WEBVTT - Nvidia's Market Cap, Peloton Turnaround, Apple Shakeup 0:00:02.600 --> 0:00:12.160 Bloomberg Audio Studios, podcasts, radio news. 0:00:09.680 --> 0:00:12.760 From Mahard where innovation, money and power. 0:00:12.560 --> 0:00:14.960 Colle in Silicon Valley. N Beyond. 0:00:15.280 --> 0:00:19.320 This is Bloomberg Technology with Caroline Hyde and Ed lud. 0:00:19.120 --> 0:00:35.680 Love live from New York. This is Bloomberg Technology. 0:00:36.240 --> 0:00:38.880 Let's get to it with n Video back beating Microsoft 0:00:38.920 --> 0:00:40.080 in market capitalization. 0:00:40.200 --> 0:00:42.839 We talk with a top shareholder in the chip. 0:00:42.640 --> 0:00:46.120 Giant mean while Palatin jumps one better than expected earnings. 0:00:46.159 --> 0:00:48.160 We talk turnaround efforts. 0:00:47.960 --> 0:00:51.800 As it pushes for profitability, and Apple's app store reorg. 0:00:52.000 --> 0:00:56.040 We discussed the executive shake up as made a regulator scrutiny. 0:00:56.280 --> 0:00:58.520 That is so much more coming up. Let's get to 0:00:58.600 --> 0:01:01.200 what has been the market capitalizing story that we reference. 0:01:01.400 --> 0:01:05.360 Nvidia clipsing Microsoft again to tech chalants, when you have 0:01:05.360 --> 0:01:07.800 been justing over the world's second most valuable company title 0:01:07.840 --> 0:01:09.840 a few time said for the past week, pace to 0:01:09.880 --> 0:01:12.520 say Emoni Graffeo joins us to talk it all through, 0:01:12.640 --> 0:01:16.400 and in Vidia, just as we look towards earnings August 0:01:16.400 --> 0:01:19.479 the twenty eighth, still seems to be getting momentum from 0:01:19.520 --> 0:01:21.160 who's purchasing what from them? 0:01:21.240 --> 0:01:23.320 Yeah, I mean that's exactly right. We haven't had in 0:01:23.440 --> 0:01:26.319 Video's earnings yet. But from the earnings that we've seen 0:01:26.400 --> 0:01:29.840 so far, we're noticing and investors are noticing, that these 0:01:29.840 --> 0:01:33.319 big tech companies are still willing to spend a lot 0:01:33.319 --> 0:01:36.320 on AI, and in Vidia is the biggest beneficiary of that. 0:01:36.640 --> 0:01:40.200 If you look at just Microsoft, Amazon, Alphabet, and Meta 0:01:40.280 --> 0:01:42.560 all in their earnings reports, they kind of underscored this 0:01:42.680 --> 0:01:45.480 idea that we want to continue to spend on AI. 0:01:45.800 --> 0:01:47.440 And I was looking at a note this morning from 0:01:47.520 --> 0:01:50.280 Nick Colos of Data Trek, and he pointed out that 0:01:50.360 --> 0:01:54.520 for Amazon, Microsoft, and Meta, the operating cash flow growth 0:01:54.600 --> 0:01:57.920 exceeds capex, so that means that these companies still have 0:01:58.000 --> 0:02:02.200 a lot more cash toy on the capex. So he 0:02:02.360 --> 0:02:04.680 takes that as a sign that the companies will continue 0:02:04.680 --> 0:02:07.320 to spend even more on AI and that's going to 0:02:07.360 --> 0:02:09.600 benefit in Video. Whether or not we'll see that in 0:02:09.639 --> 0:02:12.120 the results next week, that's really the big question. But 0:02:12.639 --> 0:02:15.280 like you said, the stakes are very high right now, 0:02:15.400 --> 0:02:19.120 especially after TSNC earnings were good. Everyone's just watching for 0:02:19.200 --> 0:02:21.040 Nvidia to see if they can keep up with that, and. 0:02:21.080 --> 0:02:22.160 There's a load of anxiety. 0:02:22.320 --> 0:02:27.400 We have seen how basically bullish the market was and 0:02:27.960 --> 0:02:30.040 a few concerns and then the market the beginning of 0:02:30.080 --> 0:02:32.400 August and we saw a significant sell off, and we've 0:02:32.400 --> 0:02:35.079 actually been seeing the sell off since July. What do 0:02:35.200 --> 0:02:37.639 flows telling in terms of people's appetite to get into 0:02:37.680 --> 0:02:39.920 a company that has got such a high market cap? 0:02:40.160 --> 0:02:41.480 People are buying the dip. 0:02:41.639 --> 0:02:45.280 It's surprising because all year I keep asking sources, okay, 0:02:45.280 --> 0:02:48.240 well is it time to finally pivot out of big tech? 0:02:48.280 --> 0:02:51.840 But we're actually seeing people the rotation into small caps 0:02:51.880 --> 0:02:55.320 that's really not a theme anymore. Investors still have this 0:02:55.440 --> 0:02:58.280 appetite to hide out in big tech, even in mid 0:02:58.320 --> 0:03:00.000 concerns that the economy is slowing. 