WEBVTT - Metsera Tumbles After Novo Pulls Out of Bidding War With Pfizer 

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

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<v Speaker 2>Looking at the news, Met Sarah shares tumbled after Noboode

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<v Speaker 2>nord Dick's declined to further raise its offer for the

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<v Speaker 2>US maker of an experimental weight loss drug, bringing a

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<v Speaker 2>bidding war with Pfizer to an end.

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<v Speaker 3>I like the good bidding war. Being a former.

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<v Speaker 2>Banker, Sam Fazzelli joins US here director of research for

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<v Speaker 2>Global Industries. He covers all the healthcare stuff for Bloomberg Intelligence.

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<v Speaker 3>He's based in London.

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<v Speaker 2>So how good is this Met Sarah company? Sam and

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<v Speaker 2>their drug? How good is met Sarah? Because boy, it

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<v Speaker 2>seemed like everybody wanted a piece of it.

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<v Speaker 4>Yeah. So, Paul, before this last week, sorry, I've been

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<v Speaker 4>off and you know what happens to your brain when

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<v Speaker 4>you're off for a few days. Before last week, which

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<v Speaker 4>is called we had the obesity week right where my

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<v Speaker 4>colleague mug Show was at. There was a little bit

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<v Speaker 4>of confusion around how good their data was, how good

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<v Speaker 4>their assets were in the obesity space, and some questions

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<v Speaker 4>about can they really be dosed once a month if

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<v Speaker 4>people wanted to do that. Do we really know what

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<v Speaker 4>the side effect profile is like? Given the way that

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<v Speaker 4>disclosed so far, and of course last week you cleared

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<v Speaker 4>most of it up. The side effect profile is the

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<v Speaker 4>same as most of these GLP wilogy. You get some nausea,

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<v Speaker 4>in some tough cases, you get some vomiting, but those

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<v Speaker 4>are early on and they get out of the way

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<v Speaker 4>if you can withstand them. You seem to get the

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<v Speaker 4>benefit and it seems to work pretty well as a

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<v Speaker 4>once monthly drug, but there's always more wood to be chopped.

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<v Speaker 4>You know what these things are like. So the assets

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<v Speaker 4>look great, they're competitive. Adfiser just stood this ground and

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<v Speaker 4>put the bid up. And of course I think what

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<v Speaker 4>Clinch did was what we'd be going on for ages

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<v Speaker 4>about for the past ten days or twenty days about,

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<v Speaker 4>is that Nova's deal had the risk of not being

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<v Speaker 4>able to pass due to competition competition issue with FTC issues,

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<v Speaker 4>and it sounds like the FTC had had given Metzera

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<v Speaker 4>call saying look, if you go with that there is

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<v Speaker 4>a risk you won't close, so do whatever you think

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<v Speaker 4>is the right thing for your shareholders. And they did

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<v Speaker 4>in the end and find as it did a bit

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<v Speaker 4>spit right.

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<v Speaker 5>So Novo Nordisk one in a way in that Vizer

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<v Speaker 5>is paying up more. Does that actually work in Nova

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<v Speaker 5>Nordisks favor or does it? Is it still as desperate

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<v Speaker 5>as it was before to look for some new catalysts

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<v Speaker 5>in the obesity market.

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<v Speaker 4>I mean, I'm not going to call Novo desperate. I

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<v Speaker 4>think they have assets in there. I think they wanted

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<v Speaker 4>to add some more options to their their sales reps

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<v Speaker 4>bags over time, so I wouldn't call them desperate, but

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<v Speaker 4>they're obviously by going after this, they did say that

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<v Speaker 4>we need more assets in our bang so and Lily

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<v Speaker 4>wasn't in the game. So it just gives them. That

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<v Speaker 4>gives you that flavor that they are and I think

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<v Speaker 4>the market's telling you that. Look at the divergence of

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<v Speaker 4>the share price performance of Lily versus never noticed that

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<v Speaker 4>there's the market favoring the drugs that Lily has got

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<v Speaker 4>on the market today and to compete they needed to

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<v Speaker 4>get some more. So I think this is not the

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<v Speaker 4>end for novo at all in this space. There's lots

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<v Speaker 4>of other interesting obviously assets coming up with different mechanisms.

