WEBVTT - Palantir Jumps After Reporting Record Quarterly Sales Growth

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<v Speaker 2>There's been a ton of earnings out. It's hard to

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<v Speaker 2>keep up with all of it. But one that has

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<v Speaker 2>been the talk of everywhere is Palied here right, And

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<v Speaker 2>one person who has been running around Bloomberg like crazy

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<v Speaker 2>is Man Deep saying he's Bloomberg Intelligence senior tech industry analysts.

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<v Speaker 2>Thanks for coming out, Man Deep, right in the studio.

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<v Speaker 2>The Stack price sarch more than five hundred percent over

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<v Speaker 2>the past year. I mean, this company is incredible. Is

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<v Speaker 2>it what the company CEO calls a dominant software company

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<v Speaker 2>of the future? Would would you say?

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<v Speaker 3>I mean, clearly there is a lot baked into the valuation,

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<v Speaker 3>but I want to focus on, you know, the net

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<v Speaker 3>new R, which is a metric that software companies are

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<v Speaker 3>measured on.

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<v Speaker 4>And when you compare Palenteers.

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<v Speaker 3>Commercial segment revenue, which everyone is excited about, their total

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<v Speaker 3>deal value that's remaining is around two point eight billion.

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<v Speaker 3>The new ar are increased by five hundred million. Contrast

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<v Speaker 3>that with a Microsoft or a Google Cloud. Microsoft added

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<v Speaker 3>almost nine billion in net new ARR this quarter, and

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<v Speaker 3>they talked about you know, AI being used across one

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<v Speaker 3>hundred million Microsoft Copilot users twenty million GitHub Copilot users.

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<v Speaker 3>So from that perspective, you know, balenteers increase in remaining

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<v Speaker 3>deal value of five hundred million looks pretty small.

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<v Speaker 4>I mean, Palenteers overall revenue rund rate is four billion.

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<v Speaker 3>Microsoft clearly is you know, a company that's almost one

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<v Speaker 3>hundred times or eighty times more bigger than Palenteer.

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<v Speaker 4>But it just goes to show that even on a

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<v Speaker 4>net new AIRR.

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<v Speaker 3>Basis, Microsoft is adding more revenue per quarter than a

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<v Speaker 3>Palenteer is. And still people are very excited about Palenteer's product,

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<v Speaker 3>you know, prospects, and to my mind, clearly, you know

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<v Speaker 3>they have a product that is appealing to a certain

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<v Speaker 3>section of enterprise users. But at this valuation, I mean,

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<v Speaker 3>they can't sustain that for the next thirty forty quarters,

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<v Speaker 3>which is what they need to show to grow into

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<v Speaker 3>the valuation. And I just don't see from a product

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<v Speaker 3>perspective they'll have the same kind of appeal as a

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<v Speaker 3>Microsoft Copilot or a Google Cloud or you know, any

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<v Speaker 3>of these large companies.

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<v Speaker 5>Some question today, how do you guys value this thing?

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<v Speaker 5>I mean I got it at like two three hundred

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<v Speaker 5>times earning. So that's not the way to go.

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<v Speaker 3>So we've seen that with you know, new IPOs. When

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<v Speaker 3>they come to the market, they get a premium multiple.

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<v Speaker 3>They get traded at you know, thirty forty time sales.

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<v Speaker 3>Snowflake which is a competitor to Palenteer, when it went public,

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<v Speaker 3>it traded at sixty seventy time sales. Look at where

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<v Speaker 3>the stock is now. It's flat since the IPO. Even

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<v Speaker 3>though the company has grown top line at thirty thirty

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<v Speaker 3>five percent Kegger, the stock is flat. So that's what

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<v Speaker 3>I mean by growing into the valuation, because there is

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<v Speaker 3>so much embedded in that upfront multiple that even growing

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<v Speaker 3>at thirty percent is not enough. Palenteer really needs to

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<v Speaker 3>grow at fifty percent to be able to show any

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<v Speaker 3>sort of stock return from.

