Speaker 1: From Mahart where Innovation, Money and power Collie in Silicon
Speaker 1: Vallet NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: Live from New York and San Francisco. This is Bloomberg
Speaker 3: Technology coming up, Big Tech on Deck, Alphabet, AMD, Reddit
Speaker 3: after the bell, will talk you through what to.
Speaker 4: Expect and so Fi just came out with their own earnings.
Speaker 4: This morning, We're gonna speak with the ceo.
Speaker 3: OUs shares of Trump media surge again getting briefly suspended
Speaker 3: amid the volatility. We discussed the election impact across assets,
Speaker 3: but first we check on the markets and I daral
Speaker 3: into what some say is indeed a Trump trade. Bitcoin
Speaker 3: powering ever higher, up another three percent. In fact, we're
Speaker 3: training at the highest since March of this year. What
Speaker 3: happened in March of this year, a record high. We
Speaker 3: clip the seventy four thousand number. Of course, we hit
Speaker 3: just below that back in March of twenty twenty four.
Speaker 3: We're up three percent, and all of this being thought
Speaker 3: of is ultimately risk on many feeling that potentially this
Speaker 3: is a signal of a Trump trade, but also option signaling. Look,
Speaker 3: it's going to eighty thousand in November, no matter what
Speaker 3: the election outcome.
Speaker 5: But and you're looking at the.
Speaker 4: Micro yeah, there's a lot of headlines that's hit in
Speaker 4: the last hour or so. Tesla has seen a lot
Speaker 4: of volatility. Elon Musk, speaking in Saudi Arabia at FII
Speaker 4: and on the Trump trade, he said that actually, if
Speaker 4: Trump gets to office, he's more optimistic his lofty goals
Speaker 4: for SpaceX and Tesla will happen.
Speaker 6: We'll get to that later in the program.
Speaker 4: PayPal gave us guidance for the fourth quarter that missed expectations.
Speaker 4: We will dig into that later in the show. The
Speaker 4: stock on track for its biggest drop since February, and
Speaker 4: big tech in ernest right, I think Alphabet, the parent
Speaker 4: of Google, is the main focus. It's not just the
Speaker 4: big AI name. But if you think about it in
Speaker 4: the stock context, Caro, it's been disappointing.
Speaker 6: For many investors.
Speaker 4: They want signs that all the money being spent on
Speaker 4: AI will translate that growth, particularly in cloud.
Speaker 6: We should probably talk about that.
Speaker 3: We should, and someone's been writing about exactly that, as
Speaker 3: well as all the companies of course that are set
Speaker 3: to report Reddit, AMD SNAP. We think of Google though
Speaker 3: in particular as ed was laying out there, maybe just
Speaker 3: trailing the magnificent seven piers because investors are trying to
Speaker 3: struggle to price in antitrust risks and.
Speaker 5: Many others that confront the company.
Speaker 3: Rand Rastelca is the guy who's been across this and
Speaker 3: that there has been the sideways movement of Alphabet's shares.
Speaker 3: How are people trying to think about any rosiness from
Speaker 3: the earnings dialing into the anti trust picture?
Speaker 7: Good morning, Thanks for having me so, Yeah, those are
Speaker 7: the two major issues people are focused on right now.
Speaker 7: Most everyone I talked to remains pretty positive on Alphabet
Speaker 7: as far as its fundamentals go. It's been showing improved
Speaker 7: results in its cloud business. Advertising seems to be fairly strong,
Speaker 7: which is of course key for the company search business.
Speaker 7: But you do have the anti trust the regulatory picture.
Speaker 7: There's been some rulings against the company and people aren't
Speaker 7: quite yet sure how to you know, price this impact,
Speaker 7: How severe is any punishment going to be? How long
Speaker 7: is this going to remain in overhang on the shares?
Speaker 7: What is the ultimate impact here? These are very unclear
Speaker 7: right now, and that is something that is you know,
Speaker 7: weighing on the stock right now. And kind of preventing
Speaker 7: it from participating in the games that you've seen in
Speaker 7: the other Max seven.
Speaker 4: Stocks weighing on the stock and it could weigh at
Speaker 4: the index level.
Speaker 8: Right. You were writing over the.
Speaker 4: Weekend about how profit expectations for those MAG seven names
Speaker 4: reporting this week are still way beyond the S and
Speaker 4: P five hundred overall, but I think we're on track
Speaker 4: for our basically lowest quarter of VPS expansion in six
Speaker 4: quarters or something like that.
Speaker 7: How high is the bar? Like, how braced are we
Speaker 7: for this week? Well, it's really a company by company
Speaker 7: kind of thing. In general, Like you said, earnings growth
Speaker 7: for the Max seven is extremely strong, much stronger than
Speaker 7: the overall market. But we have seen a deceleration in growth.
Speaker 7: And given how much these stocks have moved up this year,
Speaker 7: you have some of the major index components, Apple, Microsoft,
Speaker 7: and so forth. These names are prett expensive rolled up
Speaker 7: to their history, which does suggest there is a high
Speaker 7: bar here. You have slowing growth, high multiples that leaves
Speaker 7: limited room for error.
Speaker 4: All right, Bloombo's Ryan for Selica, You've got to check
Speaker 4: out his reporting before, during, and after the big tech
Speaker 4: earnings beat.
Speaker 6: Thank you so much. Let's keep a conversation going with Jay.
Speaker 4: Jacobs, head of Thematic and Active ETF at Black Rock,
Speaker 4: which manages an astonishing eleven point five trillion dollars in
Speaker 4: total for its clients, And same question to you. Alphabet's
Speaker 4: one name, But if you think about the broad basket
Speaker 4: of AI, hyperscaler, software, hardware, chip names that you track,
Speaker 4: how braced are you for this week starting with Google?
Speaker 7: Well, we're looking much further than just individual names. We
Speaker 7: have identified artificial intelligence and digital disruption is a multi year,
Speaker 7: if not multi decade, mega force that's going to have
Speaker 7: a tremendous impact on the economy and markets. So while
Speaker 7: earnings might have some directional information on how some of
Speaker 7: this investment from hyperscalers are going with the adoption of
Speaker 7: artificial intelligence, we're really looking three, five, ten years out
Speaker 7: to see the landscape shifting impact of artificial intelligence on
Speaker 7: the economy.