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<v Speaker 4>That's the thing that I think the company is now

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<v Speaker 4>going to have to think about rather than trying to

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<v Speaker 4>go after the same mechanism all the time.

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<v Speaker 2>So, Sam, all these big, big cap pharmaceutical companies that

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<v Speaker 2>you've covered for decades, I kind of always thought they

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<v Speaker 2>were big diversified portfolios of lots of different drugs and

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<v Speaker 2>therapeutics and you know, but Bay, when I look at

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<v Speaker 2>your stocks this year, it seems like there's halves and

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<v Speaker 2>have nots. If you have obesity exposure, the stocks up,

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<v Speaker 2>and if you don't, they're down. Is that kind of

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<v Speaker 2>how your world's evolved into over the last several years.

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<v Speaker 4>I would just give you one little caveat to the Astrosenicasenica.

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<v Speaker 4>I think it's doing fine. And then they have an

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<v Speaker 4>obesity asset, but it's not their major game. Their big

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<v Speaker 4>plays in oncology cardiovascular is there and they're adding it

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<v Speaker 4>to it. So, yes, obesity the has been the talk

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<v Speaker 4>of this this past twenty twenty five. I think you'll

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<v Speaker 4>still be the talk of twenty twenty six. But there's

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<v Speaker 4>a lot more going on in pharma neuroscience. Diseases of

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<v Speaker 4>the brain, diseases of mental health are getting much more attention.

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<v Speaker 4>Cardiovascular aside from obesity, is getting quite a lot of

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<v Speaker 4>attention in heart to treat hype atension, et cetera. I

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<v Speaker 4>have to tell you, I don't think there's an area,

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<v Speaker 4>perhaps antibiotics set aside, that is not getting a significant

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<v Speaker 4>amount of progress across some farmer company somewhere.

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<v Speaker 5>Is what happened with Metsara, no Nordisk afisor an unabashed

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<v Speaker 5>victory for Eli Lilly. I mean, does it just kind

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<v Speaker 5>of keep on moving forward or does any of this

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<v Speaker 5>kind of hurt Eli Lilly's market position.

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<v Speaker 4>No, I mean, at the end of the day, there'll

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<v Speaker 4>be multiple players in this space as that are now

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<v Speaker 4>too at least, and I think Eli Lily is currently

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<v Speaker 4>very well placed with the assets that they have today

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<v Speaker 4>to compete, and they're showing that they're competing very very

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<v Speaker 4>effectively and in some cases winning market share from Noma,

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<v Speaker 4>not disc.

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<v Speaker 2>Sam got about thirty seconds left. What's that you have

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<v Speaker 2>a little hindsight here, President Trump threatening medical funding at.

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<v Speaker 4>The university level.

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<v Speaker 3>What's the updated there with the status of that.

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<v Speaker 4>Yeah, it seems to be that some universities are getting

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<v Speaker 4>some reprieve from general funding issues, but medical funding is

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<v Speaker 4>something that I keep scratching my head on. I don't

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<v Speaker 4>understand why you would want to cut off funding to

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<v Speaker 4>research and funding to medicine in general, because that is

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<v Speaker 4>a major driver of economic boom in the US. And

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<v Speaker 4>it's not just medicine, it's also stem I don't understand it.

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<v Speaker 3>Stay with us more from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

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<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

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<v Speaker 2>Man Deep Singh just barely made it under the wire

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<v Speaker 2>to get here to talk to us today. Then I

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<v Speaker 2>was going to give him a hard time, but then

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<v Speaker 2>I remember he has like five other jobs. He's like

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<v Speaker 2>senior research channels covering technology. He manages a bunch of people.