0:03:00.200 --> 0:03:00.960 If you look at the. 0:03:00.880 --> 0:03:05.559 Flows QLD, this is an ETF that goes two x QQQ, 0:03:05.720 --> 0:03:09.000 so big tech but going ultra bullish QQQ. It's taken 0:03:09.040 --> 0:03:11.840 in flows nearly every day for the last two weeks, 0:03:12.120 --> 0:03:14.200 and just in the last session it took about two 0:03:14.320 --> 0:03:16.639 hundred and fifty million dollars in, which is the biggest 0:03:16.639 --> 0:03:19.239 flow since April. So even after the sell off that 0:03:19.280 --> 0:03:21.799 we saw to start August, we're still seeing that appetite 0:03:21.840 --> 0:03:22.160 to buy. 0:03:22.680 --> 0:03:25.720 Okay, we're seeing some long positions in this market. Emini 0:03:25.760 --> 0:03:27.639 Graffe talks us through it when it comes from video. Look, 0:03:27.680 --> 0:03:28.520 let's talk about one. 0:03:28.440 --> 0:03:30.640 Of those lungs. Tony Wong is one of them, one 0:03:30.639 --> 0:03:32.080 of the key holders of. 0:03:32.080 --> 0:03:35.240 In Vidia, portfolio manager at tro Price Trow. In fact, 0:03:35.440 --> 0:03:38.200 Tony holds what about two percent of video shares outstanding, that. 0:03:38.200 --> 0:03:39.440 Fifty six billion dollars worth. 0:03:39.440 --> 0:03:42.320 That makes you the seventh largest individual shareholder as an 0:03:42.320 --> 0:03:46.000 overall company. But at your fund, the Science and Technology Fund, 0:03:46.400 --> 0:03:48.000 why remain vullish on Nvidia? 0:03:50.160 --> 0:03:51.600 Yeah, Well, I think there's a lot of reasons to 0:03:51.720 --> 0:03:54.280 still like the company. I mean, they've driven a salary 0:03:54.320 --> 0:03:56.960 compute about one thousand x for the last ten years, 0:03:57.000 --> 0:04:00.520 and they continue your leaders in the space, and AI 0:04:00.680 --> 0:04:03.040 is right now just too important of an area to 0:04:03.640 --> 0:04:05.920 let up the gas. And so I think that the 0:04:06.000 --> 0:04:08.320 large companies will still spend. I think there's a tension 0:04:08.320 --> 0:04:11.000 of like, just you know, what does spending more mean 0:04:11.040 --> 0:04:13.480 and does that need expectations? And that's what the market's 0:04:13.480 --> 0:04:15.520 really going to be focused on going forward, And so 0:04:16.040 --> 0:04:17.960 I think like there's a lot of great reasons to 0:04:18.000 --> 0:04:20.800 like the stock long term. I think that at the 0:04:20.800 --> 0:04:23.320 same time, you have to remember that semi conductors are 0:04:23.400 --> 0:04:26.520 very cyclical and they're also secular. So I think that's 0:04:26.560 --> 0:04:29.719 part of our job to navigate navigate the environment. 0:04:30.160 --> 0:04:33.120 So basically, brace yourself with potential short term volatility, but 0:04:33.240 --> 0:04:36.279 longer term you're still bullish on money coming into the 0:04:36.360 --> 0:04:38.880 likes of video. But does it broaden out. At the moment, 0:04:38.920 --> 0:04:41.000 it's felt like in video is the only picks and 0:04:41.000 --> 0:04:44.479 shovels game in town. You're started seeing Rawcom doing relatively 0:04:44.480 --> 0:04:46.839 well on some AI wins. What do you make of 0:04:46.880 --> 0:04:49.600 in video really raining the main place to win on AI? 0:04:51.560 --> 0:04:53.800 Yeah, well, I think that the reason why in video 0:04:53.800 --> 0:04:57.040 has been so good in terms of it's because it's 0:04:57.040 --> 0:04:59.080 a platform, right, It's not just a chip, and so 0:04:59.400 --> 0:05:02.400 they have a big ecosystem with