WEBVTT - Bloomberg Intelligence: Nvidia Surges after Blowout Results 0:00:02.960 --> 0:00:10.840 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.880 --> 0:00:15.040 Bloomberg Intelligence podcast. Catch us live weekdays at ten am 0:00:15.080 --> 0:00:17.439 Eastern on Apple Car playing Android. 0:00:17.040 --> 0:00:18.759 Auto with the Bloomberg Business app. 0:00:18.800 --> 0:00:22.000 Listen on demand wherever you get your podcasts, or watch 0:00:22.079 --> 0:00:24.040 us live on YouTube. 0:00:25.160 --> 0:00:28.040 The story that does not have any issues with its 0:00:28.120 --> 0:00:31.360 network is in Vidia again posted a big print last 0:00:31.400 --> 0:00:34.800 night as a Nora's just reporting, and everybody was focused 0:00:34.840 --> 0:00:37.600 on the revenue guidance, and they did not disappoint there 0:00:37.600 --> 0:00:39.960 given a revenue guidance that was substantially above where the 0:00:40.000 --> 0:00:43.199 street was yet again, and that's kind of all the 0:00:43.200 --> 0:00:47.080 bulls needed here. So Emily, let's bring in Kun John Sohani. 0:00:47.159 --> 0:00:49.080 He's a senior analyst. He covers the semi conductors for 0:00:49.120 --> 0:00:53.360 Bloomberg Intelligence. He joins us via zoom. He's in San Francisco. Kunjohn, 0:00:53.440 --> 0:00:56.160 you're the grizzled veteran. You see these semi conductor companies 0:00:56.200 --> 0:00:58.720 come and go. What you make of Nvidia last night? 0:01:00.000 --> 0:01:02.600 I mean, look for any earning surprise from Nvidia is 0:01:02.640 --> 0:01:04.480 no longer a surprise. We have come to sort of 0:01:04.560 --> 0:01:06.800 expect this to be a new norm. But there were 0:01:06.800 --> 0:01:10.520 a lot of positive reassuring things. On the supply side, 0:01:10.560 --> 0:01:14.120 we saw supply coming up really strong. More importantly, supply 0:01:14.160 --> 0:01:17.800 getting diversified and the benefits for which we're seen in 0:01:17.840 --> 0:01:21.479 their gross margin, which beat the estimates. But more important 0:01:21.640 --> 0:01:25.160 was the assurance that demand continues to stay strong and 0:01:25.240 --> 0:01:28.200 they expected to stay strong in twenty twenty four, and 0:01:28.280 --> 0:01:30.720 not just from the large cloud players. We all are 0:01:30.760 --> 0:01:33.520 aware of how much money they're spending, but Remand's strength 0:01:33.680 --> 0:01:37.679 was broad based across their enterprise customers, across different verticals, 0:01:37.880 --> 0:01:40.679 so that really reassures us for the twenty twenty four 0:01:41.160 --> 0:01:41.640 What did you. 0:01:41.600 --> 0:01:45.440 Make of the CEO's statement that Generative AI has hit 0:01:45.800 --> 0:01:48.320 the tipping point. I saw that headline and I didn't 0:01:48.400 --> 0:01:51.480 actually really understand what that meant. So what did you 0:01:51.520 --> 0:01:51.920 think of that? 0:01:53.000 --> 0:01:56.080 I mean, look, it's really Jensen. If you have been 0:01:56.120 --> 0:01:59.240 following the company for the past ten years, at every junction, 0:01:59.520 --> 0:02:03.040 that's what his messaging always is in whatever they're working on. 0:02:03.440 --> 0:02:05.880 So but apart from that, I would really, you know, 0:02:06.880 --> 0:02:09.600 ask investors to look into the end data points rather 0:02:09.680 --> 0:02:11.880 than what just he's saying. I mean, he's a very 0:02:11.880 --> 0:02:14.440 important person right now, but we look at the end 0:02:14.480 --> 0:02:17.880 data points. The customers are really increasing their AI spend. Right, 0:02:18.120 --> 0:02:21.840 the IT total capex budgets are increasing, but the AI 0:02:21.919 --> 0:02:24.440 portion within that is also increasing. And it's not just 0:02:24.520 --> 0:02:26.720 at the chip level. The contracts that they have with 0:02:26.800 --> 0:02:30.120 their software customers, even those customers are guiding up their 0:02:30.120 --> 0:02:31.000 revenue targets. 