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<v Speaker 5>He's also updating the AI tech guide, that that slide

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<v Speaker 5>that you're always talking about.

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<v Speaker 2>You know, all right, we'll cut a break here. Many

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<v Speaker 2>Deep sing joints us here. He's our senior techauist the

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<v Speaker 2>Bloomberg Intelligence managing it's like hurting it.

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<v Speaker 4>You know, a group of cats.

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<v Speaker 2>And you're managing research channels because they, by definition, they

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<v Speaker 2>don't want to be managed. You know, Taiwan semiconductor manufacturing,

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<v Speaker 2>we don't pick attention to this one.

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<v Speaker 3>It's chips and stuff like that. That's not a lot

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<v Speaker 3>of fun.

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<v Speaker 4>But this is interesting.

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<v Speaker 2>They reported some numbers slower growth, and I think for

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<v Speaker 2>those that are concerned about the growth of this AI

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<v Speaker 2>juggernaut that we've all been on over a couple of years,

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<v Speaker 2>you're wondering does slow and growth at Taiwan Semi confector

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<v Speaker 2>mean anything for the industry? Written large, Andy, what do

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<v Speaker 2>you think when you saw the Taiwan Semiconductor numbers.

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<v Speaker 6>I mean, Taiwan Semi is unique because they give you

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<v Speaker 6>monthly numbers. So all of our companies report on a

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<v Speaker 6>quarterly basis. And when I look at Taiwan Semi's quarterly results,

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<v Speaker 6>they had over thirty percent growth. Gave a guide where

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<v Speaker 6>AI would be growing, you know, almost fifty percent plus

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<v Speaker 6>over the next five years. And so if you know

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<v Speaker 6>this deceleration is happening for a reason, you know I

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<v Speaker 6>would attribute it to the diversification of their business, because

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<v Speaker 6>you have to remember Apple is more than twenty percent

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<v Speaker 6>of their revenue and video is close to twenty percent now,

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<v Speaker 6>and then they also have some auto's revenues, some analog business.

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<v Speaker 6>So what is happening right now is everyone is putting

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<v Speaker 6>their dollars in AI capex, but then they have to

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<v Speaker 6>take away spending from elsewhere, and so the non AI

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<v Speaker 6>piece of the hardware spend that seems to be slowing down,

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<v Speaker 6>although we haven't really seen that. Even with PC sales

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<v Speaker 6>things seem to be steady. But that could be one

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<v Speaker 6>reason I can think of in terms of why the

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<v Speaker 6>monthly number was slightly weak, And there could be seasonality

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<v Speaker 6>as well. I mean, this is a monthly number. Could

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<v Speaker 6>happen that the next two months actually are above thirty percent,

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<v Speaker 6>and then the overall quarter may still look solid.

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<v Speaker 5>Very good point. And just to recap the numbers, a

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<v Speaker 5>sixteen point nine percent increase in October sales, which was

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<v Speaker 5>on track with analyst estimates, but that is the slowest

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<v Speaker 5>pace in about eighteen months. Well, I keep reading how

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<v Speaker 5>TSMC is constrained by limited capacity, so if it wanted to,

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<v Speaker 5>it would want to actually have higher sales. It's just

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<v Speaker 5>physically limited.

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<v Speaker 6>Well limited capacity again on the AI side. Okay, so

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<v Speaker 6>you know TSMC does one hundred and twenty billion dollars

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<v Speaker 6>run rate business in a year, so out of that

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<v Speaker 6>AI is still fifteen percent, you know. And so from

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<v Speaker 6>that perspective, not everything that TSMC manufacturers is at the

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<v Speaker 6>cutting edge. And then you can slice it by leading

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<v Speaker 6>versus you know, some of the trailing notes. So from

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<v Speaker 6>that perspective, the utilization is far higher in terms of

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<v Speaker 6>the leading notes versus some of the other notes that

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<v Speaker 6>they manufacture on. And it could happen that, you know,

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<v Speaker 6>because of the lower utilization they're not seeing as much

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<v Speaker 6>customer orders flow in. And look, I mean it's hard

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<v Speaker 6>to say for sure, given you know the book of

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<v Speaker 6>their business and how many customers they have, and for

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<v Speaker 6>some customers, they're still the only game in town. You know.

