1 00:00:02,720 --> 00:00:10,520 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,560 --> 00:00:14,520 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:14,560 --> 00:00:17,800 Speaker 1: Eastern on Apple, Corclay and Android Auto with the Bloomberg 4 00:00:17,880 --> 00:00:21,000 Speaker 1: Business Up. Listen on demand wherever you get your podcasts, 5 00:00:21,320 --> 00:00:23,040 Speaker 1: or watch us live on YouTube. 6 00:00:23,760 --> 00:00:26,239 Speaker 2: Let's head out to DC for the latest. When it 7 00:00:26,280 --> 00:00:29,920 Speaker 2: comes to the potential budget. House Republicans past a budget 8 00:00:29,920 --> 00:00:32,280 Speaker 2: blueprint on Tuesday, still has to go to the Senate. 9 00:00:32,920 --> 00:00:36,440 Speaker 2: It looks like tax cut chances are rising, although it 10 00:00:36,479 --> 00:00:39,599 Speaker 2: doesn't come without cuts to some major programs potentially. Eric 11 00:00:39,640 --> 00:00:42,760 Speaker 2: Watson is a Bloomberg congressional reporter and joins us now. 12 00:00:42,800 --> 00:00:44,560 Speaker 2: So first, Eric, just give us the lay of the land. 13 00:00:44,600 --> 00:00:45,960 Speaker 2: What did the House pass yesterday? 14 00:00:46,920 --> 00:00:49,720 Speaker 3: So this is a four point five trillion dollar tax 15 00:00:49,760 --> 00:00:53,200 Speaker 3: cut blueprint. It calls for two trillion dollars and cuts 16 00:00:53,200 --> 00:00:56,960 Speaker 3: to mandatory programs such as Medicaid and food stamps, and 17 00:00:57,040 --> 00:00:59,680 Speaker 3: would raise the debt ceiling by four trillion dollars. This 18 00:00:59,720 --> 00:01:03,800 Speaker 3: is the first step after it's if it was adopted 19 00:01:03,800 --> 00:01:05,200 Speaker 3: by the Senate, then they would have to produce a 20 00:01:05,200 --> 00:01:07,880 Speaker 3: bill that actually details the cuts. And as long as 21 00:01:07,880 --> 00:01:10,800 Speaker 3: that bill adhere to the budget. It can pass the 22 00:01:10,800 --> 00:01:13,560 Speaker 3: Senate with just fifty votes instead of sixty. This is 23 00:01:13,600 --> 00:01:17,360 Speaker 3: called budget reconciliation. It's the way Obamacare was passed. It 24 00:01:17,440 --> 00:01:21,560 Speaker 3: was the way the Inflation Reduction Act Green subsidies under 25 00:01:21,600 --> 00:01:24,480 Speaker 3: Biden were passed. So it was really an achievement for 26 00:01:24,520 --> 00:01:28,640 Speaker 3: Speaker Mike Johnson. The House Republican Conference has been very divided. 27 00:01:28,959 --> 00:01:32,240 Speaker 3: You have moderates who are very worried about Medicaid cuts. 28 00:01:32,240 --> 00:01:34,960 Speaker 3: You have conservatives who at the last minute put their 29 00:01:35,040 --> 00:01:37,559 Speaker 3: votes and allow the bill to the budget to pass, 30 00:01:37,640 --> 00:01:40,560 Speaker 3: but wanted even deeper cuts. They wanted to see this 31 00:01:41,200 --> 00:01:44,920 Speaker 3: budget fully paid for itself. But Trump lobbied them and 32 00:01:45,040 --> 00:01:46,959 Speaker 3: was back calling them at the last minute to get 33 00:01:46,959 --> 00:01:49,600 Speaker 3: them to flip in a dramatic scene here last night. 34 00:01:50,520 --> 00:01:53,120 Speaker 3: So this is a positive I will basically say, my 35 00:01:53,160 --> 00:01:55,240 Speaker 3: assumption has been that the Trump tax cuts of twenty 36 00:01:55,280 --> 00:01:58,040 Speaker 3: seventeen do get extended, but I was thinking it could 37 00:01:58,080 --> 00:02:00,400 Speaker 3: be more like December, right up against the dead line. 38 00:02:00,520 --> 00:02:02,840 Speaker 3: This makes it more likely that happens in May. We'll 39 00:02:02,840 --> 00:02:07,360 Speaker 3: give businesses and individuals better heads up as far as 40 00:02:07,400 --> 00:02:10,120 Speaker 3: tax planning. It's just a positive sign for the tax 41 00:02:10,160 --> 00:02:11,440 Speaker 3: cuts overall. 42 00:02:11,560 --> 00:02:12,480 Speaker 4: What are next steps? 43 00:02:12,840 --> 00:02:15,800 Speaker 3: Eric, You know, the Senate is not really going to 44 00:02:15,919 --> 00:02:18,160 Speaker 3: just put this House budget on the floor and pass it. 45 00:02:18,360 --> 00:02:23,480 Speaker 3: They want to actually make larger tax cuts. They want 46 00:02:23,480 --> 00:02:26,120 Speaker 3: to basically do something which is assume that the Trump 47 00:02:26,160 --> 00:02:29,120 Speaker 3: tax cuts four trillion don't cost anything. This is called 48 00:02:29,160 --> 00:02:31,280 Speaker 3: a baseline shift. That's very technical, but it would be 49 00:02:31,360 --> 00:02:33,679 Speaker 3: kind of a budget gimmick, and then add a lot 50 00:02:33,720 --> 00:02:37,480 Speaker 3: of things like a state tax repeal, you know, fullsome 51 00:02:38,040 --> 00:02:41,160 Speaker 3: no tax on tips, no tax on overtime, you know, 52 00:02:41,200 --> 00:02:43,760 Speaker 3: probably trying to make the tax cuts permanent rather than 53 00:02:43,800 --> 00:02:46,000 Speaker 3: eight or nine years, which is what my estimate is 54 00:02:46,240 --> 00:02:48,120 Speaker 3: of what the House bill would do as far as 55 00:02:48,200 --> 00:02:51,000 Speaker 3: individual rate cuts. So they're going to make those changes. 