0:02:31.560 --> 0:02:34.840 Hey, Kun, John, I love their customer list that they 0:02:34.840 --> 0:02:35.120 read off. 0:02:35.160 --> 0:02:38.280 It's kind of a who's who of Silicon Valley, you know, Facebook, Google, 0:02:38.919 --> 0:02:40.200 whatever their new names are. 0:02:40.760 --> 0:02:44.400 What's the next? Is there a next set of customers out. 0:02:44.200 --> 0:02:47.120 There above and beyond kind of the household names that 0:02:47.320 --> 0:02:48.960 we all know that maybe they're targeting. 0:02:50.160 --> 0:02:53.080 Yes, an enterprise segment is sort of the new the 0:02:53.160 --> 0:02:56.080 next area that they're really targeting. Right, They already have 0:02:56.400 --> 0:02:59.960 the big large spenders, but now they want to diverse 0:03:00.080 --> 0:03:03.880 if I and expand the reach across enterprises. And the 0:03:03.919 --> 0:03:06.960 second big target now is sort of governments and reach 0:03:07.160 --> 0:03:10.919 sovereign governments and solign wells. Right, that's what they're targeting 0:03:10.960 --> 0:03:13.920 that they believe AI will be, you know, because of 0:03:14.200 --> 0:03:17.400 geopolitical and trade issues will be more regional and every 0:03:17.720 --> 0:03:19.679 big economy will need to spend on that. 0:03:20.800 --> 0:03:23.760 Are there any headwinds that investors need to be looking 0:03:23.800 --> 0:03:26.480 out for, because I just looked on the A and 0:03:26.639 --> 0:03:30.080 R function on Bloomberg and there are zero cells for 0:03:30.160 --> 0:03:32.320 in video. There was one last night from morning Star, 0:03:32.400 --> 0:03:34.560 and now he's upgraded to a hold. 0:03:35.720 --> 0:03:35.920 Yeah. 0:03:35.920 --> 0:03:37.960 I mean, look, if you look at just what the 0:03:38.040 --> 0:03:43.120 data says, usually the stock price follows the analyst price targets. 0:03:43.320 --> 0:03:45.760 It seems here the price targets are following the stock price. 0:03:46.680 --> 0:03:49.160 When we look at the fundamentals, right, there was really 0:03:49.200 --> 0:03:52.880 nothing that to highlight as a risk factor in the 0:03:52.920 --> 0:03:55.720 earnings and really in the near term for twenty twenty four. 0:03:56.240 --> 0:03:58.040 But if you were, if we were to form a 0:03:58.080 --> 0:04:00.280 bare thesis, a couple of things that would you would 0:04:00.320 --> 0:04:02.840 look at as risk factors for the long term. One 0:04:02.920 --> 0:04:05.720 is the China risk. We did see China revenue almost 0:04:06.480 --> 0:04:09.200 reduced by half versus three q in this quarter, right, 0:04:09.640 --> 0:04:12.200 and we know this problem is not going away, if 0:04:12.280 --> 0:04:14.920 at all getting worse. So right now they are easily 0:04:14.920 --> 0:04:17.640 able to offset what they could have shipped to China 0:04:17.800 --> 0:04:20.440 while shipping to other customers in the US and other regions. 0:04:20.680 --> 0:04:23.680 But at some point when the demand supply sort of 0:04:23.760 --> 0:04:27.040 normalizes and the growth rates become more of a normal 0:04:27.240 --> 0:04:30.760 run rate. You know, this is taking a bite out 0:04:30.800 --> 0:04:33.119 of that opportunity that they could have served in China. 0:04:33.320 --> 0:04:35.400 So that's one risk factor on the long term. The 0:04:35.440 --> 0:04:38.760 second being their largest customers, which are the cloud players, 0:04:39.000 --> 0:04:41.479 have started to design their own ships. So again this 0:04:41.600 --> 0:04:44.599 is far out, but at some point this still takes 0:04:44.600 --> 0:04:46.960 a bite out of the apple that n media could 0:04:46.960 --> 0:04:47.400 have served. 