WEBVTT - U.S Services Growth Cools, 10 Companies to Watch 0:00:02.920 --> 0:00:10.840 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.840 --> 0:00:15.000 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:15.040 --> 0:00:18.040 Eastern on Affo, Cardplay and Android Auto with the Bloomberg 0:00:18.079 --> 0:00:21.400 Business App. Listen on demand wherever you get your podcasts, 0:00:21.640 --> 0:00:23.360 or watch us live on YouTube. 0:00:23.440 --> 0:00:27.200 But it's hard to understand, at least for me. The 0:00:27.240 --> 0:00:29.760 ISM Services index. John was just saying comes in a 0:00:29.760 --> 0:00:33.240 bit light. Price is paid coming in light, employment coming 0:00:33.320 --> 0:00:35.519 in light, and new orders coming in light, but like 0:00:35.600 --> 0:00:37.400 some of them are still over expansion. So we've got 0:00:37.440 --> 0:00:39.720 to get to the guy behind the data. Anthony Yavis 0:00:39.800 --> 0:00:42.960 is chair of the Ism Services Business Committee, and he 0:00:43.080 --> 0:00:45.040 is here with us to help break down this data. 0:00:45.080 --> 0:00:47.839 Is this a good report or is this a slowing 0:00:48.000 --> 0:00:48.680 bad report? 0:00:51.000 --> 0:00:52.960 I look at it as being a good report, and 0:00:53.000 --> 0:00:55.960 the reason being, as we know the baseline being fifty, 0:00:56.040 --> 0:00:59.080 we're still experiencing growth month over months. So even though 0:00:59.120 --> 0:01:01.600 we had this pulled back of one point two percentage 0:01:01.640 --> 0:01:04.240 points to the fifty one point four from fifty two 0:01:04.280 --> 0:01:08.119 point six, activity still looks fairly strong. It's up point 0:01:08.120 --> 0:01:11.520 two percentage points and new orders, which tells us what's 0:01:11.520 --> 0:01:14.800 in the pipeline. Did come down one point seven percent, 0:01:14.920 --> 0:01:17.200 but again we're north of the fifty baseline. It's a 0:01:17.280 --> 0:01:20.880 fifty four point four, which indicates that we'll have continued growth. 0:01:21.720 --> 0:01:24.759 As you mentioned in the prelude, that we see employment 0:01:25.440 --> 0:01:28.800 and deliveries of what's pulling down the composite index here. 0:01:29.680 --> 0:01:32.120 So again, as we think about the services part of 0:01:32.160 --> 0:01:36.000 the economy, the major part of the US economy, again 0:01:36.080 --> 0:01:38.640 just for our listeners and our viewers, anything above fifty 0:01:38.800 --> 0:01:42.000 is expansion, So that part of the economy is still expanding, 0:01:42.120 --> 0:01:43.280 is that the way that you think about it. 0:01:45.440 --> 0:01:48.320 Absolutely, And we're measuring change month over a month, So 0:01:48.600 --> 0:01:50.640 what we're seeing is just a slowing in the rate 0:01:50.680 --> 0:01:54.480 of growth. And the employment picture is continues. As I've 0:01:54.480 --> 0:01:56.400 been saying for several months now, it's a mixed bag. 0:01:56.600 --> 0:01:59.560 Forty eight point five, it's down point five percentage points. 0:02:00.120 --> 0:02:03.160 And what the respondents are indicating is that, you know, 0:02:03.200 --> 0:02:06.560 they're very cautious and it's a controllable expense for them, 0:02:06.760 --> 0:02:10.320 and so interesting some of the respondents indicated in their 0:02:10.360 --> 0:02:15.120 comments that even though business activity is still going good, 0:02:15.200 --> 0:02:17.720 that they're not hiring. They're holding back, waiting to see 0:02:17.760 --> 0:02:21.560 how things materialize. In the upcoming months, because as you 0:02:21.639 --> 0:02:26.160 mentioned about pricing, pricing still shows increases month over month. 0:02:26.240 --> 0:02:29.440 It's strong, but it's somewhat stabilizing from where it was 0:02:29.480 --> 0:02:32.639 in the past. And well we see the most volatility 0:02:32.720 --> 0:02:34.440 continues to be in the food items. 