WEBVTT - Week Ahead: Cisco, McDonalds, T-Mobile 

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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 1>Let's take a look now, add some stocks making news

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<v Speaker 1>in the week ahead. I'm Nathan Hager, joined by Bailey Lipschultz,

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<v Speaker 1>senior equities reporter for Bloomberg News. And Bailey, it looks

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<v Speaker 1>like Wednesday is going to be a particularly busy day

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<v Speaker 1>on the earnings. We got several big names reporting in

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<v Speaker 1>the middle of the week. So let's start with Cisco.

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<v Speaker 1>The tech earnings aren't quite done with us yet.

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<v Speaker 3>Huh Now, not done with us yet, and we're pivoting

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<v Speaker 3>to some of those I don't know, actual companies that

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<v Speaker 3>make real tangible goods that you can hold, and Cisco's

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<v Speaker 3>going to be a big one given the stocks up

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<v Speaker 3>more than thirty percent over the last year and a

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<v Speaker 3>lot of expectations are a big focus on can they

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<v Speaker 3>maintain the momentum that we've been seeing given the jitters,

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<v Speaker 3>probably speaking around software AI and kind of the broader

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<v Speaker 3>sell off.

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<v Speaker 1>Yeah, we've seen this sub mat of sell off, particularly

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<v Speaker 1>and software stocks after the anthropic AI agent was announced

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<v Speaker 1>so how could that potentially affect the results we see

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<v Speaker 1>from Cisco particularly well.

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<v Speaker 3>I think the big question comes back to what is

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<v Speaker 3>management guide towards for the remainder of twenty twenty six

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<v Speaker 3>And everyone seemingly is marking down their software expectations. But

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<v Speaker 3>is a company like Cisco that makes the hardware and

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<v Speaker 3>is able to at least benefit from a huge push

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<v Speaker 3>of AI investments. The question will be is there actually capacity?

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<v Speaker 3>Is their capacity constraight and are we going to hit

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<v Speaker 3>a point where maybe some of these companies, the likes

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<v Speaker 3>of Meta and Google, who seemingly are not slowing down

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<v Speaker 3>on their investment, are we going to see that potentially

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<v Speaker 3>hidden inflection point or a peak and that'll be critical

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<v Speaker 3>for investors. But again, this is a stock that has

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<v Speaker 3>continued to rally over the last few days and weeks,

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<v Speaker 3>as opposed to, as we mentioned, the big sell off

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<v Speaker 3>that we've seen for anything that could lose out to

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<v Speaker 3>AI making their kind of software relevant.

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<v Speaker 1>Along with big Tech, we're waiting for earnings from Big Max.

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<v Speaker 1>What do we expect from McDonald's this week, Bailey, There's

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<v Speaker 1>a lot.

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<v Speaker 3>Of optimism about how how McDonald's is positioning benefiting from

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<v Speaker 3>tax rebates for the lower end consumer, benefiting potentially from

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<v Speaker 3>your upper and middle class down shifting some of their spending.

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<v Speaker 3>This is a company that, if you look at the

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<v Speaker 3>chart on a twelve month basis, looks a bit like

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<v Speaker 3>an EKG. But right now it's going to close at

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<v Speaker 3>another record high. So this is a lot of excitement

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<v Speaker 3>around their new offerings. It does seem like when you

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<v Speaker 3>talk to analysts or look through some of the notes,

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<v Speaker 3>this is one of the companies that could benefit as

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<v Speaker 3>a fast food operator, not only here in the US,

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<v Speaker 3>but globally speaking. So again, does it turn into to

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<v Speaker 3>your point of price perfection example remains to be seen,

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<v Speaker 3>but a lot of excitement.

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<v Speaker 1>So there are a lot of questions that aren't there

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<v Speaker 1>about whether the pivot, the return of the extra value

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<v Speaker 1>meal is going to eat into McDonald's margins potentially.

