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

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on Apple Coarcklay and Android Auto with the Bloomberg

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Speaker 1: Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: Another big, big noise, I would say, news story coming

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Speaker 2: out of the technology space. Meta will buy AMD chips

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Speaker 2: and computers designed to run artificial intelligence models over a

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Speaker 2: five year stretch beginning the second half of twenty twenty six.

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Speaker 2: And this is a kicker for me and I received

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Speaker 2: warrants to buy one hundred and sixty million AMD shares.

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Speaker 3: Pretty cool.

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Speaker 2: Let's get the latest reporting there at ludlow b tech

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Speaker 2: co host he's out there in San Francisco. Add another

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Speaker 2: big deal, another two mega companies here doing some big

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Speaker 2: business together.

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Speaker 4: What do you make of it?

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Speaker 5: Yeah, I mean it's very large scale. Six gigle lots

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Speaker 5: of capacity is equivalent to the output of six nuclear reactors.

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Speaker 5: It's the enough power for several million homes. The average

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Speaker 5: size of a data center is about three hundred to

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Speaker 5: five hundred megawatts, So it is a sort of multi

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Speaker 5: year massive commitment and you know the market has faded

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Speaker 5: a little bit in terms of AMD share reaction, but

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Speaker 5: it's quite a big bet by Meta. The AMD's technology,

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Speaker 5: in particular its AI accelerators, the chips that will be

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Speaker 5: used to run models and what we call inference are effective.

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Speaker 5: But the warrants bit, I agree, very interesting, Like is

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Speaker 5: it or is it not circular financing? I'm always up

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Speaker 5: to debate it.

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Speaker 3: And of course we.

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Speaker 6: Know that Meta announced a tie up with Nvidia just

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Speaker 6: last week, so this is about Meta also diversifying its

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Speaker 6: partners in this build out. How much do we know

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Speaker 6: or can we guess that Meta is spending on this partnership,

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Speaker 6: on this transaction.

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Speaker 5: Well, on this AMD one. The way that Lisa Sue

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Speaker 5: and AMD put it is that it's double digit billions

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Speaker 5: per gigawat, So it's tens of billions of dollars over

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Speaker 5: the five years. Remember, AMD is a distant number two

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Speaker 5: player with respect. You know, it's all of its revenues

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Speaker 5: are about ten billion dollars a quarter, which includes the

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Speaker 5: data center part in Video's just data center part is

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Speaker 5: more than fifty billion dollars, So you know they've got

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Speaker 5: some ways to catch up. But yeah, it's very significant scale.

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Speaker 5: And on the Meta side, right, you know, Mark zucker

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Speaker 5: both said it next to the President. He's committing to

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Speaker 5: spending about six hundred billion dollars over the next five

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Speaker 5: years or more. And you know he's always said that

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Speaker 5: like if they misspend quote two hundred billion dollars here

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Speaker 5: or there, the risk of not spending that money is

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Speaker 5: greater for them. So the stocks like down half a

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Speaker 5: percentage point right now. But yeah, you know, most people,

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Speaker 5: this is consistent with what we'd expect from Meta ed.

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Speaker 2: What I'm seeing as I'm coming up to speed and

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Speaker 2: all things AI and the lingo, that's you the net industry.

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Speaker 2: When Meta agrees to buy AMD chips computers, Okay, I

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Speaker 2: get that. Where does the whole concept of measuring this

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Speaker 2: in terms of gigawatts and power?

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Speaker 4: How does that work into the story?

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Speaker 5: Oh that's a really no, that's a really smart question. Basically,

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Speaker 5: like data is transferred via electrons, there's work in more

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Speaker 5: nascent fields of transferring data via photons light in other words,

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Speaker 5: but inside the server, that's how data passes through electrons.

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Speaker 5: There is a heavy electricity draw to power the whole system,

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Speaker 5: not just to run the GPUs and run the computations,

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Speaker 5: but also like everything involved in cooling and heat dissipation.

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Speaker 5: Like we're talking about electricity and that's why it's measured

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Speaker 5: such and like to go back to Scarlett's earlier question,

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Speaker 5: like this is six gigawatts just between Meta and AMD,

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Speaker 5: but Meta has plans to install like tens of gigawatts

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Speaker 5: by the end of this decade, and then beyond that,

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Speaker 5: like hundreds of gigawatts, you know, completely different scale to

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Speaker 5: what we've we've been talking about. That that's why we

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Speaker 5: track so closely in parallel what is happening with grid

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Speaker 5: and energy infrastructure, because the burden is is you know,

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Speaker 5: it's not you can't even compute it with the human brain.