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<v Speaker 4>This point on. Can it do that?

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<v Speaker 2>No?

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<v Speaker 4>I mean that's why I said I compare the product.

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<v Speaker 3>My initial comments were around comparing Palenteer's product versus other

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<v Speaker 3>large enterprise software makers, and even you know, you go

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<v Speaker 3>down the list, Salesforce service, now Adobe like, these are

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<v Speaker 3>much bigger companies and they have come I hounded at

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<v Speaker 3>twenty percent Keger over the years because they had a

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<v Speaker 3>seat base or a consumption based model. We don't even

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<v Speaker 3>know what kind of a business model Talenteer has. Yes,

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<v Speaker 3>it's winning government deals, Yes it's winning some enterprise deals.

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<v Speaker 3>But we don't know how they account for that revenue

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<v Speaker 3>every quarter. Is it a seat based model, is a

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<v Speaker 3>consumption base? We don't have that kind of visibility to

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<v Speaker 3>their business model.

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<v Speaker 4>All right, make it this red headline out of the way.

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<v Speaker 4>White House fires.

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<v Speaker 5>Most of Puerto Rico's oversight board members not really sure

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<v Speaker 5>what that is, but we're going to have more reporting

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<v Speaker 5>on that coming up. I want to get that headline

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<v Speaker 5>out there. So in a conter party, I can tell

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<v Speaker 5>you the Google story, I can tell you that Microsoft story.

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<v Speaker 5>I have no idea what the Palenteer story is. Can

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<v Speaker 5>you explain it to me like I'm a five year old?

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<v Speaker 3>Yeah, So their software out of the box will help

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<v Speaker 3>you make sense of your big data strategy. They really

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<v Speaker 3>curved out a name for themselves. Big data became the

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<v Speaker 3>thing when a company had a large amount of data,

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<v Speaker 3>whether it's log data or some other type of reporting data.

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<v Speaker 3>They would help you make sense of it because they

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<v Speaker 3>have something proprietary that no one else has in terms

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<v Speaker 3>of organizing that data and making it usable.

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<v Speaker 4>So that's their value proposition.

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<v Speaker 3>But with the AI wave and llms, they were able

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<v Speaker 3>to integrate LLM calls within their offering to develop a

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<v Speaker 3>customer service or a supply chain use case that you

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<v Speaker 3>can apply AI on top of their ontology, which is

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<v Speaker 3>their core product, and a lot of other companies are

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<v Speaker 3>doing the same. To my mind, Microsoft is doing the

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<v Speaker 3>same for their customers. They're trying to embed open AI

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<v Speaker 3>with their core offerings, with their CRM system and help

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<v Speaker 3>them deploy a customer service use case. So the differentiation

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<v Speaker 3>of Balanteer versus Microsoft, to my mind is not that

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<v Speaker 3>big as the valuation reflects. And that's where I'm They're

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<v Speaker 3>not going to grow fifty percent for the next twelve

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<v Speaker 3>to twenty quarters, which is what the valuation is implying.

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<v Speaker 2>Now, how would you compare what they do as far

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<v Speaker 2>as a government contractor versus the commercial side, like which

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<v Speaker 2>is doing better for them?

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<v Speaker 3>Yeah, so they have a much higher exposure to government side.

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<v Speaker 3>I mean government side is still more than fifty percent

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<v Speaker 3>of their revenue. And all these large enterprise software companies

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<v Speaker 3>they have ten to fifteen percent government exposure. So Paleteer's

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<v Speaker 3>government exposure is way too large compared to other software makers.

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<v Speaker 3>And on top of that, their international sales seem to

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<v Speaker 3>be declining at least, you know, on the commercial side,

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<v Speaker 3>because of the polarizing views of the management.

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<v Speaker 4>So if they.

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<v Speaker 3>Were more balanced, probably they would win more international business.