0:02:34.680 --> 0:02:36.440 Do you get the impression when you talk to the 0:02:36.440 --> 0:02:39.480 respondents that they're going to have to look at layoffs 0:02:40.240 --> 0:02:42.320 or is it just more about hiring more. 0:02:44.160 --> 0:02:46.640 It's a combination, and it depends on the industry. It 0:02:46.720 --> 0:02:50.320 varies by industry within the sectors within this sector, i 0:02:50.360 --> 0:02:54.359 should say, and you know, certain industries like accommodation and 0:02:54.440 --> 0:02:57.960 food services is continuing to hire, whereas we know with 0:02:58.080 --> 0:03:00.680 the slowdown that we experienced in the past with real 0:03:00.760 --> 0:03:03.239 estate rental and leasing, there you're not hiring. 0:03:04.160 --> 0:03:06.200 All right, Anthony, thanks a lot, We really appreciate it. 0:03:06.200 --> 0:03:08.600 It's always good to get the details here. Anthony Javis 0:03:08.840 --> 0:03:11.720 share of the Ism Business Services Committee again that overall 0:03:11.720 --> 0:03:15.880 index still an expansionary territory, but definitely still slowing down just. 0:03:15.840 --> 0:03:16.320 A little bit. 0:03:17.880 --> 0:03:21.760 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:03:21.840 --> 0:03:25.359 weekdays at ten am Eastern on applecar Play and Android 0:03:25.400 --> 0:03:28.160 Auto with the Bloomberg Business app. You can also listen 0:03:28.280 --> 0:03:31.360 live on Amazon Alexa from our flagship New York station. 0:03:31.760 --> 0:03:34.520 Just say Alexa play Bloomberg eleven thirty. 0:03:35.840 --> 0:03:39.360 This is Bloomberg Intelligence Radio. We bring you all the 0:03:39.400 --> 0:03:42.280 amazing work from our Bloomberg Intelligence analysts. They cover over 0:03:42.320 --> 0:03:45.400 two thousand companies and one hundred and forty industries all 0:03:45.520 --> 0:03:48.200 around the world. And one of them is named Tim 0:03:48.200 --> 0:03:53.280 Craighead Bloomberg Intelligence Research Director for content fancy title. And 0:03:53.320 --> 0:03:55.440 the reason why is because he came up with a 0:03:55.520 --> 0:03:59.560 really great list along with his teammates about fifty companies 0:03:59.560 --> 0:04:01.880 to why in January they came up with that and 0:04:01.920 --> 0:04:03.760 that was the ones you got to watch for this year. 0:04:03.800 --> 0:04:07.200 And they're now back with ten specifically just for the 0:04:07.280 --> 0:04:11.240 second quarter, based on scenarios from Bloomberg Intelligence. You want 0:04:11.240 --> 0:04:14.040 to get the good apples from the bad apples, cross sector, 0:04:14.160 --> 0:04:16.680 cross regions, and he's here now to help us break 0:04:16.680 --> 0:04:19.440 it down. Hey, Tim, thanks for joining. Okay, so what 0:04:19.480 --> 0:04:20.200 are the top ten? 0:04:21.440 --> 0:04:25.480 So Alex, thanks for having me on a couple of 0:04:25.560 --> 0:04:29.240 things to keep in mind here. Top ten for two Q. 0:04:30.920 --> 0:04:33.240 These are part of a broader set of focus ideas 0:04:33.240 --> 0:04:35.880 that we've got there's roughly seventy five to eighty of 0:04:35.920 --> 0:04:40.440 them right now, across sectors, across regions. These specifically have 0:04:40.600 --> 0:04:44.360 important catalysts coming up into Q that we think can 0:04:44.440 --> 0:04:47.520 bring the market around to our perspective. All of these 0:04:47.520 --> 0:04:52.000 focus ideas have really strong, high conviction fundamental views that 0:04:52.040 --> 0:04:54.440 we think are different from the market, and these catalysts 0:04:55.240 --> 0:05:00.919 should bring that awareness around. It's it's a group of 0:05:01.720 --> 0:05:05.799 US companies. There's four of them. Uh, there's three in Europe, 0:05:05.960 --> 0:05:10.520 three in in Asia, and they span the gamut from healthcare, 0:05:11.120 --> 0:05:18.120 med tech products to big financials to tires. So interesting group. 