WEBVTT - House Passes Budget Paving Way for Tax Cuts 0:00:02.720 --> 0:00:10.520 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.560 --> 0:00:14.520 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.560 --> 0:00:17.800 Eastern on Apple, Corclay and Android Auto with the Bloomberg 0:00:17.880 --> 0:00:21.000 Business Up. Listen on demand wherever you get your podcasts, 0:00:21.320 --> 0:00:23.040 or watch us live on YouTube. 0:00:23.760 --> 0:00:26.239 Let's head out to DC for the latest. When it 0:00:26.280 --> 0:00:29.920 comes to the potential budget. House Republicans past a budget 0:00:29.920 --> 0:00:32.280 blueprint on Tuesday, still has to go to the Senate. 0:00:32.920 --> 0:00:36.440 It looks like tax cut chances are rising, although it 0:00:36.479 --> 0:00:39.599 doesn't come without cuts to some major programs potentially. Eric 0:00:39.640 --> 0:00:42.760 Watson is a Bloomberg congressional reporter and joins us now. 0:00:42.800 --> 0:00:44.560 So first, Eric, just give us the lay of the land. 0:00:44.600 --> 0:00:45.960 What did the House pass yesterday? 0:00:46.920 --> 0:00:49.720 So this is a four point five trillion dollar tax 0:00:49.760 --> 0:00:53.200 cut blueprint. It calls for two trillion dollars and cuts 0:00:53.200 --> 0:00:56.960 to mandatory programs such as Medicaid and food stamps, and 0:00:57.040 --> 0:00:59.680 would raise the debt ceiling by four trillion dollars. This 0:00:59.720 --> 0:01:03.800 is the first step after it's if it was adopted 0:01:03.800 --> 0:01:05.200 by the Senate, then they would have to produce a 0:01:05.200 --> 0:01:07.880 bill that actually details the cuts. And as long as 0:01:07.880 --> 0:01:10.800 that bill adhere to the budget. It can pass the 0:01:10.800 --> 0:01:13.560 Senate with just fifty votes instead of sixty. This is 0:01:13.600 --> 0:01:17.360 called budget reconciliation. It's the way Obamacare was passed. It 0:01:17.440 --> 0:01:21.560 was the way the Inflation Reduction Act Green subsidies under 0:01:21.600 --> 0:01:24.480 Biden were passed. So it was really an achievement for 0:01:24.520 --> 0:01:28.640 Speaker Mike Johnson. The House Republican Conference has been very divided. 0:01:28.959 --> 0:01:32.240 You have moderates who are very worried about Medicaid cuts. 0:01:32.240 --> 0:01:34.960 You have conservatives who at the last minute put their 0:01:35.040 --> 0:01:37.559 votes and allow the bill to the budget to pass, 0:01:37.640 --> 0:01:40.560 but wanted even deeper cuts. They wanted to see this 0:01:41.200 --> 0:01:44.920 budget fully paid for itself. But Trump lobbied them and 0:01:45.040 --> 0:01:46.959 was back calling them at the last minute to get 0:01:46.959 --> 0:01:49.600 them to flip in a dramatic scene here last night. 0:01:50.520 --> 0:01:53.120 So this is a positive I will basically say, my 0:01:53.160 --> 0:01:55.240 assumption has been that the Trump tax cuts of twenty 0:01:55.280 --> 0:01:58.040 seventeen do get extended, but I was thinking it could 0:01:58.080 --> 0:02:00.400 be more like December, right up against the dead line. 0:02:00.520 --> 0:02:02.840 This makes it more likely that happens in May. We'll 0:02:02.840 --> 0:02:07.360 give businesses and individuals better heads up as far as 0:02:07.400 --> 0:02:10.120 tax planning. It's just a positive sign for the tax 0:02:10.160 --> 0:02:11.440 cuts overall. 0:02:11.560 --> 0:02:12.480 What are next steps? 0:02:12.840 --> 0:02:15.800 Eric, You know, the Senate is not really going to 0:02:15.919 --> 0:02:18.160 just put this House budget on the floor and pass it. 0:02:18.360 --> 0:02:23.480 They want to actually make larger tax cuts. They want 0:02:23.480 --> 0:02:26.120 to basically do something which is assume that the Trump 0:02:26.160 --> 0:02:29.120 tax cuts four trillion don't cost anything. This is called 0:02:29.160 --> 0:02:31.280 a baseline shift. That's very technical, but it would be 0:02:31.360 --> 0:02:33.679 kind of a budget gimmick, and then add a lot 0:02:33.720 --> 0:02:37.480 of things like a state tax repeal, you know, fullsome 0:02:38.040 --> 0:02:41.160 no tax on tips, no tax on overtime, you know, 0:02:41.200 --> 0:02:43.760 probably trying to make the tax cuts permanent rather than 0:02:43.800 --> 0:02:46.000 eight or nine years, which is what my estimate is 0:02:46.240 --> 0:02:48.120 of what the House bill would do as far as 0:02:48.200 --> 0:02:51.000 individual rate cuts. So they're going to make those changes. 