a loss of developers 0:05:02.480 --> 0:05:05.000 writing on their code and Kuda and so it's all 0:05:05.080 --> 0:05:07.800 built like an ecosystem and platform, and so I think 0:05:07.920 --> 0:05:11.359 that's why it's such a defensible business. And you know 0:05:11.480 --> 0:05:15.599 there it's available everywhere, is ubiquitous on the cloud, you 0:05:15.640 --> 0:05:18.679 can have it on prem and they've got great support 0:05:18.760 --> 0:05:20.920 for their for their chips, and so I think that's 0:05:21.240 --> 0:05:23.000 largely the reason. I know, I think it is it 0:05:23.000 --> 0:05:25.760 could be changing in terms of the complexion going forward 0:05:25.760 --> 0:05:29.920 is more concentrated the hyperscale players, and they're very sophisticated 0:05:29.920 --> 0:05:31.560 buyers of chips. They can do a lot of their 0:05:31.600 --> 0:05:33.600 own software, and so I think there will always be 0:05:33.640 --> 0:05:36.920 a balance between the hyperscale making their own chips with 0:05:37.080 --> 0:05:39.480 like significant volumes like you see in Google with their 0:05:39.520 --> 0:05:42.600 TPU that's very aimed at search, and so I think 0:05:42.600 --> 0:05:44.680 that will continue, you know, in other ways, and so 0:05:44.920 --> 0:05:46.440 I think they can coexist essentially. 0:05:47.160 --> 0:05:48.760 I like that point that you've been making, and we 0:05:48.800 --> 0:05:50.599 were just hearing how data track is seeing the same 0:05:50.640 --> 0:05:53.920 thing that there is a willingness on a capital expenditive 0:05:53.920 --> 0:05:56.280 perspective coming from hyperscalers. You are in a number of 0:05:56.279 --> 0:06:00.320 those hyperscalers Microsoft Meta, for example, Alphabet and metas seem 0:06:00.440 --> 0:06:04.520 to manage to nuance the argument of why they put 0:06:04.560 --> 0:06:07.320 money in there, whereas Alphabet people were worried about just 0:06:07.360 --> 0:06:10.479 spending capex at all costs. What do you make of 0:06:10.520 --> 0:06:13.480 the hyperscale is decision to keep on putting money in. 0:06:15.520 --> 0:06:17.640 Yeah, I think that that Marke did a nice job 0:06:17.800 --> 0:06:21.760 of kind of illuminating why he's spending so much in AI, 0:06:22.040 --> 0:06:24.479 like with personalized chatbots, and like how that can go 0:06:24.560 --> 0:06:28.120 through the platform. You know, I think that you should 0:06:28.200 --> 0:06:30.000 Google out at the same time, and they have a 0:06:30.040 --> 0:06:32.800 lot of AI expertise, they've been leaders in the field, 0:06:33.000 --> 0:06:36.159 that they have great chips as well, and so, you know, 0:06:36.200 --> 0:06:38.560 I think that it's too early to call who's going 0:06:38.640 --> 0:06:40.479 to be the winner or loser. They all have big 0:06:40.520 --> 0:06:44.120 platforms and user bases where they can scale their AI investments, 0:06:44.160 --> 0:06:46.800 and so you know, it's it's I think it's too 0:06:46.880 --> 0:06:48.440 early call like who's going to win or lose. But 0:06:48.440 --> 0:06:50.000 at the same and at the same time, they all 0:06:50.000 --> 0:06:51.080 have really great businesses. 0:06:51.839 --> 0:06:56.920 Return on AI ro o AI is this horrible acronym 0:06:56.920 --> 0:06:58.599 that's suddenly coming into the marketplace. 0:06:58.880 --> 0:07:00.800 What do you make of though, the that we need 0:07:00.839 --> 0:07:01.679 to start seeing? 0:07:01.960 --> 0:07:05.360 You're a keyholder in Apple, I think again tro Price 0:07:05.400 --> 0:07:07.160 of Rule is about the seventh biggest holder of Apple 0:07:07.200 --> 0:07:11.040 stock out there. That company again managing to tell us 0:07:11.040 --> 0:07:14.040 why they can be an AI bet. Where does the 0:07:14.040 --> 0:07:16.040 money end up flowing in terms of return on an 0:07:16.080 --> 0:07:16.840 AI investment. 