1 00:00:02,960 --> 00:00:10,840 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,880 --> 00:00:15,040 Speaker 1: Bloomberg Intelligence podcast. Catch us live weekdays at ten am 3 00:00:15,080 --> 00:00:17,439 Speaker 1: Eastern on Apple Car playing Android. 4 00:00:17,040 --> 00:00:18,759 Speaker 2: Auto with the Bloomberg Business app. 5 00:00:18,800 --> 00:00:22,000 Speaker 1: Listen on demand wherever you get your podcasts, or watch 6 00:00:22,079 --> 00:00:24,040 Speaker 1: us live on YouTube. 7 00:00:25,160 --> 00:00:28,040 Speaker 3: The story that does not have any issues with its 8 00:00:28,120 --> 00:00:31,360 Speaker 3: network is in Vidia again posted a big print last 9 00:00:31,400 --> 00:00:34,800 Speaker 3: night as a Nora's just reporting, and everybody was focused 10 00:00:34,840 --> 00:00:37,600 Speaker 3: on the revenue guidance, and they did not disappoint there 11 00:00:37,600 --> 00:00:39,960 Speaker 3: given a revenue guidance that was substantially above where the 12 00:00:40,000 --> 00:00:43,199 Speaker 3: street was yet again, and that's kind of all the 13 00:00:43,200 --> 00:00:47,080 Speaker 3: bulls needed here. So Emily, let's bring in Kun John Sohani. 14 00:00:47,159 --> 00:00:49,080 Speaker 3: He's a senior analyst. He covers the semi conductors for 15 00:00:49,120 --> 00:00:53,360 Speaker 3: Bloomberg Intelligence. He joins us via zoom. He's in San Francisco. Kunjohn, 16 00:00:53,440 --> 00:00:56,160 Speaker 3: you're the grizzled veteran. You see these semi conductor companies 17 00:00:56,200 --> 00:00:58,720 Speaker 3: come and go. What you make of Nvidia last night? 18 00:01:00,000 --> 00:01:02,600 Speaker 4: I mean, look for any earning surprise from Nvidia is 19 00:01:02,640 --> 00:01:04,480 Speaker 4: no longer a surprise. We have come to sort of 20 00:01:04,560 --> 00:01:06,800 Speaker 4: expect this to be a new norm. But there were 21 00:01:06,800 --> 00:01:10,520 Speaker 4: a lot of positive reassuring things. On the supply side, 22 00:01:10,560 --> 00:01:14,120 Speaker 4: we saw supply coming up really strong. More importantly, supply 23 00:01:14,160 --> 00:01:17,800 Speaker 4: getting diversified and the benefits for which we're seen in 24 00:01:17,840 --> 00:01:21,479 Speaker 4: their gross margin, which beat the estimates. But more important 25 00:01:21,640 --> 00:01:25,160 Speaker 4: was the assurance that demand continues to stay strong and 26 00:01:25,240 --> 00:01:28,200 Speaker 4: they expected to stay strong in twenty twenty four, and 27 00:01:28,280 --> 00:01:30,720 Speaker 4: not just from the large cloud players. We all are 28 00:01:30,760 --> 00:01:33,520 Speaker 4: aware of how much money they're spending, but Remand's strength 29 00:01:33,680 --> 00:01:37,679 Speaker 4: was broad based across their enterprise customers, across different verticals, 30 00:01:37,880 --> 00:01:40,679 Speaker 4: so that really reassures us for the twenty twenty four 31 00:01:41,160 --> 00:01:41,640 Speaker 4: What did you. 32 00:01:41,600 --> 00:01:45,440 Speaker 5: Make of the CEO's statement that Generative AI has hit 33 00:01:45,800 --> 00:01:48,320 Speaker 5: the tipping point. I saw that headline and I didn't 34 00:01:48,400 --> 00:01:51,480 Speaker 5: actually really understand what that meant. So what did you 35 00:01:51,520 --> 00:01:51,920 Speaker 5: think of that? 36 00:01:53,000 --> 00:01:56,080 Speaker 4: I mean, look, it's really Jensen. If you have been 37 00:01:56,120 --> 00:01:59,240 Speaker 4: following the company for the past ten years, at every junction, 38 00:01:59,520 --> 00:02:03,040 Speaker 4: that's what his messaging always is in whatever they're working on. 39 00:02:03,440 --> 00:02:05,880 Speaker 4: So but apart from that, I would really, you know, 40 00:02:06,880 --> 00:02:09,600 Speaker 4: ask investors to look into the end data points rather 41 00:02:09,680 --> 00:02:11,880 Speaker 4: than what just he's saying. I mean, he's a very 42 00:02:11,880 --> 00:02:14,440 Speaker 4: important person right now, but we look at the end 43 00:02:14,480 --> 00:02:17,880 Speaker 4: data points. The customers are really increasing their AI spend. Right, 44 00:02:18,120 --> 00:02:21,840 Speaker 4: the IT total capex budgets are increasing, but the AI 45 00:02:21,919 --> 00:02:24,440 Speaker 4: portion within that is also increasing. And it's not just 46 00:02:24,520 --> 00:02:26,720 Speaker 4: at the chip level. The contracts that they have with 47 00:02:26,800 --> 00:02:30,120 Speaker 4: their software customers, even those customers are guiding up their 48 00:02:30,120 --> 00:02:31,000 Speaker 4: revenue targets. 49 00:02:31,560 --> 00:02:34,840 Speaker 6: Hey, Kun, John, I love their customer list that they 50 00:02:34,840 --> 00:02:35,120 Speaker 6: read off. 51 00:02:35,160 --> 00:02:38,280 Speaker 3: It's kind of a who's who of Silicon Valley, you know, Facebook, Google, 52 00:02:38,919 --> 00:02:40,200 Speaker 3: whatever their new names are. 53 00:02:40,760 --> 00:02:44,400 Speaker 6: What's the next? Is there a next set of customers out. 54 00:02:44,200 --> 00:02:47,120 Speaker 3: There above and beyond kind of the household names that 55 00:02:47,320 --> 00:02:48,960 Speaker 3: we all know that maybe they're targeting. 56 00:02:50,160 --> 00:02:53,080 Speaker 4: Yes, an enterprise segment is sort of the new the 57 00:02:53,160 --> 00:02:56,080 Speaker 4: next area that they're really targeting. Right, They already have 58 00:02:56,400 --> 00:02:59,960 Speaker 4: the big large spenders, but now they want to diverse 59 00:03:00,080 --> 00:03:03,880 Speaker 4: if I and expand the reach across enterprises. And the 60 00:03:03,919 --> 00:03:06,960 Speaker 4: second big target now is sort of governments and reach 61 00:03:07,160 --> 00:03:10,919 Speaker 4: sovereign governments and solign wells. Right, that's what they're targeting 62 00:03:10,960 --> 00:03:13,920 Speaker 4: that they believe AI will be, you know, because of 63 00:03:14,200 --> 00:03:17,400 Speaker 4: geopolitical and trade issues will be more regional and every 64 00:03:17,720 --> 00:03:19,679 Speaker 4: big economy will need to spend on that. 65 00:03:20,800 --> 00:03:23,760 Speaker 5: Are there any headwinds that investors need to be looking 66 00:03:23,800 --> 00:03:26,480 Speaker 5: out for, because I just looked on the A and 67 00:03:26,639 --> 00:03:30,080 Speaker 5: R function on Bloomberg and there are zero cells for 68 00:03:30,160 --> 00:03:32,320 Speaker 5: in video. There was one last night from morning Star, 69 00:03:32,400 --> 00:03:34,560 Speaker 5: and now he's upgraded to a hold. 70 00:03:35,720 --> 00:03:35,920 Speaker 7: Yeah. 71 00:03:35,920 --> 00:03:37,960 Speaker 4: I mean, look, if you look at just what the 72 00:03:38,040 --> 00:03:43,120 Speaker 4: data says, usually the stock price follows the analyst price targets. 73 00:03:43,320 --> 00:03:45,760 Speaker 4: It seems here the price targets are following the stock price. 74 00:03:46,680 --> 00:03:49,160 Speaker 4: When we look at the fundamentals, right, there was really 75 00:03:49,200 --> 00:03:52,880 Speaker 4: nothing that to highlight as a risk factor in the 76 00:03:52,920 --> 00:03:55,720 Speaker 4: earnings and really in the near term for twenty twenty four. 77 00:03:56,240 --> 00:03:58,040 Speaker 4: But if you were, if we were to form a 78 00:03:58,080 --> 00:04:00,280 Speaker 4: bare thesis, a couple of things that would you would 79 00:04:00,320 --> 00:04:02,840 Speaker 4: look at as risk factors for the long term. One 80 00:04:02,920 --> 00:04:05,720 Speaker 4: is the China risk. We did see China revenue almost 81 00:04:06,480 --> 00:04:09,200 Speaker 4: reduced by half versus three q in this quarter, right, 82 00:04:09,640 --> 00:04:12,200 Speaker 4: and we know this problem is not going away, if 83 00:04:12,280 --> 00:04:14,920 Speaker 4: at all getting worse. So right now they are easily 84 00:04:14,920 --> 00:04:17,640 Speaker 4: able to offset what they could have shipped to China 85 00:04:17,800 --> 00:04:20,440 Speaker 4: while shipping to other customers in the US and other regions. 86 00:04:20,680 --> 00:04:23,680 Speaker 4: But at some point when the demand supply sort of 87 00:04:23,760 --> 00:04:27,040 Speaker 4: normalizes and the growth rates become more of a normal 88 00:04:27,240 --> 00:04:30,760 Speaker 4: run rate. You know, this is taking a bite out 89 00:04:30,800 --> 00:04:33,119 Speaker 4: of that opportunity that they could have served in China. 90 00:04:33,320 --> 00:04:35,400 Speaker 4: So that's one risk factor on the long term. The 91 00:04:35,440 --> 00:04:38,760 Speaker 4: second being their largest customers, which are the cloud players, 92 00:04:39,000 --> 00:04:41,479 Speaker 4: have started to design their own ships. So again this 93 00:04:41,600 --> 00:04:44,599 Speaker 4: is far out, but at some point this still takes 94 00:04:44,600 --> 00:04:46,960 Speaker 4: a bite out of the apple that n media could 95 00:04:46,960 --> 00:04:47,400 Speaker 4: have served. 