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<v Speaker 3>But right now this is a US centric story, and

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<v Speaker 3>that's where I think it sort of puts a dent

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<v Speaker 3>to the growth rate down the line once they run

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<v Speaker 3>out of the deals that they currently you have signed.

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<v Speaker 5>What's the next thing we need to pay attention to.

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<v Speaker 5>Is there anything earnings wise coming up this week?

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<v Speaker 4>You guys AMD tonight?

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<v Speaker 3>Clearly a lot of that Capex if it is flowing

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<v Speaker 3>to AMD, should show up tonight. And our view is

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<v Speaker 3>clearly the market is shifting from training to infrincing when

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<v Speaker 3>it comes to Capex, and AMD could be one of

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<v Speaker 3>the beneficiaries of that infrincing Capex.

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<v Speaker 5>AMD is the ticker. It's got a market cap of

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<v Speaker 5>two hundred and eighty billion dollars. The stock is up

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<v Speaker 5>forty two percent year to date. So another one of

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<v Speaker 5>men deep stocks is up like huge. I mean, this

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<v Speaker 5>kid was born on third base. Thought he had a

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<v Speaker 5>triple Dude. Everything you touched just be goes, just rips

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<v Speaker 5>to the sky. It's unbelievable. Man Deep Sing, He's one

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<v Speaker 5>of the good ones, folks. Senior tech industranals for Bloomberg Intelligence.

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<v Speaker 5>In fact, that ian on Agran and they manage our

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<v Speaker 5>whole tech coverage area. And it is a global business

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<v Speaker 5>and we we have analysts in Europe, Asia and North America.

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<v Speaker 4>And that's how we do that.

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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 Corplay and Android

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<v Speaker 2>We're nearing kind of like the Friday mark where the

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<v Speaker 2>tgif right, Molsen Core's happy hour, let's go for it.

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<v Speaker 2>They had their earnings come out, so we want to

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<v Speaker 2>do is break it all down for you. Kennon say,

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<v Speaker 2>Bloomberg Intelligence senior consumer product analysts, thanks for coming right

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<v Speaker 2>here in the studio. Rising costs tied to aluminum tariffs.

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<v Speaker 2>This was a big point for them. How much of

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<v Speaker 2>an impact is that having on the company?

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<v Speaker 6>Yeah, Hi, Lisa, it's material. You know, they describe it

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<v Speaker 6>as an indirect cost, but it really spiked up there

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<v Speaker 6>in the quarter, you know, encroaching on their margin.

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<v Speaker 4>I think though.

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<v Speaker 6>The bigger picture though here is the continued week sales,

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<v Speaker 6>the lackluster sales are seeing in the US beer market

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<v Speaker 6>and alcoholic beverages in general. You know, this is their

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<v Speaker 6>peak summer selling season. This is and you know, these

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<v Speaker 6>companies should be thriving, and it looks like the summer

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<v Speaker 6>selling season in the US for alcoholic beverages is going

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<v Speaker 6>to be a dud. It's a cautious consumer, it's a

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<v Speaker 6>particular pressures on the Hispanic demographic. It's it was a

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<v Speaker 6>lousy June in terms of the weather and key markets,

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<v Speaker 6>and basically all the big brewers are setting up for

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<v Speaker 6>a tough second half. As you know, if these trends continue,

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<v Speaker 6>you know, I expect continued sluggish performance in the second

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<v Speaker 6>half as well.

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<v Speaker 5>So is this beer thing? Is it the kind of

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<v Speaker 5>a global thing? I mean, I know, you guys at

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<v Speaker 5>Bloomberg Intelligence, you get the data that choose consumption of

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<v Speaker 5>everything out there.

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<v Speaker 6>In the case of most in course, Paul, Yeah, they

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<v Speaker 6>have a big operation in Europe, Eastern Europe, many parts

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<v Speaker 6>of Western Europe, and that that had they had lower

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<v Speaker 6>volumes as well. It was saved by higher prices to

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<v Speaker 6>a degree. But you know, again, the big picture is

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<v Speaker 6>that consumers are just not going out to the bars

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<v Speaker 6>as much. On premise sales, we're particularly weak. That could

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<v Speaker 6>be weather related, I mean, it's just another example, but

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<v Speaker 6>also I think it could be, you know, the culmination

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<v Speaker 6>of a lot of price increases over the last few years.