0:07:19.040 --> 0:07:21.080 Yeah, I think that we'll be looking for return on 0:07:21.120 --> 0:07:24.000 AI investment. I think Apple specifically is in a great 0:07:24.040 --> 0:07:27.400 position because they're kind of the ecosystem owner, right so 0:07:27.720 --> 0:07:32.760 they can integrate great technologies into their phones, into their hardware, 0:07:33.600 --> 0:07:35.640 you know, just like they did with Google Search, and 0:07:35.720 --> 0:07:37.640 so they didn't have to develop Google Search, but they 0:07:37.680 --> 0:07:41.040 definitely benefit from users using Google Search, and so CHATCHBT 0:07:41.160 --> 0:07:43.840 is the same thing going forward. They don't have to 0:07:43.880 --> 0:07:47.240 develop a frontier model, they can integrate it with their phones. Now. 0:07:47.280 --> 0:07:49.800 I think you can argue whether long term a company 0:07:49.800 --> 0:07:52.400 should own the frontchier model here, but right now, Apple 0:07:52.600 --> 0:07:55.200 strategies really focus on what they're really good at, which 0:07:55.280 --> 0:07:58.400 I think is design and integration with your life of 0:07:58.480 --> 0:08:02.000 their products and services. So it's an interesting way to 0:08:02.120 --> 0:08:05.320 like be a capital like player and this kind of 0:08:05.360 --> 0:08:07.320 AI proliferation here. 0:08:08.160 --> 0:08:10.160 It's interesting that you're in Salesforce and that's been a 0:08:10.200 --> 0:08:13.480 company that's trying to show off it's AI prowess, but 0:08:13.560 --> 0:08:15.200 make clear that they are going to be able to 0:08:15.240 --> 0:08:16.560 reap rewards from their investment. 0:08:16.640 --> 0:08:17.280 Do you think it can? 0:08:19.560 --> 0:08:21.400 You know, I think that Salesforce is a really sticky 0:08:21.440 --> 0:08:25.000 software company. I don't think it's going anywhere. It's kind 0:08:25.040 --> 0:08:27.040 of like they're kind of game to lose I think 0:08:27.080 --> 0:08:29.080 at this point. And so I think they have a 0:08:29.120 --> 0:08:32.959 good mode. They have AI products that are coming out. 0:08:33.000 --> 0:08:35.120 I think the question is like, how do they price them, 0:08:35.360 --> 0:08:38.160 how do they drive ROI for their customers. And I 0:08:38.200 --> 0:08:40.040 think the whole space is kind of going through this 0:08:40.520 --> 0:08:43.240 seat versus consumption of AI, and so like if AI 0:08:43.320 --> 0:08:46.319 works you, well, you might not have many seats that 0:08:46.640 --> 0:08:49.679 you need. So I think there's that business model that's 0:08:49.720 --> 0:08:52.240 being figured out. But I do think that if you 0:08:52.240 --> 0:08:54.640 look at startups that are in the space, it can 0:08:54.720 --> 0:08:56.720 be hard for them to get into large enterprises where 0:08:56.720 --> 0:08:59.160 salesforce sits just because you need to let them into 0:08:59.160 --> 0:09:01.599 your your whole system, and that can be actually a 0:09:01.760 --> 0:09:03.079 pretty big mode. 0:09:03.880 --> 0:09:06.719 Well said, there has been other companies that we've been 0:09:06.960 --> 0:09:11.680 questioning how much they can align themselves with the AI tailwinds. 0:09:11.920 --> 0:09:13.960 One of them Cisco, for example. Dell. 0:09:14.080 --> 0:09:17.240 Initially we thought, yes, really, within this ecosystem, they're going 0:09:17.280 --> 0:09:19.040 to be there for the service, for the networking, and 0:09:19.040 --> 0:09:20.679 then every now and then we get caught off guard 0:09:20.720 --> 0:09:22.720 and feel that perhaps they're not so well placed. What 0:09:22.760 --> 0:09:25.360 do you make of like the bottoming out story of 0:09:25.400 --> 0:09:29.000 a Cisco for example, Yeah. 0:09:28.679 --> 0:09:30.880 Well, you know, I think that what we've seen is 0:09:30.880 --> 0:09:33.840 that kind of legacy tech has in some ways reinvented 0:09:33.880 --> 0:09:36.440 itself like Dell and become an AI beneficiary. And I 0:09:36.440 --> 0:09:40.160 think here Cisco has been largely kind of not on 0:09:40.200 --> 0:09:43.560 the AI beneficiary list, and I think in the recent 