56 00:02:51,040 --> 00:02:55,799 Speaker 3: There's also more squeamishness among senators for actual spending cuts 57 00:02:55,800 --> 00:02:58,160 Speaker 3: such as to medicaid, so they may bring that down. 58 00:02:58,639 --> 00:03:02,160 Speaker 3: So I'm expecting substantial chain will be the backdoor negotiations, 59 00:03:02,720 --> 00:03:04,800 Speaker 3: a compromise will emerge, and then we'll see if it 60 00:03:04,800 --> 00:03:06,320 Speaker 3: can pass both the House and the Senate. 61 00:03:06,800 --> 00:03:09,360 Speaker 5: Matt from Westchester writes in and asked, how about the 62 00:03:09,400 --> 00:03:10,400 Speaker 5: salt tax deduction. 63 00:03:12,680 --> 00:03:15,680 Speaker 3: There's you know, there's there's some runway to do that 64 00:03:16,240 --> 00:03:18,680 Speaker 3: you know, on the House side. But I think that 65 00:03:18,720 --> 00:03:21,080 Speaker 3: you know, basically the Senate would have to create more 66 00:03:21,600 --> 00:03:24,480 Speaker 3: room or they would have to find deeper cuts. Now, 67 00:03:24,480 --> 00:03:26,880 Speaker 3: there's a lot of options they can do in order 68 00:03:26,880 --> 00:03:29,000 Speaker 3: to allow for salt. You know, you could do things 69 00:03:29,040 --> 00:03:31,160 Speaker 3: on the tax side, make it more difficult to apply 70 00:03:31,200 --> 00:03:34,080 Speaker 3: for a child tax credit, for example, or do a 71 00:03:34,120 --> 00:03:37,760 Speaker 3: stock buyback tax increase. But you know, it's all going 72 00:03:37,800 --> 00:03:40,280 Speaker 3: to be very controversial and create winners and losers. But 73 00:03:40,360 --> 00:03:45,000 Speaker 3: certainly there's a group within the House Republican Conference from 74 00:03:45,040 --> 00:03:48,120 Speaker 3: New York, New Jersey, and California that will not vote 75 00:03:48,120 --> 00:03:51,400 Speaker 3: for a tax bill without some kind of salt. You know, 76 00:03:51,560 --> 00:03:55,720 Speaker 3: tax cap change. Right now, it's limited to ten thousand dollars. 77 00:03:55,840 --> 00:03:58,440 Speaker 3: That applies to a couple as well as an individual. 78 00:03:58,480 --> 00:04:00,320 Speaker 3: They may double it allowed to be twenty need for 79 00:04:00,360 --> 00:04:02,320 Speaker 3: a couple. We could see another type of rise. I 80 00:04:02,360 --> 00:04:04,520 Speaker 3: don't think it's going to be completely uncapped. It just 81 00:04:04,600 --> 00:04:06,480 Speaker 3: costs too much. 82 00:04:07,200 --> 00:04:10,280 Speaker 2: So how hard was it to get this done? Like 83 00:04:10,320 --> 00:04:12,640 Speaker 2: how much corraling did President Trump have to do over 84 00:04:12,760 --> 00:04:15,200 Speaker 2: House Republicans relatively united? 85 00:04:17,120 --> 00:04:19,120 Speaker 3: You know, it was the House Freedom caucuss is often 86 00:04:19,160 --> 00:04:21,600 Speaker 3: up pinned as being a big obstacle to leadership. They 87 00:04:21,640 --> 00:04:23,240 Speaker 3: came out early on as long as they got this 88 00:04:23,279 --> 00:04:25,280 Speaker 3: two trillion in cuts, so that's a big chunk of 89 00:04:25,360 --> 00:04:28,479 Speaker 3: what the conservative But they're what they call the affiliates, 90 00:04:28,520 --> 00:04:33,560 Speaker 3: people like Victorious Bart's, Thomas Massey, Tim Burchett, and Warren Davidson, 91 00:04:33,600 --> 00:04:35,279 Speaker 3: who at the last minute were saying, we are not 92 00:04:35,360 --> 00:04:37,480 Speaker 3: voting for this, We'll never vote for this. They were 93 00:04:37,480 --> 00:04:39,720 Speaker 3: really dug in. In fact, there's a scene I've never 94 00:04:39,760 --> 00:04:41,760 Speaker 3: seen in my almost twenty years up here where they 95 00:04:41,800 --> 00:04:44,880 Speaker 3: sent everybody home. Lawmakers got in their cars, were leaving 96 00:04:44,920 --> 00:04:48,200 Speaker 3: the capitol, and eight minutes later they said everyone come back. 97 00:04:48,240 --> 00:04:50,240 Speaker 3: So in that was minutes I think President Trump got 98 00:04:50,279 --> 00:04:52,720 Speaker 3: to some people, they started to flip and they ended 99 00:04:52,800 --> 00:04:54,719 Speaker 3: up passing it. But it's a very dramatic scene here. 100 00:04:54,880 --> 00:04:57,560 Speaker 3: In fact, even saw some Democrats coming, one who had 101 00:04:57,600 --> 00:04:59,120 Speaker 3: just had a baby and one who had just had 102 00:04:59,160 --> 00:05:02,160 Speaker 3: surgery coming with Walker to try to put the pressure 103 00:05:02,200 --> 00:05:05,679 Speaker 3: on Republicans to get every vote that they needed. 104 00:05:06,160 --> 00:05:08,120 Speaker 5: Eric got about thirty seconds left. But this seems like 105 00:05:08,160 --> 00:05:11,120 Speaker 5: a real big win for President Trump. Does this signal 106 00:05:11,600 --> 00:05:14,600 Speaker 5: even additional momentum for his agenda? 