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<v Speaker 6>Maybe we've hit a point where there's some sticker shot

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<v Speaker 6>going on here.

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<v Speaker 2>And what about people drinking You said not going to

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<v Speaker 2>the bar, but what about just drinking less alcohol in general.

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<v Speaker 6>Well, that's a great point least, I think. Longer term,

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<v Speaker 6>you have some secular headwinds as well. Things you've talked

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<v Speaker 6>about in the past. You know, the spread of legal cannabis,

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<v Speaker 6>particularly here in the US. In the US, you also

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<v Speaker 6>have these intoxicating hemp drinks which are all the rage

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<v Speaker 6>now in many markets. You have the GLP one users

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<v Speaker 6>are cutting back. Gen Z doesn't seem to embrace alcohol

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<v Speaker 6>as much as their parents did. All those things are

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<v Speaker 6>weighing on it longer term, but that combined with some

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<v Speaker 6>near term pressures, is really weighing on these you know,

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<v Speaker 6>these companies.

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<v Speaker 5>It's a disappointing discussion here. I mean, not that we're

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<v Speaker 5>gonna have fun here. I'll tell you here's the problem

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<v Speaker 5>with all this White.

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<v Speaker 4>Claw and sea Breeze and I don't know what.

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<v Speaker 5>You know, the iced tea in vodka, what's that all about?

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<v Speaker 2>Is that a fad?

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<v Speaker 6>It seems to have some legs there, you know, the

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<v Speaker 6>pre mixed cocktails. Let me put it this way. Some

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<v Speaker 6>of the things that did well in the quarter are

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<v Speaker 6>things like bush light apple. You know, some flavor, some

0:11:23.520 --> 0:11:27.920
<v Speaker 6>flavor out there is coming back apple. You know. Some

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<v Speaker 6>of the hard teas are doing well. The pre mixes

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<v Speaker 6>continue to do well. So I think the way you

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<v Speaker 6>could take away is maybe the consumer, while you know, economizing,

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<v Speaker 6>is also looking for a flavor and different variety and so.

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<v Speaker 6>And also the non alcoholic and low alcoholic segment continues

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<v Speaker 6>to do well from a low base. So I think

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<v Speaker 6>in the second half I would expect a higher level

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<v Speaker 6>of promotion and innovation along those themes low alcohol and

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<v Speaker 6>no alcohol flavor innovation that's going to be really popular,

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<v Speaker 6>I think in the second half the spur volume.

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<v Speaker 2>Hey, before you go, can you break down some of

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<v Speaker 2>those macro economic headwinds that the company's facing.

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<v Speaker 6>Sure, well, the primary one is just you know, consumer confidence.

0:12:13.080 --> 0:12:15.640
<v Speaker 6>Consumers just feel you know, they're reading the papers all

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<v Speaker 6>these you know, tier fund certainties, and you know the

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<v Speaker 6>pressure on the Hispanics in particular, what's going on there.

0:12:24.080 --> 0:12:25.600
<v Speaker 6>Those are the big things, you know, And I don't

0:12:25.600 --> 0:12:27.679
<v Speaker 6>think it's anything major, but it's it's just enough on

0:12:27.720 --> 0:12:30.000
<v Speaker 6>the margin that these are these are purchases that can

0:12:30.040 --> 0:12:33.880
<v Speaker 6>be deferred. H and consumers buy and large are.

0:12:34.160 --> 0:12:37.720
<v Speaker 5>All right, It's not It wasn't very Funkenshey, senior consumer

0:12:37.760 --> 0:12:42.679
<v Speaker 5>products analyst, Bloomberg Intelligence, joining us from a print in.