0:04:47.960 --> 0:04:49.839 So that's kind of where I wanted to go, Ko John, 0:04:49.880 --> 0:04:52.960 I mean just the competitive environment. You know, can you 0:04:53.000 --> 0:04:55.880 explain why these guys are the only game in town? 0:04:55.960 --> 0:04:57.000 That seems odd to me. 0:04:58.760 --> 0:05:01.680 I mean, it's not by an accident. These guys were 0:05:01.760 --> 0:05:04.719 sort of the inventor, if you will, for the GPU. 0:05:05.040 --> 0:05:08.040 They have been working on a GPU for decades and 0:05:08.160 --> 0:05:12.040 out investing everyone, being at the leading edge. So you know, 0:05:13.160 --> 0:05:15.600 this was the same question when we talked about gaming 0:05:15.600 --> 0:05:17.720 and when we talked about crypto, right the last two 0:05:17.760 --> 0:05:20.120 waves which drove the growth for this company. It was 0:05:20.160 --> 0:05:22.839 not by accident. They have been at this forefront of 0:05:22.880 --> 0:05:27.159 these new applications where the application suddenly realized, well, GPU 0:05:27.240 --> 0:05:30.400 is the best case compute platform, and that's why they 0:05:30.440 --> 0:05:33.000 adopted GP. Same thing what we're saying with AI so 0:05:33.320 --> 0:05:34.960 this was not by accident. If you look at that 0:05:35.160 --> 0:05:38.760 R and D spend, which they guided to being growing 0:05:38.800 --> 0:05:41.720 by mid thirties next year, it's a significant amount of 0:05:41.839 --> 0:05:44.320 R and NE dollars they continue to spend and to 0:05:44.480 --> 0:05:47.039 keep again being at the leading edge of the next 0:05:47.040 --> 0:05:47.880 cycle of innovation. 0:05:48.520 --> 0:05:51.640 Can you talk a little bit also about the gaming 0:05:51.880 --> 0:05:54.560 revenue here, because I'm looking at your report you said 0:05:54.600 --> 0:05:58.120 gamings better than seasonal top line, But what was really 0:05:58.520 --> 0:06:00.599 driving that? Because I actually don't really know if I 0:06:00.800 --> 0:06:03.400 know anything about in Video's gaming involvement. 0:06:04.400 --> 0:06:06.840 Yeah, so the last quarter was if you look at 0:06:06.839 --> 0:06:09.839 typical seasonality, it would be we expected it to be 0:06:09.839 --> 0:06:12.640 a down quarter at least by mid single digits, but 0:06:13.200 --> 0:06:15.640 it came in flat right. So and the strength the 0:06:15.680 --> 0:06:19.920 reason driver for there was better demand for their RTX products. 0:06:20.080 --> 0:06:23.520 These are their gaming cards you know in dex stops 0:06:23.520 --> 0:06:25.840 and what gamers get. So this is what came in 0:06:25.960 --> 0:06:28.240 better than they had expected due to the holiday season. 0:06:28.360 --> 0:06:30.920 Now this is again a temporary move and sort of 0:06:31.040 --> 0:06:33.880 not no longer a big focus for investors, but that 0:06:34.040 --> 0:06:36.640 was still good to see that in a typical down 0:06:36.680 --> 0:06:39.360 seasonal quarters they were still able to do better than seasonality. 0:06:39.720 --> 0:06:42.600 Could John talk to me your your investment research channels. 0:06:42.600 --> 0:06:45.320 You care about valuation, It's not just all hype for you. 0:06:45.360 --> 0:06:47.640 Give us a sense of how this stock is valued. 0:06:49.720 --> 0:06:51.640 It's up a good jillion and one percent. Don't we 0:06:51.680 --> 0:06:53.120 have like concerns about value here? 0:06:55.120 --> 0:06:58.680 Yeah, we do. Just like any other stock which has 0:06:58.680 --> 0:07:02.400 a premium valuation. We do one thing that gives us 0:07:02.440 --> 0:07:04.520 a little bit comfort. Now, like when you look at 0:07:04.560 --> 0:07:07.840 the valuation multiples now versus as it says six months ago, 0:07:08.200 --> 0:07:10.400 they have come down to a sort of now it's 0:07:10.400 --> 0:07:14.360 a reasonable premium above socks and in sort of in 0:07:14.440 --> 0:07:18.240 line or slightly better than it's peers. And look, it 0:07:18.320 --> 0:07:20.920 is still the fastest growing story in same as it 0:07:21.040 --> 0:07:24.400 is at this size. It is still the de fact 0:07:24.440 --> 0:07:27.880 on name when it comes to AI. As of today, 0:07:28.160 --> 0:07:31.920 it is taking almost entire wallet share of AI spending, 0:07:32.160 --> 0:07:34.840 so it does deserve that premium. 