107 00:05:14,680 --> 00:05:17,120 Speaker 3: It does, but you know, there's a lot of hurdles 108 00:05:17,160 --> 00:05:19,599 Speaker 3: when right now a lot of moderates voted for this 109 00:05:19,640 --> 00:05:21,839 Speaker 3: saying it's just a plan, there are no real cuts. 110 00:05:22,040 --> 00:05:24,400 Speaker 3: But if you see an eight hundred billion dollar cut 111 00:05:24,440 --> 00:05:28,200 Speaker 3: to medicate that goes beyond work requirements for able bodied adults, 112 00:05:28,200 --> 00:05:31,160 Speaker 3: that goes beyond you know, improper payments, that's things like 113 00:05:31,279 --> 00:05:35,640 Speaker 3: capping you know, Medicaid, a block granting into the states 114 00:05:35,640 --> 00:05:39,600 Speaker 3: where you'll see actual you know, impoverished people go without healthcare. 115 00:05:39,800 --> 00:05:42,760 Speaker 3: And that's going to cause I think an uproar probably 116 00:05:43,040 --> 00:05:45,720 Speaker 3: that a lot of swing district monits are not prepared for. 117 00:05:45,920 --> 00:05:49,320 Speaker 3: So you know, it's going to be very difficult to 118 00:05:49,360 --> 00:05:51,960 Speaker 3: get something through because if they don't make those cuts, 119 00:05:52,000 --> 00:05:54,599 Speaker 3: those conservatives that they also need will not vote for 120 00:05:54,600 --> 00:05:54,920 Speaker 3: the bill. 121 00:05:55,279 --> 00:05:57,600 Speaker 2: All I really appreciate that. Thank you so much for 122 00:05:57,680 --> 00:06:00,640 Speaker 2: joining us, great reporting. Eric Watson, a Bloomberg Congression reporter, 123 00:06:00,760 --> 00:06:02,360 Speaker 2: literally joining us in a hall somewhere. 124 00:06:02,560 --> 00:06:02,760 Speaker 3: Yeah. 125 00:06:02,839 --> 00:06:06,880 Speaker 4: No, that's the capital rotanda underneath the Trumbelt chaining. 126 00:06:06,920 --> 00:06:07,160 Speaker 6: Okay. 127 00:06:07,200 --> 00:06:09,760 Speaker 2: My point was that he's like in the in the weeds, 128 00:06:09,920 --> 00:06:10,440 Speaker 2: is my point. 129 00:06:10,560 --> 00:06:13,160 Speaker 4: That's the surrender a morning's. 130 00:06:12,480 --> 00:06:13,000 Speaker 7: On the ground. 131 00:06:13,040 --> 00:06:14,719 Speaker 2: He's that kind of waning. 132 00:06:14,520 --> 00:06:18,680 Speaker 4: Is the painting of the surrender of General We're Goyne. 133 00:06:18,920 --> 00:06:21,200 Speaker 7: Thank you. 134 00:06:21,200 --> 00:06:24,919 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 135 00:06:25,000 --> 00:06:28,080 Speaker 1: weekdays at ten am Eastern on Apple, Coarclay, and Android 136 00:06:28,080 --> 00:06:31,400 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 137 00:06:31,480 --> 00:06:34,600 Speaker 1: you get your podcasts, or watch us live on YouTube. 138 00:06:35,480 --> 00:06:37,839 Speaker 2: All right, I'm Alexey alongside dun Tucker and Paul Sweeny. 139 00:06:37,880 --> 00:06:39,720 Speaker 2: This is Bloomberg Intelligence Radio. We bring you all the 140 00:06:39,760 --> 00:06:42,120 Speaker 2: top news and business, economics and finance through our lens 141 00:06:42,160 --> 00:06:44,839 Speaker 2: of our Bloomberg Intelligence folks. They cover two thousand companies 142 00:06:45,040 --> 00:06:47,800 Speaker 2: and one hundred and thirty industries all around the world. 143 00:06:47,800 --> 00:06:49,680 Speaker 2: We also love checking in on some of the companies 144 00:06:49,680 --> 00:06:51,960 Speaker 2: that are basically running the show when it comes to 145 00:06:52,040 --> 00:06:53,920 Speaker 2: us being able to turn on our lights, or when 146 00:06:53,920 --> 00:06:57,000 Speaker 2: it comes to us turning on our cars, or actually 147 00:06:57,040 --> 00:06:59,000 Speaker 2: like starting our cars maybe a different way. 148 00:06:58,839 --> 00:06:59,240 Speaker 3: To say it. 149 00:06:59,600 --> 00:07:04,200 Speaker 2: And of those companies is American Superconductor. The ticker is AMSC. 150 00:07:04,480 --> 00:07:06,680 Speaker 2: That's on the Nasdaq. You can find it there. The 151 00:07:06,680 --> 00:07:09,440 Speaker 2: stock is currently up by almost six percent. It currently 152 00:07:09,560 --> 00:07:12,440 Speaker 2: It recently announced it's fiscal third quarter results and the 153 00:07:12,480 --> 00:07:16,920 Speaker 2: CEO Daniel McCann joins us. Now, So, Daniel, you basically 154 00:07:16,960 --> 00:07:19,160 Speaker 2: make all the stuff that allows us turn on lights. 155 00:07:19,240 --> 00:07:20,320 Speaker 2: Is that a fair way of saying it. 156 00:07:20,560 --> 00:07:22,600 Speaker 7: Yeah, we don't really make the power move the power, 157 00:07:22,640 --> 00:07:24,440 Speaker 7: but we make sure that the power is where it 158 00:07:24,520 --> 00:07:25,360 Speaker 7: is when it's needed. 159 00:07:25,680 --> 00:07:27,360 Speaker 2: So what does that wind up meaning? So you can 160 00:07:27,400 --> 00:07:29,040 Speaker 2: tuck to the electricity basically? 161 00:07:29,400 --> 00:07:32,000 Speaker 7: Yeah, So if it's an industrial site in a manufacturer 162 00:07:32,040 --> 00:07:35,040 Speaker 7: that needs power at a certain level of certain frequency, 163 00:07:35,200 --> 00:07:37,600 Speaker 7: we modulate that and make it the right way for 164 00:07:37,680 --> 00:07:40,360 Speaker 7: that factory. Same thing if you're trying to deal with 165 00:07:40,840 --> 00:07:44,240 Speaker 7: bringing generation onto the grid or even different spots within 166 00:07:44,280 --> 00:07:46,440 Speaker 7: the grid itself, to bolster and make sure that the 167 00:07:46,480 --> 00:07:47,880 Speaker 7: power can go where it's needed. 