96 00:04:47,960 --> 00:04:49,839 Speaker 3: So that's kind of where I wanted to go, Ko John, 97 00:04:49,880 --> 00:04:52,960 Speaker 3: I mean just the competitive environment. You know, can you 98 00:04:53,000 --> 00:04:55,880 Speaker 3: explain why these guys are the only game in town? 99 00:04:55,960 --> 00:04:57,000 Speaker 3: That seems odd to me. 100 00:04:58,760 --> 00:05:01,680 Speaker 4: I mean, it's not by an accident. These guys were 101 00:05:01,760 --> 00:05:04,719 Speaker 4: sort of the inventor, if you will, for the GPU. 102 00:05:05,040 --> 00:05:08,040 Speaker 4: They have been working on a GPU for decades and 103 00:05:08,160 --> 00:05:12,040 Speaker 4: out investing everyone, being at the leading edge. So you know, 104 00:05:13,160 --> 00:05:15,600 Speaker 4: this was the same question when we talked about gaming 105 00:05:15,600 --> 00:05:17,720 Speaker 4: and when we talked about crypto, right the last two 106 00:05:17,760 --> 00:05:20,120 Speaker 4: waves which drove the growth for this company. It was 107 00:05:20,160 --> 00:05:22,839 Speaker 4: not by accident. They have been at this forefront of 108 00:05:22,880 --> 00:05:27,159 Speaker 4: these new applications where the application suddenly realized, well, GPU 109 00:05:27,240 --> 00:05:30,400 Speaker 4: is the best case compute platform, and that's why they 110 00:05:30,440 --> 00:05:33,000 Speaker 4: adopted GP. Same thing what we're saying with AI so 111 00:05:33,320 --> 00:05:34,960 Speaker 4: this was not by accident. If you look at that 112 00:05:35,160 --> 00:05:38,760 Speaker 4: R and D spend, which they guided to being growing 113 00:05:38,800 --> 00:05:41,720 Speaker 4: by mid thirties next year, it's a significant amount of 114 00:05:41,839 --> 00:05:44,320 Speaker 4: R and NE dollars they continue to spend and to 115 00:05:44,480 --> 00:05:47,039 Speaker 4: keep again being at the leading edge of the next 116 00:05:47,040 --> 00:05:47,880 Speaker 4: cycle of innovation. 117 00:05:48,520 --> 00:05:51,640 Speaker 5: Can you talk a little bit also about the gaming 118 00:05:51,880 --> 00:05:54,560 Speaker 5: revenue here, because I'm looking at your report you said 119 00:05:54,600 --> 00:05:58,120 Speaker 5: gamings better than seasonal top line, But what was really 120 00:05:58,520 --> 00:06:00,599 Speaker 5: driving that? Because I actually don't really know if I 121 00:06:00,800 --> 00:06:03,400 Speaker 5: know anything about in Video's gaming involvement. 122 00:06:04,400 --> 00:06:06,840 Speaker 4: Yeah, so the last quarter was if you look at 123 00:06:06,839 --> 00:06:09,839 Speaker 4: typical seasonality, it would be we expected it to be 124 00:06:09,839 --> 00:06:12,640 Speaker 4: a down quarter at least by mid single digits, but 125 00:06:13,200 --> 00:06:15,640 Speaker 4: it came in flat right. So and the strength the 126 00:06:15,680 --> 00:06:19,920 Speaker 4: reason driver for there was better demand for their RTX products. 127 00:06:20,080 --> 00:06:23,520 Speaker 4: These are their gaming cards you know in dex stops 128 00:06:23,520 --> 00:06:25,840 Speaker 4: and what gamers get. So this is what came in 129 00:06:25,960 --> 00:06:28,240 Speaker 4: better than they had expected due to the holiday season. 130 00:06:28,360 --> 00:06:30,920 Speaker 4: Now this is again a temporary move and sort of 131 00:06:31,040 --> 00:06:33,880 Speaker 4: not no longer a big focus for investors, but that 132 00:06:34,040 --> 00:06:36,640 Speaker 4: was still good to see that in a typical down 133 00:06:36,680 --> 00:06:39,360 Speaker 4: seasonal quarters they were still able to do better than seasonality. 134 00:06:39,720 --> 00:06:42,600 Speaker 3: Could John talk to me your your investment research channels. 135 00:06:42,600 --> 00:06:45,320 Speaker 3: You care about valuation, It's not just all hype for you. 136 00:06:45,360 --> 00:06:47,640 Speaker 3: Give us a sense of how this stock is valued. 137 00:06:49,720 --> 00:06:51,640 Speaker 3: It's up a good jillion and one percent. Don't we 138 00:06:51,680 --> 00:06:53,120 Speaker 3: have like concerns about value here? 139 00:06:55,120 --> 00:06:58,680 Speaker 4: Yeah, we do. Just like any other stock which has 140 00:06:58,680 --> 00:07:02,400 Speaker 4: a premium valuation. We do one thing that gives us 141 00:07:02,440 --> 00:07:04,520 Speaker 4: a little bit comfort. Now, like when you look at 142 00:07:04,560 --> 00:07:07,840 Speaker 4: the valuation multiples now versus as it says six months ago, 143 00:07:08,200 --> 00:07:10,400 Speaker 4: they have come down to a sort of now it's 144 00:07:10,400 --> 00:07:14,360 Speaker 4: a reasonable premium above socks and in sort of in 145 00:07:14,440 --> 00:07:18,240 Speaker 4: line or slightly better than it's peers. And look, it 146 00:07:18,320 --> 00:07:20,920 Speaker 4: is still the fastest growing story in same as it 147 00:07:21,040 --> 00:07:24,400 Speaker 4: is at this size. It is still the de fact 148 00:07:24,440 --> 00:07:27,880 Speaker 4: on name when it comes to AI. As of today, 149 00:07:28,160 --> 00:07:31,920 Speaker 4: it is taking almost entire wallet share of AI spending, 150 00:07:32,160 --> 00:07:34,840 Speaker 4: so it does deserve that premium. 151 00:07:35,880 --> 00:07:38,240 Speaker 5: We're about to speak to the executive director of the 152 00:07:38,240 --> 00:07:40,600 Speaker 5: Port of Los Angeles YEP in just a few minutes, 153 00:07:40,640 --> 00:07:42,600 Speaker 5: Gene Soroca. So I imagine we're going to be talking 154 00:07:42,600 --> 00:07:45,200 Speaker 5: about the supply chain. Could you give us a sense 155 00:07:45,440 --> 00:07:50,040 Speaker 5: of how Nvidia is dealing with the snirled global supply chain, 156 00:07:50,040 --> 00:07:51,000 Speaker 5: any challenges there. 157 00:07:53,200 --> 00:07:56,760 Speaker 4: They have done an absolutely amazing job at bringing up 158 00:07:56,800 --> 00:08:00,480 Speaker 4: supply right the last year, for every quarter, the biggest 159 00:08:00,480 --> 00:08:03,640 Speaker 4: concern was not demand but supply, because usually when you 160 00:08:03,680 --> 00:08:06,520 Speaker 4: try to bring up supply so fast so quick, you 161 00:08:06,560 --> 00:08:09,440 Speaker 4: do run into hiccups. We didn't see any hiccups throughout 162 00:08:09,520 --> 00:08:13,160 Speaker 4: every quarter last year. In fact, you know the gross 163 00:08:13,160 --> 00:08:17,320 Speaker 4: margin upside. A key driver for that was lower component cost. 164 00:08:17,400 --> 00:08:19,600 Speaker 4: And what we did from that is that they were 165 00:08:19,840 --> 00:08:22,840 Speaker 4: able to get more suppliers online. They were they were 166 00:08:22,880 --> 00:08:26,720 Speaker 4: able to expand and diversify supply and enjoyed the benefits 167 00:08:26,760 --> 00:08:28,920 Speaker 4: of the pricing that comes with it. So they've done 168 00:08:28,920 --> 00:08:31,520 Speaker 4: an absolute amazing job bringing up supply this quick. 169 00:08:31,800 --> 00:08:34,160 Speaker 3: All right, So in a chip space, the play here 170 00:08:34,640 --> 00:08:37,360 Speaker 3: for AI is in Vidia. Is there a number two 171 00:08:37,400 --> 00:08:40,280 Speaker 3: play that I can try to, you know, jump onto? 172 00:08:43,000 --> 00:08:45,480 Speaker 4: I wouldn't. I cannot commend of regarding the valuation, But 173 00:08:45,480 --> 00:08:48,800 Speaker 4: from the fundamental point of view, A couple of other 174 00:08:48,880 --> 00:08:51,040 Speaker 4: names we really like in terms of AI and Semi's 175 00:08:51,120 --> 00:08:54,440 Speaker 4: are a MD and Broadcom and to some extend, Marvell. 176 00:08:55,200 --> 00:08:57,000 Speaker 3: All right, Kunjohn, thanks so much for joining us quon 177 00:08:57,040 --> 00:09:00,880 Speaker 3: John Sabani, Senior analyst on semiconductors for Bloomer Intelligency, joins 178 00:09:00,960 --> 00:09:04,720 Speaker 3: us on Zoom from San Francisco, and again, just a 179 00:09:04,760 --> 00:09:07,679 Speaker 3: great print out of in video and that's something that 180 00:09:07,679 --> 00:09:10,679 Speaker 3: the stock had to have because it's up over two 181 00:09:10,720 --> 00:09:13,360 Speaker 3: hundred and forty percent over the last year, and it's up, 182 00:09:13,400 --> 00:09:14,680 Speaker 3: you know, fifty percent. 183 00:09:14,440 --> 00:09:16,920 Speaker 6: Year to date, So that was a high bar. 184 00:09:16,840 --> 00:09:19,880 Speaker 3: Of expectations for the street. And stock's up fifteen percent 185 00:09:19,880 --> 00:09:22,160 Speaker 3: on the print. So market's tonya. They like what they 186 00:09:22,240 --> 00:09:22,840 Speaker 3: heard last night. 187 00:09:24,360 --> 00:09:28,240 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 188 00:09:28,320 --> 00:09:31,240 Speaker 1: weekdays at ten am Eastern on Applecar. 189 00:09:30,880 --> 00:09:33,679 Speaker 2: Play and Android Auto with the Bloomberg Business app. 190 00:09:33,760 --> 00:09:36,600 Speaker 1: You can also listen live on Amazon Alexa from our 191 00:09:36,600 --> 00:09:41,960 Speaker 1: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 192 00:09:42,360 --> 00:09:44,680 Speaker 3: It's all about Nvidia today, up fifteen percent, taking the 193 00:09:44,679 --> 00:09:47,200 Speaker 3: markets high. Our next guest had this name on our list, 194 00:09:47,240 --> 00:09:50,040 Speaker 3: so I'm guessing a good good day for her. Shana Sissel, 195 00:09:50,240 --> 00:09:53,240 Speaker 3: president and CEO of Van Ryan Capital Management, joins us 196 00:09:53,320 --> 00:09:56,760 Speaker 3: via that Zoom thing also the Internet in Chicago, Illinois. 197 00:09:56,840 --> 00:09:58,920 Speaker 3: So Shana, thanks so much for joining us. I know 198 00:09:59,000 --> 00:10:01,880 Speaker 3: in your notes, you had up in videos one of 199 00:10:01,880 --> 00:10:05,679 Speaker 3: your names A y. I think I understand now, but 200 00:10:05,720 --> 00:10:07,240 Speaker 3: what do you make of the quarter last night? 