0:02:51.040 --> 0:02:55.799 There's also more squeamishness among senators for actual spending cuts 0:02:55.800 --> 0:02:58.160 such as to medicaid, so they may bring that down. 0:02:58.639 --> 0:03:02.160 So I'm expecting substantial chain will be the backdoor negotiations, 0:03:02.720 --> 0:03:04.800 a compromise will emerge, and then we'll see if it 0:03:04.800 --> 0:03:06.320 can pass both the House and the Senate. 0:03:06.800 --> 0:03:09.360 Matt from Westchester writes in and asked, how about the 0:03:09.400 --> 0:03:10.400 salt tax deduction. 0:03:12.680 --> 0:03:15.680 There's you know, there's there's some runway to do that 0:03:16.240 --> 0:03:18.680 you know, on the House side. But I think that 0:03:18.720 --> 0:03:21.080 you know, basically the Senate would have to create more 0:03:21.600 --> 0:03:24.480 room or they would have to find deeper cuts. Now, 0:03:24.480 --> 0:03:26.880 there's a lot of options they can do in order 0:03:26.880 --> 0:03:29.000 to allow for salt. You know, you could do things 0:03:29.040 --> 0:03:31.160 on the tax side, make it more difficult to apply 0:03:31.200 --> 0:03:34.080 for a child tax credit, for example, or do a 0:03:34.120 --> 0:03:37.760 stock buyback tax increase. But you know, it's all going 0:03:37.800 --> 0:03:40.280 to be very controversial and create winners and losers. But 0:03:40.360 --> 0:03:45.000 certainly there's a group within the House Republican Conference from 0:03:45.040 --> 0:03:48.120 New York, New Jersey, and California that will not vote 0:03:48.120 --> 0:03:51.400 for a tax bill without some kind of salt. You know, 0:03:51.560 --> 0:03:55.720 tax cap change. Right now, it's limited to ten thousand dollars. 0:03:55.840 --> 0:03:58.440 That applies to a couple as well as an individual. 0:03:58.480 --> 0:04:00.320 They may double it allowed to be twenty need for 0:04:00.360 --> 0:04:02.320 a couple. We could see another type of rise. I 0:04:02.360 --> 0:04:04.520 don't think it's going to be completely uncapped. It just 0:04:04.600 --> 0:04:06.480 costs too much. 0:04:07.200 --> 0:04:10.280 So how hard was it to get this done? Like 0:04:10.320 --> 0:04:12.640 how much corraling did President Trump have to do over 0:04:12.760 --> 0:04:15.200 House Republicans relatively united? 0:04:17.120 --> 0:04:19.120 You know, it was the House Freedom caucuss is often 0:04:19.160 --> 0:04:21.600 up pinned as being a big obstacle to leadership. They 0:04:21.640 --> 0:04:23.240 came out early on as long as they got this 0:04:23.279 --> 0:04:25.280 two trillion in cuts, so that's a big chunk of 0:04:25.360 --> 0:04:28.479 what the conservative But they're what they call the affiliates, 0:04:28.520 --> 0:04:33.560 people like Victorious Bart's, Thomas Massey, Tim Burchett, and Warren Davidson, 0:04:33.600 --> 0:04:35.279 who at the last minute were saying, we are not 0:04:35.360 --> 0:04:37.480 voting for this, We'll never vote for this. They were 0:04:37.480 --> 0:04:39.720 really dug in. In fact, there's a scene I've never 0:04:39.760 --> 0:04:41.760 seen in my almost twenty years up here where they 0:04:41.800 --> 0:04:44.880 sent everybody home. Lawmakers got in their cars, were leaving 0:04:44.920 --> 0:04:48.200 the capitol, and eight minutes later they said everyone come back. 0:04:48.240 --> 0:04:50.240 So in that was minutes I think President Trump got 0:04:50.279 --> 0:04:52.720 to some people, they started to flip and they ended 0:04:52.800 --> 0:04:54.719 up passing it. But it's a very dramatic scene here. 0:04:54.880 --> 0:04:57.560 In fact, even saw some Democrats coming, one who had 0:04:57.600 --> 0:04:59.120 just had a baby and one who had just had 0:04:59.160 --> 0:05:02.160 surgery coming with Walker to try to put the pressure 0:05:02.200 --> 0:05:05.679 on Republicans to get every vote that they needed. 