Speaker 4: Jay Caro and I like looking to the horizon as
Speaker 4: much as anyone else. But when the hyperscalers talk about CAPEX,
Speaker 4: the market responds in all sorts of ways. You must
Speaker 4: be a little bit excited or a little bit nervous
Speaker 4: about the next twenty four hours.
Speaker 7: Well, I think What will be interesting about all of
Speaker 7: this CAPEX, which could be almost a quarter of a
Speaker 7: trillion dollars, is that money is being spent on semiconductor companies.
Speaker 7: It's being spent on data centers, it's being spent on
Speaker 7: power infrastructure, and in some of our actively managed strategies
Speaker 7: like BAI, which just launched a few days ago. It's
Speaker 7: really looking at that infrastructure layer of artificial intelligence, where
Speaker 7: all that CAPEX money is being spent to take advantage
Speaker 7: of the revenue opportunities that we see today in artificial intelligence.
Speaker 3: It's interesting over in Saudi Arabia, many tech leaders, finance
Speaker 3: leaders are speaking Massa Yoshisan, one of them talking about
Speaker 3: how Nvidia is undervalued.
Speaker 5: Now, Jay, I know you've thought a lot.
Speaker 3: About ultimately the investment in the picks and shovels. Are
Speaker 3: we too obsessed with one or two names? Do we
Speaker 3: need to broaden out?
Speaker 6: I think we are.
Speaker 7: This is a much bigger story than just the mag
Speaker 7: seven and just a handful of names and artificial intelligence.
Speaker 7: We really look across the entire AI value chain or
Speaker 7: the AI tech stack to find opportunities. I would really
Speaker 7: bucket this in three layers. There's the AI infrastructure layer
Speaker 7: that I just mentioned. That's about the semiconductors, that's about
Speaker 7: the power infrastructure, It's about the data centers that are
Speaker 7: providing that physical backbones artificial intelligence. The mid layer has
Speaker 7: also gotten a fair amount of attention. That's where the models,
Speaker 7: these large language models live, where a lot of the
Speaker 7: proprietary data lives. But then on top of that is
Speaker 7: the applications layer, and this is where we could see
Speaker 7: some of the most significant growth over the long term,
Speaker 7: which is really what are the companies that are embracing
Speaker 7: artificial intelligence to build revolutionary products and Apple cations.
Speaker 6: And I think if you.
Speaker 7: Look across that AI tech stack, there's a lot of
Speaker 7: opportunity that goes far beyond just the mag seven and
Speaker 7: that's why we believe active management can be really powerful
Speaker 7: and artificial intelligence to pick and choose those opportunities.
Speaker 3: Let's talk there for about some of the latest CTF
Speaker 3: you've launched and those within them to give the exposure.
Speaker 3: How broad are the names and how geographically broad are
Speaker 3: they as well?
Speaker 5: Is it all about the US?
Speaker 7: So if you look at BAI, which is our Artificial
Speaker 7: Intelligence and Technology Actively Managed GTF, it is largely focused
Speaker 7: on the digital infrastructure layer right now, that's where we
Speaker 7: see some of the most immediate opportunity because of all
Speaker 7: of that capex spending by the hyperscalers. That's where the
Speaker 7: flows of dollars are going today and therefore kind of
Speaker 7: the most concrete part of the artificial intelligence opportunity. But
Speaker 7: it is a highly concentrated portfolio. It really only has
Speaker 7: about thirty four companies in it. That is our portfolio
Speaker 7: managers really taking high conviction bets on which parts of
Speaker 7: AI are going to.
Speaker 4: Succeed, and so by compared Garrison, TEK is broad is
Speaker 4: still right because you have the full spectrum of software
Speaker 4: through too hardware, even the semiconductor names in there. What
Speaker 4: I always think about JAY is like, take the semiconductor
Speaker 4: space right in the context of AI accelerators, Nvidia, Intel
Speaker 4: and am D all compete with one another, but they
Speaker 4: will see this very expansive and enduring market. Why is
Speaker 4: the function of an ETF important to get the full
Speaker 4: benefit of that?
Speaker 7: Well, because this is again this says about an entire
Speaker 7: value chain of opportunity. On one hand, you want high
Speaker 7: conviction picks and the names that are going to win,
Speaker 7: but at the same time, it's not about one or
Speaker 7: two stocks in artificial intelligence, we believe the whole basket
Speaker 7: of stocks is going to benefit in the ETF like
Speaker 7: BAI delivers that very efficiently to investors.
Speaker 3: Jay, you've spelled out your long term viewpoint. But in
Speaker 3: the short term we have earnings. We also have an
Speaker 3: election in the US. From your perspective, is that a
Speaker 3: moment to actively invest to change up the portfolio.
Speaker 7: It can certainly introduce some volatility or uncertainty into the portfolio.
Speaker 7: But again, if we're looking thematically at artificial intelligence, this
Speaker 7: is an area where we see, you know, this is
Speaker 7: longer than an election. This is longer than just the
Speaker 7: next four years. Even this is something that's going to
Speaker 7: play out over multiple decades. So near term volatility is
Speaker 7: really less important to thematic investors than what is the
Speaker 7: trajectory of artificial intelligence over the next several years, which
Speaker 7: we remain very bolish on.
Speaker 3: J Jacobs moaning British heado thematic and active ETFs at
Speaker 3: black Plock, We thank you. Coming up, we'll take a
Speaker 3: look at the volatility around Trump media shares, so push
Speaker 3: ever higher this morning. The details and where you're looking
Speaker 3: at well.
Speaker 4: Elon Musk participated in a surprise conversation at the Future
Speaker 4: Investment Initiative taking place in Riard to discuss the future
Speaker 4: of AI solar energy, but also why he thinks AMA's
Speaker 4: launch for Starship is more likely under a Trump presidency.
Speaker 6: Listen to this.
Speaker 2: I feel more optimistic about it with a Trump White
Speaker 2: House and an point House because the biggest impedimental progress
Speaker 2: that we're experiencing is regulatory is over regulation.
Speaker 4: Shares of Trump Media, the operator of the True Social site,
Speaker 4: were suspended earlier today after they rose as much as
Speaker 4: twenty one percent in pre market trading.
Speaker 6: Trading later resumed. What's going on, Let's.