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Speaker 3: That's kind of what we're talking about. Stay with us.

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Speaker 3: More from Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: One of the things we're keeping an eye on is

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Speaker 2: this big M and a trade in the media space

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Speaker 2: Warner Brothers Discovery. What do we know we know that

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Speaker 2: it's for sale. We know that Netflix has an offer

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Speaker 2: that's been accepted.

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Speaker 4: By Warner Brothers Discovery. That's a good thing.

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Speaker 2: But we also know that Paramount's guidance is very interested.

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Speaker 2: It's made repeated bids for this company, and it's been

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Speaker 2: reported most recently that Paramount's actually raised its bid a

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Speaker 2: little bit. But I don't know where we are. That's

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Speaker 2: kind of it's been hang and on for such a

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Speaker 2: long time here. Somebody is following this stuff very closely,

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Speaker 2: and that's Keitha Ranganathan. She is the media analyst for

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Speaker 2: Bloomberg Intelligence. She follows all of the media companies out there. Githa,

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Speaker 2: I guess Paramount's coming up with a higher offer. Do

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Speaker 2: we have any details of what this new offer for

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Speaker 2: Warner Brothers Discovery is?

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Speaker 7: Yeah, thanks Paul. So we don't have the dollar amount.

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Speaker 7: We know that it's above thirty dollars a share. That's

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Speaker 7: the that's the tender offer that they launched a few

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Speaker 7: months ago for all of Warner Brothers Discovery. They had

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Speaker 7: informally agreed to take the number up to thirty one

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Speaker 7: dollars or above thirty one dollars. But we still do

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Speaker 7: not have clarity on the number that they have revised

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Speaker 7: it too. And you know, we're still kind of I

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Speaker 7: think at least the Warner Brothers shareholders oneer brother Discovery

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Speaker 7: shareholders are still kind of waiting for that best and

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Speaker 7: final offer. So still, you know, a lot of details

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Speaker 7: not really disclosed. We have to wait to hear back

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Speaker 7: and see what the Warner Brothers Discovery board de sides.

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Speaker 2: You know, I'm looking at Netflix's stock. It's down seventeen

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Speaker 2: percent this year, It's down twenty two percent on the

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Speaker 2: trailing twelve months. This is a stock that did nothing

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Speaker 2: but go up for years and years. Do Netflix shareholders

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Speaker 2: how are they viewing this potential deal for Warner Brothers.

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Speaker 7: Yeah, so, you know, at this point, I think majority

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Speaker 7: of the investors really view it as a distraction, at

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Speaker 7: least in the near term. I mean, we've seen this

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Speaker 7: happen time and time again. When you know, winning an Emina,

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Speaker 7: there's always this this kind of cloud with M and A.

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Speaker 7: You know, you just don't know whether the deal is

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Speaker 7: actually actually going to work. Execution risk is there, Integration

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Speaker 7: risk is there? For Netflix? There is the added complexity

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Speaker 7: of you know, a long regulatory road one doesn't really

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Speaker 7: know how any of that scrutiny is going to play

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Speaker 7: out on the regulatory side, on the anti trust side.

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Speaker 7: So there's just a lot of uncertainty at this time, Paul,

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Speaker 7: And you know, we do know that the underlying story,

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Speaker 7: the underlying business economics for Netflix is working. I mean,

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Speaker 7: they have subscriber growth, they have pricing power, they have

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Speaker 7: a new lever in the form of advertising, which is

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Speaker 7: expected to take off in a big way this year.

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Speaker 7: So all of the underlying drivers are in place. Does

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Speaker 7: the Warner Brothers deal help? Absolutely? It is a nice

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Speaker 7: to have, but it is not a must have. And

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Speaker 7: I think what the Netflix shareholders have been really afraid

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Speaker 7: of is Netflix over paying for this asset. We know

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Speaker 7: that at the current offer they're already paying twenty five

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Speaker 7: times EBITDA. Is Warner Brothers worth that? One can argue that,

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Speaker 7: yes it is. It does have some global great franchises,

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Speaker 7: But going above and trying to match paramount's offer that

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Speaker 7: could be a risky move and I don't think shareholders would.

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Speaker 3: Like that, KEITHA.