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<v Speaker 3>Well that's the question when you look at a company

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<v Speaker 3>like McDonald's, or you kind of look broadly speaking at

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<v Speaker 3>some of these companies who are needing to rethink their playbook,

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<v Speaker 3>does that impact margins and are investors willing to underwrite

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<v Speaker 3>maybe more narrow margins for actually a return to growth.

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<v Speaker 3>They're seemingly a bigger kind of beat on the top line.

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<v Speaker 3>But the questions do come back to your point. If

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<v Speaker 3>you're using better deals or trying to get people in

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<v Speaker 3>the door, and you're competing with other peers who are

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<v Speaker 3>catering towards people who don't want to spend up to

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<v Speaker 3>eat out or eat fast food, how does that ultimately

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<v Speaker 3>impact the bottom line. But it does seem like again,

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<v Speaker 3>at least the cell side is very optimistic, and I

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<v Speaker 3>do want to call out the fact that if investors

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<v Speaker 3>are rotating away from fast growing tech stocks, McDonald's is

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<v Speaker 3>not a bad place to park your money. And we've

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<v Speaker 3>been seeing that play out over the last few weeks.

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<v Speaker 1>And along with McDonald's and Cisco Systems, we're going to

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<v Speaker 1>get earnings as well from Tea Mobile on Wednesday. I

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<v Speaker 1>think we had some recent beats, didn't we from Verizon

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<v Speaker 1>and AT and T. Where does that leave the country's

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<v Speaker 1>most valuable cell phone provider.

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<v Speaker 3>It's kind of stuck in a rut. If you look

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<v Speaker 3>at the stock price right now on Team Mobile, really

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<v Speaker 3>move in sideways. Yes, it did rally from a low

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<v Speaker 3>at the end towards the end of January of one

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<v Speaker 3>hundred and eighty three dollars. But when you compare or

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<v Speaker 3>overlay their charts against AT and T to your point

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<v Speaker 3>or Verizon, those stocks look like rocket ships. Verizon over

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<v Speaker 3>the last week went from thirty about forty dollars a

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<v Speaker 3>share to forty seven dollars a share. On the flip side,

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<v Speaker 3>AT and T is up pretty sharply after rallying after

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<v Speaker 3>its results, So it does seem like investors maybe are

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<v Speaker 3>baking in some optimism. There was a bit of a lift,

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<v Speaker 3>which we typically do see with mobile or spectrum providers.

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<v Speaker 3>We do see with airlines when one company beats, people

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<v Speaker 3>get a bit more optimistic. But if we're looking at

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<v Speaker 3>a T Mobile stock that on the last twelve months

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<v Speaker 3>is down, it doesn't seem like investors are maybe giving

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<v Speaker 3>them the credit to benefit again from the optimism and

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<v Speaker 3>from what all intents and purposes, kind of looks like

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<v Speaker 3>a little bit like a rocket ship as much as

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<v Speaker 3>it could for a communication company. What we saw for

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<v Speaker 3>Verizon again rallying twelve percent last week after their results.

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<v Speaker 1>So what are the potential big growth drivers for T

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<v Speaker 1>Mobile in this quarter?

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<v Speaker 3>Well, the big focus is going to be on how

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<v Speaker 3>are they competing with AT and T With Verizon, can

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<v Speaker 3>they continue to compete on price. We all see the

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<v Speaker 3>Verizon ads about how if you can swap and they

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<v Speaker 3>can beat your price for a mobile provider. The big

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<v Speaker 3>other question is are they going to benefit potentially from

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<v Speaker 3>what we've seen play out with SpaceX's starlink direct to

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<v Speaker 3>consumer potentially from Starlink. The big question also is when

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<v Speaker 3>you look at these companies in their propensity to return capital,

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<v Speaker 3>whether that's buybax, whether that's through dividends, managements. Commentary around

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<v Speaker 3>that I think also will be closely watched.

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<v Speaker 2>The Stock Movers Report from Bloomberg Radio. Check back with

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