168 00:07:48,280 --> 00:07:51,680 Speaker 5: All right, that sounds critical, sounds important, but it doesn't 169 00:07:51,720 --> 00:07:54,440 Speaker 5: sound sexy. But your stock is up seventy eight percent 170 00:07:54,560 --> 00:07:55,720 Speaker 5: over the past twelve months. 171 00:07:56,080 --> 00:07:56,720 Speaker 4: Why do you think that is? 172 00:07:56,760 --> 00:07:58,600 Speaker 5: Are you guys getting caught up in an AI and 173 00:07:58,640 --> 00:07:59,679 Speaker 5: the need for energy? 174 00:07:59,760 --> 00:08:00,560 Speaker 4: And I don't. 175 00:08:00,760 --> 00:08:02,640 Speaker 7: I think we're getting caught up in the need for energy. 176 00:08:02,640 --> 00:08:04,720 Speaker 7: I think there's a lot of drivers that are changing 177 00:08:05,240 --> 00:08:07,520 Speaker 7: our need for power. If you think about everything you 178 00:08:07,600 --> 00:08:11,880 Speaker 7: do in your day now requires electricity, and that could 179 00:08:11,880 --> 00:08:15,600 Speaker 7: be from healthcare to data to semiconductor manufacturing and everything 180 00:08:15,640 --> 00:08:19,040 Speaker 7: in between. So power it becomes more and more critical. 181 00:08:19,040 --> 00:08:21,640 Speaker 7: We're becoming more dependent upon it. And the grid really 182 00:08:21,680 --> 00:08:24,280 Speaker 7: wasn't built for the modern era of electricity. 183 00:08:24,520 --> 00:08:26,800 Speaker 2: And from that perspective, I mean, just for a super 184 00:08:26,840 --> 00:08:29,800 Speaker 2: nerdy moment. You guys also make the conductors, right, like 185 00:08:29,840 --> 00:08:31,720 Speaker 2: the thing that so if you have a wind farm 186 00:08:31,720 --> 00:08:33,199 Speaker 2: and you need attached to a grid, there's like a 187 00:08:33,240 --> 00:08:35,360 Speaker 2: piece of equipment that you need to attach it. You 188 00:08:35,440 --> 00:08:38,360 Speaker 2: make those and those are in super super super tight 189 00:08:38,400 --> 00:08:41,160 Speaker 2: demand like tons of demand, not on a supply it 190 00:08:41,160 --> 00:08:42,960 Speaker 2: doesn't matter what kind of power source that is. Am 191 00:08:42,960 --> 00:08:43,440 Speaker 2: I accurate? 192 00:08:43,520 --> 00:08:45,800 Speaker 7: Yeah, And many of the suppliers are from overseas as well, 193 00:08:45,880 --> 00:08:48,559 Speaker 7: So we're kind of unique also being an American company 194 00:08:48,600 --> 00:08:51,960 Speaker 7: making product in America with Americans, and I think that 195 00:08:52,000 --> 00:08:54,480 Speaker 7: fits very well in today's climate where we're trying to 196 00:08:54,520 --> 00:08:55,280 Speaker 7: push the country. 197 00:08:55,679 --> 00:08:58,200 Speaker 5: So what are the drivers for your company right here 198 00:08:58,240 --> 00:09:01,320 Speaker 5: right now? I know you recently reported are things. What 199 00:09:01,320 --> 00:09:03,240 Speaker 5: did you identify as the drivers for your business? 200 00:09:03,840 --> 00:09:05,640 Speaker 7: A lot of it is this further in the need 201 00:09:05,679 --> 00:09:09,079 Speaker 7: for demand. A lot of it. We're seeing our business 202 00:09:09,080 --> 00:09:12,520 Speaker 7: start to ramp really with the reshoring of manufactured capacity 203 00:09:12,520 --> 00:09:16,360 Speaker 7: and capability in America. All those operations need power, so 204 00:09:16,400 --> 00:09:20,319 Speaker 7: we see expansion in manufacturing that's starting to happen critically 205 00:09:20,320 --> 00:09:22,679 Speaker 7: in these critical elements if you want to deal with 206 00:09:23,000 --> 00:09:25,720 Speaker 7: cars and chips and AI and all those things. We 207 00:09:25,800 --> 00:09:28,760 Speaker 7: sit kind of secondarily that we help enable the power 208 00:09:28,840 --> 00:09:31,960 Speaker 7: to be there. But more and more operations are becoming 209 00:09:31,960 --> 00:09:33,679 Speaker 7: more dependent upon electricity. 210 00:09:34,320 --> 00:09:36,920 Speaker 2: So from that perspective, does it matter to you where 211 00:09:36,960 --> 00:09:39,880 Speaker 2: the electricity comes from? In that does the policy from 212 00:09:39,880 --> 00:09:43,240 Speaker 2: a Biden administration and transition to a Trump administration on 213 00:09:43,440 --> 00:09:45,960 Speaker 2: say energy and climate, does that matter? 214 00:09:46,440 --> 00:09:48,800 Speaker 7: Well, I'll say something that may not be popular, but 215 00:09:48,840 --> 00:09:49,679 Speaker 7: I'll still say it. 216 00:09:49,760 --> 00:09:50,480 Speaker 4: I think that. 217 00:09:50,400 --> 00:09:53,400 Speaker 7: The end result and desire from both are the same. 218 00:09:54,640 --> 00:09:57,120 Speaker 7: We want to make sure that we're building an economy 219 00:09:57,120 --> 00:10:00,560 Speaker 7: in America for Americans. I think that was insistent with 220 00:10:00,600 --> 00:10:03,680 Speaker 7: the last administration. It's definitely consistent with the current administration. 