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Speaker 2: You know, in my view, Lisa and I've read across

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Speaker 2: some Wall Street research, this is deal for Netflix. It's

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Speaker 2: a nice to have obviously great, great assets, but for Paramount,

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Speaker 2: it's kind of a must have. What happens to paramount

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Speaker 2: S guidance.

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Speaker 4: If they don't get this Warner Brothers deal.

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Speaker 7: Yeah, yeah, that's the big head scratcher, Paul. I mean,

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Speaker 7: there is effectively no plan B for Paramount skuidance.

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Speaker 8: You know.

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Speaker 7: One of the things that has been kind of debated

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Speaker 7: a lot is you know, who can they combine with? Obviously, organically,

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Speaker 7: the growth prospects look extremely bleak. You know, they have

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Speaker 7: about sixty percent exposure to a declining linear TV ecosystem

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Speaker 7: the studio business while it's up and down. The streaming business. Yeah,

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Speaker 7: they've done okay, but again it's still subscale with only

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Speaker 7: about eighty million subscribers. So they absolutely need to have

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Speaker 7: a dance partner. The question is who do they combine

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Speaker 7: with if they don't have Warner Brothers Discovery. Obviously one

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Speaker 7: of the choices out there is Comcasts NBC. We'll have

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Speaker 7: to wait and watch because again, there could be potentially

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Speaker 7: a lot of regulatory issues because you do have two

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Speaker 7: broadcast networks with CBS as well as NBC, So I'm

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Speaker 7: not sure how that works, but that is potentially an

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Speaker 7: option that they can explore if the Warner Brothers deal

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Speaker 7: doesn't work out.

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Speaker 3: Stay with us. More from Blue Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: Novo Nordisk plans to slash US list prices for its

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Speaker 2: medicines Wigovy and Ozempic next year.

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Speaker 4: We are Wigov households, so this is good news there.

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Speaker 2: Michael Shaw, senior at Pharma Biotech analyst for Bloomberg Intelligence,

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Speaker 2: joins us from London. Mikey, what's Novo doing here? They're

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Speaker 2: going for market share? What's the plan here?

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Speaker 8: Yeah?

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Speaker 9: I think that, I mean the slashing of the list

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Speaker 9: price would I mean, would essentially improve access. I think

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Speaker 9: in terms of the price cut, so fifty percent on

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Speaker 9: the list, so it's bringing down the monthly cost down

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Speaker 9: of thirteen fifty to about six five dollars per month.

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Speaker 9: I mean, you won't see that sort of discount translate

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Speaker 9: to the net price, so I think it's important to

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Speaker 9: kind of make that distinction between the list and the net.

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Speaker 9: I mean what it does mean is, you know, Nova

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Speaker 9: will be essentially negotiating with insurers off a lower base

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Speaker 9: and then you'll probably see some adjustment in in the

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Speaker 9: discount or rebate offered. But I don't think that fifty

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Speaker 9: percent is going to translate down to the net net price.

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Speaker 9: I think what's also important to note is, I mean

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Speaker 9: it's going to benefit you know, patients here with high

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Speaker 9: deductibles insurance plans or patients that have co insurance plans

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Speaker 9: that where you know they're they're paying a percentage of

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Speaker 9: the list price. But it doesn't affect kind of pricing

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Speaker 9: in the in the in the director, the patient channel,

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Speaker 9: or the set or the self pay prices, which are

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Speaker 9: obviously you know, a key driver of sales and volume

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Speaker 9: at the moment. So the flaw here is effectively sent

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Speaker 9: by by by trump bar x. Where the drugs are

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Speaker 9: available at about three hundred and fifty dollars per month, how.

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Speaker 6: Do patients decide whether they want the Eli Lily pill

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Speaker 6: versus the Novo pill? Is it just whatever their doctor prescribes.

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Speaker 6: The more are people going out in and actively saying

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Speaker 6: I want this one over that one.

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Speaker 9: Well, the Lily pill hasn't been.

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Speaker 6: Injection at this point.

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Speaker 9: Yeah, but I mean in terms of the injects also

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Speaker 9: zet bound versus we GOOVI. I think in general, you know,

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Speaker 9: based on our the prescribers that we've spoken to, and

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Speaker 9: also based on the clinical data that's out there, Lily's

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Speaker 9: got the superior product. I think that was, you know,

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Speaker 9: clear in head to head studies as a redefined foretrial

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Speaker 9: that read out you know, a couple of days ago,

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Speaker 9: and you know, the base case there was for Novo's

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Speaker 9: we're goby to show non inferiority versus zet bound didn't

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Speaker 9: meet its primary endpoint. The weight loss actually looked you inferior.