0:05:06.160 --> 0:05:08.120 Eric got about thirty seconds left. But this seems like 0:05:08.160 --> 0:05:11.120 a real big win for President Trump. Does this signal 0:05:11.600 --> 0:05:14.600 even additional momentum for his agenda? 0:05:14.680 --> 0:05:17.120 It does, but you know, there's a lot of hurdles 0:05:17.160 --> 0:05:19.599 when right now a lot of moderates voted for this 0:05:19.640 --> 0:05:21.839 saying it's just a plan, there are no real cuts. 0:05:22.040 --> 0:05:24.400 But if you see an eight hundred billion dollar cut 0:05:24.440 --> 0:05:28.200 to medicate that goes beyond work requirements for able bodied adults, 0:05:28.200 --> 0:05:31.160 that goes beyond you know, improper payments, that's things like 0:05:31.279 --> 0:05:35.640 capping you know, Medicaid, a block granting into the states 0:05:35.640 --> 0:05:39.600 where you'll see actual you know, impoverished people go without healthcare. 0:05:39.800 --> 0:05:42.760 And that's going to cause I think an uproar probably 0:05:43.040 --> 0:05:45.720 that a lot of swing district monits are not prepared for. 0:05:45.920 --> 0:05:49.320 So you know, it's going to be very difficult to 0:05:49.360 --> 0:05:51.960 get something through because if they don't make those cuts, 0:05:52.000 --> 0:05:54.599 those conservatives that they also need will not vote for 0:05:54.600 --> 0:05:54.920 the bill. 0:05:55.279 --> 0:05:57.600 All I really appreciate that. Thank you so much for 0:05:57.680 --> 0:06:00.640 joining us, great reporting. Eric Watson, a Bloomberg Congression reporter, 0:06:00.760 --> 0:06:02.360 literally joining us in a hall somewhere. 0:06:02.560 --> 0:06:02.760 Yeah. 0:06:02.839 --> 0:06:06.880 No, that's the capital rotanda underneath the Trumbelt chaining. 0:06:06.920 --> 0:06:07.160 Okay. 0:06:07.200 --> 0:06:09.760 My point was that he's like in the in the weeds, 0:06:09.920 --> 0:06:10.440 is my point. 0:06:10.560 --> 0:06:13.160 That's the surrender a morning's. 0:06:12.480 --> 0:06:13.000 On the ground. 0:06:13.040 --> 0:06:14.719 He's that kind of waning. 0:06:14.520 --> 0:06:18.680 Is the painting of the surrender of General We're Goyne. 0:06:18.920 --> 0:06:21.200 Thank you. 0:06:21.200 --> 0:06:24.919 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:06:25.000 --> 0:06:28.080 weekdays at ten am Eastern on Apple, Coarclay, and Android 0:06:28.080 --> 0:06:31.400 Auto with the Bloomberg Business App. Listen on demand wherever 0:06:31.480 --> 0:06:34.600 you get your podcasts, or watch us live on YouTube. 0:06:35.480 --> 0:06:37.839 All right, I'm Alexey alongside dun Tucker and Paul Sweeny. 0:06:37.880 --> 0:06:39.720 This is Bloomberg Intelligence Radio. We bring you all the 0:06:39.760 --> 0:06:42.120 top news and business, economics and finance through our lens 0:06:42.160 --> 0:06:44.839 of our Bloomberg Intelligence folks. They cover two thousand companies 0:06:45.040 --> 0:06:47.800 and one hundred and thirty industries all around the world. 0:06:47.800 --> 0:06:49.680 We also love checking in on some of the companies 0:06:49.680 --> 0:06:51.960 that are basically running the show when it comes to 0:06:52.040 --> 0:06:53.920 us being able to turn on our lights, or when 0:06:53.920 --> 0:06:57.000 it comes to us turning on our cars, or actually 0:06:57.040 --> 0:06:59.000 like starting our cars maybe a different way. 0:06:58.839 --> 0:06:59.240 To say it. 0:06:59.600 --> 0:07:04.200 And of those companies is American Superconductor. The ticker is AMSC. 0:07:04.480 --> 0:07:06.680 That's on the Nasdaq. You can find it there. The 0:07:06.680 --> 0:07:09.440 stock is currently up by almost six percent. It currently 0:07:09.560 --> 0:07:12.440 It recently announced it's fiscal third quarter results and the 0:07:12.480 --> 0:07:16.920 CEO Daniel McCann joins us. Now, So, Daniel, you basically 0:07:16.960 --> 0:07:19.160 make all the stuff that allows us turn on lights. 