201 00:10:08,200 --> 00:10:11,080 Speaker 8: So I've followed in video my entire career. When I 202 00:10:11,120 --> 00:10:13,960 Speaker 8: first started in the business, it wasn't even in the 203 00:10:14,000 --> 00:10:15,880 Speaker 8: s and P five hundred, but it traded in a 204 00:10:16,000 --> 00:10:19,520 Speaker 8: very like predictable pattern, So it was just a stock 205 00:10:19,559 --> 00:10:21,959 Speaker 8: I kind of clung on to when I was learning 206 00:10:21,960 --> 00:10:26,079 Speaker 8: the ropes, and I've followed it ever since. In twenty seventeen, 207 00:10:26,120 --> 00:10:29,600 Speaker 8: I attended a private equity conference where every single speaker 208 00:10:30,480 --> 00:10:34,640 Speaker 8: talked about how important in video was for you know, 209 00:10:35,080 --> 00:10:39,080 Speaker 8: artificial intelligence, autonomous vehicles, data centers, and I thought at 210 00:10:39,080 --> 00:10:41,520 Speaker 8: that time, like I should own this stock. And I've 211 00:10:41,520 --> 00:10:44,679 Speaker 8: been a bull ever since. So I've been pretty happy 212 00:10:44,679 --> 00:10:46,680 Speaker 8: with how the stock's done, and I keep trying to 213 00:10:46,679 --> 00:10:49,959 Speaker 8: come up with a barecase because I'm one of those 214 00:10:50,000 --> 00:10:51,760 Speaker 8: people that if it's too good to be true, there's 215 00:10:51,840 --> 00:10:53,800 Speaker 8: got to be something wrong. And I still haven't been 216 00:10:53,840 --> 00:10:55,880 Speaker 8: able to come up with a really solid barecase for 217 00:10:55,920 --> 00:10:59,199 Speaker 8: the stock. I'm not surprised by their killer earnings last night. 218 00:11:00,080 --> 00:11:03,560 Speaker 8: They've been doing this now for several quarters, and it 219 00:11:03,600 --> 00:11:06,760 Speaker 8: seems like they are the rocket ship that's keeping the market, 220 00:11:07,280 --> 00:11:08,200 Speaker 8: you know, afloat. 221 00:11:08,720 --> 00:11:11,880 Speaker 5: So what do you tell someone that, unlike you, has 222 00:11:12,000 --> 00:11:14,800 Speaker 5: not owned in Vidia and is just looking at the 223 00:11:14,840 --> 00:11:17,880 Speaker 5: stock now and the earnings now and thinking, oh my gosh, 224 00:11:17,920 --> 00:11:21,760 Speaker 5: should I should I buy this stock right now? Is 225 00:11:21,800 --> 00:11:24,520 Speaker 5: this a time that you know, people can be adding 226 00:11:24,559 --> 00:11:27,679 Speaker 5: more to Nvidia and maybe entering the position, or is 227 00:11:27,720 --> 00:11:29,680 Speaker 5: it more a time to be holding on to what 228 00:11:29,679 --> 00:11:30,280 Speaker 5: you already have. 229 00:11:31,440 --> 00:11:33,880 Speaker 8: Well, I've always people ask me this all the time, 230 00:11:33,880 --> 00:11:36,439 Speaker 8: and I'm always hesitant to say, yes, buy it at 231 00:11:36,440 --> 00:11:39,240 Speaker 8: this entry point because it feels really frothy. I know 232 00:11:39,320 --> 00:11:41,960 Speaker 8: I'm personally not adding to it, but my cost spaces 233 00:11:42,000 --> 00:11:44,680 Speaker 8: is like two hundred and fifty dollars, so you know, 234 00:11:44,960 --> 00:11:47,520 Speaker 8: and that you know, I have no reason to at 235 00:11:47,520 --> 00:11:50,400 Speaker 8: this point. It's hard to say. The momentum is there, 236 00:11:50,520 --> 00:11:52,760 Speaker 8: and I don't think there's anything that's going to be 237 00:11:53,040 --> 00:11:55,240 Speaker 8: a headwind to the stock in the near future. We're 238 00:11:55,280 --> 00:11:59,760 Speaker 8: really early in this artificial intelligence trend, maybe second inning, 239 00:12:00,160 --> 00:12:02,240 Speaker 8: and so I think that there's a real possibility this 240 00:12:02,320 --> 00:12:04,880 Speaker 8: stock could be, you know, twelve hundred dollars a year 241 00:12:04,920 --> 00:12:07,360 Speaker 8: from now. So I don't think it's a bad idea 242 00:12:07,559 --> 00:12:09,240 Speaker 8: if you don't have a position to enter it now. 243 00:12:09,280 --> 00:12:11,839 Speaker 8: But I would be careful and maybe look for buying 244 00:12:11,840 --> 00:12:13,640 Speaker 8: it on weakness, like I would have bought it ahead 245 00:12:13,640 --> 00:12:17,000 Speaker 8: of earnings when it was at six fifty as opposed 246 00:12:17,000 --> 00:12:20,760 Speaker 8: to today where it's really benefiting from the news. I 247 00:12:20,840 --> 00:12:23,360 Speaker 8: might look to find some good entry points. But it's 248 00:12:23,360 --> 00:12:25,880 Speaker 8: hard because every time I say that, the stock just 249 00:12:25,960 --> 00:12:27,760 Speaker 8: keeps going up, and then people get mad at me 250 00:12:27,760 --> 00:12:29,840 Speaker 8: because they missed the opportunity to buy in when it 251 00:12:29,880 --> 00:12:30,360 Speaker 8: was cheaper. 252 00:12:30,880 --> 00:12:31,920 Speaker 9: Shane, how about Cisco. 253 00:12:32,120 --> 00:12:34,240 Speaker 3: That's kind of what I consider kind of a you know, 254 00:12:34,400 --> 00:12:36,559 Speaker 3: old school tech name here, and I look at the 255 00:12:36,559 --> 00:12:38,319 Speaker 3: over the last five years and it's had a compounded 256 00:12:38,320 --> 00:12:41,240 Speaker 3: annual growth of about only about two and a half percent, 257 00:12:41,320 --> 00:12:43,319 Speaker 3: with S and P up about fourteen and a half 258 00:12:43,360 --> 00:12:46,760 Speaker 3: percent compounded. What's been the story at Cisco in terms 259 00:12:46,800 --> 00:12:48,840 Speaker 3: of its underperformance from your perspective. 260 00:12:49,200 --> 00:12:52,440 Speaker 8: Well, primarily it's been that they just haven't kept up 261 00:12:52,440 --> 00:12:55,880 Speaker 8: with the trends. The technology that they provide isn't relevant 262 00:12:55,920 --> 00:12:58,560 Speaker 8: to a lot of the latest and greatest trends like 263 00:12:58,640 --> 00:13:03,040 Speaker 8: artificial intelligence. But they're trying to pivot and become more 264 00:13:03,080 --> 00:13:06,680 Speaker 8: relevant and the stock is really cheap. So in my opinion, 265 00:13:06,679 --> 00:13:08,360 Speaker 8: it's a stock that I've looked at and I own 266 00:13:08,400 --> 00:13:10,520 Speaker 8: a small position, and it is a stock that I 267 00:13:10,559 --> 00:13:13,880 Speaker 8: do like, but it is a stock that I don't 268 00:13:13,920 --> 00:13:16,320 Speaker 8: know if I'm completely a bull, but it's just so 269 00:13:16,559 --> 00:13:19,880 Speaker 8: cheap and they are trying hard to become more relevant 270 00:13:19,880 --> 00:13:22,920 Speaker 8: in the space that I think they have an opportunity 271 00:13:23,160 --> 00:13:26,400 Speaker 8: to at least improve their growth rate going forward, which 272 00:13:26,400 --> 00:13:30,360 Speaker 8: should help the stock. It's trading at an ridiculously cheap multiple, 273 00:13:30,440 --> 00:13:33,680 Speaker 8: especially when you consider tech as a whole, So I 274 00:13:33,679 --> 00:13:35,840 Speaker 8: don't think there's a ton of downside in the stock, 275 00:13:36,440 --> 00:13:39,400 Speaker 8: but you know, I'm still not sure it's a go 276 00:13:39,520 --> 00:13:41,520 Speaker 8: to the moon like Nvidio kind of thing, But I 277 00:13:41,559 --> 00:13:43,960 Speaker 8: do think there is an opportunity with the management chain 278 00:13:44,160 --> 00:13:46,680 Speaker 8: really looking to focus and pivot the business to be 279 00:13:47,600 --> 00:13:49,720 Speaker 8: more relevant in current trends today. 280 00:13:50,440 --> 00:13:52,640 Speaker 5: What are you looking at in the pharmaceutical sector? 281 00:13:53,760 --> 00:13:58,160 Speaker 8: So I really like Novartis and Veritex's pharmaceuticals. You know, 282 00:13:58,200 --> 00:14:00,360 Speaker 8: one of the things that I find really interesting is 283 00:14:00,720 --> 00:14:03,200 Speaker 8: if you haven't figured this out yet, I like looking 284 00:14:03,240 --> 00:14:05,640 Speaker 8: at what the new emerging trends are, what's going to 285 00:14:05,679 --> 00:14:08,520 Speaker 8: be the thing that you know, changes the world going forward. 286 00:14:08,600 --> 00:14:11,680 Speaker 8: And when you look at drug development, there's really interesting 287 00:14:11,720 --> 00:14:15,000 Speaker 8: things going on right now, especially in things like cancer research. 288 00:14:15,320 --> 00:14:19,480 Speaker 8: So Novartists in particular has some absolutely groundbreaking oncology drugs. 289 00:14:20,120 --> 00:14:24,880 Speaker 8: And the speed at which we're seeing new drugs come 290 00:14:24,880 --> 00:14:27,320 Speaker 8: to the market that are really changing the game and cancer, 291 00:14:27,680 --> 00:14:31,160 Speaker 8: where it's changing cancer from you know, a terminal illness 292 00:14:31,160 --> 00:14:34,400 Speaker 8: to more like a chronic illness is remarkable. Novartis is 293 00:14:34,480 --> 00:14:36,600 Speaker 8: kind of at the forefront for that. In the case 294 00:14:36,680 --> 00:14:41,440 Speaker 8: of ver attacks. They have a very strong cystic fibrosisline 295 00:14:41,560 --> 00:14:44,640 Speaker 8: which really doesn't have any competitors, and they really are 296 00:14:44,640 --> 00:14:47,160 Speaker 8: trying to focus on those key areas where they have 297 00:14:47,480 --> 00:14:49,800 Speaker 8: a true edge. So those that's why I like those 298 00:14:49,800 --> 00:14:52,920 Speaker 8: two stocks in particular. But you know, we have like 299 00:14:53,160 --> 00:14:57,400 Speaker 8: Nova Noordis and Eli Lilly who are benefiting from, you know, 300 00:14:57,480 --> 00:15:00,920 Speaker 8: the ozembic trends, and Eli li also has some great 301 00:15:00,920 --> 00:15:03,120 Speaker 8: oncology drugs. It's just a little pricey right now, which 302 00:15:03,120 --> 00:15:04,120 Speaker 8: is why it's not on my list. 303 00:15:04,360 --> 00:15:06,680 Speaker 3: How about energy here, I'm looking at WTI crude oil 304 00:15:06,840 --> 00:15:11,000 Speaker 3: at seventy eight dollars per barrel. How do you think 305 00:15:11,000 --> 00:15:13,480 Speaker 3: about the energy space here. The stocks have been quite 306 00:15:13,520 --> 00:15:15,360 Speaker 3: good over the last several years. Hey, what do you 307 00:15:15,360 --> 00:15:16,240 Speaker 3: think going forward here? 308 00:15:17,080 --> 00:15:19,880 Speaker 8: Well, inflation has helped energy stocks, and if you looked 309 00:15:19,880 --> 00:15:22,960 Speaker 8: at the latest PPI and CPI numbers, energy was one 310 00:15:23,000 --> 00:15:25,600 Speaker 8: of the main reasons why some of those numbers are 311 00:15:25,640 --> 00:15:29,240 Speaker 8: one of the only areas that we saw decline in 312 00:15:29,240 --> 00:15:31,880 Speaker 8: inflation if you look at it with energy and food. 313 00:15:32,640 --> 00:15:35,080 Speaker 8: So obviously gas prices have come down. That's good for 314 00:15:35,120 --> 00:15:37,280 Speaker 8: the consumer. And so I don't know if there's a 315 00:15:37,360 --> 00:15:39,800 Speaker 8: huge till end to the entire sector, but I do 316 00:15:39,920 --> 00:15:43,120 Speaker 8: like a stock like saying like Diamondback Energy because they 317 00:15:43,160 --> 00:15:46,280 Speaker 8: don't need oil to be one hundred dollars a barrel 318 00:15:46,560 --> 00:15:50,080 Speaker 8: to have good revenue and good profitability. I think their 319 00:15:50,120 --> 00:15:53,280 Speaker 8: break even is fifty dollars a barrel, and so there's 320 00:15:53,640 --> 00:15:56,440 Speaker 8: quite a bit of opportunity for a stock like Fang 321 00:15:56,520 --> 00:15:59,640 Speaker 8: to do well in an environment where other energy companies 322 00:15:59,680 --> 00:16:01,080 Speaker 8: aren't doing as well. 323 00:16:01,280 --> 00:16:04,160 Speaker 5: Paul, I don't know if you know this, but Shana 324 00:16:04,520 --> 00:16:06,920 Speaker 5: actually has a nickname. It doesn't have to deal with 325 00:16:07,120 --> 00:16:12,600 Speaker 5: single stocks. She is also known as the Queen of Alternatives. 