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Speaker 9: There are a few caveats there. So in general, I think,

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Speaker 9: you know, doctor is well, the ones we've spoken to,

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Speaker 9: you know, prefers that in reality, it comes down to

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Speaker 9: essentially cost and whatever the patient can access either through

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Speaker 9: you know, what they can afford or their insurance pan.

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Speaker 9: Mike yah. I know.

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Speaker 2: You guys, since the beginning of all this have kind

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Speaker 2: of scoped out the size of the market here, and

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Speaker 2: the numbers are just huge. What does the introduction of

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Speaker 2: an oral dosage mean for maybe growing a number of

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Speaker 2: patients that may be attracted here.

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Speaker 9: Yeah, so I mean we still see you know, a

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Speaker 9: place for orals and injectibles. Orals obviously helps improve access,

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Speaker 9: they're cheaper, they don't face the same film finished constraints

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Speaker 9: of an injectable treatment. And then in terms of kind

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Speaker 9: of positioning, whether they're going to use for you know,

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Speaker 9: weight loss induction or weight loss maintenance. I think that

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Speaker 9: you know, the jury is still out on that. You know,

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Speaker 9: different people we've spoken to, in different companies that we've

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Speaker 9: spoken to, you know, have different views on the positioning

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Speaker 9: of an oral versus an injectable. But I mean I

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Speaker 9: think there's going to be room for both, and you know,

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Speaker 9: both formulations are going to be utilized.

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Speaker 2: What's the next real I guess big move here in

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Speaker 2: this part of the market. I mean, I think getting

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Speaker 2: the oral dosage is big. What's the next big thing?

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Speaker 2: Is it just improving it? Maybe lowering the side effects?

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Speaker 2: What are you looking for next?

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Speaker 9: Yes, I mean when we look at we've done an

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Speaker 9: analysis into the pipeline for a b C. So I

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Speaker 9: mean there's you know, more than one hundred and ninety

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Speaker 9: assets in clinic. It's heavily dominated by it by GLP one,

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Speaker 9: So there's going to be a need for new mechanisms

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Speaker 9: outside of GLP one. One of the key ones coming

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Speaker 9: through the pipeline at the moment and is going to

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Speaker 9: be in focus this year is going to be amelin.

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Speaker 9: So the idea here is to have I mean it's

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Speaker 9: a different it's a non incredit mechanism. It's an injection,

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Speaker 9: a weekly injection. But the idea here is to basically

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Speaker 9: have GLP one like weight loss, but with better tolerability.

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Speaker 9: So as you know, you know, one of the main

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Speaker 9: drawbacks at the moment of GLP one therapy is the

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Speaker 9: gi side effects of the gasher intestinal side effects, which

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Speaker 9: leads to disc discontinuations. So amline aims to solve that problem.

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Speaker 9: You know, we don't need to see kind of more

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Speaker 9: than twenty percent weight loss, so amline drugs are generally

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Speaker 9: targeting fifteen to twenty percent weight loss over over a year,

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Speaker 9: but we do want to see that improvement in tolerability

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Speaker 9: if it can show improvements in body composition. So that's

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Speaker 9: fat mass loss versus muscle mass loss. You know, that's

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Speaker 9: going to be considered a bonus. So that's really going

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Speaker 9: to be you know the next the next focus, or

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Speaker 9: the next wave of innovation in in obuc.

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Speaker 3: Stay with us more from Bloomberg Intelligence coming up for this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto

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Speaker 1: get your podcasts, or watch us live on YouTube.

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Speaker 2: Earnings still kind of have trickling in here. We at

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Speaker 2: Home Depot reported some numbers today's so pretty good numbers,

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Speaker 2: pretty good outook stocks up about two point nine percent today,

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Speaker 2: It's up about thirteen percent year to date.

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Speaker 3: It's got a.

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Speaker 4: Market cap at three hundred and eighty six billion dollars.

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Speaker 3: Let's check in with Drew Reading.

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Speaker 2: He covers all the homebuilders and all the related stocks there,

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Speaker 2: including the home depots of the world. Drew, what'd you

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Speaker 2: make from the earnings coming out of Home Depot.