0:12:43.480 --> 0:12:47.199
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:12:47.280 --> 0:12:50.320
<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

0:12:50.360 --> 0:12:53.679
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0:12:53.720 --> 0:12:56.840
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0:12:57.440 --> 0:13:00.719
<v Speaker 2>Tariffs having a bigger impact on Caterpillar margins shares all over,

0:13:00.760 --> 0:13:02.520
<v Speaker 2>they're down about two tens of percent. So here to

0:13:02.520 --> 0:13:05.959
<v Speaker 2>break down. It's earnings ward Christopher Jillino, Bloomberg Intelligence Senior

0:13:06.080 --> 0:13:09.640
<v Speaker 2>US machinery analyst, Christopher, thanks for joining us this morning.

0:13:09.920 --> 0:13:12.800
<v Speaker 2>All that said, the CEO, Joe Creed, the new CEOs,

0:13:12.800 --> 0:13:14.640
<v Speaker 2>said the company is going to be able to offset

0:13:14.720 --> 0:13:17.520
<v Speaker 2>the impact of tariffs. Did he get into how they're

0:13:17.520 --> 0:13:18.000
<v Speaker 2>going to do that.

0:13:19.400 --> 0:13:21.560
<v Speaker 7>Yeah, The focus initially now was really going to be

0:13:21.679 --> 0:13:24.160
<v Speaker 7>on the cost side of the equation and really some

0:13:24.280 --> 0:13:28.559
<v Speaker 7>you know, internal initiatives and productivity to help mitigate the tariffs.

0:13:29.559 --> 0:13:31.840
<v Speaker 7>They are going to have to raise prices eventually, but

0:13:32.040 --> 0:13:34.040
<v Speaker 7>you know, I think that's probably more of a twenty

0:13:34.080 --> 0:13:37.360
<v Speaker 7>sixth story right now. They're doing their best to kind of,

0:13:37.400 --> 0:13:38.960
<v Speaker 7>you know, mitigate this internally.

0:13:40.440 --> 0:13:43.360
<v Speaker 5>So talk to us about underlying demand out there for

0:13:43.640 --> 0:13:46.640
<v Speaker 5>Caterpillar tractors. What's the company saying?

0:13:47.840 --> 0:13:50.200
<v Speaker 7>Yeah, So I think this is really the big takeaway

0:13:50.200 --> 0:13:52.880
<v Speaker 7>from the quarter. You know, the print was a little weak,

0:13:53.040 --> 0:13:56.160
<v Speaker 7>it came in a little below expectations, But I think

0:13:56.200 --> 0:13:59.000
<v Speaker 7>the big takeaway here is that underlying demand is still

0:13:59.080 --> 0:14:03.360
<v Speaker 7>pretty darn reszils. You had backlog ubsequentially again this quarter,

0:14:03.360 --> 0:14:07.000
<v Speaker 7>which set another record. You had improving order trends across

0:14:07.040 --> 0:14:10.800
<v Speaker 7>all three of their main businesses. Dealer inventories still remain

0:14:10.920 --> 0:14:14.080
<v Speaker 7>quite low, and the company actually raised their sales guidance

0:14:14.120 --> 0:14:16.520
<v Speaker 7>for the year. So you know, that seems to suggest

0:14:16.679 --> 0:14:19.960
<v Speaker 7>us that underlying demand is still intact despite all these

0:14:20.040 --> 0:14:21.120
<v Speaker 7>these tariff headwinds.

0:14:21.680 --> 0:14:23.800
<v Speaker 2>And now, how did their results kind of match up

0:14:23.840 --> 0:14:26.080
<v Speaker 2>to some of their their peers if they believe there's

0:14:26.320 --> 0:14:28.960
<v Speaker 2>Terrex Lindsay who already opened their books, how did the

0:14:29.000 --> 0:14:30.120
<v Speaker 2>how does Caterpillar match up?