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<v Speaker 5>So TSMC makes custom chips for companies that order it

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<v Speaker 5>from TSMC. It's a manufacturer overall. We know that all

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<v Speaker 5>these big tech companies in the US are starting to

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<v Speaker 5>turn on their own capabilities of making their own chips.

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<v Speaker 5>Is that competition or is that out of necessity? I mean,

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<v Speaker 5>does that take away market share from TSMC down the road.

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<v Speaker 6>I mean, look, if Intel is successful in terms of

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<v Speaker 6>reviving itself on the manufacturing side, and that's what everyone

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<v Speaker 6>is hoping, you know, with the initiative with the government

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<v Speaker 6>taking a ten percent stake Intel, that the fab side

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<v Speaker 6>really gets a lift in terms of other companies using

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<v Speaker 6>Intel fabs to manufacture chips. That's when you got to

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<v Speaker 6>be worried about TSMC. But for now, there is nothing

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<v Speaker 6>on the horizon where you think and Open Ai or

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<v Speaker 6>any of these chip companies is going to go to

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<v Speaker 6>Intel for manufacturing their chips.

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<v Speaker 2>And TSMC marketcap one point five trillion, stock up fifty

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<v Speaker 2>five zero percent this year.

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<v Speaker 3>Maybe I should pay a little more attention to this one.

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<v Speaker 3>What do you think?

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<v Speaker 2>In a related story in Nvidia, more Bloomberg News reporting

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<v Speaker 2>these people are everywhere in Nvidia, chief executive officer Jensen

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<v Speaker 2>Wang said he had asked Taiwan Semiconductor Manufacturing for more

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<v Speaker 2>chips supplies as artificial intelligence demand remained strong.

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<v Speaker 3>So there you go. I mean, I mean, that's hey,

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<v Speaker 3>is this thing slowing down? Well, not the Gensen Wong.

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<v Speaker 6>The Blackwell ramp up is actually accelerating. And if all

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<v Speaker 6>the hyperscalers are telling you they're raising their capex for

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<v Speaker 6>twenty twenty six and it's going to be another fifty

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<v Speaker 6>percent plus year. They need more TSMC capacity, and Nvidia

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<v Speaker 6>needs more TSMC allocation because TSMC can allocate to anyone

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<v Speaker 6>outside of Nvidia as well. So from that perspective, you

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<v Speaker 6>can see how much Nvidia cares about TSMC capacity.

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<v Speaker 4>Let me ask a dumb question.

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<v Speaker 5>I used to cover Taiwan equities when I worked in

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<v Speaker 5>Hong Kong, and there are two big companies in Taiwan,

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<v Speaker 5>TSMC and UMC United Microelectronics, and it feels like TSMC

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<v Speaker 5>just ran away with it and UMC is kind of

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<v Speaker 5>a shadow of its former self. Is there anyone any

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<v Speaker 5>company with in Taiwan that can really compete or even

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<v Speaker 5>hope to compete against TSMC?

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<v Speaker 6>Not right now, and especially when it comes to leading notes.

0:12:09.080 --> 0:12:12.880
<v Speaker 6>I think that's where our TSMC talking about two nanometer.