0:07:19.240 --> 0:07:20.320 Is that a fair way of saying it. 0:07:20.560 --> 0:07:22.600 Yeah, we don't really make the power move the power, 0:07:22.640 --> 0:07:24.440 but we make sure that the power is where it 0:07:24.520 --> 0:07:25.360 is when it's needed. 0:07:25.680 --> 0:07:27.360 So what does that wind up meaning? So you can 0:07:27.400 --> 0:07:29.040 tuck to the electricity basically? 0:07:29.400 --> 0:07:32.000 Yeah, So if it's an industrial site in a manufacturer 0:07:32.040 --> 0:07:35.040 that needs power at a certain level of certain frequency, 0:07:35.200 --> 0:07:37.600 we modulate that and make it the right way for 0:07:37.680 --> 0:07:40.360 that factory. Same thing if you're trying to deal with 0:07:40.840 --> 0:07:44.240 bringing generation onto the grid or even different spots within 0:07:44.280 --> 0:07:46.440 the grid itself, to bolster and make sure that the 0:07:46.480 --> 0:07:47.880 power can go where it's needed. 0:07:48.280 --> 0:07:51.680 All right, that sounds critical, sounds important, but it doesn't 0:07:51.720 --> 0:07:54.440 sound sexy. But your stock is up seventy eight percent 0:07:54.560 --> 0:07:55.720 over the past twelve months. 0:07:56.080 --> 0:07:56.720 Why do you think that is? 0:07:56.760 --> 0:07:58.600 Are you guys getting caught up in an AI and 0:07:58.640 --> 0:07:59.679 the need for energy? 0:07:59.760 --> 0:08:00.560 And I don't. 0:08:00.760 --> 0:08:02.640 I think we're getting caught up in the need for energy. 0:08:02.640 --> 0:08:04.720 I think there's a lot of drivers that are changing 0:08:05.240 --> 0:08:07.520 our need for power. If you think about everything you 0:08:07.600 --> 0:08:11.880 do in your day now requires electricity, and that could 0:08:11.880 --> 0:08:15.600 be from healthcare to data to semiconductor manufacturing and everything 0:08:15.640 --> 0:08:19.040 in between. So power it becomes more and more critical. 0:08:19.040 --> 0:08:21.640 We're becoming more dependent upon it. And the grid really 0:08:21.680 --> 0:08:24.280 wasn't built for the modern era of electricity. 0:08:24.520 --> 0:08:26.800 And from that perspective, I mean, just for a super 0:08:26.840 --> 0:08:29.800 nerdy moment. You guys also make the conductors, right, like 0:08:29.840 --> 0:08:31.720 the thing that so if you have a wind farm 0:08:31.720 --> 0:08:33.199 and you need attached to a grid, there's like a 0:08:33.240 --> 0:08:35.360 piece of equipment that you need to attach it. You 0:08:35.440 --> 0:08:38.360 make those and those are in super super super tight 0:08:38.400 --> 0:08:41.160 demand like tons of demand, not on a supply it 0:08:41.160 --> 0:08:42.960 doesn't matter what kind of power source that is. Am 0:08:42.960 --> 0:08:43.440 I accurate? 0:08:43.520 --> 0:08:45.800 Yeah, And many of the suppliers are from overseas as well, 0:08:45.880 --> 0:08:48.559 So we're kind of unique also being an American company 0:08:48.600 --> 0:08:51.960 making product in America with Americans, and I think that 0:08:52.000 --> 0:08:54.480 fits very well in today's climate where we're trying to 0:08:54.520 --> 0:08:55.280 push the country. 0:08:55.679 --> 0:08:58.200 So what are the drivers for your company right here 0:08:58.240 --> 0:09:01.320 right now? I know you recently reported are things. What 0:09:01.320 --> 0:09:03.240 did you identify as the drivers for your business? 