Speaker 4: Bring in Bloomberg's baby Lipshaltz. I think we get this
Speaker 4: idea that there's this thing called the Trump Trade and
Speaker 4: that DJT because it's the parent company of Trump's social
Speaker 4: media platform, Truth Social, is a part of that. But
Speaker 4: explain the specificity of what happened this morning. I don't
Speaker 4: get it.
Speaker 9: Well, nothing makes sense and meanwhay.
Speaker 10: So you have to go in understanding and acknowledging that
Speaker 10: the thing with Trump Media shares, given the fact that
Speaker 10: Donald Trump owns more about sixty percent of the stock,
Speaker 10: is that it typically trades closely with the betting odds.
Speaker 10: So we've been tracking a number of betting markets that
Speaker 10: have been shifting up into the right for Donald J.
Speaker 9: Trump to return to the White House.
Speaker 10: What we saw today with some of those volatility halls
Speaker 10: by Mike count it was about five of them to
Speaker 10: the up and downside is just simply an overwhelming amount
Speaker 10: of activity and volatility. We saw volumes about six times
Speaker 10: of what's normal in the first hour. So when you
Speaker 10: see investors, whether that's retail traders who are pushing their
Speaker 10: investments on things like Reddit or True Social itself, or
Speaker 10: Wall Street professionals or even just auctions traders, that's what
Speaker 10: we can see with some of these wild swings to
Speaker 10: the up and downside, and just looking at today, it's
Speaker 10: really emblematic of what we've been tracking. When you even
Speaker 10: look back to when this spec deal was announced back
Speaker 10: in October twenty twenty one, it.
Speaker 5: Has generally been up into the right. Even if there
Speaker 5: is volatility on an industry basis.
Speaker 3: What two hundred and seventy two percent at least was
Speaker 3: the number we counted yesterday over the last five trading weeks,
Speaker 3: is it really the eye of the storm when it
Speaker 3: comes to the so called Trump trade. What are the
Speaker 3: names have been evolved in?
Speaker 10: Meanwhile, it's the biggest one to keep an eye on,
Speaker 10: and it is really the most indicative. Obviously, it trades
Speaker 10: under DJT. That's Trump's initials, so the ticker symbol is
Speaker 10: actually that closely tied in a line with the former president.
Speaker 9: We also keep an eye on Rumble.
Speaker 10: They're a Peter telbacked video platform, typically skewing towards a
Speaker 10: more conservative audience, trying to also rally against big tech.
Speaker 10: The company is also in partnerships with Trump Media itself.
Speaker 10: We keep an eye on Funware, which really seems to
Speaker 10: be more of, at least when I talk to investors,
Speaker 10: more of a gambling mechanism. It was associated with some
Speaker 10: of the past Trump campaigns, though doesn't appear to be
Speaker 10: tied towards the twenty twenty four re election campaign, but
Speaker 10: that also has gotten swept up in the shift as well.
Speaker 4: Bailey, you wrote a story on October twenty fifth, which
Speaker 4: I appreciate seems like an eternity ago now that basically,
Speaker 4: if Trump wins, it's hard to see what happens next
Speaker 4: with True Social and DJT. But I think you were
Speaker 4: talking more about its business, Like, what do we know
Speaker 4: about this company as a company.
Speaker 10: It operates and owns True Social, an X lookalike platform
Speaker 10: that is one of the many kind of places that
Speaker 10: Donald Trump will post.
Speaker 9: We do know ed in the first.
Speaker 10: Half they reported just about one point six million dollars
Speaker 10: in sales, so not profitable. One point six million in
Speaker 10: sales or revenue is a drop in the bucket relative
Speaker 10: to its multi billion dollar market evaluation. It has struggled
Speaker 10: to retain users. We've seen that with third party apps.
Speaker 10: The company doesn't actually disclose those metrics. We will be
Speaker 10: closely keeping an eye on their third quarter results, which
Speaker 10: should be coming in the next few weeks, just in
Speaker 10: terms of what activity or at least what ad sales
Speaker 10: look like going into the election. But when I talk
Speaker 10: to some skeptics that they really call out the fact
Speaker 10: that all eyes right now are on Trump's re election campaign.
Speaker 10: So if the company is struggling to get anywhere near
Speaker 10: training a profit and only had one point six million
Speaker 10: dollars in first half sales, the question going forward is
Speaker 10: how does that actually grow?
Speaker 5: Bailey Lipshaw's we appreciate it, thank you.
Speaker 3: Let's stick with politics because Jeff Bezos defended The Washington
Speaker 3: Post's decision to stop endorsing presidential candidates, saying there was
Speaker 3: a quote credibility gap afflicting the media industry and that
Speaker 3: endorsing a candidate would create a perception of bias, and
Speaker 3: the move by the billionaire owner of The Washington Post
Speaker 3: prompted as many as two hundred thousand subscribers to cancel.
Speaker 3: That's according to MPR. Bloomberg's Mike Shepherd joins us to discuss,
Speaker 3: and Mike, I know you have a history what the
Speaker 3: Washington Post yourself, and just take us back in history.
Speaker 3: How long have they been saying that they support certain candidates.
Speaker 8: Well, first my own history.
Speaker 11: I did work at the Washington Post for twenty two
Speaker 11: years before joining Bloomberg in twenty eleven. So we do
Speaker 11: have some long standing ties to that newsroom and a
Speaker 11: lot of the good people that work there. And the
Speaker 11: history that the moss with endorsing candidates goes all the
Speaker 11: way back to when Jimmy Carter ran for the presidency.
Speaker 11: So there is a history and a tradition. And one
Speaker 11: of the concerns among people who are close to the
Speaker 11: newsroom and even outside observers is that this carries the appearance,
Speaker 11: eleven days before the election, of not just stopping the
Speaker 11: practice of endorsements, but spiking an editorial that was intended
Speaker 11: to endorse Kamala Harris for the presidency. And this carries
Speaker 11: the appearance of doing exactly what Jeff Bezos is trying
Speaker 11: to avoid, or at least as he explained it during
Speaker 11: in his article yesterday.
Speaker 4: Mike, just the basics here of why we're talking about this.
Speaker 4: Jeff Bezos the founder of Amazon, a high profile, an
Speaker 4: incredibly rich person in the world of technology, and he
Speaker 4: owns the Washington Post. Just take those basic facts and
Speaker 4: explain the significance of this action.