0:12:13.240 --> 0:12:15.640
<v Speaker 6>I mean, we have seen why Intel has struggled in

0:12:15.679 --> 0:12:17.960
<v Speaker 6>the last five years because they are not able to

0:12:18.000 --> 0:12:20.760
<v Speaker 6>make the note transitions even though they are a leading

0:12:20.800 --> 0:12:24.360
<v Speaker 6>note manufacturer. So from that perspective, I mean TSMC, it

0:12:24.400 --> 0:12:27.640
<v Speaker 6>feels like they have an unassailable mode, and not just

0:12:27.679 --> 0:12:30.480
<v Speaker 6>in terms of manufacturing, but also their efficiency when it

0:12:30.520 --> 0:12:34.559
<v Speaker 6>comes to using these semicap equipment tools, like they are

0:12:34.679 --> 0:12:37.800
<v Speaker 6>probably the best in terms of the leverage they have

0:12:37.880 --> 0:12:41.000
<v Speaker 6>shown in terms of the useful life of these tools

0:12:41.040 --> 0:12:44.360
<v Speaker 6>that other manufacturing companies haven't been able to show.

0:12:45.000 --> 0:12:47.160
<v Speaker 2>All Right, got about a minute and a half left.

0:12:47.200 --> 0:12:49.080
<v Speaker 2>Instead of me asking a dumb question, why don't I

0:12:49.120 --> 0:12:49.920
<v Speaker 2>just say, Hey.

0:12:49.880 --> 0:12:51.560
<v Speaker 3>What are you and your keem working on? What's the

0:12:51.559 --> 0:12:53.760
<v Speaker 3>next cool thing we need to be we're reading about

0:12:53.800 --> 0:12:54.319
<v Speaker 3>from you guys.

0:12:54.440 --> 0:12:56.840
<v Speaker 6>I mean, we are in the process of updating our

0:12:56.920 --> 0:13:00.920
<v Speaker 6>GENII numbers and they are going up for twenty twenty six.

0:13:00.960 --> 0:13:04.120
<v Speaker 6>And also there's a heavy emphasis on data centers. So

0:13:04.240 --> 0:13:07.120
<v Speaker 6>our next big report our dashboard is going to be

0:13:07.320 --> 0:13:12.000
<v Speaker 6>on data center utilization, data center capacity editions. Everyone is

0:13:12.040 --> 0:13:14.920
<v Speaker 6>talking in terms of gigawatts, so opening I said, they'll

0:13:14.920 --> 0:13:18.240
<v Speaker 6>be adding thirty gigawatts over the next five years. Well,

0:13:18.240 --> 0:13:22.319
<v Speaker 6>we want to track overall gigawats from all these vendors, Microsoft,

0:13:22.520 --> 0:13:23.400
<v Speaker 6>all the Hyperscaler.

0:13:23.480 --> 0:13:24.800
<v Speaker 3>Do we have a utilities analyst?

0:13:25.120 --> 0:13:25.520
<v Speaker 4>We do?

0:13:25.640 --> 0:13:26.400
<v Speaker 2>Who is that?

0:13:26.679 --> 0:13:30.000
<v Speaker 6>Well, I mean it's covered by multiple people. Craw Barnett

0:13:30.080 --> 0:13:30.680
<v Speaker 6>and because.

0:13:30.880 --> 0:13:34.360
<v Speaker 3>Guys, those guys become front center. I mean, do we

0:13:34.400 --> 0:13:36.880
<v Speaker 3>have the grid to power all this stuff?

0:13:37.080 --> 0:13:40.480
<v Speaker 6>I mean everyone has called that power. In fact, right now,

0:13:40.920 --> 0:13:44.440
<v Speaker 6>the consensus is your power is the biggest constraint, even

0:13:44.480 --> 0:13:46.760
<v Speaker 6>more so than the GPUs, which was the case for

0:13:46.800 --> 0:13:47.640
<v Speaker 6>the past three years.

0:13:47.640 --> 0:13:49.400
<v Speaker 5>So it's always going to be something.

0:13:49.400 --> 0:13:52.760
<v Speaker 2>Yeah, all right, And how many analysts aren't covering like

0:13:52.840 --> 0:13:56.199
<v Speaker 2>technology browding defined for BI We're close to twenty people,

0:13:56.520 --> 0:13:59.120
<v Speaker 2>twenty people globally, right, They're not just stuck in New

0:13:59.160 --> 0:14:00.000
<v Speaker 2>York everywhere?