0:09:03.840 --> 0:09:05.640 A lot of it is this further in the need 0:09:05.679 --> 0:09:09.079 for demand. A lot of it. We're seeing our business 0:09:09.080 --> 0:09:12.520 start to ramp really with the reshoring of manufactured capacity 0:09:12.520 --> 0:09:16.360 and capability in America. All those operations need power, so 0:09:16.400 --> 0:09:20.319 we see expansion in manufacturing that's starting to happen critically 0:09:20.320 --> 0:09:22.679 in these critical elements if you want to deal with 0:09:23.000 --> 0:09:25.720 cars and chips and AI and all those things. We 0:09:25.800 --> 0:09:28.760 sit kind of secondarily that we help enable the power 0:09:28.840 --> 0:09:31.960 to be there. But more and more operations are becoming 0:09:31.960 --> 0:09:33.679 more dependent upon electricity. 0:09:34.320 --> 0:09:36.920 So from that perspective, does it matter to you where 0:09:36.960 --> 0:09:39.880 the electricity comes from? In that does the policy from 0:09:39.880 --> 0:09:43.240 a Biden administration and transition to a Trump administration on 0:09:43.440 --> 0:09:45.960 say energy and climate, does that matter? 0:09:46.440 --> 0:09:48.800 Well, I'll say something that may not be popular, but 0:09:48.840 --> 0:09:49.679 I'll still say it. 0:09:49.760 --> 0:09:50.480 I think that. 0:09:50.400 --> 0:09:53.400 The end result and desire from both are the same. 0:09:54.640 --> 0:09:57.120 We want to make sure that we're building an economy 0:09:57.120 --> 0:10:00.560 in America for Americans. I think that was insistent with 0:10:00.600 --> 0:10:03.680 the last administration. It's definitely consistent with the current administration. 0:10:03.960 --> 0:10:06.040 The question is the policy and how how do we 0:10:06.040 --> 0:10:10.240 help enable it. Are we trying to create a market 0:10:10.640 --> 0:10:13.240 that people want to companies want to invest in, or 0:10:13.360 --> 0:10:17.640 is the government trying to help foster that through money 0:10:17.640 --> 0:10:20.719 and through through policy that is more economic. At the 0:10:20.800 --> 0:10:22.319 end of the day, for us, it doesn't quite matter. 0:10:22.559 --> 0:10:24.960 The problem is still the problem. The grid needs to 0:10:24.960 --> 0:10:28.719 be improved. Utilities are working on that, but as more 0:10:28.800 --> 0:10:33.040 manufacturing capacity comes online, there's there's need for higher quality 0:10:33.120 --> 0:10:35.360 power and that's where we come in and help solve 0:10:35.360 --> 0:10:37.960 those problems. Who do you compete against a lot of 0:10:37.960 --> 0:10:39.160 the big guys from Europe? 0:10:39.960 --> 0:10:43.040 And what we found is that like Semens, it could be. 0:10:42.960 --> 0:10:45.720 Semens or ABB locally here in the US a small 0:10:45.720 --> 0:10:49.640 company called General Electric. But what we've found is over 0:10:49.679 --> 0:10:52.959 the past several years, our largest competitors have become very 0:10:52.960 --> 0:10:56.120 good customers. And what we've found is what we offer, 0:10:56.200 --> 0:10:58.400 the uniqueness of what we do and the service that 0:10:58.440 --> 0:11:02.160 we provide, it complements their offering. And I think they're 0:11:02.200 --> 0:11:05.040 starting to understand that we're not really a threat per 0:11:05.040 --> 0:11:07.760 se to their business. We're a helpful solution to the 0:11:07.840 --> 0:11:08.440 end customer. 0:11:08.720 --> 0:11:11.360 What inputs do you need for your business? So? What 0:11:11.400 --> 0:11:13.839 things are tight for you? What things do you want 0:11:13.840 --> 0:11:14.760 to help change? 0:11:15.720 --> 0:11:17.920 When you say inputs, I think supply chaining. 0:11:18.000 --> 0:11:19.600 That's what I'm and that's what I'm trying to get at. 0:11:19.640 --> 0:11:21.559 So is it like the raw materials that you need 0:11:21.600 --> 0:11:23.160 to build stuff in the US to them sell. 0:11:23.480 --> 0:11:25.040 Yeah, almost everything. 