Speaker 11: Well, the signific against cannot be overstated. And it is
Speaker 11: yet another twist and an election that has had a
Speaker 11: historic number of surprises already. And it even caught the
Speaker 11: attention of Kamala Harris this morning. She was interviewed on
Speaker 11: the Breakfast Club syndicated radio program, calling it disappointing, but
Speaker 11: then also tying Jeff Bezos, the world's second second richest
Speaker 11: man after Elon Musk, to Donald Trump and other billionaires, saying, look,
Speaker 11: these are the people, the billionaires that Donald Trump is
Speaker 11: more likely to support. Rather than mainstream Americans. And we
Speaker 11: do see our own analysis here at Bloomberg indicates that
Speaker 11: more billionaires have donated toward the Trump candidacy than non billionaires. Now,
Speaker 11: when it comes to the tech industry, we do see
Speaker 11: a little bit of a reversal of polarity. We do
Speaker 11: see more of the wealthy tech founders, especially people like
Speaker 11: Eric Schmidt and Bill Gates. They have thrown their lot
Speaker 11: in with Kamala Harris, but overall, Harris is using this
Speaker 11: moment to point to what she sees as billionaires leaning
Speaker 11: toward Donald Trump.
Speaker 3: One billionaire just name checking Donald Trump over in Saudi Arabia,
Speaker 3: a live stream of Ela Masque, just speak to the
Speaker 3: impact that he's making.
Speaker 11: Mike Well, his impact on the race cannot be overstated. First,
Speaker 11: it's financial. He has put more than one hundred and
Speaker 11: thirty two million dollars of his own money into a
Speaker 11: superpack that is backing Donald Trump.
Speaker 8: But he is also putting in something.
Speaker 11: That's very precious for a guy who's running five companies,
Speaker 11: and that is time. He has spent time on the
Speaker 11: campaign trail in Pennsylvania and other states. He has been
Speaker 11: with Donald Trump, including at the event in New York
Speaker 11: at Madison Square Garden on Sunday, and he is seeing
Speaker 11: in Donald Trump as he is seeing Donald Trump as
Speaker 11: someone who can clear the path for some of his
Speaker 11: own ventures and his own aspirations, including a trip to Mars.
Speaker 11: And the President is being present former President Trump as
Speaker 11: if he were to make a return to office, someone
Speaker 11: who can clear the path when it comes to regulations.
Speaker 4: Yeah, that's the soundbit that we played early to Stay
Speaker 4: of Blowburg's Michael Shepard. Thank you very much. It's time
Speaker 4: for talking tech and first start. Indian food delivery platform
Speaker 4: Swiggy is seeking to sell shares for an IPO that
Speaker 4: may raise one point three five billion dollars.
Speaker 6: According to sources, The IPO will open for.
Speaker 4: Bids from November sixth and shares he expected to start
Speaker 4: trading from November thirteen. Swingy's IPO follows Hyundai India's recent
Speaker 4: record sale. Plus, Toshiba wants to reach double digit market
Speaker 4: share in the world's power chip market by twenty thirty
Speaker 4: as it lags behind rivals.
Speaker 6: Toshiba may eventually form.
Speaker 4: An alliance of companies that would corner thirty percent of
Speaker 4: the industry. According to one of his executives and over
Speaker 4: in Japan, Liberal Democratic Party heavyweight Akira Amari was defeated
Speaker 4: in the general election. It removes one from parliament, one
Speaker 4: of the chip sector's biggest advocates, while concerns have been
Speaker 4: growing over the amount of taxpayer money getting plowed into
Speaker 4: that industry.
Speaker 8: Of caroline.
Speaker 3: In other international chip news and the Biden administration finalized
Speaker 3: restrictions on investments by US individuals and companies into Chinese technology,
Speaker 3: including semiconductors, quantum computing, artificial intelligence. Of course, Bloomberg's Mackenzie
Speaker 3: Hawkins is here with more and this was long in
Speaker 3: the making.
Speaker 5: Just what is new in terms of these policies.
Speaker 12: So this is sort of the last big shoot to
Speaker 12: drop from the Biden Administration's restrictions on Chinese advanced tech development.
Speaker 12: We've said a lot of time on the show talking
Speaker 12: about export controls, restrictions on the sale of actual chips
Speaker 12: and ship making components to companies in China. This is
Speaker 12: restrictions on investments by American individuals and companies into Chinese
Speaker 12: AI chip and quantum computing companies. The rules have been
Speaker 12: in the works for over a year. There was originally
Speaker 12: fears that the investment restrictions would cover a broader swath
Speaker 12: of industries, but officials say they're aiming for a narrowly
Speaker 12: targeted approach looking at technologies that are key to US
Speaker 12: and Chinese national security.
Speaker 4: It's been some time, I think, since we've discussed the
Speaker 4: sector in these terms. But the target is American mutual funds,
Speaker 4: large venture capital firms, other technology companies that want to
Speaker 4: get a placehold on some of China's tech. Right, I'm
Speaker 4: trying to understand McKenzie, who would be subject to these controls?
Speaker 11: Right?
Speaker 12: So there are exemptions for certain types of investments, such
Speaker 12: as publicly traded securities or certain limited partner investments, but
Speaker 12: the goal is really to capture American capital and then
Speaker 12: know how that officials say comes with American capital going
Speaker 12: into early stage investments in Chinese startups. So, you know,
Speaker 12: officials brief reporters on there were frictions before they were
Speaker 12: formally announced, and they pointed to a report by a
Speaker 12: think tank based here which found that between twenty fifteen
Speaker 12: and twenty twenty one, of all of the global transactions
Speaker 12: investing in Chinese AI companies, seventeen percent involved American investors,
Speaker 12: and of that around nine and ten were at the
Speaker 12: venture capital stage. So that's the type of investment that
Speaker 12: officials are aiming to capture with these rules.
Speaker 3: The Chinese Foreign Ministry spokesman saying his nation strongly deplodes,
Speaker 3: infirmly rejects these new US restrictions. They didn't come into
Speaker 3: force briefly until January the second.
Speaker 5: Is there any way that these could be subject to change? Mackenzie?