0:14:00.160 --> 0:14:03.360
<v Speaker 4>Right there? You need that stay with us.

0:14:03.520 --> 0:14:05.920
<v Speaker 3>More from Bloomberg Intelligence coming up after this.

0:14:09.800 --> 0:14:13.480
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:14:13.559 --> 0:14:16.679
<v Speaker 1>weekdays at ten am easterne on Apple, Cocklay and Android

0:14:16.679 --> 0:14:20.000
<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

0:14:20.040 --> 0:14:23.160
<v Speaker 1>you get your podcasts, or watch us live on YouTube.

0:14:23.800 --> 0:14:26.400
<v Speaker 5>Let's head over now to company news, because we do

0:14:26.480 --> 0:14:30.520
<v Speaker 5>still have companies reporting earnings, and Tyson is the latest

0:14:31.160 --> 0:14:34.000
<v Speaker 5>to do so. Tyson of course reporting results today and

0:14:34.080 --> 0:14:37.160
<v Speaker 5>it looks like we had a fourth quarter adjusted earnings

0:14:37.160 --> 0:14:40.960
<v Speaker 5>for share Beat. And Jennifer Bartashis is joining us now.

0:14:41.080 --> 0:14:45.520
<v Speaker 5>Jen Covers Senior she's the senior retail staples and packaged

0:14:45.560 --> 0:14:49.240
<v Speaker 5>food analysts for us here at Bloomberg Intelligence, and Jen,

0:14:49.920 --> 0:14:51.920
<v Speaker 5>you know, we think about Tyson, I think about chicken

0:14:52.000 --> 0:14:55.320
<v Speaker 5>right away, and hired demand for chicken certainly was a

0:14:55.440 --> 0:14:59.360
<v Speaker 5>factor that helped fourth quarter results. But beef is going

0:14:59.400 --> 0:15:00.800
<v Speaker 5>to be a problem on the road, isn't it.

0:15:01.680 --> 0:15:05.040
<v Speaker 7>Well, it's an interesting thing because obviously Tyson has been

0:15:05.040 --> 0:15:07.680
<v Speaker 7>doing very well with the chicken business. They've invested in

0:15:07.720 --> 0:15:10.600
<v Speaker 7>the last couple of years and improving their operations and

0:15:10.640 --> 0:15:12.880
<v Speaker 7>we've seen that come through with a better margin, better

0:15:12.960 --> 0:15:17.320
<v Speaker 7>operating usage, and that sort of thing. But when we

0:15:17.360 --> 0:15:20.000
<v Speaker 7>look at the guidance for next year, over half of

0:15:20.040 --> 0:15:22.960
<v Speaker 7>their adjusted operating income is expected to come from chicken.

0:15:23.400 --> 0:15:26.840
<v Speaker 7>And for a diversified protein company, that's putting a lot

0:15:26.840 --> 0:15:28.800
<v Speaker 7>of eggs in one basket, so to speak. And so

0:15:29.840 --> 0:15:33.480
<v Speaker 7>you know it, it's doing well. There's there's a lot

0:15:33.480 --> 0:15:37.240
<v Speaker 7>of momentum behind chicken in general, but Tyson is going

0:15:37.320 --> 0:15:39.520
<v Speaker 7>to be very dependent on the continued success of that

0:15:39.520 --> 0:15:41.840
<v Speaker 7>segment to hit its guidance for next year.

0:15:42.480 --> 0:15:45.720
<v Speaker 2>Talk to us about the cattle herd in this country,

0:15:45.720 --> 0:15:48.720
<v Speaker 2>how does that work here? I mean, prices are so high,

0:15:48.760 --> 0:15:51.160
<v Speaker 2>and I thought, for like a lot of commodities, when

0:15:51.160 --> 0:15:53.920
<v Speaker 2>you see a price, you know, move materially higher, it

0:15:54.000 --> 0:15:55.960
<v Speaker 2>brings on more supply. But I guess it's a little

0:15:55.960 --> 0:15:58.520
<v Speaker 2>different in the cattle business. What's your understanding.

