 --> 0:12:53.200 be looking for, and if that demand doesn't necessarily materialize, 0:12:53.240 --> 0:12:55.640 then the pricing might not increase at the magnitude at 0:12:55.640 --> 0:12:58.800 which the market is expecting, which would impact revenue and 0:12:58.800 --> 0:12:59.880 margin growth throughout the rest. 0:13:00.440 --> 0:13:02.319 I don't know a lot about the semiconductor business, and 0:13:02.360 --> 0:13:03.760 I want to keep it that way, But what I 0:13:03.840 --> 0:13:06.199 do know is it's a cyclical business. You got to 0:13:06.240 --> 0:13:07.400 get those cycles right. 0:13:07.760 --> 0:13:10.160 Does AI change the cyclicality? Do you think? 0:13:10.480 --> 0:13:12.480 Do we know enough to say that maybe it don't 0:13:12.480 --> 0:13:14.280 make it less cyclical or maybe more so. 0:13:15.240 --> 0:13:18.160 Yeah, it's a very good question. It's difficult to say 0:13:18.240 --> 0:13:21.319 right now. I think because this AI build out for 0:13:21.440 --> 0:13:24.760 AI infrastructure, it's so early, so we don't really know 0:13:24.800 --> 0:13:27.120 what that cycle will look like. But this is certainly 0:13:27.120 --> 0:13:31.160 a secular driver in the near term. AI infrastructure buildouts 0:13:31.160 --> 0:13:35.120 from the hyperscalers are continuing. There's potentially some upward bias 0:13:35.160 --> 0:13:37.920 to those estimates and those expenditures this year, and so 0:13:37.960 --> 0:13:41.040 as long as that continues, that should have like a 0:13:41.160 --> 0:13:45.880 multifold impact on Micron because there's another aspect, which is, 0:13:45.920 --> 0:13:48.360 first of all, there's a couple aspects. First of all, 0:13:48.559 --> 0:13:52.240 HBM is margin acreative, and some of those other products 0:13:52.240 --> 0:13:54.640 that are related to AI are also margin acreative, so 0:13:54.880 --> 0:13:58.880 talking about high capacity DRAM module, solid state drives, but 0:13:59.120 --> 0:14:04.000 HBM more so. But also HBM takes up additional wafer capacity. 0:14:03.640 --> 0:14:06.000 High band with memory, yes. 0:14:05.360 --> 0:14:09.920 High bandwid memory, sorry HBM, but that also takes up 0:14:10.040 --> 0:14:10.439 way it. 0:14:10.360 --> 0:14:12.080 Took me like ten minutes. That will remember that, so 0:14:12.320 --> 0:14:13.600 you don't want to say nice, yes. 0:14:13.480 --> 0:14:16.760 Sorry, I go in and out of h memory. 0:14:16.800 --> 0:14:17.400 No, thank you. 0:14:18.480 --> 0:14:21.960 So but also it takes up additional wafer capacity for 0:14:23.080 --> 0:14:26.960 high bandwidth memory, so about three times as much. So 0:14:27.000 --> 0:14:30.960 that actually, as you shift capacity away from standard memory 0:14:31.000 --> 0:14:34.560 towards HBM, that has a specific impact on the actual 0:14:34.600 --> 0:14:38.480 supply allocation. So as that demand continues to increase, that 0:14:38.560 --> 0:14:42.440 actually takes supply away from traditional markets as well. So 0:14:42.840 --> 0:14:45.360 ultimately you have a two fold impact where you have 0:14:45.480 --> 0:14:49.760 margin expansion, but you also have pricing probably increasing even 0:14:49.800 --> 0:14:53.520 if demand is somewhat stable because the supply comes offline 0:14:53.880 --> 0:14:57.960 from traditional end markets and goes towards AI well. 0:14:58.000 --> 0:15:01.400 Also to the cyclical point too. As long as AI 0:15:01.520 --> 