Speaker 12: So this is sort of the last leg of what
Speaker 12: has been a very long rulemaking process, and this is
Speaker 12: a final rule. So it's highly, highly unlikely that things
Speaker 12: would change between now and January. Tewod. They wouldn't only
Speaker 12: investments going forward.
Speaker 5: It's not a retroactive policy, Megs.
Speaker 3: Mackenzie Holkins. Wait, thank you, Welcome back to Blue Meg Technology.
Speaker 3: I'm Caroline Hyde in.
Speaker 6: New York and I'm me d love Lo in San Francisco.
Speaker 3: Quick check on these markets, because while we're pushing higher
Speaker 3: on the Nastack and then Astak one hundred, we're up
Speaker 3: about five ten percent now, so near trading highs of
Speaker 3: the day and in fact training highs. Ever, because we
Speaker 3: are close about two hundred points on the NASAK one
Speaker 3: hundred to its record high set back in July.
Speaker 5: So we keep an eye on those numbers.
Speaker 3: We want to dig into some of the individual movers
Speaker 3: because we are thick and fast and earning season and
Speaker 3: really Cadence Design Systems doing particularly well, having its best
Speaker 3: day since March of twenty twenty, up eleven percent. It's
Speaker 3: numbers coming in strong, it's revenue posting growth of about
Speaker 3: nineteen percent, and it's all about Cadence dot AI basically
Speaker 3: in the design workflow artificial intelligence now integral, says the CEO.
Speaker 5: We're seeing AMD.
Speaker 3: We're going to see the numbers after the bell, and look,
Speaker 3: we're pretty buoyant and running into them more than two
Speaker 3: percent higher. The question is AI accelerators. Are they managing
Speaker 3: to make inroads on Nvidia and how much of the
Speaker 3: market share and they manage to take from the likes
Speaker 3: of Intel. When it comes to the BC and it
Speaker 3: comes to as the server business, PayPal look disappoints, even
Speaker 3: though we saw the third quarter fiscal third quarter do
Speaker 3: well in terms of profits on the revenue forecast, disappointed
Speaker 3: and the shares have run up into these earnings well
Speaker 3: by about five percent.
Speaker 11: Ed.
Speaker 6: What have you got?
Speaker 4: Some other headlines in the last thirty minutes. Apples overhauled
Speaker 4: the design of its Mac Mini desktop computer for the
Speaker 4: first time in about fifteen years, cutting the device's size
Speaker 4: to five inches across and adding a Speedia M four
Speaker 4: chip series doing Bose Mark German joins us in San Francisco.
Speaker 4: This is kind of consistent, right with what Apple is
Speaker 4: doing with new gen of different hardware, platform size and
Speaker 4: then updating the processor.
Speaker 6: What else do we know?
Speaker 8: Yeah, it's quite interesting.
Speaker 13: So last year this time they held an event called
Speaker 13: Scary Fast timed around Halloween. They launched the three new chips,
Speaker 13: a bunch of new Macs, but it was a thirty
Speaker 13: minute kino and it's sort of disappeared, as you will,
Speaker 13: on Halloween right after that. This time around, they're doing
Speaker 13: three launches three days in a row. Yesterday Monday was
Speaker 13: the iMac with the M four, Today is the Mac
Speaker 13: Mini with the M four and M four Pro. Tomorrow
Speaker 13: will be the new MacBook pros at the M four,
Speaker 13: M four Pro and M four Max. This new Mac
Speaker 13: Mini looks extremely impressive. It's probably the most impressive new
Speaker 13: mac that I've seen from them since the current MacBook
Speaker 13: Pro design launched three years ago. Two inches tall, five
Speaker 13: inches across, super cool, super powerful two ports on the front,
Speaker 13: now matching the Mac.
Speaker 6: Studio as you reported, would be the case.
Speaker 13: I think this is going to be a very hot seller.
Speaker 13: People like to use these to connect them to TVs
Speaker 13: gaming setups, and they're also extremely popular in the enterprise
Speaker 13: and in server environment. So this is a nice launch
Speaker 13: for Apple, a.
Speaker 3: Nice launch and necessary when you're baking in the markets
Speaker 3: expectations to growth at this company. We had key Bank,
Speaker 3: the analyst there last week saying, look, we very rarely
Speaker 3: have geographical growth and every product growing in terms of revenue,
Speaker 3: but the market seems to be baking that in mark How.
Speaker 5: Likely is it that we're going to see such growth
Speaker 5: do you think.
Speaker 13: Well, well, the Mac Mini is only going to be
Speaker 13: a very incremental part of that.
Speaker 8: Right.
Speaker 13: They'll generate sales here, but probably they'll sell maybe a
Speaker 13: billion dollar worth of these tops through the end of
Speaker 13: the year, maybe even a little bit less than that.
Speaker 13: So this is not a super material.
Speaker 8: Launch for them.
Speaker 13: It's really a cool launch that gets people in the
Speaker 13: Mac community really interested. It sets up the design for
Speaker 13: this product, hopefully not for the next fifteen years like
Speaker 13: the last design, but certainly this is a nice launch
Speaker 13: for them. But it's not important from a financial standpoint,
Speaker 13: like let's say a new iPhone or iPad mark.
Speaker 4: Overnight, our colleagues in India reported some interesting numbers about
Speaker 4: exports from that country for Apple, So not necessarily the
Speaker 4: end market, but what they're doing there and then selling
Speaker 4: to the world.
Speaker 6: What do we know?
Speaker 13: India's becoming an increasingly important part of the overall Apple
Speaker 13: story in terms of production and in terms of sales.
Speaker 13: I think you're a one day going to see more
Speaker 13: product development happen there as well if you have some
Speaker 13: engineering labs, particularly for maps testing there as well. So
Speaker 13: India is incrementally becoming a bigger part of the Apple story.
Speaker 13: I don't think they're ever going to drop China totally,
Speaker 13: but they're inching towards India becoming the new China.
Speaker 3: Al German, we thank you. Let's turn our attention to
Speaker 3: Netflix now. It's in talks to release Gretagog's upcoming remake
Speaker 3: of the Chronicles of Narnia on Imax screams globally. This
Speaker 3: would be one of these streaming platform's biggest business deals
Speaker 3: with cinemas.
Speaker 5: According to sources. Let's bring in mus Lucas.