0:09:43.640 --> 0:09:46.120 quarter they have some of AI revenue coming through. The 0:09:46.160 --> 0:09:50.240 business is bottoming. It's a value idea. It's you know, 0:09:50.360 --> 0:09:52.680 it's got a lot of a good amount of cashflow 0:09:52.679 --> 0:09:55.720 and dividend yield, and so from that aspect, it adds 0:09:55.760 --> 0:09:58.200 a little bit to the portfolio that you know the 0:09:58.240 --> 0:10:00.640 rest of the tech stocks might now not offered. So 0:10:01.000 --> 0:10:04.400 you know, I think that there's a place for you know, 0:10:04.559 --> 0:10:08.880 various stocks in portfolio construction and with bonding fundamentals and 0:10:08.920 --> 0:10:13.520 potentially like an attractive valuation. You know, it could be good. 0:10:14.120 --> 0:10:17.160 You've been great at articulating why you believe AI is 0:10:17.160 --> 0:10:20.960 such a winning story. But JUX suppose that with the 0:10:21.000 --> 0:10:24.360 overall macro picture here we see the market get hit 0:10:24.440 --> 0:10:25.160 on the fact. 0:10:25.160 --> 0:10:27.360 The whether or not we will have interest rate cuts. 0:10:27.600 --> 0:10:29.400 How much do you factor that in in the here 0:10:29.440 --> 0:10:31.960 and now when you're looking at a portfolio allocation. 0:10:34.040 --> 0:10:36.560 Yeah, I mean it's definitely an area that you can't ignore. 0:10:37.480 --> 0:10:39.439 The macro is super important. You have to be aware 0:10:39.440 --> 0:10:41.960 of like what's going on top down. At the same time, 0:10:42.040 --> 0:10:43.719 I think that we kind of take a stock by 0:10:43.720 --> 0:10:47.120 stock and look at where expectations are, like the likelihood 0:10:47.160 --> 0:10:49.920 that they beat expectations, how well the company is positioned. 0:10:50.120 --> 0:10:53.160 So no matter you're like what direction the macro is going, like, 0:10:53.240 --> 0:10:56.280 you should be able to like create alpha either way 0:10:56.440 --> 0:10:59.800 just by relative selection of stocks. And so you know 0:10:59.800 --> 0:11:01.839 why I think about kind of in Nvidia, like a 0:11:01.880 --> 0:11:03.760 lot of it, you know, is it's going to be 0:11:03.760 --> 0:11:05.440 a really big point here, Like we never had this 0:11:05.520 --> 0:11:08.640 amount of debate I think in terms of, you know, 0:11:08.679 --> 0:11:10.680 are we kind of near the sickle peak or is 0:11:10.679 --> 0:11:12.840 it going to continue? And so you know, we do 0:11:12.880 --> 0:11:15.920 a lot of fundamental work to understand like kind of 0:11:16.000 --> 0:11:18.439 where the products are positioned and how to think about 0:11:18.480 --> 0:11:19.160 the setup of the. 0:11:19.120 --> 0:11:25.479 Stock you're managing the Science and Technology Fund. Does it 0:11:25.520 --> 0:11:28.280 suddenly amaze you that the whole world now thinks in 0:11:28.360 --> 0:11:31.960 video is a macro moment its earnings might dictate the 0:11:32.000 --> 0:11:33.160 rest of the benchmarks. 0:11:35.679 --> 0:11:38.240 Yeah, it's a phenomenal moment. I mean you think about it. 0:11:38.720 --> 0:11:42.800 The stock as has just been amazing, and I remember 0:11:42.840 --> 0:11:46.720 I started covering it about seven eight years ago and 0:11:46.800 --> 0:11:49.080 you never have thought it would be three trillions. So 0:11:49.160 --> 0:11:53.680 everybody has like underestimated the company, you know, through like 0:11:53.800 --> 0:11:57.320 multiple cycles, and so it's been you know, phenomenal because 0:11:57.400 --> 0:12:01.640 you know, they offer so much value and and like 0:12:01.679 --> 0:12:05.200 we've seen this like kind of AI vision of cellar 0:12:05.280 --> 0:12:08.600 compute play out, and so I think everyone now recognizes 0:12:08.679 --> 0:12:11.360 it and so you know, it is it is pretty 0:12:11.400 --> 0:12:13.360 fun opmble. And I think that's part of the reason 0:12:13.440 --> 0:12:15.839 why in video is so important, is because there are 0:12:15.840 --> 0:12:18.240 a lot of AI multipliers through the economy and there's 0:12:18.240 --> 0:12:21.280 a lot of market captreation because in video is doing well, 0:12:21.280 --> 0:12:23.640 and there is this like kind of idea that long 0:12:23.720 --> 0:12:27.560 term value creation productivity driving through the economy. So I 0:12:27.559 --> 0:12:29.480 think it's a big moment for the market for sure, 0:12:29.559 --> 0:12:31.880 and so we're we're excited to see what happens in the. 0:12:31.800 --> 0:12:35.360 Next Political risk in any way affect. 