0:14:31.200 --> 0:14:34.600
<v Speaker 7>Yeah, I characterized the overall earning season for for US

0:14:34.640 --> 0:14:38.200
<v Speaker 7>machinery is kind of mixed. If you think about really

0:14:38.280 --> 0:14:43.720
<v Speaker 7>construction peers, which which is kind of more Caterpillars sweet spot.

0:14:44.600 --> 0:14:46.920
<v Speaker 7>That's a market that's you know, kind of bouncing along

0:14:46.960 --> 0:14:51.560
<v Speaker 7>the bottom. Here. We do have you know, infrastructure projects

0:14:51.720 --> 0:14:54.680
<v Speaker 7>and these large megat projects which are helping to offset

0:14:54.960 --> 0:14:57.320
<v Speaker 7>some of the weakness that you're seeing on the private,

0:14:57.400 --> 0:15:00.440
<v Speaker 7>non residential side, things that are more interest rates inive.

0:15:01.160 --> 0:15:03.560
<v Speaker 7>But you know, you're starting to see some positive indicators

0:15:03.560 --> 0:15:05.680
<v Speaker 7>that would you know, lead us to believe that you're

0:15:05.680 --> 0:15:08.040
<v Speaker 7>going to start to see a cyclicl of recovery emerge

0:15:08.320 --> 0:15:10.480
<v Speaker 7>in twenty twenty six. There's a number of you know,

0:15:10.560 --> 0:15:12.800
<v Speaker 7>leading indicators out there that would support that, And I

0:15:12.800 --> 0:15:16.680
<v Speaker 7>think really Caterpillars results here with orders being up in

0:15:16.720 --> 0:15:19.480
<v Speaker 7>the construction business, with the backlog being up, really kind

0:15:19.480 --> 0:15:20.680
<v Speaker 7>of reinforced that view.

0:15:22.160 --> 0:15:26.520
<v Speaker 5>Where does Caterpillar make their big trucks and stuff like

0:15:26.560 --> 0:15:28.680
<v Speaker 5>that everywhere?

0:15:28.760 --> 0:15:28.960
<v Speaker 1>Right?

0:15:29.000 --> 0:15:32.880
<v Speaker 7>They're they're a global company. They've got a large footprint

0:15:33.320 --> 0:15:37.400
<v Speaker 7>that spans you know, every continent in you know, most countries.

0:15:38.040 --> 0:15:38.720
<v Speaker 4>But if you think.

0:15:38.560 --> 0:15:41.200
<v Speaker 7>About it, at the end of the day, it's North America, right,

0:15:41.320 --> 0:15:44.600
<v Speaker 7>It's more than half of their revenues. Europe is called it,

0:15:44.680 --> 0:15:48.320
<v Speaker 7>you know, twenty percent, ish Asia Pacific a little bit

0:15:48.360 --> 0:15:50.640
<v Speaker 7>below that, and then you know Latin America is kind

0:15:50.640 --> 0:15:53.840
<v Speaker 7>of closer to ten percent. They are a net exporter

0:15:53.920 --> 0:15:56.760
<v Speaker 7>out of the US. But as we saw today, you know,

0:15:56.800 --> 0:15:58.480
<v Speaker 7>Tariff's probably going to be a little bit more of

0:15:58.680 --> 0:16:02.040
<v Speaker 7>ahead wind they than they had an initially anticipated. They're

0:16:02.080 --> 0:16:04.320
<v Speaker 7>looking for, you know, somewhere between a one point three

0:16:04.400 --> 0:16:07.320
<v Speaker 7>to a one point five billion dollar hit for this year.

0:16:07.840 --> 0:16:10.120
<v Speaker 2>So, Chris, you kind of touched upon this. Sales slipped

0:16:10.120 --> 0:16:14.040
<v Speaker 2>in construction resource industries, but energy and transportation unit that

0:16:14.080 --> 0:16:17.520
<v Speaker 2>had some higher sales. What is that that driving force

0:16:17.680 --> 0:16:19.800
<v Speaker 2>behind the growth in engines and transportation.