0:11:24.679 --> 0:11:27.000 That we make in the US. So probably eighty five 0:11:27.080 --> 0:11:31.000 percent of our businesses here home in the US, manufactured here. 0:11:32.240 --> 0:11:34.839 Almost all of our supply chain, probably more than ninety 0:11:34.840 --> 0:11:38.520 five ninety six percent, is sourced in the US. So 0:11:39.440 --> 0:11:42.000 the current ap climate really puts us in a unique 0:11:42.000 --> 0:11:45.920 opportunity that we may have unique opportunities presented to us 0:11:45.960 --> 0:11:49.920 because we are American, American, made by Americans, supplied mostly 0:11:49.920 --> 0:11:54.079 by American suppliers. When people talk about tariffs and these 0:11:54.160 --> 0:11:57.600 kind of external policies, they don't have a great impact 0:11:57.640 --> 0:12:00.600 on what we do now. They may how things are 0:12:00.600 --> 0:12:02.080 going to sort out. There's a lot of rhetoric and 0:12:02.120 --> 0:12:04.560 then we'll see how reality translates from that reetarc and 0:12:04.600 --> 0:12:06.760 really what gets put in place. But a lot of 0:12:06.760 --> 0:12:09.240 this is trying to push the country in a certain direction, 0:12:09.600 --> 0:12:11.600 and I think that general direction is good for us. 0:12:12.080 --> 0:12:14.480 So are you having conversations with your customers now? 0:12:14.520 --> 0:12:16.560 They may be calling you and saying, hey, Dan, we're 0:12:16.559 --> 0:12:18.800 a little nervous about what might be happening over the 0:12:18.840 --> 0:12:22.000 next three, six, twelve months in terms of terrors. Are 0:12:22.000 --> 0:12:24.000 they are you seeing that in your order flow or 0:12:24.040 --> 0:12:25.880 are you seeing that maybe just in conversations you're having. 0:12:26.080 --> 0:12:29.800 We're seeing that from companies in Canada, Mexico, we're seeing 0:12:29.840 --> 0:12:33.320 that to some extent some companies on the continent of Europe, 0:12:34.000 --> 0:12:36.200 but certainly in the US they're comforted by the fact 0:12:36.280 --> 0:12:37.760 of where we make it and how we make it, 0:12:37.800 --> 0:12:39.319 and where we source products from. 0:12:39.360 --> 0:12:41.040 Some of the headlines over the last couple of days 0:12:41.080 --> 0:12:44.040 have evolved around tariffs on things like steel, aluminum. Copper 0:12:44.080 --> 0:12:47.360 was thrown into the mix yesterday. If that winds up 0:12:47.440 --> 0:12:49.560 denting demand as and we're not going to build as 0:12:49.600 --> 0:12:52.599 much manufacturing or industrial sites because it's just really expensive, 0:12:52.720 --> 0:12:53.920 how does that trickle to you? 0:12:54.280 --> 0:12:56.560 Well, I think the opposite's going to happen. The need 0:12:56.640 --> 0:12:58.880 is going to persist. The question is can it absorb 0:12:58.960 --> 0:13:01.559 the cost, And there's gonna have to be a way 0:13:01.600 --> 0:13:04.240 to figure that out and find that out. But I 0:13:04.280 --> 0:13:07.400 think all of the things that go into the electric 0:13:07.440 --> 0:13:10.559 grid use all those materials, so they're gonna have to 0:13:10.559 --> 0:13:15.600 get sources. And if it makes American sourced product more competitive, 0:13:15.720 --> 0:13:18.760 then so be it. From my standpoint, it doesn't directly 0:13:18.840 --> 0:13:21.680 affect us because we're already sourcing most of our principal 0:13:21.720 --> 0:13:23.479 equipment from the US. 0:13:23.520 --> 0:13:25.559 Interesting, all right, Dan, great, thanks for joining us. Really 0:13:25.559 --> 0:13:26.000 appreciate it. 0:13:26.080 --> 0:13:32.200 Dan again, a MSc. That's American Semiconductor Corporation. They're up 0:13:32.200 --> 0:13:33.960 there in Massachusetts. 0:13:34.160 --> 0:13:35.719 It's a public trading company. On this deck. 0:13:35.840 --> 0:13:39.000 AMSC is the ticker I put in there. So we 0:13:39.040 --> 0:13:42.280 appreciate that. Dan coming into our Bloomberg Interactive Brookers Studio 0:13:42.640 --> 0:13:44.439 in New York City, Red Sox. 0:13:44.160 --> 0:13:45.240 Fan of course. 