0:12:35.080 --> 0:12:40.000 That sorry, can you say again? 0:12:40.040 --> 0:12:42.160 Political risk in any way affect that. 0:12:44.480 --> 0:12:46.080 The macro risk? 0:12:46.240 --> 0:12:49.120 Yeah, the politics, the element that maybe we have a 0:12:49.240 --> 0:12:51.680 change change in the White House, would that in any 0:12:51.679 --> 0:12:53.440 way change the innovation focus? 0:12:55.200 --> 0:12:58.040 Yeah, you know, it's really hard to kind of call politics. 0:12:58.040 --> 0:13:01.000 I think, you know, I think there's a tension of 0:13:01.040 --> 0:13:04.520 like how much you regulate AI and Nvidia as such 0:13:04.559 --> 0:13:09.240 a dominant player perhaps you know, pushing computing versus like 0:13:09.280 --> 0:13:12.120 there we are in an AI space race kind of 0:13:12.160 --> 0:13:15.240 with other countries, and at the same time we're trying 0:13:15.240 --> 0:13:19.679 to kind of signy China's efforts to develop AI, like 0:13:20.120 --> 0:13:22.520 I think that we can. Also it's hard to then 0:13:22.559 --> 0:13:25.559 also like kind of restrict our own companies. So my 0:13:26.080 --> 0:13:29.360 view is that, like the space is moving so fast, 0:13:29.440 --> 0:13:32.440 we're trying to push the envelope here. I don't think, 0:13:32.880 --> 0:13:37.079 you know, politics will really change that given how important 0:13:37.200 --> 0:13:39.040 AI is to the economy in the future. 0:13:39.640 --> 0:13:42.600 Well said, we really appreciate your time today such an 0:13:42.600 --> 0:13:45.679 important shareholder and indeed view on AI from t row 0:13:45.679 --> 0:13:50.600 Price Science and Technology Fund portfolio manager Tony One Stay, well, look, 0:13:50.640 --> 0:13:52.920 there's an update on a story that we've been following. 0:13:53.200 --> 0:13:56.520 Italian search and rescue teams now say they have retrieved 0:13:56.600 --> 0:13:59.719 a fifth body from a sunken yacht of Sicily, but 0:13:59.800 --> 0:14:02.600 it's tech tycoon Mike Lynch and Morgan Stanley International chair 0:14:02.679 --> 0:14:06.080 Jonathan Bloomer are among those feared to have died. The 0:14:06.080 --> 0:14:08.920 fifth body was recovered Thursday morning as search on the 0:14:08.920 --> 0:14:11.720 wreck resumed for a fourth day. According to an Italian official, 0:14:11.960 --> 0:14:14.720 No statements identifying any of the bodies have so far 0:14:14.800 --> 0:14:18.440 been issued officially. Now we move on and coming up, 0:14:18.679 --> 0:14:21.640 we're going to be assessing Platon for you shares as 0:14:21.680 --> 0:14:24.320 you'll see on the up and up, because maybe we 0:14:24.360 --> 0:14:27.640 see signs of a turnaround paying off details. Next, this 0:14:27.680 --> 0:14:47.720 is Bloomberg cany of earnings to be digesting. Look, let's 0:14:47.720 --> 0:14:50.760 take a look at both Zoom and Snowflake Zoom as well. 0:14:50.760 --> 0:14:52.520 See on the up more than twelve percent high. This 0:14:52.600 --> 0:14:54.720 is the biggest moves. That's November twenty twenty two. 0:14:55.080 --> 0:14:58.040 Forecasts looking good even as the CFO is handing over 0:14:58.080 --> 0:15:00.000 the rains, Kelly Steckelberg saying she's going to be moving 0:15:00.240 --> 0:15:03.600 from the business mean while Snowflake the polar opposite perspective 0:15:03.640 --> 0:15:06.560 here forecasts not living up to expectations, worrying about AI 0:15:06.640 --> 0:15:08.560 with down more than twelve percent. Let's get to brodie 0:15:08.600 --> 0:15:11.680 forward on these because Snowflake first and foremost, what's the 0:15:11.720 --> 0:15:13.120 worry the anxiety here, Berdy. 