Speaker 3: Shore and they have done it before, but this would
Speaker 3: once again be sort of an interesting area for them
Speaker 3: to push.
Speaker 14: Yeah, like Netflix has largely embraced movie theaters when they
Speaker 14: have worked with filmmakers that want that. Think about Martin
Speaker 14: Scorsese with The Irishman or Alfonso Corone with Roma.
Speaker 8: You know this is no different.
Speaker 14: Greta Gerwig coming off of Barbie has a lot of
Speaker 14: clout in the Hollywod community. Netflix was very excited to
Speaker 14: get her to adapt the sort of legendary series of
Speaker 14: children's books. But she wants to see those movies in theaters,
Speaker 14: and so Netflix is going to try to work with
Speaker 14: her without sort of violating its beliefs about putting movies
Speaker 14: in its on its screens and on as streaming service
Speaker 14: prompt for its customers.
Speaker 4: Lucas, I don't think we've ever had the chance to
Speaker 4: discuss this with you, but basically, how does Hollywood see.
Speaker 6: Netflix in this field of like big fiction?
Speaker 4: I think about Rebel Moon and Atlas Jennifer Lopez, like,
Speaker 4: personally those were great, but I guess they want big
Speaker 4: hits the world over Narnia.
Speaker 8: Well, Atlas actually was a reasonable hit.
Speaker 14: I mean I think, yeah, you're right that Netflix has
Speaker 14: tried a lot with these sort of world building science
Speaker 14: fiction projects, largely because it doesn't sit on a trove
Speaker 14: of historical intellectual property like Disney and Warner Brothers and
Speaker 14: other studios do, so it's had to invest a lot
Speaker 14: more in original properties when it has gone outside of
Speaker 14: that and tried to buy ip that it could use,
Speaker 14: like it did a deal with the did a deal
Speaker 14: with a royal doll.
Speaker 8: Now it's not this Narnia. I mean, look, it could work.
Speaker 8: I don't know.
Speaker 14: Their track record on the quality of those movies, I'd
Speaker 14: say is sort of mid to poor, but people do
Speaker 14: tend to watch them, just because people watch whatever's on
Speaker 14: Netflix that has a big budget Netflix puts in front
Speaker 14: of them.
Speaker 3: Well said, it's interesting what they lose because of not
Speaker 3: always going for the big screen. Emerald Fanal for example,
Speaker 3: Hernie Wuthering Heights.
Speaker 5: They didn't want to.
Speaker 3: Go in Netflix because of this. So is IMAX going
Speaker 3: to satisfy Greta Gerwig?
Speaker 5: Do you think?
Speaker 8: Yeah?
Speaker 14: I think it'll satisfy her for this project.
Speaker 8: You know, I don't think Greta.
Speaker 14: Gerwig will want to make all of her movies at
Speaker 14: Netflix or her next several movies at Netflix. You know,
Speaker 14: I could be wrong, obviously, if this becomes a huge
Speaker 14: success and she wants to do it again, she could.
Speaker 14: But what we've tended to see is big name filmmakers
Speaker 14: like Greta Gerwig, like Alfonso Corone, they want to see
Speaker 14: their movies and theaters and so they will mostly do that.
Speaker 14: But if there's a project that they are particularly drawn
Speaker 14: to or that no other studio will make and Netflix
Speaker 14: will step forward, they'll do it, and especially because Netflix
Speaker 14: will often satisfy the budgetary requirements that they have or want.
Speaker 14: But it's sort of a you know, a temporary waystation
Speaker 14: for a lot of these big filmmakers and not a home,
Speaker 14: whereas Christopher Nolan, for example, another filmmaker, likes to find
Speaker 14: a home.
Speaker 3: Right.
Speaker 14: He was at Warner Brothers for several years. Now it
Speaker 14: seems like he's going to be at Universal for the
Speaker 14: foreseeable future.
Speaker 3: Well, they've got money spend what is it, at least
Speaker 3: one hundred and seventy five million on this Narnia one, Lucas, Sure,
Speaker 3: we thank you.
Speaker 8: Ed Yeah.
Speaker 4: Coming up on the show, how a Spanish brain computer
Speaker 4: interface company is taken on Neuralink.
Speaker 6: That's why we're looking forward to Carro.
Speaker 3: Yeah, meanwhile, what's in a here and now ed bitcoin crypto?
Speaker 3: You've been keeping it close on it, as we all have.
Speaker 5: Look.
Speaker 3: At one point it touched seventy two thousand dollars. We
Speaker 3: haven't done that since April, but we are very close
Speaker 3: to the record high setback in March of this year,
Speaker 3: which is close to seventy four thousand dollars.
Speaker 8: Just under it.
Speaker 5: Well we get there. We're up three percent.
Speaker 3: Options traders think it's going to get to eighty thousand
Speaker 3: come what may in the election by the end of November.
Speaker 3: This is Blomberg Technology. We hear a lot about Elo
Speaker 3: Musque's brain computer startup Neuralink, but it is far from
Speaker 3: being the only player in the field.
Speaker 5: Take in Brain.
Speaker 3: It's a European company building devices that could one day
Speaker 3: treat neurological disorders like Parkinson's disease.
Speaker 5: The startup just announced today that it's.
Speaker 3: Raised fifty million dollars to develop its graphic based mural technologies.
Speaker 3: Let's bring in the CEO co founder, Carolina Aguila for more,
Speaker 3: and Carolina, just how soon might we see such things
Speaker 3: as Parkinson's and other diseases tackled?
Speaker 5: And how.
Speaker 1: Thank you, thank you for having me here and hello
Speaker 1: on New York. Well very soon, because we already treated
Speaker 1: two patients on our safety at study and last year
Speaker 1: we already obtained FDA breakthrough designation, so we actually provide
Speaker 1: to the FDA reasonable proof of superiority versus car and neuromolation.
Speaker 1: So it's I mean, this funding round, which is significant,
Speaker 1: is going to help us to get there in the
Speaker 1: next few years.
Speaker 6: Let's go back to basics really quickly.
Speaker 4: So synchron does this sort of intravenously with a stint
Speaker 4: neural link is the insertion of very very thin wires
Speaker 4: directly into the brain.
Speaker 6: How does your technology work?