0:13:45.360 --> 0:13:48.440 Oh jeez, all right, what are you gonna do? 0:13:49.120 --> 0:13:52.800 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:13:52.880 --> 0:13:56.240 weekdays at ten am Eastern on Applecarplay and Android Auto 0:13:56.360 --> 0:13:59.400 with the Bloomberg Business app. Listen on demand wherever you 0:13:59.440 --> 0:14:02.439 get your pod, or watch us live on YouTube. 0:14:03.400 --> 0:14:06.640 Alex Steel here alongside Toal Sweeney. This is Bloomberg Intelligence Radio. 0:14:06.679 --> 0:14:09.240 We are broadcasting to live for Interactive Broker Studio right 0:14:09.280 --> 0:14:11.840 here in midtown Manhattan. You can also check us out 0:14:12.040 --> 0:14:14.560 on YouTube as well. Obviously, the main event here is 0:14:14.559 --> 0:14:16.320 going to be in Vidia at the closing bill. The 0:14:16.360 --> 0:14:19.480 options market is looking for anywhere from about an eight 0:14:19.600 --> 0:14:22.960 to nine percent move to the upper of the downside, 0:14:22.960 --> 0:14:25.400 which could equate to something like three hundred billion dollars 0:14:25.440 --> 0:14:27.800 in market cap, so that could be a very sizeable event. 0:14:28.000 --> 0:14:29.920 So I want to get you a preview here of 0:14:29.920 --> 0:14:31.800 that kind of what to expect in a broader sense. 0:14:31.960 --> 0:14:34.880 Joining us as Matt Stucky, chief portfolio manager of equities 0:14:34.920 --> 0:14:37.760 at Northwestern at Mutual Wealth Management. Matt, good to see you, 0:14:37.800 --> 0:14:39.520 all right, do my homework for me. What am I 0:14:39.560 --> 0:14:41.720 looking at for Nvidia? 0:14:42.120 --> 0:14:45.880 Well, certainly is the event of the day. Look, it's 0:14:45.920 --> 0:14:48.720 an interesting report that we're going to get after the close, 0:14:49.160 --> 0:14:52.720 and specifically to the company. You know, you're looking at 0:14:52.720 --> 0:14:56.360 a ramp up in Blackwell production as well as Blackwell revenue, 0:14:56.400 --> 0:14:59.920 but that needs to offset a deceleration in Hopper revenues. 0:15:00.040 --> 0:15:03.560 And is of Q three of Navidia's fiscal year that 0:15:03.680 --> 0:15:06.480 was twenty seven billion dollars worth of revenue in terms 0:15:06.520 --> 0:15:08.440 of Hopper sales, and by the end of this fiscal 0:15:08.520 --> 0:15:10.880 year it should be down to minimal levels relatives to 0:15:11.000 --> 0:15:14.440 Navidia's revenue base. And so this product transition, I think 0:15:14.600 --> 0:15:16.520 is one of the reasons behind kind of why the 0:15:16.560 --> 0:15:18.280 implied move is as high as what it is. 0:15:19.480 --> 0:15:22.320 So talk to us about valuation. How do you think 0:15:22.360 --> 0:15:24.760 about valuation for this name. I mean, you look at 0:15:24.760 --> 0:15:26.840 the growth and I know a lot of folks are 0:15:26.880 --> 0:15:28.760 saying this, this is actually a name that can grow 0:15:28.760 --> 0:15:29.640 into its valuation. 0:15:29.960 --> 0:15:30.840 How do you feel about that? 0:15:32.200 --> 0:15:36.080 Well, I think I think Navidia's valuation has never been 0:15:36.640 --> 0:15:40.960 a reason why, you know, the stock has done what 0:15:41.000 --> 0:15:43.240 it's done. And what I mean by that is, you know, 0:15:43.320 --> 0:15:45.560 the multiple expansion hasn't been the driver of the stock. 0:15:45.600 --> 0:15:49.600 It's been earning's growth. In fact, I think most Byside 0:15:49.640 --> 0:15:53.840 investors expect calendar or twenty twenty six earnings to be 0:15:53.880 --> 0:15:56.800 in the neighborhood of six dollars a share, and at 0:15:56.840 --> 0:16:00.240 today's price, you know, that's just a modest mind, just 0:16:00.520 --> 0:16:03.480 premium to the S and P five hundred, despite you know, 0:16:03.800 --> 0:16:06.720 much better growth, much better margins, much better kind of 0:16:07.120 --> 0:16:11.120 end market health relative to the rest of both technology 0:16:11.160 --> 0:16:14.320 as well as the overall market. So you know, to me, 0:16:14.400 --> 0:16:18.400 evaluation has never really been you know, the the kind 0:16:18.440 --> 0:16:21.560 of headwind to kind of buying the video. You know, really, 0:16:21.640 --> 0:16:26.960 I think the question a lot of investors have is, 0:16:27.360 --> 0:16:32.480 you know, does this investment wave from hyperscalers, does that persist? 