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Speaker 8: Yeah, it was a solid print for Home Depot, be

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Speaker 8: on same store sales with a little bit of weather impact.

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Speaker 8: I think importantly, they maintained their four year guidance that

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Speaker 8: they issued at their December Analyst stay calling for comp

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Speaker 8: sales of zero to two percent. You know, quite Frankly,

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Speaker 8: when you think about Home Depot, it's really been steady

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Speaker 8: as she goes for several quarters. If you strip out

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Speaker 8: all the weather impacts that we've seen over the last

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Speaker 8: couple of years, they're really growing demand at about a

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Speaker 8: one percent comp range. So their customer has been resilient.

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Speaker 8: As you heard on the call, though, the problem is

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Speaker 8: there's just not really a catalyst for a significant next

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Speaker 8: leg of growth, and a lot of that has to

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Speaker 8: do with what we're seeing in the housing market.

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Speaker 6: Right Affordability still remains a big issue. All the mortgage

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Speaker 6: rates have come down, so that should be a positive

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Speaker 6: for Home Depot.

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Speaker 8: No, Yeah, of course, lower mortgage rates rates we do

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Speaker 8: expect will stimulate demand throughout the year. You know, it

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Speaker 8: should also encourage more refinance and activity, which could support

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Speaker 8: bigger ticket spending this year. Is we just haven't seen

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Speaker 8: it yet.

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Speaker 9: If you look at existing.

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Speaker 8: Home sales in December, they were below a four million

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Speaker 8: annualized rate. That's about twenty five percent below kind of

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Speaker 8: what the normalized market would look like. You know, one

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Speaker 8: of the big issues that's out there. We heard it

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Speaker 8: from Home DEEPO, and we hear it from all of

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Speaker 8: the builders that we taught to is that there's just

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Speaker 8: a lack of confidence at the moment, whether it's the

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Speaker 8: direction of the economy or the outlook for employment, there's

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Speaker 8: just a lack of urgency among buyers. And if you

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Speaker 8: think about it, there's a lot of people sitting on

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Speaker 8: the fence looking at the headlines, saying to themselves, look,

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Speaker 8: maybe home prices are going to come down, maybe mortgage

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Speaker 8: rates are going to come down further. So they're taking

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Speaker 8: more of a wait and see approach. So I think

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Speaker 8: until you know, we could kind of rebuild that confidence.

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Speaker 8: You know, lower rates aren't having much of an impact.

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Speaker 3: Drew.

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Speaker 2: Just the last several days, the tariff's story and narrative

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Speaker 2: has kind of reared its ugly head again.

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Speaker 3: Just refresh our memory out of the.

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Speaker 2: Home you know, the home depots of the world, how

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Speaker 2: they dealt with tariffs over the last year or so.

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Speaker 8: Sure so, for for some context, home Depot sources about

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Speaker 8: fifty to sixty percent of the products they sell from

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Speaker 8: North America, so those aren't subject to tariffs. The remaining portion,

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Speaker 8: you know, comes from you know, a number of countries.

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Speaker 8: They've done well to diversify their supply chain. What they

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Speaker 8: told US today is that they've pretty much implemented all

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Speaker 8: of the pricing in terms of tariffs that they're going

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Speaker 8: to do. It's about a three percent increase. We've seen

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Speaker 8: it in average ticket this quarter, and they expect that

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Speaker 8: to drive average ticket in twenty twenty six. As it

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Speaker 8: relates to you know, the comments we heard Friday and

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Speaker 8: over the weekend, as you would expect given it's you know,

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Speaker 8: happening in real time and a fluid situation, they said

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Speaker 8: they're still analyzing the impact.

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Speaker 6: And very quickly drew before we let you go home

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Speaker 6: deeple small arrival. Lows will be reporting earnings tomorrow morning.

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Speaker 6: Are we expecting a similar story from Lows?

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Speaker 8: Yeah. I would expect to hear from Lows the strength

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Speaker 8: of their professional customer. They've done well to invest in

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Speaker 8: a space where they've kind of ignored for you know,

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Speaker 8: a couple of years. That's really driven out performance of

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Speaker 8: home depot. So we expect to hear relative strength there,

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Speaker 8: a little pick up from weather, but big picture, I

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Speaker 8: do expect a continue to hear that big ticket discretionary

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Speaker 8: spending remains challenged by these same things that we discussed,

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Speaker 8: whether it's related to housing or overall sentiment from the consumer.

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