0:15:04.600 chips keep getting better and better with each iteration, doesn't 0:15:04.640 --> 0:15:07.440 that take away some of the near term cyclicality, Like 0:15:07.800 --> 0:15:10.280 because by the time you get your old chip, then 0:15:10.280 --> 0:15:12.080 the new chip is like that much more awesome, so 0:15:12.200 --> 0:15:14.000 you have to go buy it, and at some point 0:15:14.080 --> 0:15:14.880 that runs out. 0:15:15.320 --> 0:15:18.720 So I just yeah, it's difficult to determine actually what 0:15:18.800 --> 0:15:21.320 the magnitude of the cyclicality will be up or down. 0:15:21.520 --> 0:15:23.600 I think what this is really going to do right now, 0:15:23.640 --> 0:15:25.960 at least in the near term, will extend the current 0:15:26.080 --> 0:15:29.960 up cycle. So the peak is difficult to determine when 0:15:30.000 --> 0:15:32.240 that will happen. I mean, you can always guess. I 0:15:32.240 --> 0:15:34.680 don't think people are very accurate at guessing peaks and 0:15:34.720 --> 0:15:38.480 troughs at least multiple quarters out. But you know, in 0:15:38.520 --> 0:15:42.080 this case, as long as there's those secular demand drivers, 0:15:42.880 --> 0:15:45.320 we think the cycle can continue its upward trajectory. 0:15:45.840 --> 0:15:48.200 Jake, great stuff. Yeah, we can bring him back right. 0:15:48.240 --> 0:15:49.040 Oh yeah, he was great. 0:15:49.080 --> 0:15:49.640 He was really good. 0:15:49.680 --> 0:15:49.840 Yeah. 0:15:49.960 --> 0:15:54.240 Yeah, another tech voice, which we desperately need because we can't. 0:15:54.160 --> 0:15:55.880 Keep going back from man deep at on a rock. 0:15:56.200 --> 0:15:58.680 I mean, you know, boring, they have other jobs. 0:15:58.960 --> 0:16:01.520 Thank you so much, all right, Jake Silverman semi conduct around. 0:16:01.520 --> 0:16:03.880 Also Bloomberg Intelligence joining us here on our Bloomberg Interactive 0:16:03.880 --> 0:16:06.000 brokers to you talking about the chip business. 0:16:07.520 --> 0:16:11.400 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:16:11.480 --> 0:16:14.560 weekdays at ten am Eastern on Affo, Cardplay and Android 0:16:14.560 --> 0:16:17.680 Auto with the Bloomberg Business App. Listen on demand wherever 0:16:17.720 --> 0:16:21.560 you get your podcasts, or watch us live on YouTube. 0:16:22.400 --> 0:16:24.520 Are joining us sound Kate Richards, founder and CEO of 0:16:24.600 --> 0:16:28.240 Warwick Investment Group. So, Warwick Investment is the largest PE 0:16:28.360 --> 0:16:30.080 firm in the US that's founded and led by a 0:16:30.080 --> 0:16:33.440 woman founder and it focuses on real assets like natural 0:16:33.480 --> 0:16:36.440 resources in real estate. I've known Kate for a long while, 0:16:36.480 --> 0:16:38.240 it feels, but I haven't seen you in forever in 0:16:38.240 --> 0:16:38.600 a day. 0:16:39.720 --> 0:16:41.800 How are you great? Thanks for having me. 0:16:41.880 --> 0:16:43.440 I think that the fact that I haven't seen you 0:16:43.600 --> 0:16:46.400 is probably sort of reflective of what most people haven't seen, 0:16:46.440 --> 0:16:49.120 which is commodities in their portfolio over the past decade. 