326 00:16:12,640 --> 00:16:15,920 Speaker 5: Oh nice, So let's get your perspective on the outlook 327 00:16:15,960 --> 00:16:18,440 Speaker 5: for alts in twenty twenty four. Is there anything in 328 00:16:18,480 --> 00:16:21,400 Speaker 5: particular that jumps out to you as attractive for this year. 329 00:16:22,480 --> 00:16:24,600 Speaker 8: Yeah, I think that. You know, we've spent a lot 330 00:16:24,640 --> 00:16:26,840 Speaker 8: of time over the last couple of years being really 331 00:16:26,880 --> 00:16:30,640 Speaker 8: excited about that venture capital and private equity space, and 332 00:16:31,760 --> 00:16:34,240 Speaker 8: we're not seeing as much of a tailwind in either 333 00:16:34,280 --> 00:16:36,280 Speaker 8: one of those spaces right now. Private equity has not 334 00:16:36,320 --> 00:16:39,280 Speaker 8: performed as well as the overall public markets, and venture 335 00:16:39,280 --> 00:16:42,200 Speaker 8: capital has a ton of headwinds to it. So you 336 00:16:42,280 --> 00:16:44,560 Speaker 8: gotta think a little bit outside the box. And there's 337 00:16:44,680 --> 00:16:47,680 Speaker 8: areas in the alternative space that I think are really interesting, 338 00:16:48,080 --> 00:16:51,320 Speaker 8: some of the more diversifying kind of names in the 339 00:16:51,360 --> 00:16:54,960 Speaker 8: hedge fund space, like equity market neutral, some event driven 340 00:16:55,080 --> 00:16:57,240 Speaker 8: things of that nature. But also if you look at 341 00:16:57,280 --> 00:17:00,000 Speaker 8: private credit and private debt in the environment we're in now, 342 00:17:00,120 --> 00:17:03,400 Speaker 8: where I think we're at peak interest rates. I'm not 343 00:17:03,480 --> 00:17:05,399 Speaker 8: saying that I think the Fed's going to cut anytime soon, 344 00:17:05,400 --> 00:17:07,040 Speaker 8: because I don't think that, but I do think there's 345 00:17:07,080 --> 00:17:09,280 Speaker 8: better opportunity for yield than some of the private credit 346 00:17:09,280 --> 00:17:13,600 Speaker 8: and private debt markets because banks as a whole are 347 00:17:13,600 --> 00:17:18,639 Speaker 8: not as open to smaller businesses and to startups and 348 00:17:18,640 --> 00:17:20,760 Speaker 8: things of that nature. So they're going to other markets, 349 00:17:21,000 --> 00:17:24,480 Speaker 8: and the biggest beneficiary of that are private debt, debt 350 00:17:24,480 --> 00:17:25,200 Speaker 8: and private credit. 351 00:17:25,440 --> 00:17:28,120 Speaker 3: Yeah, that's certainly been just a tremendous area of growth 352 00:17:28,160 --> 00:17:31,320 Speaker 3: really over the last ten to twelve years, private credit. 353 00:17:31,440 --> 00:17:33,240 Speaker 3: As you know, the banks have kind of pulled back 354 00:17:33,240 --> 00:17:35,880 Speaker 3: after the posts after the financial crisis. So a big, 355 00:17:35,920 --> 00:17:38,400 Speaker 3: big market there. Shanna Sisso, thanks so much for joining us. 356 00:17:38,440 --> 00:17:41,639 Speaker 3: Shana is president and CEO fan Ryan Capital Management. She 357 00:17:41,680 --> 00:17:44,640 Speaker 3: joins us via zoom from Chicago, Illinois. 358 00:17:46,119 --> 00:17:49,960 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 359 00:17:50,040 --> 00:17:51,800 Speaker 1: weekdays at ten am Eastern on. 360 00:17:51,960 --> 00:17:54,880 Speaker 2: Fo car playing Enroud Auto with the Bloomberg Business app. 361 00:17:54,920 --> 00:17:58,120 Speaker 1: Listen on demand wherever you get your podcasts, or watch 362 00:17:58,200 --> 00:18:00,400 Speaker 1: us live on YouTube. 363 00:18:00,119 --> 00:18:02,400 Speaker 9: Ye boy, it is Nvidia day. 364 00:18:02,440 --> 00:18:06,040 Speaker 3: To say, the leases impacting not only at stock that sector, 365 00:18:06,080 --> 00:18:07,280 Speaker 3: any overall market. 366 00:18:07,280 --> 00:18:07,399 Speaker 4: Here. 367 00:18:07,480 --> 00:18:09,960 Speaker 3: Let's get some perspective on it as only one b 368 00:18:10,080 --> 00:18:12,879 Speaker 3: rid Holts can do. Barry Ridolt's host of Masters in 369 00:18:12,920 --> 00:18:15,080 Speaker 3: Business on Bloomberg Grit. It's a little podcast like a 370 00:18:15,320 --> 00:18:17,400 Speaker 3: jillion people will listen to every week. He gets great 371 00:18:17,400 --> 00:18:19,639 Speaker 3: guests but his day job, he's a founder of a 372 00:18:19,720 --> 00:18:22,760 Speaker 3: rid Holt's Wealth Management. Barry, I mean you and I 373 00:18:22,800 --> 00:18:25,760 Speaker 3: we've been in this market a long time. I'm struggling 374 00:18:25,800 --> 00:18:28,919 Speaker 3: to find a stock that had such an impact for 375 00:18:29,000 --> 00:18:31,760 Speaker 3: such a period of time as in video. 376 00:18:31,840 --> 00:18:32,520 Speaker 9: What do you make of it? 377 00:18:33,760 --> 00:18:37,720 Speaker 10: Well, you know, I'm always perplexed when I see people 378 00:18:39,160 --> 00:18:44,879 Speaker 10: sort of shrugging off new technology, new companies, shifts in 379 00:18:45,000 --> 00:18:49,399 Speaker 10: how we operate. We should just stick with the you know, 380 00:18:49,480 --> 00:18:52,960 Speaker 10: imagine someone in the nineteen twenty saying, what's with these 381 00:18:53,040 --> 00:18:58,000 Speaker 10: new fangled you know, telephone and radio and aueomobiles. Let's 382 00:18:58,160 --> 00:19:01,960 Speaker 10: just stick with the steam and leather belt companies. They've 383 00:19:02,000 --> 00:19:05,880 Speaker 10: done great for so long. Hey, you know, technology is 384 00:19:06,119 --> 00:19:11,320 Speaker 10: how wealth is created, how society moves forward, how humans 385 00:19:12,040 --> 00:19:16,600 Speaker 10: dominate the planet. And it's pretty clear. Yeah, there's a 386 00:19:16,600 --> 00:19:20,199 Speaker 10: lot of hype. I'll go back to computer companies in 387 00:19:20,280 --> 00:19:24,680 Speaker 10: the eighties or automobile companies in the twenties. I can't 388 00:19:24,720 --> 00:19:27,080 Speaker 10: tell you which of those companies are going to be 389 00:19:27,160 --> 00:19:31,560 Speaker 10: the winners. And there's always hundreds of them, remember Gateway Computing. 390 00:19:33,280 --> 00:19:36,399 Speaker 10: But somebody out of that complex is going to be 391 00:19:36,440 --> 00:19:39,520 Speaker 10: a big winner, and it's going to drive a lot 392 00:19:39,560 --> 00:19:42,320 Speaker 10: of the economic activity that takes place. 393 00:19:43,080 --> 00:19:47,280 Speaker 5: Barry, what have you learned from in Video's earnings in 394 00:19:47,359 --> 00:19:50,600 Speaker 5: terms of whether Nvidia is going to emerge as one 395 00:19:50,640 --> 00:19:53,800 Speaker 5: of those winners. Paul's been asking pretty much every guest 396 00:19:53,880 --> 00:19:57,240 Speaker 5: on this show today, you know what makes in video 397 00:19:57,400 --> 00:20:01,200 Speaker 5: so different? Why are their chips attractive to so many 398 00:20:01,200 --> 00:20:07,040 Speaker 5: corporations versus IBM's broad cooms. So where are we right 399 00:20:07,080 --> 00:20:09,040 Speaker 5: now in terms of assessing weather and video is really 400 00:20:09,040 --> 00:20:10,920 Speaker 5: going to emerge as one of these winners? 401 00:20:11,080 --> 00:20:17,520 Speaker 10: Aig so caveat. I'm not a semiconductor analyst. However, if 402 00:20:17,520 --> 00:20:20,320 Speaker 10: we look at the history of chips and how they've 403 00:20:20,359 --> 00:20:23,840 Speaker 10: developed over time, at one point it was all Intel 404 00:20:23,920 --> 00:20:28,520 Speaker 10: and nobody else had a whole lot to say. Then 405 00:20:28,600 --> 00:20:33,520 Speaker 10: we started looking at more complex calculations. We went from 406 00:20:34,240 --> 00:20:38,479 Speaker 10: reduced instruction sets to more complex to floating point, and 407 00:20:38,520 --> 00:20:44,200 Speaker 10: then it was graphic generators and games and then mobile 408 00:20:44,240 --> 00:20:47,280 Speaker 10: and so there's this been this progression, and along that 409 00:20:47,400 --> 00:20:53,520 Speaker 10: progression in Vidia has been extremely innovative and ahead of 410 00:20:53,560 --> 00:20:57,320 Speaker 10: the curve from their bigger competitors, or at least once 411 00:20:57,359 --> 00:21:00,520 Speaker 10: bigger competitors. You can't can't say that anymore. And so 412 00:21:00,680 --> 00:21:05,000 Speaker 10: this is all about GPUs and cycles. I'm going to 413 00:21:05,080 --> 00:21:06,800 Speaker 10: tell you what I think a lot of people are 414 00:21:06,840 --> 00:21:10,080 Speaker 10: afraid to say. I have no idea if Nvidia is 415 00:21:10,160 --> 00:21:13,680 Speaker 10: ultimately going to be the winner ten or twenty years 416 00:21:13,720 --> 00:21:19,080 Speaker 10: from now. The technology changes so quickly, the upstarts come 417 00:21:19,119 --> 00:21:25,360 Speaker 10: along and disrupt the environment so much, it's very difficult 418 00:21:26,000 --> 00:21:29,840 Speaker 10: to make that be that said, go back. You don't 419 00:21:29,840 --> 00:21:32,280 Speaker 10: even have to go back twenty five years. Go back 420 00:21:32,440 --> 00:21:37,360 Speaker 10: five years, and video was that disruptor. I can't tell 421 00:21:37,400 --> 00:21:40,520 Speaker 10: you who might be the disruptor to in video or 422 00:21:40,520 --> 00:21:45,320 Speaker 10: if they're going to dominate. Very few companies dominate for decades. 