0:15:59.200 --> 0:16:01.360
<v Speaker 7>Yeah, it's a little bit harder in the cattle business.

0:16:01.640 --> 0:16:03.880
<v Speaker 7>You know, you have to remember that raising cattle is

0:16:03.880 --> 0:16:07.520
<v Speaker 7>a it's a capital intensive activity, and so there have

0:16:07.560 --> 0:16:09.680
<v Speaker 7>been a lot of things that have held ranchers back

0:16:09.960 --> 0:16:12.840
<v Speaker 7>from increasing the size of their herds. We've had high

0:16:12.920 --> 0:16:15.880
<v Speaker 7>interest rates because a lot of them have to borrow

0:16:16.120 --> 0:16:19.280
<v Speaker 7>in order to rebuild herds. We've had drought conditions, especially

0:16:19.280 --> 0:16:22.120
<v Speaker 7>in the West and in the South, which make it

0:16:22.160 --> 0:16:25.240
<v Speaker 7>difficult to commit to raising more animals if your land

0:16:25.280 --> 0:16:28.040
<v Speaker 7>can't sustain them. And so those are some of the

0:16:28.160 --> 0:16:30.920
<v Speaker 7>kind of structural impediments that have really held us back

0:16:30.960 --> 0:16:34.200
<v Speaker 7>from what we would typically at this point have expected

0:16:34.240 --> 0:16:37.720
<v Speaker 7>to see some rebuilding of those herds already. You know,

0:16:37.880 --> 0:16:40.360
<v Speaker 7>Tyson says they see a couple of indicators in the

0:16:40.400 --> 0:16:43.960
<v Speaker 7>Northwest and sorry in the Upper Midwest that there's some

0:16:43.960 --> 0:16:48.800
<v Speaker 7>some heifer retention coming that means that cows are not

0:16:48.880 --> 0:16:51.920
<v Speaker 7>being sent to slaughter, but it's not enough to really

0:16:51.960 --> 0:16:54.680
<v Speaker 7>move the needle. So from our estimate, we're not looking

0:16:54.720 --> 0:16:57.600
<v Speaker 7>at a meaningful change in supply until twenty twenty eight,

0:16:58.440 --> 0:17:02.000
<v Speaker 7>So you know, expect high beef pace beef prices to continue.

0:17:02.160 --> 0:17:04.600
<v Speaker 5>Yeah, okay, so not great news if you're a hamburger lover.

0:17:04.640 --> 0:17:07.120
<v Speaker 5>And it's because these consumer beef prices that are at

0:17:07.160 --> 0:17:10.119
<v Speaker 5>record highs is what prompted President Trump to ask the

0:17:10.160 --> 0:17:13.760
<v Speaker 5>DOJ to investigate the meat packing industry. He is blaming

0:17:14.040 --> 0:17:18.280
<v Speaker 5>majority foreign owned companies for driving up these beef prices. Jen,

0:17:18.320 --> 0:17:19.119
<v Speaker 5>how do you think about this?

0:17:19.960 --> 0:17:22.600
<v Speaker 7>Well, you know, when we look at this, I mean,

0:17:23.880 --> 0:17:26.520
<v Speaker 7>this seems like it's more of a political maneuver than

0:17:26.720 --> 0:17:29.960
<v Speaker 7>actually based on anything from a market perspective. At this

0:17:30.119 --> 0:17:32.720
<v Speaker 7>point we will see what the dj comes up with

0:17:32.800 --> 0:17:35.560
<v Speaker 7>and what they actually share, but this seems to be

0:17:35.600 --> 0:17:40.240
<v Speaker 7>looking for a rationalization for high beef prices versus actually