221 00:10:03,960 --> 00:10:06,040 Speaker 7: The question is the policy and how how do we 222 00:10:06,040 --> 00:10:10,240 Speaker 7: help enable it. Are we trying to create a market 223 00:10:10,640 --> 00:10:13,240 Speaker 7: that people want to companies want to invest in, or 224 00:10:13,360 --> 00:10:17,640 Speaker 7: is the government trying to help foster that through money 225 00:10:17,640 --> 00:10:20,719 Speaker 7: and through through policy that is more economic. At the 226 00:10:20,800 --> 00:10:22,319 Speaker 7: end of the day, for us, it doesn't quite matter. 227 00:10:22,559 --> 00:10:24,960 Speaker 7: The problem is still the problem. The grid needs to 228 00:10:24,960 --> 00:10:28,719 Speaker 7: be improved. Utilities are working on that, but as more 229 00:10:28,800 --> 00:10:33,040 Speaker 7: manufacturing capacity comes online, there's there's need for higher quality 230 00:10:33,120 --> 00:10:35,360 Speaker 7: power and that's where we come in and help solve 231 00:10:35,360 --> 00:10:37,960 Speaker 7: those problems. Who do you compete against a lot of 232 00:10:37,960 --> 00:10:39,160 Speaker 7: the big guys from Europe? 233 00:10:39,960 --> 00:10:43,040 Speaker 4: And what we found is that like Semens, it could be. 234 00:10:42,960 --> 00:10:45,720 Speaker 7: Semens or ABB locally here in the US a small 235 00:10:45,720 --> 00:10:49,640 Speaker 7: company called General Electric. But what we've found is over 236 00:10:49,679 --> 00:10:52,959 Speaker 7: the past several years, our largest competitors have become very 237 00:10:52,960 --> 00:10:56,120 Speaker 7: good customers. And what we've found is what we offer, 238 00:10:56,200 --> 00:10:58,400 Speaker 7: the uniqueness of what we do and the service that 239 00:10:58,440 --> 00:11:02,160 Speaker 7: we provide, it complements their offering. And I think they're 240 00:11:02,200 --> 00:11:05,040 Speaker 7: starting to understand that we're not really a threat per 241 00:11:05,040 --> 00:11:07,760 Speaker 7: se to their business. We're a helpful solution to the 242 00:11:07,840 --> 00:11:08,440 Speaker 7: end customer. 243 00:11:08,720 --> 00:11:11,360 Speaker 2: What inputs do you need for your business? So? What 244 00:11:11,400 --> 00:11:13,839 Speaker 2: things are tight for you? What things do you want 245 00:11:13,840 --> 00:11:14,760 Speaker 2: to help change? 246 00:11:15,720 --> 00:11:17,920 Speaker 7: When you say inputs, I think supply chaining. 247 00:11:18,000 --> 00:11:19,600 Speaker 2: That's what I'm and that's what I'm trying to get at. 248 00:11:19,640 --> 00:11:21,559 Speaker 2: So is it like the raw materials that you need 249 00:11:21,600 --> 00:11:23,160 Speaker 2: to build stuff in the US to them sell. 250 00:11:23,480 --> 00:11:25,040 Speaker 4: Yeah, almost everything. 251 00:11:24,679 --> 00:11:27,000 Speaker 7: That we make in the US. So probably eighty five 252 00:11:27,080 --> 00:11:31,000 Speaker 7: percent of our businesses here home in the US, manufactured here. 253 00:11:32,240 --> 00:11:34,839 Speaker 7: Almost all of our supply chain, probably more than ninety 254 00:11:34,840 --> 00:11:38,520 Speaker 7: five ninety six percent, is sourced in the US. So 255 00:11:39,440 --> 00:11:42,000 Speaker 7: the current ap climate really puts us in a unique 256 00:11:42,000 --> 00:11:45,920 Speaker 7: opportunity that we may have unique opportunities presented to us 257 00:11:45,960 --> 00:11:49,920 Speaker 7: because we are American, American, made by Americans, supplied mostly 258 00:11:49,920 --> 00:11:54,079 Speaker 7: by American suppliers. When people talk about tariffs and these 259 00:11:54,160 --> 00:11:57,600 Speaker 7: kind of external policies, they don't have a great impact 260 00:11:57,640 --> 00:12:00,600 Speaker 7: on what we do now. They may how things are 261 00:12:00,600 --> 00:12:02,080 Speaker 7: going to sort out. There's a lot of rhetoric and 262 00:12:02,120 --> 00:12:04,560 Speaker 7: then we'll see how reality translates from that reetarc and 263 00:12:04,600 --> 00:12:06,760 Speaker 7: really what gets put in place. But a lot of 264 00:12:06,760 --> 00:12:09,240 Speaker 7: this is trying to push the country in a certain direction, 265 00:12:09,600 --> 00:12:11,600 Speaker 7: and I think that general direction is good for us. 266 00:12:12,080 --> 00:12:14,480 Speaker 4: So are you having conversations with your customers now? 267 00:12:14,520 --> 00:12:16,560 Speaker 5: They may be calling you and saying, hey, Dan, we're 268 00:12:16,559 --> 00:12:18,800 Speaker 5: a little nervous about what might be happening over the 269 00:12:18,840 --> 00:12:22,000 Speaker 5: next three, six, twelve months in terms of terrors. Are 270 00:12:22,000 --> 00:12:24,000 Speaker 5: they are you seeing that in your order flow or 271 00:12:24,040 --> 00:12:25,880 Speaker 5: are you seeing that maybe just in conversations you're having. 