423 00:21:45,359 --> 00:21:49,040 Speaker 10: Look at Microsoft as an example. That's the exception, not 424 00:21:49,200 --> 00:21:54,600 Speaker 10: the rule. We've gone through Armholdings and AMD and Intel 425 00:21:54,760 --> 00:21:59,840 Speaker 10: and Qualcomm and one semi company after another. So it's 426 00:22:00,119 --> 00:22:03,480 Speaker 10: really really difficult to make that bad. 427 00:22:03,720 --> 00:22:06,600 Speaker 3: So Barry, I would say, you can correct me here 428 00:22:07,080 --> 00:22:09,080 Speaker 3: on the number of years here, But it seems like 429 00:22:09,119 --> 00:22:13,160 Speaker 3: for the last twenty plus years tech has been leading 430 00:22:13,440 --> 00:22:14,440 Speaker 3: this market. 431 00:22:14,800 --> 00:22:18,080 Speaker 9: Is there any scenario why why shouldn't that be overweight 432 00:22:18,119 --> 00:22:20,000 Speaker 9: Tech long term? And just no scenario is there? 433 00:22:20,880 --> 00:22:24,119 Speaker 10: So first let me correct you. It's not twenty years. 434 00:22:24,200 --> 00:22:27,560 Speaker 10: It's forty years, right, go back to the nineteen eighties. 435 00:22:27,560 --> 00:22:29,760 Speaker 9: Well you're a lot older than me Berry's. 436 00:22:31,359 --> 00:22:37,280 Speaker 10: So you move from from mainframe computing to desktop computing 437 00:22:37,320 --> 00:22:40,800 Speaker 10: and the rise of software with that, and then eventually 438 00:22:40,840 --> 00:22:45,000 Speaker 10: you moved to gaming and mobile, and now AI is 439 00:22:45,040 --> 00:22:48,879 Speaker 10: a software that's driving a lot of this. You know, 440 00:22:49,359 --> 00:22:53,160 Speaker 10: what we think of as a separate space of technology. 441 00:22:53,520 --> 00:22:57,440 Speaker 10: I love to look at the books about investing from 442 00:22:57,880 --> 00:23:03,400 Speaker 10: like the early twentieth century, and they talk about telegrams 443 00:23:03,480 --> 00:23:08,480 Speaker 10: and telephones and rails the way we talked about chips 444 00:23:08,480 --> 00:23:13,960 Speaker 10: and software and internet. You know, in the nineteen thirties, forties, fifties, 445 00:23:13,960 --> 00:23:18,720 Speaker 10: there were no telephone companies other than ma Bel. Everybody 446 00:23:19,040 --> 00:23:23,440 Speaker 10: used a telephone. So the way we describe internet companies, 447 00:23:23,480 --> 00:23:26,240 Speaker 10: I think that's going to fade and everybody's going to 448 00:23:26,320 --> 00:23:30,320 Speaker 10: be an Internet using company. Everybody is going to end 449 00:23:30,400 --> 00:23:33,280 Speaker 10: up being an AI company. The question is are you 450 00:23:33,480 --> 00:23:37,200 Speaker 10: providing the picks and shovels? Like, it wasn't the the 451 00:23:37,480 --> 00:23:40,000 Speaker 10: you know, the gold miners who got money, who got wealthy, 452 00:23:40,440 --> 00:23:44,400 Speaker 10: It was the company selling them dungarees and picks and shovels. 453 00:23:44,760 --> 00:23:47,760 Speaker 10: And so we kind of think of Nvidia that way, 454 00:23:47,800 --> 00:23:52,840 Speaker 10: that's the appeal, But that's a long way to answer. 455 00:23:53,960 --> 00:24:00,280 Speaker 10: I'm not uncomfortable being overweight technology. You want to be 456 00:24:00,880 --> 00:24:05,720 Speaker 10: a little you know, advantageous in the way you purchase it. 457 00:24:06,480 --> 00:24:10,520 Speaker 10: The one thing that is so counterintuitive about all time 458 00:24:10,600 --> 00:24:14,320 Speaker 10: highs that we just reached. All time highs tend to 459 00:24:14,400 --> 00:24:18,160 Speaker 10: be very bullish and historically have done well. 460 00:24:17,960 --> 00:24:20,360 Speaker 9: Before we let you go because of your extension age. 461 00:24:20,760 --> 00:24:26,399 Speaker 3: The Nike all time high since nineteen eighty nine, that's perspective. 462 00:24:25,880 --> 00:24:29,240 Speaker 10: Isn't it that that's bullish and and you know people 463 00:24:29,280 --> 00:24:31,600 Speaker 10: have a tendency to look at last year is a 464 00:24:31,600 --> 00:24:35,199 Speaker 10: perfect example. Oh my god, the nasdak up fifty percent, 465 00:24:35,320 --> 00:24:38,159 Speaker 10: the SMB of twenty five percent. You have to have 466 00:24:38,280 --> 00:24:42,440 Speaker 10: context and say over two years, twenty two and twenty three, 467 00:24:43,160 --> 00:24:45,479 Speaker 10: those in the seas are flat. So as much as 468 00:24:45,520 --> 00:24:48,000 Speaker 10: it looks like we've come too far, too fast, you're 469 00:24:48,000 --> 00:24:50,760 Speaker 10: really just making up. Kind of reminds me of you know, 470 00:24:50,800 --> 00:24:53,240 Speaker 10: the rally in nine to ten, making up the losses 471 00:24:53,280 --> 00:24:59,160 Speaker 10: from seven oh eight. So Japan is a whole nother world. 472 00:24:59,359 --> 00:25:01,560 Speaker 3: Our friends until could deserve a shout out. I mean, 473 00:25:01,600 --> 00:25:03,320 Speaker 3: it's been nineteen eighty nine. 474 00:25:03,720 --> 00:25:06,280 Speaker 9: Good for them. Remember Barry, back early in our career. 475 00:25:06,359 --> 00:25:08,720 Speaker 3: You had to be a part of that whole Japanese 476 00:25:08,720 --> 00:25:11,800 Speaker 3: market and then boy for just nothing for a long time. 477 00:25:11,800 --> 00:25:14,560 Speaker 3: Barry Ridolts, host of Masters in Business on Bloomberg Radio. 478 00:25:14,680 --> 00:25:18,760 Speaker 3: Great podcast, go check it out. His great guests every week, 479 00:25:19,000 --> 00:25:21,720 Speaker 3: some of the leaders in finance. It's also founder of 480 00:25:21,880 --> 00:25:24,320 Speaker 3: rid Holts Wealth Management. Some good stuff there. 481 00:25:25,880 --> 00:25:29,760 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 482 00:25:29,840 --> 00:25:32,760 Speaker 1: weekdays at ten am Eastern on applecar. 483 00:25:32,400 --> 00:25:35,200 Speaker 2: Play and Android Auto with the Bloomberg Business App. 484 00:25:35,280 --> 00:25:38,119 Speaker 1: You can also listen live on Amazon Alexa from our 485 00:25:38,119 --> 00:25:42,480 Speaker 1: flagship New York station Just Say Alexa playing Bloomberg eleven thirty. 486 00:25:43,840 --> 00:25:46,159 Speaker 3: You know, during the pandemic Emily, one of the economic 487 00:25:46,440 --> 00:25:49,720 Speaker 3: issues that really became apparent is supply chains and how 488 00:25:50,119 --> 00:25:53,399 Speaker 3: you know, susceptible supply chains are to disruptions and boy 489 00:25:53,640 --> 00:25:56,960 Speaker 3: shutting down the world's economy and then reopening it creates 490 00:25:57,000 --> 00:25:59,480 Speaker 3: some disruptions. And one of the people we leaned on 491 00:25:59,640 --> 00:26:03,120 Speaker 3: for kind of analysis and explanations about how this whole 492 00:26:03,119 --> 00:26:05,800 Speaker 3: thing works is Jeene Soroca. He is the executive director 493 00:26:05,840 --> 00:26:07,480 Speaker 3: of the Port of Los Angeles. 494 00:26:07,960 --> 00:26:09,040 Speaker 9: Yes, that port. 495 00:26:09,080 --> 00:26:11,040 Speaker 3: The Port of Los Angeles is one of the world's 496 00:26:11,040 --> 00:26:14,119 Speaker 3: busiest seaports and the leading gateway for international trade in 497 00:26:14,119 --> 00:26:16,080 Speaker 3: North America. So Gene was so good to us during 498 00:26:16,119 --> 00:26:19,520 Speaker 3: the pandemic and the logistics and all the stuff you 499 00:26:19,560 --> 00:26:22,159 Speaker 3: had to worry about supply chain during that period. So 500 00:26:22,160 --> 00:26:25,080 Speaker 3: we appreciate getting some of Gene's time. So, Jean, I 501 00:26:25,119 --> 00:26:27,679 Speaker 3: know we're back to normal. I know you guys in 502 00:26:27,680 --> 00:26:30,800 Speaker 3: the Port of Los Angeles settled your labor issues last year. 503 00:26:31,200 --> 00:26:33,520 Speaker 9: Talk to us about global trade. What's it like in 504 00:26:33,560 --> 00:26:35,640 Speaker 9: a day at the Port of Los Angeles? Died these days? 505 00:26:35,800 --> 00:26:37,720 Speaker 9: How's business Paul Emily, Good morning. 