0:05:18.000 --> 0:05:20.480 And Tim one of the ones that you know, I've 0:05:20.480 --> 0:05:22.919 been kind of thinking about. I just think these Olympics 0:05:22.920 --> 0:05:25.200 in Parish are going to be just huge, and I'm 0:05:25.200 --> 0:05:27.520 thinking that ways to play it. You guys have one 0:05:27.560 --> 0:05:29.599 of them in the lodging space. Talk to us about 0:05:29.960 --> 0:05:30.720 that opportunity. 0:05:31.320 --> 0:05:36.679 Yeah, we do. Acor it's a big French hotel company. 0:05:36.720 --> 0:05:40.400 You might not know Acor, but you probably know some 0:05:40.480 --> 0:05:45.640 of their underlying brands. And you know, anybody who's made 0:05:45.640 --> 0:05:49.320 a hotel booking as of late knows that the prices 0:05:49.360 --> 0:05:56.680 seem to be really high. Surprisingly so that's feeding Acor's 0:05:57.279 --> 0:06:00.479 rev par They're they're pricing, which is playing through into 0:06:00.480 --> 0:06:04.719 profit margins, and the catalyst for these guys is, in fact, 0:06:06.680 --> 0:06:09.520 the Paris Olympics. We should start to see early booking 0:06:09.600 --> 0:06:13.039 data over the course of two Q heading into Summer Olympics. 0:06:13.080 --> 0:06:15.520 Now Paris is only one part of their portfolio. They're 0:06:15.520 --> 0:06:18.599 across Europe and Asia, and we're seeing a strong sustained 0:06:18.640 --> 0:06:22.120 travel recovery story that we think is better than consensus expects. 0:06:22.360 --> 0:06:24.040 But apparently they have to like clean out the send. 0:06:24.080 --> 0:06:25.840 Did you read that that there's so much to you, 0:06:27.040 --> 0:06:29.080 Like can you imagine being an Olympic swimmer and like 0:06:29.080 --> 0:06:30.600 there's garbage hitting you in the send? I mean they're 0:06:30.640 --> 0:06:31.000 working on it. 0:06:31.040 --> 0:06:31.960 They're definitely working on it. 0:06:32.560 --> 0:06:32.839 Okay. 0:06:32.880 --> 0:06:35.720 Your second one is in retail chow Tai Fuk. No 0:06:35.720 --> 0:06:37.560 one's going to know this company here in the US, 0:06:37.600 --> 0:06:39.719 So tell us about it and why this makes the outlook. 0:06:40.400 --> 0:06:40.640 Yep. 0:06:40.760 --> 0:06:43.560 So that and the next one on the list from 0:06:43.560 --> 0:06:48.080 an alphabetical perspective, are both sort of interesting twists on 0:06:48.120 --> 0:06:52.280 the same underlying theme, and that's China. We all know 0:06:52.400 --> 0:06:55.039 that there's problems in China. From the standpoint that the 0:06:55.040 --> 0:06:59.120 property market, and now that's playing through in terms of sentiment, 0:07:00.360 --> 0:07:03.320 uh with the wealth effect on spending plans, et cetera. 0:07:03.880 --> 0:07:09.200 Child Tai Fook is arguably the best known Chinese retailer 0:07:09.240 --> 0:07:11.960 when it comes to jewelry, and it's a big market 0:07:12.080 --> 0:07:16.320 historically for tourists and travelers coming into Hong Kong and 0:07:16.360 --> 0:07:19.720 to make those purchases. In fact, what we're seeing right 0:07:19.760 --> 0:07:23.360 now is Hong kongers are going out of Hong Kong 0:07:23.520 --> 0:07:26.240 across the border in the mainland China to shop for 0:07:26.360 --> 0:07:31.280 pretty much everything because it's cheaper. So you combine that 0:07:31.520 --> 0:07:34.360 with negative sentiment, we think Hong Kong retail sales are 0:07:34.360 --> 0:07:37.400 going to disappoint, and Child Tai Fuk is a poster child. 0:07:37.760 --> 0:07:42.760 The other one, CSC Financial is one of the largest 0:07:42.840 --> 0:07:47.560 Chinese brokerages you know, good old fashioned, you know, wealth management, 0:07:47.960 --> 0:07:50.520 and they are the investment banking business we think is 0:07:50.520 --> 0:07:53.760 set for disappointment because I POS and other new new 0:07:53.840 --> 0:07:59.800 stock listings are way under way, underwater, and you know, 0:07:59.840 --> 0:08:03.320 we think you're going to see investment banking revenue disappoint 0:08:03.720 --> 0:08:03.920 You know. 0:08:03.920 --> 0:08:05.600 I was looking through the list here, Tim, and I 0:08:05.640 --> 0:08:08.280 was looking for a name from Michael Dean and the 0:08:08.320 --> 0:08:10.680 European Autos team, and I think I found one in 0:08:10.760 --> 0:08:12.240 Perelli Tires. 