Speaker 1: Yeah, well, it is a technology that it sits on
Speaker 1: the brain, on the cortex of the brain, and also
Speaker 1: has a deeper probe that it's inserted more into the
Speaker 1: basal ganglia and together, actually it's able to decode in
Speaker 1: a bidirectional communication with the brain specific biomarkers that are
Speaker 1: disrupted in diseases like Parkinson's disease and actually restore such functions.
Speaker 1: So we call it busy itherapeutics because this bi directional
Speaker 1: communication with the brain is actually able to decode so
Speaker 1: to read, but also right into their brain and actually
Speaker 1: restore the function.
Speaker 4: We're showing a video which is demonstrating that right now.
Speaker 4: So fifty million dollars you know in your development process
Speaker 4: and scaling of the technology, where we deploy that money.
Speaker 1: Yeah, these fans are extremely important to continue the clinical
Speaker 1: trials that we are now conducting. We are on boarding
Speaker 1: up to ten patients for this safety trial that also
Speaker 1: is going to show the superiority of graphine rescues current
Speaker 1: metals like platin idiom. To expand the team because we
Speaker 1: need very much excellent talent across boards. So we are
Speaker 1: developing the semiconductor process of the interfaces, but also the electronics,
Speaker 1: the software, the artificial intelligence. So we have already sixty people,
Speaker 1: but we are missing some key pieces that would like
Speaker 1: to recruit and also to continue the platform development to
Speaker 1: the final pivotal that leads to the conversization.
Speaker 3: So many people listening will be so excited at the
Speaker 3: idea that Parkinson's disease, that epilepsy, the strokes can in
Speaker 3: some way be tackled with this who from a venture
Speaker 3: community is excited to put the money in, whereas the
Speaker 3: ultimate return the reward for them when it comes to
Speaker 3: your own growth.
Speaker 1: Well, we are seeing deep tech fans very, very interested
Speaker 1: on this field. I think in the past it's been
Speaker 1: a traditional healthcare metech BC driven world, and now dep tech,
Speaker 1: with the emergence of semiconductors, is also willing to chip
Speaker 1: in big time into the development of such ventures. The end,
Speaker 1: we're at the convergence of metech digital but also the
Speaker 1: semiconductor world now that chips act. It's fuel and also
Speaker 1: a lot of money.
Speaker 6: In the US, but also in.
Speaker 1: Europe, this community has bigger funds and is willing to
Speaker 1: make this happen.
Speaker 4: Tarlina, what's the regulatory environment like for this in Europe
Speaker 4: relative I guess to the United States where we'll see
Speaker 4: this in the real world.
Speaker 1: First, yeah, we are regulated by the medical device regulatory bodies,
Speaker 1: So for US it's very important to get, for instance,
Speaker 1: what we call a C mark. It's a very similar
Speaker 1: process to the one in the US. Whoever, I think
Speaker 1: in the US there's been a tremendous progress with FDA
Speaker 1: actually being extremely supportive with the FDA Breakthrough Designation program
Speaker 1: but also the TAP program that we belong to, and
Speaker 1: basically we are able to meet monthly FDA to discuss
Speaker 1: some of the hurdles and the questions that we have
Speaker 1: in order to develop this conversization at the speed. So
Speaker 1: artificial intelligence is one of the subjects that we've been
Speaker 1: treating in the last months, month after months, and this
Speaker 1: is something that Europe still doesn't have. But I hope
Speaker 1: that it's coming soon because it's extremely useful for innovation
Speaker 1: and to not get people lost, which is also.
Speaker 4: Waste of money in brain. CEO and co founder Caroline Aguila,
Speaker 4: thank you so much. Sofi Technology has raised its profit
Speaker 4: guidance for a third time this year. Is it benefited
Speaker 4: from efforts to expand beyond its student lending business here
Speaker 4: with Sofi and its results right now down seven percent.
Speaker 4: I think the bar was pretty high going into this.
Speaker 4: That that does put it on track for its biggest
Speaker 4: drop since August.
Speaker 6: What's going on?
Speaker 4: Let's ask the CEO, Anthony noto and Anthony, you know
Speaker 4: the story in the Court of Gone. It's kind of
Speaker 4: the result of the work you've put into so far
Speaker 4: doing more. Just explain that a little and where you're
Speaker 4: bearing fruit in sort of diversifying business lines right now?
Speaker 15: Sure, First to your point about the stock the study
Speaker 15: is of about forty forty percent in the last month,
Speaker 15: So it came into the quarter after a very big
Speaker 15: increase in value over the last thirty days. So I
Speaker 15: think we're seeing some of that being taken off the table.
Speaker 15: But we had our best quarter as a public company.
Speaker 15: We had record revenue. The growth rate of the revenue
Speaker 15: accelerated to thirty percent year of year. That growth was
Speaker 15: driven by sixty four percent year of year growth in
Speaker 15: our financial services and our technology platform revenue taken as one,
Speaker 15: that now accounts for forty nine percent of our total revenue.
Speaker 15: And so we're not just a lender anymore, is the
Speaker 15: key message. And this is a historic day for us.
Speaker 15: Not only is it historic revenue, but we're to that
Speaker 15: fifty to fifty split between lending and mind lending that
Speaker 15: we wanted to drive to to really continue to diverse
Speaker 15: fire revenue. We've been able to overcome a really tumultuous
Speaker 15: environment over the last five years to deliver seventeen quarters
Speaker 15: of consecutive seventeen quarters of record revenue growth and improving profitability,
Speaker 15: and we finally got to the point where the business
Speaker 15: is fifty to fifty, which is right where we.
Speaker 9: Wanted to be.
Speaker 15: The strength is really driven by the frigal services products
Speaker 15: growing thirty seven percent year of a year, and that's
Speaker 15: driving the revenue growth that I mentioned.
Speaker 4: Part of this sort of slow down response in the
Speaker 4: stock I think is some investors looking at your comments
Speaker 4: about balance sheet growth longer term low single digit growth.
Speaker 6: What would you be a response to that? Please?
Speaker 15: We want to grow our revenue twenty to twenty five
Speaker 15: percent compounded annually, so there's a lot of different drivers
Speaker 15: to get there. We do not necessarily need to grow
Speaker 15: a balance sheet at that rate, and in fact, we
Speaker 15: don't plan to grow a balance sheet at that rate.