506 00:26:37,760 --> 00:26:40,240 Speaker 11: Business is really good. We're running it about seventy five 507 00:26:40,280 --> 00:26:42,800 Speaker 11: to eighty percent of full capacity at the Port of 508 00:26:42,800 --> 00:26:46,719 Speaker 11: Los Angeles. Anything butt normal though around the world, with 509 00:26:46,800 --> 00:26:49,960 Speaker 11: issues in the Panama Canal, with respect to drought in 510 00:26:50,040 --> 00:26:53,800 Speaker 11: the Middle East, with concerns around safety and security, and 511 00:26:53,880 --> 00:26:56,720 Speaker 11: broader looks at how this US economy is going to 512 00:26:56,760 --> 00:27:00,480 Speaker 11: continue to propel itself thanks to the American consumer. So 513 00:27:00,600 --> 00:27:02,680 Speaker 11: let's start off with where we're at right now. Six 514 00:27:02,720 --> 00:27:06,840 Speaker 11: consecutive months of growth, the second best January ever up 515 00:27:06,960 --> 00:27:10,920 Speaker 11: eighteen percent compared to last year, and our first quarter 516 00:27:11,000 --> 00:27:13,840 Speaker 11: outlook is it about two point two million containers or 517 00:27:14,000 --> 00:27:17,040 Speaker 11: twenty percent year on year increase compared to Q one 518 00:27:17,240 --> 00:27:17,920 Speaker 11: of last year. 519 00:27:18,440 --> 00:27:21,919 Speaker 5: So how would you assess then, the overall health of 520 00:27:21,960 --> 00:27:24,720 Speaker 5: the global supply chain relative to what we saw during 521 00:27:24,760 --> 00:27:27,320 Speaker 5: the pandemic, because, like Paul said, it seemed like everyone 522 00:27:27,400 --> 00:27:31,360 Speaker 5: was suddenly talking about the supply chain and where are 523 00:27:31,359 --> 00:27:34,000 Speaker 5: we relative to just a few years ago. 524 00:27:34,320 --> 00:27:36,120 Speaker 11: Emily, I think we're in a lot better shape. We've 525 00:27:36,200 --> 00:27:38,480 Speaker 11: learned a lot from what we saw then too, But 526 00:27:38,600 --> 00:27:41,400 Speaker 11: we're front of mind now to so many people outside 527 00:27:41,440 --> 00:27:44,760 Speaker 11: our general industry, whether it's us looking for our packages, 528 00:27:44,800 --> 00:27:47,640 Speaker 11: what's on the store shelves, or just the general consciousness 529 00:27:47,880 --> 00:27:53,040 Speaker 11: about how this port supply chain and trade business impacts 530 00:27:53,040 --> 00:27:56,159 Speaker 11: economies and jobs around the world. What we see in 531 00:27:56,200 --> 00:27:58,400 Speaker 11: Los Angeles is that there are a couple things happening 532 00:27:58,480 --> 00:28:02,160 Speaker 11: right now. The stability of that labor contract has given 533 00:28:02,240 --> 00:28:05,600 Speaker 11: us about a four percentage point boost in market share, 534 00:28:05,640 --> 00:28:07,720 Speaker 11: So some of that cargo that we lost during the 535 00:28:07,720 --> 00:28:11,600 Speaker 11: protracted negotiations has started to come back, not all of it. 536 00:28:11,800 --> 00:28:15,399 Speaker 11: Much more work to do, but good trajectory now with 537 00:28:15,480 --> 00:28:19,200 Speaker 11: the Panama Canal suffering drought and the concerns of safety 538 00:28:19,200 --> 00:28:23,480 Speaker 11: in the Middle East. With respect to the Hoothy going 539 00:28:23,560 --> 00:28:28,000 Speaker 11: after the ships and the cargo and oil tankers, you're 540 00:28:28,040 --> 00:28:32,080 Speaker 11: starting to see more cargo shifted our way, not services 541 00:28:32,160 --> 00:28:36,160 Speaker 11: being collapsed, not new vessels coming in, but higher levels 542 00:28:36,200 --> 00:28:40,480 Speaker 11: of capacity and utilization, and importers and exporters saying I 543 00:28:40,600 --> 00:28:43,240 Speaker 11: may not want to take that much time, but the 544 00:28:43,400 --> 00:28:47,520 Speaker 11: bigger difference is the gap between cargo that's moving east 545 00:28:47,560 --> 00:28:51,360 Speaker 11: and Gulf Coast versus the West Coast is wider from 546 00:28:51,360 --> 00:28:55,400 Speaker 11: a freight cost perspective. That's important because we're right now 547 00:28:55,440 --> 00:28:58,480 Speaker 11: in the middle of our annual contracting season for freight. 548 00:28:58,960 --> 00:29:02,040 Speaker 3: All right, So right on the Port of Los Angeles 549 00:29:02,120 --> 00:29:03,760 Speaker 3: on the West Coast, you probably have the best of 550 00:29:03,800 --> 00:29:06,000 Speaker 3: you of anybody trade with China. 551 00:29:06,120 --> 00:29:07,720 Speaker 9: What's what's it like now? 552 00:29:07,760 --> 00:29:11,920 Speaker 3: What's your expectation for that important route of trade coming 553 00:29:11,920 --> 00:29:13,400 Speaker 3: from China to your port. 554 00:29:13,440 --> 00:29:17,160 Speaker 11: Paul, it's still our most dominant trading partner. Fifty three 555 00:29:17,200 --> 00:29:20,440 Speaker 11: percent of Port of Los Angeles business is with China. 556 00:29:20,520 --> 00:29:20,680 Speaker 4: Now. 557 00:29:20,680 --> 00:29:23,160 Speaker 11: That's down from fifty seven percent at the end of 558 00:29:23,200 --> 00:29:26,080 Speaker 11: year twenty twenty two, and it may drop into the 559 00:29:26,120 --> 00:29:30,400 Speaker 11: mid forties as many supply chain executives are continuing with 560 00:29:30,480 --> 00:29:34,240 Speaker 11: their China plus one strategy, looking at other locations to 561 00:29:34,400 --> 00:29:38,920 Speaker 11: source and produce goods in. But still forty five fifty 562 00:29:39,040 --> 00:29:42,040 Speaker 11: years of supply chain relationships exist. You don't tear that 563 00:29:42,080 --> 00:29:43,160 Speaker 11: apart overnight. 564 00:29:43,640 --> 00:29:45,920 Speaker 5: Just the other day, the White House said that they 565 00:29:45,920 --> 00:29:49,280 Speaker 5: were concerned that more than two hundred ship to shore 566 00:29:49,360 --> 00:29:53,160 Speaker 5: cranes at US ports are manufactured by China and can 567 00:29:53,240 --> 00:29:58,120 Speaker 5: be serviced and programmed remotely, creating a cybersecurity vulnerability. What 568 00:29:58,120 --> 00:30:00,480 Speaker 5: did you make of those comments? How legitimate are the 569 00:30:00,480 --> 00:30:02,320 Speaker 5: White House's concerns? 570 00:30:02,360 --> 00:30:05,920 Speaker 11: It's also very important to us. The Port of Los Angeles, 571 00:30:05,920 --> 00:30:08,480 Speaker 11: Emily was the first in the nation to create a 572 00:30:08,520 --> 00:30:12,240 Speaker 11: cyber security operations center back in twenty fourteen with the 573 00:30:12,280 --> 00:30:16,479 Speaker 11: help of the Department of Homeland Security. Today that system 574 00:30:16,520 --> 00:30:20,680 Speaker 11: is stopping more than sixty million cyber intrusion attempts per month. 575 00:30:21,320 --> 00:30:25,240 Speaker 11: It also gave us awareness to create a cyber resilient center. 576 00:30:25,360 --> 00:30:27,640 Speaker 11: Also one of the first in the world to bring 577 00:30:27,640 --> 00:30:32,160 Speaker 11: in the private sector partners with US that co helped 578 00:30:32,160 --> 00:30:35,720 Speaker 11: with the IBM folks. It has now stopped to have 579 00:30:36,000 --> 00:30:39,959 Speaker 11: a dozen cyber intrusion attempts to private sector interests that 580 00:30:40,000 --> 00:30:44,120 Speaker 11: they were otherwise unaware of. So this work must continue. 581 00:30:45,000 --> 00:30:46,760 Speaker 9: It gives that up there. You mentioned the Panama Canal. 582 00:30:46,880 --> 00:30:48,480 Speaker 6: Fascinated by the Panama canaw I read a. 583 00:30:48,440 --> 00:30:50,520 Speaker 9: Great book on it. I'll fundy author later. 584 00:30:50,640 --> 00:30:53,920 Speaker 3: It's phenomenal how they built that thing. So what's wrong 585 00:30:53,960 --> 00:30:55,880 Speaker 3: with the Panamac There's a drought and so the water 586 00:30:56,000 --> 00:30:57,760 Speaker 3: levels are lower, so they're not taking the amount of 587 00:30:57,760 --> 00:30:58,800 Speaker 3: freight they typically take. 588 00:30:59,000 --> 00:31:02,640 Speaker 11: That's exact lead it. And you think about a vessel 589 00:31:02,680 --> 00:31:06,320 Speaker 11: at full capacity. They can't load to the top, and 590 00:31:06,560 --> 00:31:09,440 Speaker 11: the transits through the canal are down some twenty three 591 00:31:09,480 --> 00:31:13,000 Speaker 11: percent according to published reports thus far this year. Now 592 00:31:13,080 --> 00:31:16,360 Speaker 11: the port authority folks switched on. They're railing cargo from 593 00:31:16,400 --> 00:31:18,960 Speaker 11: the Atlanta from the Pacific side to the Atlantic for 594 00:31:19,080 --> 00:31:22,920 Speaker 11: onward carriage to Europe and North America. But it's just 595 00:31:23,040 --> 00:31:25,800 Speaker 11: not enough. And that's that's why this capacity issue is 596 00:31:25,800 --> 00:31:27,080 Speaker 11: so important. 597 00:31:26,560 --> 00:31:29,280 Speaker 3: The path between the seas. David McCollough, that's the book 598 00:31:29,360 --> 00:31:31,840 Speaker 3: phenomenal about the history of the Panamakete. 599 00:31:32,600 --> 00:31:33,160 Speaker 9: It's a weekend. 600 00:31:33,240 --> 00:31:37,160 Speaker 3: It's more than a weekend, it's a beast all right, So, Gene, 601 00:31:37,400 --> 00:31:41,360 Speaker 3: so is your business, I mean it's a GDP business? 602 00:31:41,440 --> 00:31:42,960 Speaker 3: Is that how you kind of plan it out here? 603 00:31:43,160 --> 00:31:45,240 Speaker 3: And so do you get a sense of are your 604 00:31:45,600 --> 00:31:47,240 Speaker 3: customers are they telling you? What are they telling me 605 00:31:47,280 --> 00:31:48,920 Speaker 3: about their sense of the economy? 606 00:31:49,320 --> 00:31:53,080 Speaker 11: Broadly speaking, most are upbeat. Seventy percent of our GDP 607 00:31:53,240 --> 00:31:56,480 Speaker 11: is tied to you and me buying goods now. Although 608 00:31:57,120 --> 00:32:00,440 Speaker 11: the consumer purchasing was down a little bit of Jamanuary, 609 00:32:00,520 --> 00:32:04,000 Speaker 11: it was not unexpected. Great sales for the holiday season 610 00:32:04,000 --> 00:32:08,240 Speaker 11: nearly a trillion dollars up three point eight percent last year. 611 00:32:08,360 --> 00:32:09,760 Speaker 11: There was going to be a little bit of a 612 00:32:09,840 --> 00:32:12,400 Speaker 11: lull in January, but the forward look is strong. The 613 00:32:12,440 --> 00:32:16,520 Speaker 11: Atlanta Fed is currently estimating first quarter GDP around two 614 00:32:16,600 --> 00:32:20,320 Speaker 11: point nine percent, healthier than SIT expected, and fourth quarter 615 00:32:20,360 --> 00:32:25,480 Speaker 11: GDP came in beyond expectations. Again, what we see and 616 00:32:25,560 --> 00:32:28,960 Speaker 11: the forward look is an order cycle that runs about 617 00:32:29,000 --> 00:32:31,440 Speaker 11: six months ahead of when we actually buy things in 618 00:32:31,480 --> 00:32:35,880 Speaker 11: the store online. That inventory flow is a leading economic indicator. 