0:08:13.760 --> 0:08:17.280 Yes, indeed, I started to say, if you're an F 0:08:17.360 --> 0:08:20.200 one fan, but that's more from a European perspective than 0:08:20.320 --> 0:08:25.040 NASCAR in the US. But Perelli is a well known 0:08:25.080 --> 0:08:29.920 tire maker and what they're doing is twofold Number one, 0:08:30.560 --> 0:08:32.720 upgrading their mix. They're getting rid of some of their 0:08:32.720 --> 0:08:36.679 lower end products. And number two, they've taken on a 0:08:36.679 --> 0:08:41.040 pretty big initiative to shift production from core Europe to 0:08:41.160 --> 0:08:45.480 places like Romania over here in Mexico over there, all 0:08:45.520 --> 0:08:48.640 of which is driving better margins. And we think that 0:08:48.679 --> 0:08:51.520 this is going to continue more than what consensus currently 0:08:51.559 --> 0:08:51.960 bakes in. 0:08:52.280 --> 0:08:54.560 Plus, it's from one of my favorite analysts over in 0:08:54.559 --> 0:08:57.600 our London office, Gillian Davis, doing some good work there, 0:08:57.679 --> 0:08:58.360 so good stuff. 0:08:58.640 --> 0:09:01.200 Home Building Morrison made the list. 0:09:01.240 --> 0:09:02.960 That's not normally the company you think of when you 0:09:02.960 --> 0:09:05.880 think of like a homebuilder, right, you're thinking Lenar, KB homes, 0:09:05.880 --> 0:09:07.720 et cetera. How does one make a list? 0:09:08.280 --> 0:09:12.360 Yeah, I mean they're they're continuing to expand, specifically in 0:09:12.440 --> 0:09:16.600 some larger developments in Florida and Texas, and it just 0:09:16.679 --> 0:09:21.080 seems to be a case of good old fashioned running 0:09:21.120 --> 0:09:26.559 the numbers with those expansion plans feeding through and their 0:09:26.679 --> 0:09:30.080 order book coming through better than anticipated, where we think 0:09:30.120 --> 0:09:33.920 their positive surprises d but it certainly is you know, 0:09:34.640 --> 0:09:38.120 it is a classic story from the standpoint of expanding 0:09:38.240 --> 0:09:40.160 order books, expanding volumes. 0:09:40.800 --> 0:09:43.480 You know, one name that's onnor that surprising, but I 0:09:43.480 --> 0:09:47.600 think it's a potential rule opportunity. Is Tencent talks about 0:09:47.679 --> 0:09:49.839 big Chinese e commerce because for a lot of people 0:09:49.840 --> 0:09:52.640 tim as you well know, China's kind of taboot right now. 0:09:52.679 --> 0:09:54.240 From an investment perspective. 0:09:54.360 --> 0:09:58.360 It is, especially when it comes to technology and regulatory concerns, 0:09:58.640 --> 0:10:02.040 and you know, beij focusing in on you know, what 0:10:02.120 --> 0:10:05.400 the big tech companies are doing. You know, historically these 0:10:05.480 --> 0:10:11.600 have ten cents driven by online gaming and that growth 0:10:11.679 --> 0:10:16.400 rate is still somewhat muted. But there's more video that's 0:10:16.440 --> 0:10:21.959 coming through. There's AI assisted advertising that is that is growing. 0:10:22.040 --> 0:10:26.160 Both of those are drivers of their income statement that 0:10:26.200 --> 0:10:30.200 we think are underappreciated. We think it's mid teams of 0:10:30.200 --> 0:10:32.720 growth going forward. But if you do the math, the 0:10:32.760 --> 0:10:37.360 market seems to be discounting basically static to maybe low 0:10:37.440 --> 0:10:40.320 single digit growth rates and so there it's just a 0:10:40.480 --> 0:10:43.560 it's just a case where we think the market doesn't 0:10:43.600 --> 0:10:47.360 realize that they're back to having good, solid forward growth. 