0:07:35.880 --> 0:07:38.240 We're about to speak to the executive director of the 0:07:38.240 --> 0:07:40.600 Port of Los Angeles YEP in just a few minutes, 0:07:40.640 --> 0:07:42.600 Gene Soroca. So I imagine we're going to be talking 0:07:42.600 --> 0:07:45.200 about the supply chain. Could you give us a sense 0:07:45.440 --> 0:07:50.040 of how Nvidia is dealing with the snirled global supply chain, 0:07:50.040 --> 0:07:51.000 any challenges there. 0:07:53.200 --> 0:07:56.760 They have done an absolutely amazing job at bringing up 0:07:56.800 --> 0:08:00.480 supply right the last year, for every quarter, the biggest 0:08:00.480 --> 0:08:03.640 concern was not demand but supply, because usually when you 0:08:03.680 --> 0:08:06.520 try to bring up supply so fast so quick, you 0:08:06.560 --> 0:08:09.440 do run into hiccups. We didn't see any hiccups throughout 0:08:09.520 --> 0:08:13.160 every quarter last year. In fact, you know the gross 0:08:13.160 --> 0:08:17.320 margin upside. A key driver for that was lower component cost. 0:08:17.400 --> 0:08:19.600 And what we did from that is that they were 0:08:19.840 --> 0:08:22.840 able to get more suppliers online. They were they were 0:08:22.880 --> 0:08:26.720 able to expand and diversify supply and enjoyed the benefits 0:08:26.760 --> 0:08:28.920 of the pricing that comes with it. So they've done 0:08:28.920 --> 0:08:31.520 an absolute amazing job bringing up supply this quick. 0:08:31.800 --> 0:08:34.160 All right, So in a chip space, the play here 0:08:34.640 --> 0:08:37.360 for AI is in Vidia. Is there a number two 0:08:37.400 --> 0:08:40.280 play that I can try to, you know, jump onto? 0:08:43.000 --> 0:08:45.480 I wouldn't. I cannot commend of regarding the valuation, But 0:08:45.480 --> 0:08:48.800 from the fundamental point of view, A couple of other 0:08:48.880 --> 0:08:51.040 names we really like in terms of AI and Semi's 0:08:51.120 --> 0:08:54.440 are a MD and Broadcom and to some extend, Marvell. 0:08:55.200 --> 0:08:57.000 All right, Kunjohn, thanks so much for joining us quon 0:08:57.040 --> 0:09:00.880 John Sabani, Senior analyst on semiconductors for Bloomer Intelligency, joins 0:09:00.960 --> 0:09:04.720 us on Zoom from San Francisco, and again, just a 0:09:04.760 --> 0:09:07.679 great print out of in video and that's something that 0:09:07.679 --> 0:09:10.679 the stock had to have because it's up over two 0:09:10.720 --> 0:09:13.360 hundred and forty percent over the last year, and it's up, 0:09:13.400 --> 0:09:14.680 you know, fifty percent. 0:09:14.440 --> 0:09:16.920 Year to date, So that was a high bar. 0:09:16.840 --> 0:09:19.880 Of expectations for the street. And stock's up fifteen percent 0:09:19.880 --> 0:09:22.160 on the print. So market's tonya. They like what they 0:09:22.240 --> 0:09:22.840 heard last night. 0:09:24.360 --> 0:09:28.240 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:09:28.320 --> 0:09:31.240 weekdays at ten am Eastern on Applecar. 0:09:30.880 --> 0:09:33.679 Play and Android Auto with the Bloomberg Business app. 0:09:33.760 --> 0:09:36.600 You can also listen live on Amazon Alexa from our 0:09:36.600 --> 0:09:41.960 flagship New York station. Just say Alexa play Bloomberg eleven thirty. 0:09:42.360 --> 0:09:44.680 It's all about Nvidia today, up fifteen percent, taking the 0:09:44.679 --> 0:09:47.200 markets high. Our next guest had this name on our list, 0:09:47.240 --> 0:09:50.040 so I'm guessing a good good day for her. Shana Sissel, 0:09:50.240 --> 0:09:53.240 president and CEO of Van Ryan Capital Management, joins us 0:09:53.320 --> 0:09:56.760 via that Zoom thing also the Internet in Chicago, Illinois. 