0:15:14.360 --> 0:15:17.440 What's interesting about these two companies is it's a similar 0:15:17.480 --> 0:15:21.840 set of concerns. Can you expand from a hit core 0:15:22.000 --> 0:15:26.240 product to Zoom with video conferencing, Snowflake with data warehousing, 0:15:26.640 --> 0:15:30.480 to a new set of products. Expand your portfolio, especially 0:15:30.520 --> 0:15:33.800 with AI as it relates to Snowflake. Yeah, it's that 0:15:33.960 --> 0:15:37.240 concern that you were a hit viral product a couple 0:15:37.240 --> 0:15:40.120 of years ago, but a lot of folks want the 0:15:40.160 --> 0:15:43.720 AI products now. These are things that people associate more 0:15:43.840 --> 0:15:47.520 with data bricks, increasingly with Microsoft, and so Snowflake is 0:15:47.600 --> 0:15:50.920 working to expand. It has released a lot of new 0:15:50.960 --> 0:15:54.280 products this year. But what set off investors is them 0:15:54.320 --> 0:15:56.720 saying last night that maybe we're not going to see 0:15:56.760 --> 0:15:59.640 money from them until fiscal twenty twenty six, and that's 0:15:59.680 --> 0:16:01.280 further out than folks who are hoping. 0:16:02.160 --> 0:16:04.280 Meanwhile, I just want to pivot to a story that 0:16:04.320 --> 0:16:08.360 you've been chasing throughout, which is Autodesk and the accounting 0:16:08.440 --> 0:16:10.040 risks there. Can you just get us up to speed 0:16:10.080 --> 0:16:12.080 what Starboard, the activist investor, is saying. 0:16:13.080 --> 0:16:17.480 Yeah, Essentially, Autodesk had a issue with their accounting earlier 0:16:17.520 --> 0:16:21.600 this year, caused some disruption, and now activist investor Starboard 0:16:21.680 --> 0:16:25.240 is saying that there's got to be some accountability. This morning, 0:16:25.240 --> 0:16:27.680 they have a statement out saying that the board needs 0:16:27.720 --> 0:16:31.600 to hold management accountable and really ask themselves if the CEO, 0:16:31.840 --> 0:16:36.560 who interestingly enough, has been there since a previous activist episode, 0:16:36.720 --> 0:16:38.240 is still the right guy for the job. 0:16:39.240 --> 0:16:41.240 We'll keep an eye and then it's one that you've 0:16:41.280 --> 0:16:42.880 been breaking a lot of news on Brady for me. 0:16:42.960 --> 0:16:44.680 Thank you so much on all those stocks. 0:16:44.720 --> 0:16:48.120 Meanwhile, sticking with the earning story more and Peloton beating 0:16:48.240 --> 0:16:51.600 estimates on this quarter, just announced I made a turnaround 0:16:51.600 --> 0:16:54.760 effort that does look like it is working. However, the 0:16:54.760 --> 0:16:57.160 outlook for revenue a little bit of a concern. This 0:16:57.240 --> 0:16:59.440 comes to the company is continuing to search a course. 0:16:59.280 --> 0:16:59.840 For a new CEO. 0:17:00.240 --> 0:17:02.880 Stretch Conjuria is with us of courst managing director at 0:17:02.920 --> 0:17:05.200 Wolf Research, and you put your notes out. 0:17:05.119 --> 0:17:07.080 You're sort of saying that they're rolling along. 0:17:07.200 --> 0:17:10.240 More broadly, what did you make for the fourth quarter 0:17:10.400 --> 0:17:12.360 versus though the first quarter forecasts? 0:17:14.119 --> 0:17:16.000 Well, first of all, thanks for having me, I guess 0:17:16.119 --> 0:17:20.560 the results for the fourth quarter were pretty good, partly 0:17:21.000 --> 0:17:24.399 in our view because the guidance itself was a bit conservative, 0:17:24.720 --> 0:17:27.280 but also because they did a lot of cost cutting 0:17:27.400 --> 0:17:32.440 and so revenue EBIDA as well as connected fitness numbers 0:17:32.520 --> 0:17:35.520 came in relatively in line or better slightly soft and 0:17:35.560 --> 0:17:40.119 connected fitness actually, but nothing to worry about. The guidance 0:17:40.240 --> 