0:16:33.200 --> 0:16:37.080 Can you underwrite a long term revenue base that grows 0:16:37.280 --> 0:16:39.520 from this kind of high levels that exists today. 0:16:40.120 --> 0:16:41.840 And just in breaking news for you guys kind of 0:16:41.920 --> 0:16:45.640 in this vein is Amazon announcing a rebuilt Alexa assistant 0:16:45.920 --> 0:16:51.040 with generative AI. It will be renamed Alexa Plus. So 0:16:51.880 --> 0:16:55.240 just you know, creative, right, we call ours Echo because 0:16:55.240 --> 0:16:57.479 Alex Alexa it can get confusing. 0:16:57.080 --> 0:16:57.680 In our household. 0:16:57.760 --> 0:17:00.280 Oh yeah, yeah, so it's fair enough. Okay, So back 0:17:00.320 --> 0:17:02.840 to Nvidia for a moment. You talk about the product transition. 0:17:03.360 --> 0:17:05.520 This is also happening at a time when Nvidia is 0:17:05.600 --> 0:17:08.320 reporting earnings for the first time in twenty twenty two 0:17:08.400 --> 0:17:10.520 that shares are down and kind of into the report. 0:17:11.000 --> 0:17:15.080 So I'm wondering what we're going to hear that on 0:17:15.160 --> 0:17:17.840 the deep seek side potentially, which is what we really 0:17:17.920 --> 0:17:18.680 set things off. 0:17:20.240 --> 0:17:23.080 Yeah, I think that you're going to probably hear Jensen 0:17:23.119 --> 0:17:26.520 talk about this as being a catalyst for a more 0:17:26.560 --> 0:17:30.680 broad based AI adoption and not necessarily a headwind to 0:17:30.960 --> 0:17:35.760 Navidia's business, you know, Looking at DCK specifically, I think 0:17:35.800 --> 0:17:37.800 it's pretty clear by now that they didn't build their 0:17:37.800 --> 0:17:42.320 own foundational model. They optimize what was out there, and 0:17:42.359 --> 0:17:45.920 it's not slowing down importantly what hyper skills are doing 0:17:46.000 --> 0:17:48.920 in terms of investing. You know, a lot of hyper 0:17:48.920 --> 0:17:53.000 scale investments end up being revenues for Navidia. And if 0:17:53.040 --> 0:17:55.520 you look at what was expected in terms of CAPEX 0:17:55.560 --> 0:17:59.639 from you know, the likes of Microsoft, Amazon, Google Meta 0:17:59.840 --> 0:18:03.280 or from the start of the year Tilt today, it's 0:18:03.320 --> 0:18:06.439 been revised higher by twenty percent and year on your 0:18:06.560 --> 0:18:09.919 growth of capex is in the area code of around 0:18:09.920 --> 0:18:12.639 thirty three percent per year over year every year. So 0:18:13.200 --> 0:18:17.480 it's still a very healthy spending and investment investment environment. 0:18:18.000 --> 0:18:21.080 And you know a lot of those dollars again find 0:18:21.119 --> 0:18:22.119 their way over to the video. 0:18:23.280 --> 0:18:26.360 So I'm just going at the Bloomberg terminal here. 0:18:26.359 --> 0:18:28.159 The consensus for the quarter in terms of revenue is 0:18:28.200 --> 0:18:29.880 about thirty just a little more than thirty eight billion. 0:18:29.920 --> 0:18:32.440 Is there a whisper number out there, Matt that you're 0:18:32.600 --> 0:18:35.080 looking for both for this quarter and maybe for guidance 0:18:35.119 --> 0:18:35.840 for the next quarter. 0:18:36.119 --> 0:18:40.439 Yeah, I think the whisper is around forty where the 0:18:40.520 --> 0:18:42.600 where the buy side sits. And then if you look 0:18:42.640 --> 0:18:45.440 out to guidance around forty two and a half. You know, 0:18:45.560 --> 0:18:47.439 n Video got it to thirty seven and a half 0:18:47.840 --> 0:18:50.800 for the fourth quarter, and they only guy one quarter 0:18:50.840 --> 0:18:54.240