272 00:12:26,080 --> 00:12:29,800 Speaker 7: We're seeing that from companies in Canada, Mexico, we're seeing 273 00:12:29,840 --> 00:12:33,320 Speaker 7: that to some extent some companies on the continent of Europe, 274 00:12:34,000 --> 00:12:36,200 Speaker 7: but certainly in the US they're comforted by the fact 275 00:12:36,280 --> 00:12:37,760 Speaker 7: of where we make it and how we make it, 276 00:12:37,800 --> 00:12:39,319 Speaker 7: and where we source products from. 277 00:12:39,360 --> 00:12:41,040 Speaker 2: Some of the headlines over the last couple of days 278 00:12:41,080 --> 00:12:44,040 Speaker 2: have evolved around tariffs on things like steel, aluminum. Copper 279 00:12:44,080 --> 00:12:47,360 Speaker 2: was thrown into the mix yesterday. If that winds up 280 00:12:47,440 --> 00:12:49,560 Speaker 2: denting demand as and we're not going to build as 281 00:12:49,600 --> 00:12:52,599 Speaker 2: much manufacturing or industrial sites because it's just really expensive, 282 00:12:52,720 --> 00:12:53,920 Speaker 2: how does that trickle to you? 283 00:12:54,280 --> 00:12:56,560 Speaker 7: Well, I think the opposite's going to happen. The need 284 00:12:56,640 --> 00:12:58,880 Speaker 7: is going to persist. The question is can it absorb 285 00:12:58,960 --> 00:13:01,559 Speaker 7: the cost, And there's gonna have to be a way 286 00:13:01,600 --> 00:13:04,240 Speaker 7: to figure that out and find that out. But I 287 00:13:04,280 --> 00:13:07,400 Speaker 7: think all of the things that go into the electric 288 00:13:07,440 --> 00:13:10,559 Speaker 7: grid use all those materials, so they're gonna have to 289 00:13:10,559 --> 00:13:15,600 Speaker 7: get sources. And if it makes American sourced product more competitive, 290 00:13:15,720 --> 00:13:18,760 Speaker 7: then so be it. From my standpoint, it doesn't directly 291 00:13:18,840 --> 00:13:21,680 Speaker 7: affect us because we're already sourcing most of our principal 292 00:13:21,720 --> 00:13:23,479 Speaker 7: equipment from the US. 293 00:13:23,520 --> 00:13:25,559 Speaker 4: Interesting, all right, Dan, great, thanks for joining us. Really 294 00:13:25,559 --> 00:13:26,000 Speaker 4: appreciate it. 295 00:13:26,080 --> 00:13:32,200 Speaker 5: Dan again, a MSc. That's American Semiconductor Corporation. They're up 296 00:13:32,200 --> 00:13:33,960 Speaker 5: there in Massachusetts. 297 00:13:34,160 --> 00:13:35,719 Speaker 4: It's a public trading company. On this deck. 298 00:13:35,840 --> 00:13:39,000 Speaker 5: AMSC is the ticker I put in there. So we 299 00:13:39,040 --> 00:13:42,280 Speaker 5: appreciate that. Dan coming into our Bloomberg Interactive Brookers Studio 300 00:13:42,640 --> 00:13:44,439 Speaker 5: in New York City, Red Sox. 301 00:13:44,160 --> 00:13:45,240 Speaker 7: Fan of course. 302 00:13:45,360 --> 00:13:48,440 Speaker 5: Oh jeez, all right, what are you gonna do? 303 00:13:49,120 --> 00:13:52,800 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 304 00:13:52,880 --> 00:13:56,240 Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto 305 00:13:56,360 --> 00:13:59,400 Speaker 1: with the Bloomberg Business app. Listen on demand wherever you 306 00:13:59,440 --> 00:14:02,439 Speaker 1: get your pod, or watch us live on YouTube. 307 00:14:03,400 --> 00:14:06,640 Speaker 2: Alex Steel here alongside Toal Sweeney. This is Bloomberg Intelligence Radio. 308 00:14:06,679 --> 00:14:09,240 Speaker 2: We are broadcasting to live for Interactive Broker Studio right 309 00:14:09,280 --> 00:14:11,840 Speaker 2: here in midtown Manhattan. You can also check us out 310 00:14:12,040 --> 00:14:14,560 Speaker 2: on YouTube as well. Obviously, the main event here is 311 00:14:14,559 --> 00:14:16,320 Speaker 2: going to be in Vidia at the closing bill. The 312 00:14:16,360 --> 00:14:19,480 Speaker 2: options market is looking for anywhere from about an eight 313 00:14:19,600 --> 00:14:22,960 Speaker 2: to nine percent move to the upper of the downside, 314 00:14:22,960 --> 00:14:25,400 Speaker 2: which could equate to something like three hundred billion dollars 315 00:14:25,440 --> 00:14:27,800 Speaker 2: in market cap, so that could be a very sizeable event. 316 00:14:28,000 --> 00:14:29,920 Speaker 2: So I want to get you a preview here of 317 00:14:29,920 --> 00:14:31,800 Speaker 2: that kind of what to expect in a broader sense. 318 00:14:31,960 --> 00:14:34,880 Speaker 2: Joining us as Matt Stucky, chief portfolio manager of equities 319 00:14:34,920 --> 00:14:37,760 Speaker 2: at Northwestern at Mutual Wealth Management. Matt, good to see you, 320 00:14:37,800 --> 00:14:39,520 Speaker 2: all right, do my homework for me. What am I 321 00:14:39,560 --> 00:14:41,720 Speaker 2: looking at for Nvidia? 322 00:14:42,120 --> 00:14:45,880 Speaker 6: Well, certainly is the event of the day. Look, it's 323 00:14:45,920 --> 00:14:48,720 Speaker 6: an interesting report that we're going to get after the close, 324 00:14:49,160 --> 00:14:52,720 Speaker 6: and specifically to the company. You know, you're looking at 325 00:14:52,720 --> 00:14:56,360 Speaker 6: a ramp up in Blackwell production as well as Blackwell revenue, 326 00:14:56,400 --> 00:14:59,920 Speaker 6: but that needs to offset a deceleration in Hopper revenues. 