0:16:21.080 --> 0:16:23.480
<v Speaker 7>So this continues to be one of really the big

0:16:23.560 --> 0:16:26.560
<v Speaker 7>highlights for Caterpillar, you know, despite some of the cyclical

0:16:27.000 --> 0:16:31.320
<v Speaker 7>softness that they're seeing, is the energy and transportation business,

0:16:31.760 --> 0:16:35.800
<v Speaker 7>particularly in power generation. So think you know, data centers

0:16:35.800 --> 0:16:39.680
<v Speaker 7>that are becoming an increasingly big larger part of the portfolio.

0:16:40.440 --> 0:16:43.560
<v Speaker 7>Power gen continues to drive outsize growth within the energy

0:16:43.560 --> 0:16:48.000
<v Speaker 7>and transportation business. There's you know, a multi year backlog there,

0:16:48.000 --> 0:16:51.480
<v Speaker 7>so we have, you know, veryly tremendous visibility. And what

0:16:51.520 --> 0:16:55.160
<v Speaker 7>Caterpillar is doing now is really expanding capacity to help,

0:16:55.240 --> 0:16:58.360
<v Speaker 7>you know, meet this growing demand for data centers and

0:16:58.480 --> 0:17:03.880
<v Speaker 7>power generation. So there's a long secular tailwind at play

0:17:03.920 --> 0:17:05.560
<v Speaker 7>here and really, you know, we think we have a

0:17:05.600 --> 0:17:08.840
<v Speaker 7>pretty good visibility here over the back half of the decade.

0:17:09.200 --> 0:17:13.280
<v Speaker 5>So is Caterpillar and companies like Caterpillar, are they benefiting

0:17:13.400 --> 0:17:16.359
<v Speaker 5>or do you expect them to benefit from maybe on

0:17:16.600 --> 0:17:20.240
<v Speaker 5>shoring even more manufacturing in this country if to the

0:17:20.280 --> 0:17:22.840
<v Speaker 5>extend that President Trump you know, wants to do that

0:17:22.920 --> 0:17:24.520
<v Speaker 5>and he's been talking about that a lot. Is that

0:17:24.640 --> 0:17:28.600
<v Speaker 5>something where kat would will see it?

0:17:28.880 --> 0:17:32.640
<v Speaker 7>Yeah, I mean I would say we haven't really heard

0:17:32.640 --> 0:17:36.160
<v Speaker 7>of you know, I would say concrete or tangible evidence

0:17:36.200 --> 0:17:39.199
<v Speaker 7>of that happening yet, and it's really difficult to you know,

0:17:40.119 --> 0:17:42.520
<v Speaker 7>get a lens on that on a quarter to quarter

0:17:42.640 --> 0:17:44.280
<v Speaker 7>I think, you know, if we look back, maybe over

0:17:45.000 --> 0:17:47.640
<v Speaker 7>a five year window, maybe we'll have a better picture

0:17:47.640 --> 0:17:49.680
<v Speaker 7>of that. But yet, no doubt, Caterpillar is a big

0:17:49.680 --> 0:17:55.800
<v Speaker 7>beneficiary of any kind of construction activity here domestically. And

0:17:55.800 --> 0:17:57.800
<v Speaker 7>then not only on top of you know, not only

0:17:57.880 --> 0:18:02.480
<v Speaker 7>just moving the dirt and building the the facilities, they

0:18:02.520 --> 0:18:05.080
<v Speaker 7>are also, like I mentioned, having a have a bigger

0:18:05.119 --> 0:18:09.720
<v Speaker 7>piece of the data center and power generation needs within

0:18:09.800 --> 0:18:13.040
<v Speaker 7>our within our country as well. So it's really kind

0:18:13.080 --> 0:18:16.320
<v Speaker 7>of twofold, not only you know, with the moving the

0:18:16.400 --> 0:18:19.680
<v Speaker 7>dirt and the facilities, but also you know, longer term,

0:18:19.680 --> 0:18:23.800
<v Speaker 7>we think the secular tailwinds around power generation are you know,

0:18:23.960 --> 0:18:24.800
<v Speaker 7>pretty favorable.