0:17:43.159 clearly was lower than expected on all fronts on the 0:17:43.280 --> 0:17:45.720 top line, but better on the IBIDAH, largely because of 0:17:45.760 --> 0:17:48.440 the restructuring. Our view is that this is going to 0:17:48.480 --> 0:17:54.080 be a very difficult transition. You can we don't think 0:17:54.119 --> 0:17:57.280 that you can make growth by cutting costs. They'll have 0:17:57.440 --> 0:17:59.879 to eventually show top line growth and that they're not 0:18:00.080 --> 0:18:02.600 tapping out of the market. With a down nine percent 0:18:02.720 --> 0:18:05.720 decline in year of a year revenue for next year, 0:18:06.000 --> 0:18:07.920 that's not a good sign. Whether it is macro or 0:18:07.920 --> 0:18:10.760 whether it is pulling back on their marketing spend because 0:18:10.760 --> 0:18:14.399 they have to, and whether it is restrategizing as the 0:18:14.480 --> 0:18:17.160 new CEO comes in and there's this leadership change, it's 0:18:17.359 --> 0:18:18.800 just not a good sign. 0:18:19.520 --> 0:18:20.920 Where should they be leaning into. 0:18:21.640 --> 0:18:25.600 Is it more app users, is it more online and subscription. 0:18:26.080 --> 0:18:28.239 Should they back away from the hardware or do they 0:18:28.320 --> 0:18:30.960 need to re up some of the marketing around the hardware, 0:18:31.000 --> 0:18:34.359 which for many there have been too many recalls and worriesover. 0:18:35.359 --> 0:18:38.880 Well, it's a very tough challenge. One is because their 0:18:38.920 --> 0:18:42.000 hardware is premium quality or premium priced, and so it's 0:18:42.080 --> 0:18:44.600 not for any average consumer, which is why they're going 0:18:44.760 --> 0:18:48.000 through with the rental as well as they're refurbished. In 0:18:48.119 --> 0:18:50.520 our view, we think that they should focus more on 0:18:50.600 --> 0:18:54.000 the app subscription piece, even if the churn is hired, 0:18:54.200 --> 0:18:55.760 just because of the margin profile. 0:18:56.119 --> 0:18:56.960 If the app. 0:18:56.880 --> 0:19:01.159 Product experience is very, very good and superior to everything 0:19:01.200 --> 0:19:03.600 else in the market, even if it is a crowded market, 0:19:03.920 --> 0:19:06.760 they could gain shared and show some real margin expansion 0:19:07.080 --> 0:19:09.960 while they deliver product expansion, whether it is an international 0:19:10.040 --> 0:19:14.520 markets or in North America. The other question with hardware 0:19:14.640 --> 0:19:17.119 is is there any way they can bring their prices 0:19:17.240 --> 0:19:20.439 down for hardware, whether it is through supply chain changes 0:19:20.720 --> 0:19:25.320 or product innovation or technology innovation to drive greater adoption 0:19:25.480 --> 0:19:28.920 because an average consumer it could be prohibitive. 0:19:29.440 --> 0:19:30.200 And never realizes. 0:19:30.240 --> 0:19:33.040 The issue is that suddenly it was a luxury one 0:19:33.080 --> 0:19:35.639 and everyone pivoted, just very quickly shorted the CEO. 0:19:35.880 --> 0:19:37.280 You're expecting that anytime soon. 0:19:38.359 --> 0:19:42.119 Yes, they are expecting to make an announcement before or 0:19:42.160 --> 0:19:45.440 at least during the next earnings quarter earnings call, so 0:19:45.800 --> 0:19:49.640 it'll be another quarter. We think that they may lean 0:19:49.800 --> 0:19:53.480 towards a retail CEO. I'm not sure and I don't 0:19:53.480 --> 0:19:55.520 want to speculate, but I wouldn't be surprised if a 0:19:55.600 --> 0:19:57.200 retail CEO is broad on board. 0:19:57.119 --> 0:19:59.520 Short extra Juria, great to have you on. We thank you. 0:19:59.640 --> 0:20:01.360 WILF search there memhile. 0:20:01.480 --> 0:20:03.800 Talking about succession planning, Disney has a new chair in 0:20:03.880 --> 0:20:07.479 its succession plan Committee. It's former Morgan Stanley CEO James Gorman, 0:20:07.600 --> 0:20:09.080 who will be taking the lead in the search for 0:20:09.160 --> 0:20:11.879