619 00:32:36,080 --> 00:32:36,800 Speaker 11: Appears good. 620 00:32:37,400 --> 00:32:40,320 Speaker 3: So, Geene, I'm the captain of this big monstership. I 621 00:32:40,320 --> 00:32:41,880 Speaker 3: got my containers all over the place. 622 00:32:41,920 --> 00:32:43,200 Speaker 9: At how they don't fall off? 623 00:32:43,200 --> 00:32:46,320 Speaker 3: I have no idea I come into your port, how 624 00:32:46,320 --> 00:32:48,320 Speaker 3: long am I there before I get back on my way. 625 00:32:49,000 --> 00:32:51,600 Speaker 11: I look at these vital statistics as I call on 626 00:32:51,720 --> 00:32:54,640 Speaker 11: Paul every morning, and we're at or better than when 627 00:32:54,640 --> 00:32:57,720 Speaker 11: we were pre COVID. The largest ships that come into 628 00:32:57,720 --> 00:33:01,520 Speaker 11: the Port of Los Angeles average twelve thousand containers on 629 00:33:01,560 --> 00:33:04,160 Speaker 11: and off, best in the industry. Every call four and 630 00:33:04,200 --> 00:33:06,120 Speaker 11: a half days is the amount of time a ship 631 00:33:06,160 --> 00:33:08,920 Speaker 11: is in port working. That's right where it should be. 632 00:33:08,840 --> 00:33:10,440 Speaker 9: All right, So I just I think those things. 633 00:33:10,920 --> 00:33:13,280 Speaker 3: All my bucket list is to go on a cruise 634 00:33:13,280 --> 00:33:15,120 Speaker 3: on one of those big things. And then when every 635 00:33:15,120 --> 00:33:17,080 Speaker 3: time I say that, every time I say that, people 636 00:33:17,080 --> 00:33:18,360 Speaker 3: will email in says that you. 637 00:33:18,320 --> 00:33:19,600 Speaker 9: Do not want to go in one of those strips 638 00:33:19,600 --> 00:33:20,480 Speaker 9: because it's not like. 639 00:33:20,400 --> 00:33:22,360 Speaker 3: You're going on to the Queen Mary or anything. It's 640 00:33:22,400 --> 00:33:24,400 Speaker 3: tough conditions for those folks that work on their ships. 641 00:33:24,520 --> 00:33:26,040 Speaker 3: Gene Sroka, thanks so much for joining us. 642 00:33:26,080 --> 00:33:26,280 Speaker 9: Geen S. 643 00:33:26,280 --> 00:33:29,520 Speaker 3: Troka is the Executive Director of the Port of Los Angeles. 644 00:33:29,600 --> 00:33:31,800 Speaker 3: Joining us live here in our Bloomberg Intreactive Broker Studio. 645 00:33:32,000 --> 00:33:34,400 Speaker 3: Appreciate getting some of his time. He was critical and 646 00:33:34,480 --> 00:33:37,000 Speaker 3: helping us kind of understand the global supply chain back 647 00:33:37,000 --> 00:33:38,640 Speaker 3: in the day when that was front. 648 00:33:38,400 --> 00:33:39,160 Speaker 9: Of mine for everybody. 649 00:33:39,160 --> 00:33:40,680 Speaker 6: Everybody kind of had to get smart on that. 650 00:33:40,800 --> 00:33:43,760 Speaker 5: Oh yeah, I mean even just friends and family were bringing. 651 00:33:43,800 --> 00:33:45,880 Speaker 3: The first time I noticed it during the pandemic because 652 00:33:45,880 --> 00:33:47,640 Speaker 3: when I went in to get a bicycle and then 653 00:33:47,720 --> 00:33:50,400 Speaker 3: Guy's like, no, they all come from Asia. Done, it 654 00:33:50,440 --> 00:33:51,360 Speaker 3: can't get them. 655 00:33:51,400 --> 00:33:53,840 Speaker 5: So I recently ordered a couch and it still took 656 00:33:53,880 --> 00:33:54,560 Speaker 5: like two months. 657 00:33:54,400 --> 00:33:56,920 Speaker 9: To get to Yeah, exactly, exactly, so global supply chain. 658 00:33:58,360 --> 00:34:01,920 Speaker 1: You're listening to the Bloomberg and Intelligence Podcast. Catch us 659 00:34:02,000 --> 00:34:05,160 Speaker 1: live weekdays at ten am Eastern on Apple car Play 660 00:34:05,200 --> 00:34:08,000 Speaker 1: and Android Outo with the Bloomberg Business App. You can 661 00:34:08,040 --> 00:34:11,279 Speaker 1: also listen live on Amazon Alexa from our flagship New 662 00:34:11,360 --> 00:34:15,959 Speaker 1: York station Just Say Alexa playing Bloomberg eleven thirty. 663 00:34:16,120 --> 00:34:18,279 Speaker 3: There is another big company out with a really good 664 00:34:18,400 --> 00:34:23,040 Speaker 3: print on their release that was Moderna. mRNA, the pharmaceutical 665 00:34:23,120 --> 00:34:25,320 Speaker 3: company put out some good number. Stock is up about 666 00:34:25,400 --> 00:34:28,160 Speaker 3: nine percent today. This is a thirty billion dollars thirty 667 00:34:28,160 --> 00:34:31,120 Speaker 3: six billion dollar market cap stock and this is important company. 668 00:34:31,200 --> 00:34:33,880 Speaker 3: It's one of the companies that delivered the COVID nineteen vaccines. 669 00:34:33,960 --> 00:34:36,560 Speaker 3: So always have a special place in my heart for sure, 670 00:34:37,080 --> 00:34:39,560 Speaker 3: along with a couple of others. Sam Fizzelli, he covers 671 00:34:39,560 --> 00:34:41,640 Speaker 3: his stock, he covers his sector. He's a director of 672 00:34:41,640 --> 00:34:44,200 Speaker 3: research for Global Industries. He's a senior farmer analyst, one 673 00:34:44,239 --> 00:34:47,320 Speaker 3: of the best in the city of London for Bloomberg Intelligence. 674 00:34:47,520 --> 00:34:50,120 Speaker 3: So Sam, looks like a really good quarter for Moderner. 675 00:34:50,160 --> 00:34:51,080 Speaker 3: What stood out for you. 676 00:34:52,400 --> 00:34:53,880 Speaker 7: In Nvidia stood out for your pole. 677 00:34:56,080 --> 00:34:59,719 Speaker 12: After two days of shenanigans in the walket's about how 678 00:35:00,080 --> 00:35:01,920 Speaker 12: high numbers? Well, but anyway, we're not talking at any 679 00:35:02,000 --> 00:35:03,279 Speaker 12: video has nothing to do with me. 680 00:35:03,560 --> 00:35:04,080 Speaker 7: Well, they're not. 681 00:35:04,680 --> 00:35:07,319 Speaker 12: Clearly they beat in four Q. I mean were they were? 682 00:35:07,400 --> 00:35:10,600 Speaker 12: They given guidance and LISTA followed the guidance. They were 683 00:35:10,600 --> 00:35:13,160 Speaker 12: looking for a certain number and then four Q beat 684 00:35:13,200 --> 00:35:15,440 Speaker 12: as like I said on the terminal in MDL twelve 685 00:35:15,480 --> 00:35:18,279 Speaker 12: point four percent, right, and they turned the profit a 686 00:35:18,360 --> 00:35:19,920 Speaker 12: small one in four Q. 687 00:35:20,080 --> 00:35:24,680 Speaker 7: So that was particularly good. The thing is it's just 688 00:35:24,880 --> 00:35:25,440 Speaker 7: one quarter. 689 00:35:25,600 --> 00:35:28,160 Speaker 12: It doesn't really change the dynamic of what's going on 690 00:35:28,400 --> 00:35:30,760 Speaker 12: in twenty twenty four to twenty twenty five and beyond. 691 00:35:31,320 --> 00:35:34,279 Speaker 5: Tell us a little bit about that dynamic as you 692 00:35:34,320 --> 00:35:38,240 Speaker 5: look ahead for Maderna, how exactly are they pivoting away 693 00:35:38,280 --> 00:35:41,120 Speaker 5: from being a company that people see the name Maderna 694 00:35:41,200 --> 00:35:42,520 Speaker 5: and they just think COVID. 695 00:35:43,480 --> 00:35:45,200 Speaker 7: Yeah, so they've got a lot going on. 696 00:35:45,280 --> 00:35:48,480 Speaker 12: They have one more COVID sales potentially coming up, you know. 697 00:35:48,520 --> 00:35:51,520 Speaker 12: Apparently they've told us today that the European Union is 698 00:35:51,520 --> 00:35:55,200 Speaker 12: looking for contracts for thirty six million doses per year 699 00:35:55,239 --> 00:35:57,560 Speaker 12: in the next few years. You know, that's a lot 700 00:35:57,560 --> 00:36:01,399 Speaker 12: of doses. And this is always the question here right 701 00:36:01,400 --> 00:36:03,480 Speaker 12: this European Union. They don't like to pay for much, 702 00:36:03,520 --> 00:36:08,120 Speaker 12: as we all know. So then they've got a vaccine 703 00:36:08,160 --> 00:36:13,880 Speaker 12: for RSV, which is another respiratory virus pretty much a 704 00:36:13,960 --> 00:36:18,640 Speaker 12: major issue in younger kids and older adults. Then you 705 00:36:18,640 --> 00:36:20,520 Speaker 12: have a flu vaccine that's in development. They have a 706 00:36:21,120 --> 00:36:23,680 Speaker 12: CMV vaccine, which is not an infection we talk about 707 00:36:23,719 --> 00:36:28,359 Speaker 12: very often, but it's an issue for newborns, particularly if 708 00:36:28,360 --> 00:36:31,520 Speaker 12: the mother's got the virus. And of course in the 709 00:36:31,719 --> 00:36:35,600 Speaker 12: oncology setting in cancer, they've got a trial that has 710 00:36:35,640 --> 00:36:38,480 Speaker 12: been successful. Now they're trying to figure out whether they 711 00:36:38,480 --> 00:36:40,839 Speaker 12: want to they'll be able to file it this year 712 00:36:41,280 --> 00:36:44,759 Speaker 12: for melanoma. So quite a lot going on. Twenty twenty 713 00:36:44,760 --> 00:36:46,640 Speaker 12: four is a pretty important year. 714 00:36:46,680 --> 00:36:47,320 Speaker 7: For this company. 715 00:36:47,440 --> 00:36:49,760 Speaker 3: So I want to go to that cancer angle, sayings, 716 00:36:49,760 --> 00:36:52,200 Speaker 3: I know you've talked about that before. Is this something 717 00:36:52,200 --> 00:36:56,520 Speaker 3: where the mRNA technology can be which works so well 718 00:36:56,560 --> 00:37:00,319 Speaker 3: for delivering the COVID vaccine, maybe this technolo you can 719 00:37:00,320 --> 00:37:02,880 Speaker 3: be used to deliver other therapeutics, like perhaps for cancer. 