327 00:15:00,040 --> 00:15:03,560 Speaker 6: And is of Q three of Navidia's fiscal year that 328 00:15:03,680 --> 00:15:06,480 Speaker 6: was twenty seven billion dollars worth of revenue in terms 329 00:15:06,520 --> 00:15:08,440 Speaker 6: of Hopper sales, and by the end of this fiscal 330 00:15:08,520 --> 00:15:10,880 Speaker 6: year it should be down to minimal levels relatives to 331 00:15:11,000 --> 00:15:14,440 Speaker 6: Navidia's revenue base. And so this product transition, I think 332 00:15:14,600 --> 00:15:16,520 Speaker 6: is one of the reasons behind kind of why the 333 00:15:16,560 --> 00:15:18,280 Speaker 6: implied move is as high as what it is. 334 00:15:19,480 --> 00:15:22,320 Speaker 5: So talk to us about valuation. How do you think 335 00:15:22,360 --> 00:15:24,760 Speaker 5: about valuation for this name. I mean, you look at 336 00:15:24,760 --> 00:15:26,840 Speaker 5: the growth and I know a lot of folks are 337 00:15:26,880 --> 00:15:28,760 Speaker 5: saying this, this is actually a name that can grow 338 00:15:28,760 --> 00:15:29,640 Speaker 5: into its valuation. 339 00:15:29,960 --> 00:15:30,840 Speaker 4: How do you feel about that? 340 00:15:32,200 --> 00:15:36,080 Speaker 6: Well, I think I think Navidia's valuation has never been 341 00:15:36,640 --> 00:15:40,960 Speaker 6: a reason why, you know, the stock has done what 342 00:15:41,000 --> 00:15:43,240 Speaker 6: it's done. And what I mean by that is, you know, 343 00:15:43,320 --> 00:15:45,560 Speaker 6: the multiple expansion hasn't been the driver of the stock. 344 00:15:45,600 --> 00:15:49,600 Speaker 6: It's been earning's growth. In fact, I think most Byside 345 00:15:49,640 --> 00:15:53,840 Speaker 6: investors expect calendar or twenty twenty six earnings to be 346 00:15:53,880 --> 00:15:56,800 Speaker 6: in the neighborhood of six dollars a share, and at 347 00:15:56,840 --> 00:16:00,240 Speaker 6: today's price, you know, that's just a modest mind, just 348 00:16:00,520 --> 00:16:03,480 Speaker 6: premium to the S and P five hundred, despite you know, 349 00:16:03,800 --> 00:16:06,720 Speaker 6: much better growth, much better margins, much better kind of 350 00:16:07,120 --> 00:16:11,120 Speaker 6: end market health relative to the rest of both technology 351 00:16:11,160 --> 00:16:14,320 Speaker 6: as well as the overall market. So you know, to me, 352 00:16:14,400 --> 00:16:18,400 Speaker 6: evaluation has never really been you know, the the kind 353 00:16:18,440 --> 00:16:21,560 Speaker 6: of headwind to kind of buying the video. You know, really, 354 00:16:21,640 --> 00:16:26,960 Speaker 6: I think the question a lot of investors have is, 355 00:16:27,360 --> 00:16:32,480 Speaker 6: you know, does this investment wave from hyperscalers, does that persist? 356 00:16:33,200 --> 00:16:37,080 Speaker 6: Can you underwrite a long term revenue base that grows 357 00:16:37,280 --> 00:16:39,520 Speaker 6: from this kind of high levels that exists today. 358 00:16:40,120 --> 00:16:41,840 Speaker 2: And just in breaking news for you guys kind of 359 00:16:41,920 --> 00:16:45,640 Speaker 2: in this vein is Amazon announcing a rebuilt Alexa assistant 360 00:16:45,920 --> 00:16:51,040 Speaker 2: with generative AI. It will be renamed Alexa Plus. So 361 00:16:51,880 --> 00:16:55,240 Speaker 2: just you know, creative, right, we call ours Echo because 362 00:16:55,240 --> 00:16:57,479 Speaker 2: Alex Alexa it can get confusing. 363 00:16:57,080 --> 00:16:57,680 Speaker 3: In our household. 364 00:16:57,760 --> 00:17:00,280 Speaker 2: Oh yeah, yeah, so it's fair enough. Okay, So back 365 00:17:00,320 --> 00:17:02,840 Speaker 2: to Nvidia for a moment. You talk about the product transition. 366 00:17:03,360 --> 00:17:05,520 Speaker 2: This is also happening at a time when Nvidia is 367 00:17:05,600 --> 00:17:08,320 Speaker 2: reporting earnings for the first time in twenty twenty two 368 00:17:08,400 --> 00:17:10,520 Speaker 2: that shares are down and kind of into the report. 369 00:17:11,000 --> 00:17:15,080 Speaker 2: So I'm wondering what we're going to hear that on 370 00:17:15,160 --> 00:17:17,840 Speaker 2: the deep seek side potentially, which is what we really 371 00:17:17,920 --> 00:17:18,680 Speaker 2: set things off. 372 00:17:20,240 --> 00:17:23,080 Speaker 6: Yeah, I think that you're going to probably hear Jensen 373 00:17:23,119 --> 00:17:26,520 Speaker 6: talk about this as being a catalyst for a more 374 00:17:26,560 --> 00:17:30,680 Speaker 6: broad based AI adoption and not necessarily a headwind to 375 00:17:30,960 --> 00:17:35,760 Speaker 6: Navidia's business, you know, Looking at DCK specifically, I think 376 00:17:35,800 --> 00:17:37,800 Speaker 6: it's pretty clear by now that they didn't build their 377 00:17:37,800 --> 00:17:42,320 Speaker 6: own foundational model. They optimize what was out there, and 378 00:17:42,359 --> 00:17:45,920 Speaker 6: it's not slowing down importantly what hyper skills are doing 379 00:17:46,000 --> 00:17:48,920 Speaker 6: in terms of investing. You know, a lot of hyper 380 00:17:48,920 --> 00:17:53,000 Speaker 6: scale investments end up being revenues for Navidia. And if 381 00:17:53,040 --> 00:17:55,520 Speaker 6: you look at what was expected in terms of CAPEX 382 00:17:55,560 --> 00:17:59,639 Speaker 6: from you know, the likes of Microsoft, Amazon, Google Meta 383 00:17:59,840 --> 00:18:03,280 Speaker 6: or from the start of the year Tilt today, it's 384 00:18:03,320 --> 00:18:06,439 Speaker 6: been revised higher by twenty percent and year on your 385 00:18:06,560 --> 00:18:09,919 Speaker 6: growth of capex is in the area code of around 386 00:18:09,920 --> 00:18:12,639 Speaker 6: thirty three percent per year over year every year. So 387 00:18:13,200 --> 00:18:17,480 Speaker 6: it's still a very healthy spending and investment investment environment. 