Speaker 15: We've made a migration to more fee based revenue streams
Speaker 15: that are capital light in high ROI. This was our
Speaker 15: first large quarter of generating loan platform business revenue. It's
Speaker 15: a business we've been in since twenty nineteen, but it
Speaker 15: was a big contributor to both our growth and revenue
Speaker 15: as well as profitability. So we don't need to grow
Speaker 15: the balance sheet faster than it has been growing. In fact,
Speaker 15: we want to take risk off the table and leverage
Speaker 15: the other pieces of our businesses or other pieces of
Speaker 15: our business that are fee based. In the core, about
Speaker 15: one hundred and seventy five million dollars of our revenue
Speaker 15: was from fee based revenue and growing a meaningful amount
Speaker 15: year of year.
Speaker 3: Let's just talk about putting that lever and indeed a
Speaker 3: sixty four percent jump in the financial services and the
Speaker 3: tech platform segments. Where else can you invest there to
Speaker 3: ensure that sixty four percent is something you continue sure.
Speaker 15: Within the financial services segment, we have several businesses. We
Speaker 15: have our Sofi Money business, which is benefiting from a
Speaker 15: high interest rate. We're seeing great growth in deposits two
Speaker 15: point four billion dollars of member deposit growth, really strong
Speaker 15: spending annualized ten billion dollars of spending, and so we'll
Speaker 15: continue to grow that member base at a really high clip.
Speaker 15: Second is our invest business. It's also growing meaningfully year year.
Speaker 15: We also have our credit card business, and of course
Speaker 15: our business that provides referrals to other financial services product
Speaker 15: which we call Lantern. And then as I mentioned, the
Speaker 15: loan platform business. That business itself grew over one hundred
Speaker 15: percent year of year and it's annualizing now to billion
Speaker 15: dollars with really strong improvement and profitability. So we'll keep
Speaker 15: driving product and member growth in that business. In the
Speaker 15: thirty plus percent range, and that will then follow with
Speaker 15: revenue growth at are above that level over time.
Speaker 3: Talk to us about the macro, because you're saying to
Speaker 3: investors you feel really good about the current environment, that
Speaker 3: headwinds and dissipated anything.
Speaker 5: That worries you.
Speaker 3: I mean, we're all still bracing for an election, and
Speaker 3: that feels like quite a lot of lack of transparency.
Speaker 14: Yeah.
Speaker 15: I do think there's still a degree of uncertainty out there,
Speaker 15: but I think the trends are clear that we're going
Speaker 15: into a declining rate environment versus an increasing rate environment
Speaker 15: and a declining rate environment. We have several businesses that
Speaker 15: will benefit meaningfully. Our home loans business will benefit from
Speaker 15: more financing. Our student loan refinance and business will allow
Speaker 15: people to refinance their student loans at a lower rate
Speaker 15: in a lower rate environment, and so those businesses will
Speaker 15: have a tailwind for sure. In addition to that, as
Speaker 15: rates come down, the rates that other competitive banks are
Speaker 15: offering their members or their clients will also come down,
Speaker 15: and we will be able to maintain a super your
Speaker 15: rate compared to them because we also own the lending
Speaker 15: origination platform, so we can use the two of them
Speaker 15: as a competitive advantage. To drive a better apy than
Speaker 15: our competitors broadly defined. And then lastly, within that business,
Speaker 15: our credit card business. We just launched two new credit
Speaker 15: cards that we think uniquely meet the needs of our
Speaker 15: members that have a lot of growth prospects behind them
Speaker 15: as well.
Speaker 4: Anthony, what's your M and A plan from here? For
Speaker 4: things you don't already have.
Speaker 15: We're heads down. We're not focused on M and A
Speaker 15: at all. We're not focused on capital raises. We're focused
Speaker 15: on growing our business organically twenty to twenty five percent
Speaker 15: in revenue on a year of your basis balance sheet
Speaker 15: growing much slower than that, and continue to build unaided
Speaker 15: brand awareness. Our unaated brand awareness is a key to
Speaker 15: become a household brand name. It's a key to become
Speaker 15: a trusted partner in a business where people have to
Speaker 15: trust you to give give you their money. And we've
Speaker 15: driven that up forty percent year of year to seven percent.
Speaker 15: Our goals to get it into the thirty percent range.
Speaker 15: We're well in our way and making great progress.
Speaker 5: Have you got any worries about the consumer at this point? Anthony?
Speaker 5: And consumer credit quality?
Speaker 15: Sure, our credit has actually continued to improve. We saw
Speaker 15: a peak and credit normalization in Q one, and it's
Speaker 15: gotten better each quarter since then. That said, you know,
Speaker 15: we're very vigilant and making sure that we think will
Speaker 15: be in a stable economy. Declining rates with a recession
Speaker 15: would not be great. Declining rates with a stable economy
Speaker 15: would be great. And that's what our current forecast has
Speaker 15: for twenty five.
Speaker 4: And see we literally have thirty seconds the election. How
Speaker 4: are you brace for it?
Speaker 15: You know, we can work with whatever administration we have.
Speaker 15: There are different characteristic of the administration that could be
Speaker 15: more favorable for our business. I would say generally, more
Speaker 15: favorable capital markets would be welcomed. More favorable treatment towards
Speaker 15: businesses would also be welcomed. There's a lot of opportunity
Speaker 15: that sometimes gets stifled by different approaches as it relates
Speaker 15: to capital markets, to M and A from the different agencies.
Speaker 15: So we're looking for a good balanced approach from whatever
Speaker 15: administration wins. But we're prepared to work with both ends
Speaker 15: of the aisle.
Speaker 3: So FI CEO Anthony Notta, thank you so much for
Speaker 3: joining us on your earnings.
Speaker 5: We appreciate it now.
Speaker 3: That does it for a very busy edition of Bloomberg
Speaker 3: Technology and more earnings coming thick and fast after the ballot.
Speaker 6: Yeah, that was a good way of ending it though.
Speaker 4: A really interesting conversation recap on the podcast. You know
Speaker 4: where to find the pods online on all the platforms
Speaker 4: you'd expect. It is going to be a massive week
Speaker 4: the megacap Tech earnings starting Earnest Affter the Bell from
Speaker 4: the team in New York City and the team out
Speaker 4: here in San Francisco.
Speaker 6: Stay with us this week. This is Bloomberg Technology