0:10:47.520 --> 0:10:48.960 Yeah, it's gonna be I mean it could be a 0:10:49.000 --> 0:10:51.240 really interesting story. A lot of folks again really not 0:10:51.240 --> 0:10:53.360 sure how to play that part of the market. Tim Craig, 0:10:53.559 --> 0:10:55.760 thanks for joining us. Always appreciate getting your thoughts. Tim 0:10:55.840 --> 0:10:58.520 craigett Research director for Content. He has also got a 0:10:58.559 --> 0:11:01.760 day job European Equity Streates just and we're appreciating some 0:11:01.800 --> 0:11:04.480 of his times from Bloomberg Intelligence. He's based in our 0:11:04.559 --> 0:11:07.280 London office, the Queen Victoria Street offices, which are just 0:11:07.400 --> 0:11:10.600 awesome right in the City of London, right near the 0:11:10.640 --> 0:11:13.200 Bank of England. You can't get more city of London 0:11:13.240 --> 0:11:16.200 and heart of the financial system in London than the 0:11:16.240 --> 0:11:19.040 Bank of England, and that's where Bloomberg has their offices. 0:11:21.400 --> 0:11:25.280 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:11:25.360 --> 0:11:28.440 weekdays at ten am Eastern on applecar Playing and broud 0:11:28.480 --> 0:11:31.560 Otto with the Bloomberg Business app. Listen on demand wherever 0:11:31.640 --> 0:11:35.240 you get your podcasts, or watch us live on YouTube. 0:11:36.000 --> 0:11:39.680 Intel disappointing outlooks, dock down seven percent. It's one of 0:11:39.720 --> 0:11:42.160 those chip makers that's really bucking the trend here. It's 0:11:42.160 --> 0:11:45.360 down nineteen percent a year to date, while you got 0:11:45.400 --> 0:11:49.080 some of the others, Nvidia Broadcom putting up just extraordinary gains. 0:11:49.080 --> 0:11:51.439 So it feels like it's Intel's missing that. So let's 0:11:51.480 --> 0:11:53.280 break it down a little bit more for Intel, the 0:11:53.360 --> 0:11:56.000 chip names, tech, the markets overall. We can do that 0:11:56.040 --> 0:11:58.120 on our next guest, Kim Forest. She's the founder and 0:11:58.160 --> 0:12:03.640 chief investment officer at Boca Partners, I believe, located in Pittsburgh, 0:12:03.760 --> 0:12:07.720 lovely city, big fan of Pittsburgh. All right, Kim, on 0:12:07.760 --> 0:12:10.880 your list on your notes, top picks continue to be Intel, 0:12:10.920 --> 0:12:13.800 A and D mu Let's start with Intel. What is 0:12:13.880 --> 0:12:16.640 Intel just not getting right here? 0:12:17.920 --> 0:12:20.040 Sure? Well, a couple of things. 0:12:20.440 --> 0:12:24.040 They are coming up a very steep hill from where 0:12:24.200 --> 0:12:28.120 prior CEOs left them, and what happened was they kind 0:12:28.160 --> 0:12:32.400 of fell behind the curve in making sure that they 0:12:32.440 --> 0:12:36.839 could make the very fastest, best chips they could, and 0:12:36.960 --> 0:12:38.719 their technology just floundered. 0:12:38.920 --> 0:12:41.160 That's pretty much the short answer. 0:12:41.720 --> 0:12:46.720 Now. Pat Gelsinger was a long time Intel employee, went 0:12:46.720 --> 0:12:50.200 over to run VMware, came back to Intel, and he's 0:12:50.240 --> 0:12:52.679 been trying to write the ship. But more than that, 0:12:52.800 --> 0:12:55.000 he's been trying to make them into a foundry for 0:12:55.160 --> 0:13:00.440 other company companies that designed chips. So this is a 0:13:00.480 --> 0:13:05.160 long and arduous process. Becoming a foundry is they've they've 0:13:05.200 --> 0:13:08.600 done that for specific companies in the past, but they 0:13:08.640 --> 0:13:12.120 want to make it more broad like akin to what 0:13:12.480 --> 0:13:15.520 Taiwan's Semiconductor can do. And they're just going to have 0:13:15.559 --> 0:13:18.000 to come up the curve and spend some money. So 0:13:18.480 --> 0:13:20.880 they have the one two Pine ship spending money and 0:13:20.920 --> 0:13:24.560 then not having that hot AI chip, which is what 0:13:24.640 --> 0:13:27.839 is driving everybody else in the world apparently. 0:13:27.640 --> 0:13:28.560 Yeah, exactly. 0:13:28.559 --> 0:13:31.520 So let's I love to just get your your AI 0:13:31.600 --> 0:13:34.360 AI call if you will. How much do you believe 0:13:34.400 --> 0:13:37.720 in it? How big can it be? And how are 0:13:37.720 --> 0:13:38.679 you guys maybe playing it? 0:13:39.679 --> 0:13:41.160 Sure? Well? A couple of things. 