0:17:40.320 --> 0:17:43.159
<v Speaker 7>understanding what the market fundamentals are. And the other thing

0:17:43.200 --> 0:17:45.800
<v Speaker 7>you have to remember is that we import a huge

0:17:45.880 --> 0:17:49.600
<v Speaker 7>amount of beef, especially for ground beef, from Brazil, and

0:17:49.640 --> 0:17:53.200
<v Speaker 7>we have tariffs on that. So part of the part

0:17:53.200 --> 0:17:56.720
<v Speaker 7>of the government's own policy is contributing to the higher

0:17:56.760 --> 0:18:00.600
<v Speaker 7>beef prices, but that's not part of this investing at all.

0:18:01.320 --> 0:18:05.120
<v Speaker 2>All right, So what's next for Tyson is this, I mean,

0:18:05.280 --> 0:18:08.159
<v Speaker 2>are these kind of companies are they how much did

0:18:08.200 --> 0:18:10.040
<v Speaker 2>they have in their control because they don't have control

0:18:10.080 --> 0:18:13.680
<v Speaker 2>of herd sizes and bird flus and things like that,

0:18:13.760 --> 0:18:17.040
<v Speaker 2>whether the weather exactly is how do investors kind of

0:18:17.040 --> 0:18:19.240
<v Speaker 2>invest in a company like Tyson's.

0:18:20.000 --> 0:18:21.919
<v Speaker 7>Yeah, you really have to look at you know, how

0:18:22.200 --> 0:18:25.200
<v Speaker 7>how are they controlling what they can control? And so

0:18:25.440 --> 0:18:29.280
<v Speaker 7>that that comes down to their operations. Are they generating

0:18:29.280 --> 0:18:31.840
<v Speaker 7>the efficiency they need to out of their plants? You know,

0:18:31.960 --> 0:18:34.720
<v Speaker 7>are they operating at capacity? Do they still have excess

0:18:34.760 --> 0:18:38.520
<v Speaker 7>capacity to fill? It really comes down to operational execution

0:18:38.680 --> 0:18:40.600
<v Speaker 7>in this kind of backdrop when there are a lot

0:18:40.600 --> 0:18:45.439
<v Speaker 7>of unknown variables that can impact supply. But ultimately, you know,

0:18:45.640 --> 0:18:48.199
<v Speaker 7>supply at least for chicken does look pretty good. It

0:18:48.200 --> 0:18:52.000
<v Speaker 7>looks pretty solid. So if all things go well, you know,

0:18:52.119 --> 0:18:53.760
<v Speaker 7>Tyson should be in a position to be able to

0:18:53.800 --> 0:18:54.560
<v Speaker 7>hit that guidance.

0:18:54.840 --> 0:18:57.679
<v Speaker 5>Before we let you go, Jen, what does pricing for

0:18:57.720 --> 0:18:59.720
<v Speaker 5>turkeys look like as we get closer to things.

0:18:59.640 --> 0:19:04.320
<v Speaker 7>Getting Yeah, you know, turkey has been hit harder by

0:19:04.440 --> 0:19:10.000
<v Speaker 7>avian flu than chicken. And so if you're talking about

0:19:10.000 --> 0:19:12.520
<v Speaker 7>a frozen turkey, you're gonna be fine. Those turkeys have

0:19:12.600 --> 0:19:15.440
<v Speaker 7>been in frozen storage for quite a while. They'll be

0:19:15.480 --> 0:19:18.120
<v Speaker 7>ready to go. If you're more interested in the fresh bird,

0:19:18.160 --> 0:19:19.919
<v Speaker 7>your price is probably going to be a little bit

0:19:19.960 --> 0:19:21.600
<v Speaker 7>higher this year than it was last year.

0:19:23.040 --> 0:19:27.719
<v Speaker 1>This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,

0:19:27.920 --> 0:19:31.400
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0:19:31.400 --> 0:19:35.200
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0:19:35.280 --> 0:19:38.800
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