0:18:25.160 --> 0:18:26.920
<v Speaker 2>Hey, Chris, before you go, we have like about a

0:18:26.960 --> 0:18:29.679
<v Speaker 2>minute or so left. People usually say this is like

0:18:29.680 --> 0:18:31.919
<v Speaker 2>the Bell Weather for a look at the economy. Is

0:18:31.920 --> 0:18:35.280
<v Speaker 2>this company can going to continue to be that spot

0:18:35.280 --> 0:18:36.240
<v Speaker 2>and to hold that title.

0:18:37.600 --> 0:18:40.680
<v Speaker 7>I don't see anything changing in the near term here.

0:18:40.800 --> 0:18:46.080
<v Speaker 7>They are the largest global manufacturer of heavy machinery. They

0:18:46.119 --> 0:18:50.520
<v Speaker 7>have the scale, the dealer network, and really there's not

0:18:50.600 --> 0:18:53.400
<v Speaker 7>too many competitors that are are that close to them.

0:18:53.440 --> 0:18:58.400
<v Speaker 7>So they are the leading indicator for the heavy machinery

0:18:58.480 --> 0:19:01.520
<v Speaker 7>markets and construction activity. And I don't foresee that changing

0:19:01.560 --> 0:19:02.240
<v Speaker 7>anytime soon.

0:19:02.600 --> 0:19:04.080
<v Speaker 5>All right, Chris Chilian, I thank you so much. We

0:19:04.119 --> 0:19:07.960
<v Speaker 5>appreciated that. Chris Chilian covers all the big equipment manufacturing

0:19:08.040 --> 0:19:10.880
<v Speaker 5>companies for Bloomberg Intelligence. Just leaving a Caterpillar here based

0:19:10.880 --> 0:19:15.360
<v Speaker 5>in Irving, Texas, one hundred and thirteen thousand employees. It's

0:19:15.359 --> 0:19:20.399
<v Speaker 5>got a market cap of two hundred billion dollars, stocks

0:19:20.480 --> 0:19:22.840
<v Speaker 5>up like twenty percent this year. It's Chris was saying,

0:19:23.119 --> 0:19:27.919
<v Speaker 5>one of the plays on this data data center construction plays.

0:19:27.960 --> 0:19:32.280
<v Speaker 5>I mean, there's so many peripheral derivative plays off of AI.

0:19:33.000 --> 0:19:36.480
<v Speaker 5>It even gets to Caterpillar, who's going to be you know,

0:19:36.520 --> 0:19:38.520
<v Speaker 5>their equipment's can be used to build all these data

0:19:38.520 --> 0:19:41.800
<v Speaker 5>centers that are going to be used for AI. It's just,

0:19:42.000 --> 0:19:43.360
<v Speaker 5>you know, it's everywhere.

0:19:43.440 --> 0:19:45.640
<v Speaker 2>Have you ever been on one of these machineries. They

0:19:45.720 --> 0:19:49.400
<v Speaker 2>are massive. Some of the I know, like the bulldozers.

0:19:48.680 --> 0:19:52.240
<v Speaker 5>And that you know Karen Ubelheart who's covered these names

0:19:52.240 --> 0:19:54.600
<v Speaker 5>for decades. She's got some amazing pictures of her up

0:19:54.640 --> 0:19:57.280
<v Speaker 5>on these most big farms, on these huge tractors, and.

0:19:57.920 --> 0:19:59.919
<v Speaker 2>What it takes behind it to make these is is

0:20:00.000 --> 0:20:00.560
<v Speaker 2>It's incredible.

0:20:00.600 --> 0:20:02.479
<v Speaker 5>I'd love to see a manufacturing facility to see how

0:20:02.520 --> 0:20:05.120
<v Speaker 5>you make one of those huge tractors.

0:20:05.960 --> 0:20:10.639
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