0:13:41.200 --> 0:13:43.480 You have to understand that before I came over to 0:13:43.520 --> 0:13:46.040 this side of the world finance, I was a software 0:13:46.080 --> 0:13:47.559 engineer doing AI. 0:13:48.200 --> 0:13:49.840 Like how lucky is that? Okay? 0:13:49.960 --> 0:13:54.719 I know how Right's super Yes, it's nerd girl right 0:13:54.760 --> 0:13:57.959 here anyhow. But moving on, So I believe in AI 0:13:58.120 --> 0:14:01.040 and I think a couple of things that are going 0:14:01.120 --> 0:14:02.120 to drive it forward. 0:14:02.160 --> 0:14:03.360 First, we have enough data. 0:14:03.400 --> 0:14:05.360 We didn't have enough data in the nineties when I 0:14:05.440 --> 0:14:09.000 was doing it to be able to meaningfully understand the 0:14:09.040 --> 0:14:13.520 world through the lens of AI problems. The second thing 0:14:13.640 --> 0:14:17.440 is we have cheap fast computers. Again, we're spending a 0:14:17.440 --> 0:14:20.680 lot of money on these computers, but for the compute 0:14:20.720 --> 0:14:24.360 power back in the day. These are incredibly fast machines 0:14:24.640 --> 0:14:27.840 that are incredibly cheap. And the third thing is, and 0:14:27.880 --> 0:14:31.480 I always look through technologies with technology with this lens, 0:14:32.040 --> 0:14:39.120 is we can actually make AI be productive, right like 0:14:39.280 --> 0:14:42.640 help humans out. And I think putting those three things together, 0:14:42.720 --> 0:14:46.040 I'm a strong believer in it. But the caveat is this, 0:14:46.200 --> 0:14:48.280 it's not going to happen in the next fifteen minutes 0:14:48.400 --> 0:14:51.640 or even next year. It's probably going to take seven 0:14:51.680 --> 0:14:54.640 to ten years for this really to play out and 0:14:54.680 --> 0:14:58.280 to change the world in fundamental ways, much like the 0:14:58.400 --> 0:15:00.600 rollout of the Internet was so kim. 0:15:00.640 --> 0:15:01.320 How do you play that? 0:15:01.320 --> 0:15:01.480 Then? 0:15:01.920 --> 0:15:03.680 Like, is it not an Nvidia play? Is it going 0:15:03.760 --> 0:15:05.480 to be a different kind of play? 0:15:06.560 --> 0:15:08.280 Well, I think you're going to have to cast your 0:15:08.320 --> 0:15:11.280 net a little wider than in Nvidia. I love Nvidia, 0:15:11.440 --> 0:15:14.640 but they do have a reputation for making the fastest 0:15:14.680 --> 0:15:18.160 chips at the highest prices, and that's why I'm a 0:15:18.200 --> 0:15:21.960 believer still in Intel, even as it rolls that rock 0:15:22.040 --> 0:15:25.160 up the hill to correct itself. I think that it 0:15:25.400 --> 0:15:28.120 can do that. And I also think AMD is a 0:15:28.160 --> 0:15:32.240 good supplier as well, and people building aid data centers 0:15:32.280 --> 0:15:36.160 aren't going to want to spend the bucks for Nvidia 0:15:36.280 --> 0:15:40.920 in perpetuity, and I think that's just what is going 0:15:40.960 --> 0:15:43.800 to drive those two names. 0:15:43.800 --> 0:15:47.920 Micron, Micron, go ahead, go ahead, go ahead. 0:15:48.400 --> 0:15:51.240 Okay, yeah, and I love to be cool like nerd girl, 0:15:51.320 --> 0:15:54.560 cool but still cool. Okay, but I'm back so Micron, 0:15:54.840 --> 0:15:59.320 I can't under estimate or understate this or overstate this enough. 