0:16:49.240 --> 0:16:50.720 Oh way to turn that in. 0:16:50.800 --> 0:16:51.440 I like this. 0:16:52.400 --> 0:16:55.280 So what we're seeing in the trend is a people 0:16:55.320 --> 0:16:58.400 want to own commodities in their portfolio, but like not 0:16:58.480 --> 0:17:00.560 all commodities, but be very specific. But we almos seen 0:17:00.560 --> 0:17:02.640 a ton of m and a big guys with the 0:17:02.680 --> 0:17:05.000 medium guys, medium guys, with medium guys, small guys and 0:17:05.000 --> 0:17:08.159 small guys. How do you think this winds up playing out? 0:17:08.240 --> 0:17:09.679 And what are the opportunities set for you? 0:17:10.119 --> 0:17:10.840 I think two things. 0:17:10.840 --> 0:17:13.399 So number one, we're probably at the beginning of a 0:17:13.440 --> 0:17:16.520 new commodity price super cycle. And the first one was 0:17:16.560 --> 0:17:20.760 two thousand to twenty fifteen driven by urbanization and industrialization 0:17:20.840 --> 0:17:21.280 in China. 0:17:21.560 --> 0:17:23.320 This one's driven by the energy transition. 0:17:23.840 --> 0:17:27.359 And what's ironic is that it's obviously increasing demand for 0:17:27.400 --> 0:17:32.040 battery metals like nickel, lithium, copper, maybe cobalt. And secondly 0:17:32.080 --> 0:17:35.920 that it's actually increasing demand for hydrocarbons because the energy 0:17:35.920 --> 0:17:38.680 transition is hydro carbon intensive. And if you need any 0:17:38.680 --> 0:17:40.280 evidence of that, you can look at what happened with 0:17:40.400 --> 0:17:43.000 China last year, the largest ev market in the world, 0:17:43.200 --> 0:17:46.520 where hydrocarbon demand actually went up. And so the cautionary 0:17:46.520 --> 0:17:49.760 tale is looking at gasoline demand trends, which in China 0:17:49.800 --> 0:17:53.080 went down last year, and equating that to price trajectory 0:17:53.080 --> 0:17:56.200 for oil or demand for oil, So I think that's 0:17:56.240 --> 0:17:59.200 really something that's important. It's a subtlety, but whatever's happening 0:17:59.200 --> 0:18:02.160 with EV's and what what ever's happening with gasoline trends? 0:18:02.200 --> 0:18:04.760 Because of v adoption, you can't relate to the price 0:18:04.760 --> 0:18:09.800 of oil or demand for oil. But even that being said, 0:18:09.840 --> 0:18:12.600 oil and gasoline where at all time highs in terms 0:18:12.640 --> 0:18:13.560 of demand last year. 0:18:13.760 --> 0:18:16.760 Well, Alex as you know, is the energy expert, I 0:18:16.800 --> 0:18:17.080 am not. 0:18:18.600 --> 0:18:21.480 What's your view of this energy transition because it seems 0:18:21.520 --> 0:18:23.680 like just if I just think about evs to kind 0:18:23.680 --> 0:18:25.439 of take it a tick down a little bit over 0:18:25.440 --> 0:18:26.520 the last couple of years. 0:18:26.560 --> 0:18:27.399 How do you guys view that? 0:18:27.720 --> 0:18:30.520 Well, I think that you know, we deal in communities 0:18:30.520 --> 0:18:32.720 that don't want to talk about energy transition at all, 0:18:33.000 --> 0:18:34.480 and then on the mining side of our life, we 0:18:34.480 --> 0:18:37.479 deal in communities that will not talk about hydrocarbons as 0:18:37.520 --> 0:18:40.920 an ongoing source of energy in the world, and both 0:18:40.960 --> 0:18:42.160 of those are unrealistic. 0:18:42.640 --> 0:18:46.120 We talk about energy as kaleidoscopic, and. 0:18:46.080 --> 0:18:49.359 You will have certain jurisdictions like the East Coast, the 0:18:49.359 --> 0:18:51.920 West coast of the US, the OECD, certainly Europe that 0:18:51.960 --> 0:18:54.520 will skew more renewable in terms of power and more 0:18:54.560 --> 0:18:57.359