720 00:37:04,000 --> 00:37:06,960 Speaker 12: Yes, so in this case it's still being used in 721 00:37:07,080 --> 00:37:10,799 Speaker 12: a kind of a vaccine setting. They used to call 722 00:37:10,880 --> 00:37:14,160 Speaker 12: it personalized cancer vaccine, where they changed it to I 723 00:37:14,360 --> 00:37:18,919 Speaker 12: and T individualized the neo antigen therapy. I think they 724 00:37:18,960 --> 00:37:22,280 Speaker 12: wanted to get away from the word vaccine, but in reality, 725 00:37:22,320 --> 00:37:25,759 Speaker 12: what they're doing is they're using bioinformatics and systems that 726 00:37:25,760 --> 00:37:27,920 Speaker 12: they've been doing. And I just want to plug a 727 00:37:27,960 --> 00:37:31,160 Speaker 12: podcast that my colleague Man Deep saying and I did 728 00:37:31,640 --> 00:37:35,480 Speaker 12: talking to the head of AI at moderna and as 729 00:37:35,520 --> 00:37:39,440 Speaker 12: the Tech Disruptors podcast. I was honored to be invited 730 00:37:39,560 --> 00:37:42,319 Speaker 12: first time RAPP for the first time. Yeah, and then 731 00:37:42,320 --> 00:37:44,879 Speaker 12: so we had that conversation. We talked about what they're doing, 732 00:37:44,920 --> 00:37:46,440 Speaker 12: and one of the thing that they do is that 733 00:37:46,480 --> 00:37:50,400 Speaker 12: they identify new things in the tumor of the patient 734 00:37:51,120 --> 00:37:53,640 Speaker 12: and use that to create an m R and I 735 00:37:53,800 --> 00:37:55,720 Speaker 12: injected back in just as if it was a COVID 736 00:37:55,960 --> 00:37:57,440 Speaker 12: vaccine shot to. 737 00:37:57,239 --> 00:37:58,360 Speaker 7: Raise any new in response. 738 00:37:58,920 --> 00:38:03,200 Speaker 12: And that's partner with with merk sorry, and you know 739 00:38:03,560 --> 00:38:06,640 Speaker 12: it's it's shown some really interesting data in first phase two, 740 00:38:06,680 --> 00:38:08,680 Speaker 12: so the hope is that it will continue to show 741 00:38:08,719 --> 00:38:10,040 Speaker 12: strong data in phase three. 742 00:38:10,400 --> 00:38:13,960 Speaker 5: So, Sam, did you just say that Moderna is leveraging AI. 743 00:38:14,160 --> 00:38:16,960 Speaker 5: I'll definitely have to listen to that podcast. But they're 744 00:38:17,040 --> 00:38:17,600 Speaker 5: using AI. 745 00:38:17,719 --> 00:38:20,960 Speaker 12: Is there a company that's not? I mean, isn't that 746 00:38:21,000 --> 00:38:23,480 Speaker 12: why n video is going to the sun? Forget the 747 00:38:23,520 --> 00:38:27,279 Speaker 12: move We passed the moon already, right, you know, is 748 00:38:27,320 --> 00:38:30,080 Speaker 12: there a single company if you do a search for 749 00:38:30,480 --> 00:38:32,480 Speaker 12: you know, we have a function on terminal which is 750 00:38:32,520 --> 00:38:35,440 Speaker 12: quite cute, which is nt that you can look. 751 00:38:35,239 --> 00:38:38,120 Speaker 7: At mentions of words. 752 00:38:38,480 --> 00:38:43,160 Speaker 12: I think you'll find that AI in transcripts from calls 753 00:38:43,200 --> 00:38:45,920 Speaker 12: earning scolls is I don't think there is an earning 754 00:38:45,960 --> 00:38:48,600 Speaker 12: scoll during a year that hasn't mentioned AI. 755 00:38:48,719 --> 00:38:49,839 Speaker 7: Every company is using it. 756 00:38:50,600 --> 00:38:53,200 Speaker 3: Sam, let's step back from just Moderna per se and 757 00:38:53,280 --> 00:38:56,640 Speaker 3: just say what in your space is kind of really 758 00:38:56,680 --> 00:38:58,560 Speaker 3: the most exciting for you? 759 00:38:58,680 --> 00:38:58,960 Speaker 9: Is it? 760 00:38:59,000 --> 00:39:01,920 Speaker 3: Is it cancer therapy, is the dementia? What are some 761 00:39:01,960 --> 00:39:03,640 Speaker 3: of the big areas that you're seeing a lot of 762 00:39:03,640 --> 00:39:06,360 Speaker 3: money being spent and you're spending some time looking at. 763 00:39:07,000 --> 00:39:09,680 Speaker 12: Yes, So Paul, I think with what's going on in 764 00:39:09,760 --> 00:39:13,480 Speaker 12: pharmaceuticals and drug development and drug discovery and the pace 765 00:39:13,560 --> 00:39:16,640 Speaker 12: of science, frankly, I can pick any area. 766 00:39:17,400 --> 00:39:18,480 Speaker 7: Maybe CNS. 767 00:39:18,840 --> 00:39:21,760 Speaker 12: The nervous system is a little bit more more because 768 00:39:21,800 --> 00:39:23,640 Speaker 12: of the black box and the complexity that has. But 769 00:39:23,719 --> 00:39:27,480 Speaker 12: even that is seeing very interesting developments. As you've heard 770 00:39:27,840 --> 00:39:31,000 Speaker 12: about Alzheimer's is from ELI lily from biogen. 771 00:39:31,360 --> 00:39:33,759 Speaker 7: In cancer, there isn't a single cancer that. 772 00:39:34,080 --> 00:39:35,680 Speaker 12: We're now, as you know, we're doing deep dives in 773 00:39:35,719 --> 00:39:38,279 Speaker 12: cancer across the board that I look at that there 774 00:39:38,320 --> 00:39:41,319 Speaker 12: isn't some innovation coming and more innovation coming. Then you 775 00:39:41,360 --> 00:39:45,399 Speaker 12: go to immune inflammation and immunology, you know, XMI, et cetera. 776 00:39:45,800 --> 00:39:48,080 Speaker 12: A whole bunch of this is all the fruits of 777 00:39:48,560 --> 00:39:52,640 Speaker 12: two things, genomics and the ability to sequence the you know, 778 00:39:53,040 --> 00:39:54,840 Speaker 12: really cheaply, really rapidly. 779 00:39:55,080 --> 00:39:56,160 Speaker 7: That's what's come together. 780 00:39:56,200 --> 00:39:58,560 Speaker 12: And then of course you got bioinformatics next to it 781 00:39:58,760 --> 00:40:02,319 Speaker 12: that enables you to analyze that massive data set. 782 00:40:03,840 --> 00:40:05,480 Speaker 5: We don't have a ton of time left, but I 783 00:40:05,520 --> 00:40:09,160 Speaker 5: am curious when you compare the results that we got 784 00:40:09,640 --> 00:40:13,600 Speaker 5: from MODERNA. How are you thinking about MODERNA versus its competitors, 785 00:40:13,760 --> 00:40:14,600 Speaker 5: I'm thinking. 786 00:40:15,360 --> 00:40:20,160 Speaker 12: Piser, Yeah, so you're thinking Pfizer, BioNTech. I mean the 787 00:40:20,400 --> 00:40:22,480 Speaker 12: you know, Pfizer obviously has a lot more going on 788 00:40:22,560 --> 00:40:25,600 Speaker 12: than just COVID vaccines. Biontic is probably the one to 789 00:40:25,640 --> 00:40:28,120 Speaker 12: look to look at, So it'd be interesting to see. 790 00:40:27,880 --> 00:40:28,799 Speaker 7: What they report, Bob. 791 00:40:29,040 --> 00:40:30,960 Speaker 12: We kind of know already what they're going to report 792 00:40:31,000 --> 00:40:33,520 Speaker 12: because they get the revenues from Pfizer, and Pizer has 793 00:40:33,520 --> 00:40:38,920 Speaker 12: already reported, so I don't expect any fireworks there. Of course, 794 00:40:39,000 --> 00:40:42,719 Speaker 12: with biontach is a slightly different approach to taking a 795 00:40:42,960 --> 00:40:44,920 Speaker 12: challenge at tackling their future. 796 00:40:45,320 --> 00:40:47,520 Speaker 7: They've gone much more broad than MODERNA. 797 00:40:47,600 --> 00:40:49,920 Speaker 12: MODERNA is pretty much stuck with its m r n 798 00:40:49,960 --> 00:40:53,480 Speaker 12: A capabilities. Biontic is expanding rapidly. 799 00:40:53,760 --> 00:40:57,239 Speaker 3: Emily sam is a well known wine enthusiast who lives 800 00:40:57,239 --> 00:40:57,720 Speaker 3: in France. 801 00:40:57,960 --> 00:41:00,200 Speaker 9: He's usually not impressed with the wine I drink, but 802 00:41:00,320 --> 00:41:02,280 Speaker 9: I think I got him last time. Are you foot 803 00:41:02,280 --> 00:41:05,160 Speaker 9: thousand Chateau Rothchild? How good was that? 804 00:41:05,320 --> 00:41:05,560 Speaker 7: Yes? 805 00:41:06,640 --> 00:41:09,319 Speaker 12: Shield well done? I mean and drinking it out of 806 00:41:09,320 --> 00:41:11,600 Speaker 12: a plastic cop Yes, at a. 807 00:41:11,640 --> 00:41:14,360 Speaker 3: Brooklyn Nets game of all places. So that's kind of 808 00:41:14,360 --> 00:41:16,960 Speaker 3: how I roll. Not quite in the circles that Sam 809 00:41:17,040 --> 00:41:19,680 Speaker 3: rolls in in London, in the rare confines of France, 810 00:41:19,680 --> 00:41:21,320 Speaker 3: but that's kind of how I do it. Sam Fazzelli, 811 00:41:21,320 --> 00:41:23,440 Speaker 3: thanks so much for joining us. Sam Fazzelli is the 812 00:41:23,560 --> 00:41:26,560 Speaker 3: director of Research for Global Industries. He's also a senior 813 00:41:26,560 --> 00:41:29,759 Speaker 3: pharmaceuticals analyst for Bloomberg Intelligence. He's becoming a pharm of 814 00:41:29,800 --> 00:41:32,520 Speaker 3: space in the city of London for decades. He was 815 00:41:32,640 --> 00:41:37,239 Speaker 3: absolutely instrumental during the pandemic pandemic helping us understand the 816 00:41:37,480 --> 00:41:40,600 Speaker 3: virus and then just as importantly, maybe more importantly, understanding 817 00:41:41,120 --> 00:41:43,759 Speaker 3: the vaccines and the companies and what they were doing there. 818 00:41:43,800 --> 00:41:47,040 Speaker 3: So that was a critical so we appreciate his time today. 819 00:41:47,520 --> 00:41:52,040 Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify, 820 00:41:52,239 --> 00:41:55,160 Speaker 1: and anywhere else you will get your podcasts. Listen live 821 00:41:55,239 --> 00:41:58,840 Speaker 1: each weekday ten am to noon Eastern on Bloomberg dot Com, 822 00:41:58,960 --> 00:42:02,359 Speaker 1: the iHeart Radio app, tune In, and the Bloomberg Business app. 823 00:42:02,480 --> 00:42:05,440 Speaker 1: You can also watch us live every weekday on YouTube 824 00:42:05,719 --> 00:42:07,560 Speaker 1: and always on the Bloomberg terminal