0:15:59.360 --> 0:16:02.520 That's what I mean is that AI needs a lot 0:16:02.560 --> 0:16:05.440 of data, like tons and tons of data, and I 0:16:05.480 --> 0:16:08.480 won't get into it. That's beyond here. There are really 0:16:08.480 --> 0:16:13.160 good reasons why. But you're gonna need tons of data 0:16:13.200 --> 0:16:16.560 and you're gonna need to store it in duplicative ways, 0:16:16.880 --> 0:16:20.160 and so any bet on storing data is a good 0:16:20.240 --> 0:16:23.000 bet right now. And I think Micron is among the 0:16:23.080 --> 0:16:28.280 leaders of land storage, which is kind of non volatile 0:16:28.720 --> 0:16:31.200 chip storage and not a spinning disk. 0:16:31.520 --> 0:16:34.760 So that's the shortest answer. I can get for that one. 0:16:34.680 --> 0:16:37.080 Kim, I have an ancillary This is totally talking my 0:16:37.120 --> 0:16:40.440 own book here. What about power plays in relation to AI? 0:16:41.600 --> 0:16:43.480 Just because if you want to run all the stuff, 0:16:43.520 --> 0:16:46.040 you need a ton of power and the amount of 0:16:46.040 --> 0:16:47.880 money that these companies are gonna be willing to pay 0:16:47.920 --> 0:16:49.920 for it has got to be astronomical concerning that we 0:16:49.960 --> 0:16:52.360 haven't seen power demand grow at all in twenty years. 0:16:52.680 --> 0:16:54.440 Are you playing this derivative play at all? 0:16:55.520 --> 0:16:58.200 Not yet, because I don't really see a good way 0:16:58.200 --> 0:17:00.640 to do it. You know, there you can by like 0:17:03.360 --> 0:17:07.760 certain power companies that are probably physically well positioned, that 0:17:07.920 --> 0:17:11.960 have assets that are somewhat cheaper where the companies will 0:17:12.000 --> 0:17:15.840 build their data centers. That's one way to do it. 0:17:15.840 --> 0:17:18.399 It's too long of a play, Like, I'd rather stay 0:17:18.480 --> 0:17:21.960 back in the AI kind of direct space rather than 0:17:22.520 --> 0:17:27.000 that or even you know, the the data center providers. 0:17:27.200 --> 0:17:30.520 You could play it that way too, But again, I 0:17:30.640 --> 0:17:34.520 like my margins a little higher than those end markets. 0:17:34.760 --> 0:17:39.720 Yeah, hey, it's interesting Kim thinking about Tesla. I'm just 0:17:40.600 --> 0:17:42.080 I want to want to get your opinion on if 0:17:42.119 --> 0:17:43.680 you have one. I mean a stocks down thirty two 0:17:43.680 --> 0:17:47.159 percent year to date. Boy, has the tide turn on 0:17:47.320 --> 0:17:49.080 that name, the sentiment turned on that name. Do you 0:17:49.119 --> 0:17:50.560 have an opinion on Tesla here? 0:17:52.880 --> 0:17:56.400 I've never invested in Tesla because I like my CEO 0:17:56.600 --> 0:18:01.560 is more focused than Elon must But that being said, 0:18:02.160 --> 0:18:07.280 like it is a battery storage play, and your other question, 0:18:07.480 --> 0:18:11.159 Alex was on power plays. Maybe batteries are going to 0:18:11.200 --> 0:18:15.800 be one of the ways that we allow for, you know, 0:18:15.840 --> 0:18:18.120 the build out of electric power. So I think they 0:18:18.119 --> 0:18:23.320 have more than one product there. I think evs have 0:18:23.480 --> 0:18:28.600 also been overrated and people didn't do enough use case scenarios, 0:18:28.640 --> 0:18:31.520 Like I have family that lives in North Dakota. There's 0:18:31.680 --> 0:18:34.880 no way they could ever have an EV it gets 0:18:34.920 --> 0:18:38.600 to negative twenty three. There a lot, right, you can't 0:18:38.720 --> 0:18:43.160 charge them. There aren't enough towns where you could pull 0:18:43.200 --> 0:18:47.520 over and you know, recharge. It's just like it's like 0:18:47.560 --> 0:18:49.399 I look at use cases like that, and I know 0:18:49.480 --> 0:18:52.040 that not everybody lives in North Dakota, but enough people, 0:18:52.080 --> 0:18:55.760 do you know, like, and enough people live in the 0:18:55.800 --> 0:18:59.720 North that these things are not necessarily ready for it 0:18:59.800 --> 0:19:03.159 to be your only car. And I think that's a 0:19:03.160 --> 0:19:06.280 little bit behind it. I think they make a good automobile, 0:19:06.560 --> 0:19:08.760 and I'm not sure, people are just dying for that 0:19:09.359 --> 0:19:12.960 Chevy Vault or whatever they're making, So I think they 0:19:13.400 --> 0:19:16.240 they still have a product, and they still have a 0:19:16.280 --> 0:19:20.480 certain cachet, and they were a good first mover in evs, 0:19:20.560 --> 0:19:23.000 so I wouldn't throw them out necessarily. 