388 00:18:18,000 --> 00:18:21,080 Speaker 6: And you know a lot of those dollars again find 389 00:18:21,119 --> 00:18:22,119 Speaker 6: their way over to the video. 390 00:18:23,280 --> 00:18:26,360 Speaker 4: So I'm just going at the Bloomberg terminal here. 391 00:18:26,359 --> 00:18:28,159 Speaker 5: The consensus for the quarter in terms of revenue is 392 00:18:28,200 --> 00:18:29,880 Speaker 5: about thirty just a little more than thirty eight billion. 393 00:18:29,920 --> 00:18:32,440 Speaker 5: Is there a whisper number out there, Matt that you're 394 00:18:32,600 --> 00:18:35,080 Speaker 5: looking for both for this quarter and maybe for guidance 395 00:18:35,119 --> 00:18:35,840 Speaker 5: for the next quarter. 396 00:18:36,119 --> 00:18:40,439 Speaker 6: Yeah, I think the whisper is around forty where the 397 00:18:40,520 --> 00:18:42,600 Speaker 6: where the buy side sits. And then if you look 398 00:18:42,640 --> 00:18:45,440 Speaker 6: out to guidance around forty two and a half. You know, 399 00:18:45,560 --> 00:18:47,439 Speaker 6: n Video got it to thirty seven and a half 400 00:18:47,840 --> 00:18:50,800 Speaker 6: for the fourth quarter, and they only guy one quarter 401 00:18:50,840 --> 00:18:54,240 Speaker 6: at a time, and so you know, looking at kind 402 00:18:54,240 --> 00:18:56,560 Speaker 6: of where that sits relative to sell syde consensus, that's 403 00:18:56,600 --> 00:18:59,080 Speaker 6: a little bit higher. But again you're in the midst 404 00:18:59,080 --> 00:19:03,200 Speaker 6: of this product transition, and so the historical pattern of 405 00:19:03,240 --> 00:19:05,960 Speaker 6: the video delivering two billion above the current quarter and 406 00:19:05,960 --> 00:19:09,159 Speaker 6: guiding to two billion in excess of seal side consensus, 407 00:19:09,600 --> 00:19:11,679 Speaker 6: you might be a little bit questionable here just given 408 00:19:12,119 --> 00:19:15,159 Speaker 6: you know, they're in black welve. It's just more of 409 00:19:15,200 --> 00:19:17,400 Speaker 6: a complex product and it's taking a little bit longer 410 00:19:17,440 --> 00:19:18,760 Speaker 6: to ramp up the supply chain there. 411 00:19:19,119 --> 00:19:20,800 Speaker 2: What's going to be the read through for Nvidia on 412 00:19:20,960 --> 00:19:22,800 Speaker 2: some of its peers, and I use peers a little 413 00:19:22,800 --> 00:19:23,679 Speaker 2: loosely here. 414 00:19:25,920 --> 00:19:31,000 Speaker 6: Well, certainly a healthy na Vidia report is going to 415 00:19:31,040 --> 00:19:36,359 Speaker 6: translate into likely a move higher. As well as to 416 00:19:36,400 --> 00:19:41,240 Speaker 6: some of the video's competitors. You know, I think if 417 00:19:41,280 --> 00:19:45,520 Speaker 6: you're looking at direct competitors to the video, you know, 418 00:19:45,720 --> 00:19:49,000 Speaker 6: broadcome comes to mind, Marvel comes to mind. They do 419 00:19:49,080 --> 00:19:52,000 Speaker 6: operate in a little bit different, a little bit different 420 00:19:52,040 --> 00:19:55,439 Speaker 6: segment of artificial intelligence because they're you know, the customer 421 00:19:55,680 --> 00:19:58,600 Speaker 6: basic manufacturers for the lesive Google as well as for 422 00:19:59,440 --> 00:20:02,840 Speaker 6: UH as well as for Amazon. You know, I think 423 00:20:02,880 --> 00:20:06,320 Speaker 6: those are those are a little bit different than the 424 00:20:06,359 --> 00:20:09,679 Speaker 6: video because it's the merchant GPU provider, and let's not 425 00:20:09,760 --> 00:20:12,080 Speaker 6: forget you know, the video does own ninety percent of 426 00:20:12,119 --> 00:20:15,000 Speaker 6: this market, so they're the big gorilla in. 427 00:20:15,000 --> 00:20:15,720 Speaker 3: The room for sure. 428 00:20:15,840 --> 00:20:17,520 Speaker 4: Exactly all right, Matt, thanks so much for joining us. 429 00:20:17,520 --> 00:20:19,960 Speaker 5: Really appreciate giving us a little preview there of Nvidia 430 00:20:20,000 --> 00:20:22,080 Speaker 5: Air for the clothes, Matt Stuckey, he's a chief portfolio 431 00:20:22,119 --> 00:20:26,440 Speaker 5: manager filling the equity stuff for Northwestern Mutual Wealth Management 432 00:20:26,720 --> 00:20:28,400 Speaker 5: out there in Milwaukee, Wisconsin. 433 00:20:29,200 --> 00:20:33,879 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, 434 00:20:34,080 --> 00:20:38,040 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 435 00:20:38,280 --> 00:20:41,520 Speaker 1: ten am to noon Eastern on Bloomberg dot com, the 436 00:20:41,640 --> 00:20:45,520 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 437 00:20:45,520 --> 00:20:48,800 Speaker 1: can also watch us live every weekday on YouTube and 438 00:20:49,040 --> 00:20:50,960 Speaker 1: always on the Bloomberg terminal.