0:19:23.240 --> 0:19:26.440 But funnily enough, my work car's recently all been Teslas. 0:19:26.720 --> 0:19:29.439 I don't know what that means, but that I mean something. 0:19:29.600 --> 0:19:32.120 Maybe they're as you're talking about Ed Ludlow, like, there's 0:19:32.160 --> 0:19:34.320 actually more teslas now because no one's actually buying them. 0:19:34.320 --> 0:19:37.560 So then you can tree hugger capital of the world. 0:19:37.840 --> 0:19:42.440 Yes, I live in parks that, yeah, but not necessarily. 0:19:42.440 --> 0:19:44.240 My drivers don't necessarily live there. 0:19:44.520 --> 0:19:47.640 Bar's not taking a EV from eastern Ohio here. 0:19:47.920 --> 0:19:55.440 I'm from Pennsylvania. We are a lot of pickups stack Yeah. 0:19:54.160 --> 0:19:55.919 Kim, before we let you go, do you care if 0:19:55.960 --> 0:19:58.919 the FED cuts rates or not? And when they do it? 0:19:59.119 --> 0:19:59.800 Oh? Sure I do. 0:20:00.240 --> 0:20:03.600 Heck yeah, I mean I think we're signed up for 0:20:04.119 --> 0:20:08.080 a rate cut, and I'll say it even crazy relatively soon, 0:20:08.200 --> 0:20:12.600 I'd say before July. And I do think that they 0:20:12.640 --> 0:20:15.919 need to cut. The dollar is awfully strong relative to 0:20:15.960 --> 0:20:19.000 other currencies, and that might be able to cool us 0:20:19.040 --> 0:20:20.760 off a little bit more on that, and I think 0:20:20.760 --> 0:20:25.120 that's important because even though I'm a generalist, I love technology. 0:20:25.600 --> 0:20:28.200 We sell technology to the rest of the world at 0:20:28.240 --> 0:20:31.359 the price of a dollar, and we have to have 0:20:31.480 --> 0:20:32.200 that in mind. 0:20:33.200 --> 0:20:35.400 Kim, thank you for joining us, as I always appreciate 0:20:35.440 --> 0:20:38.200 getting your views there. Kim Farest. She is to founder 0:20:38.320 --> 0:20:42.439 and chief investment officer Boca Capital Partners in Pittsburgh, a 0:20:42.560 --> 0:20:45.920 former software person, a tech geek by her own admissions, 0:20:45.920 --> 0:20:49.239 So good stuff there talking about AI and boy that 0:20:49.280 --> 0:20:52.520 Intel news that John was reporting earlier having problems with 0:20:52.560 --> 0:20:55.920 this the founder here, it's one of those chip stocks 0:20:55.960 --> 0:20:59.800 that is not participating in the whole AI rising tide 0:21:00.119 --> 0:21:02.320 thing like it is for Nvidia and Broadcommon others. 0:21:02.400 --> 0:21:04.040 We'll talk about a long play, right, because if they 0:21:04.040 --> 0:21:05.720 can get the founder of business really going, it could 0:21:05.760 --> 0:21:08.080 really help them either make chips for themselves and then 0:21:08.080 --> 0:21:09.639 also make it for others, and it could be a 0:21:09.720 --> 0:21:11.440 nice driver. I mean, just look at the revenue that 0:21:11.480 --> 0:21:14.880 TSM is minting. But you got to get it there, right, 0:21:15.359 --> 0:21:17.720 and it's just not quite there yet. 0:21:18.920 --> 0:21:22.800 You're listening to the Bloomberg Intelligence Podcast. Catch us Live 0:21:22.880 --> 0:21:26.440 weekdays at ten Am Eastern on Applecar Play and Android 0:21:26.440 --> 0:21:29.240 Auto with the Bloomberg Business Act. You can also listen 0:21:29.359 --> 0:21:32.440 live on Amazon Alexa from our flagship New York station, 0:21:32.800 --> 0:21:35.560 Just Say Alexa playing Bloomberg eleven thirty. 0:21:36.960 --> 0:21:39.520 Matt Winkler joins us here in studio. Matt Winkler is 0:21:39.680 --> 0:21:44.080 the founder of Bloomberg News, as he editor at Meritis 0:21:44.160 --> 0:21:45.879 right now Bloomberg News. He joins us here in our 0:21:45.920 --> 0:21:48.360 studio and he's been doing a series of opinion pieces 0:21:48.880 --> 0:21:52.560 about key swing states in the upcoming election and give 0:21:52.680 --> 0:21:54.880 us the latest on county how the economies are doing 0:21:55.480 --> 0:21:57.639 in those key states. We started with Michigan ethic and 0:21:57.640 --> 0:22:00.720