0:09:56.840 --> 0:09:58.920 So Shana, thanks so much for joining us. I know 0:09:59.000 --> 0:10:01.880 in your notes, you had up in videos one of 0:10:01.880 --> 0:10:05.679 your names A y. I think I understand now, but 0:10:05.720 --> 0:10:07.240 what do you make of the quarter last night? 0:10:08.200 --> 0:10:11.080 So I've followed in video my entire career. When I 0:10:11.120 --> 0:10:13.960 first started in the business, it wasn't even in the 0:10:14.000 --> 0:10:15.880 s and P five hundred, but it traded in a 0:10:16.000 --> 0:10:19.520 very like predictable pattern, So it was just a stock 0:10:19.559 --> 0:10:21.959 I kind of clung on to when I was learning 0:10:21.960 --> 0:10:26.079 the ropes, and I've followed it ever since. In twenty seventeen, 0:10:26.120 --> 0:10:29.600 I attended a private equity conference where every single speaker 0:10:30.480 --> 0:10:34.640 talked about how important in video was for you know, 0:10:35.080 --> 0:10:39.080 artificial intelligence, autonomous vehicles, data centers, and I thought at 0:10:39.080 --> 0:10:41.520 that time, like I should own this stock. And I've 0:10:41.520 --> 0:10:44.679 been a bull ever since. So I've been pretty happy 0:10:44.679 --> 0:10:46.680 with how the stock's done, and I keep trying to 0:10:46.679 --> 0:10:49.959 come up with a barecase because I'm one of those 0:10:50.000 --> 0:10:51.760 people that if it's too good to be true, there's 0:10:51.840 --> 0:10:53.800 got to be something wrong. And I still haven't been 0:10:53.840 --> 0:10:55.880 able to come up with a really solid barecase for 0:10:55.920 --> 0:10:59.199 the stock. I'm not surprised by their killer earnings last night. 0:11:00.080 --> 0:11:03.560 They've been doing this now for several quarters, and it 0:11:03.600 --> 0:11:06.760 seems like they are the rocket ship that's keeping the market, 0:11:07.280 --> 0:11:08.200 you know, afloat. 0:11:08.720 --> 0:11:11.880 So what do you tell someone that, unlike you, has 0:11:12.000 --> 0:11:14.800 not owned in Vidia and is just looking at the 0:11:14.840 --> 0:11:17.880 stock now and the earnings now and thinking, oh my gosh, 0:11:17.920 --> 0:11:21.760 should I should I buy this stock right now? Is 0:11:21.800 --> 0:11:24.520 this a time that you know, people can be adding 0:11:24.559 --> 0:11:27.679 more to Nvidia and maybe entering the position, or is 0:11:27.720 --> 0:11:29.680 it more a time to be holding on to what 0:11:29.679 --> 0:11:30.280 you already have. 0:11:31.440 --> 0:11:33.880 Well, I've always people ask me this all the time, 0:11:33.880 --> 0:11:36.439 and I'm always hesitant to say, yes, buy it at 0:11:36.440 --> 0:11:39.240 this entry point because it feels really frothy. I know 0:11:39.320 --> 0:11:41.960 I'm personally not adding to it, but my cost spaces 0:11:42.000 --> 0:11:44.680 is like two hundred and fifty dollars, so you know, 0:11:44.960 --> 0:11:47.520 and that you know, I have no reason to at 0:11:47.520 --> 0:11:50.400 this point. It's hard to say. The momentum is there, 0:11:50.520 --> 0:11:52.760 and I don't think there's anything that's going to be 0:11:53.040 --> 0:11:55.240 a headwind to the stock in the near future. We're 0:11:55.280 --> 0:11:59.760 really early in this artificial intelligence trend, maybe second inning, 0:12:00.160 --> 0:12:02.240 and so I think that there's a real possibility this 0:12:02.320 --> 0:12:04.880 stock could be, you know, twelve hundred dollars a year 0:12:04.920 --> 0:12:07.360 from now. So I don't think it's a bad idea 0:12:07.559 --> 0:12:09.240 if you don't have a position to enter it now. 0:12:09.280 --> 0:12:11.839 But I would be careful and maybe look for buying 0:12:11.840 --> 0:12:13.640 it on weakness, like I would have bought it ahead 0:12:13.640 --> 0:12:17.000 of earnings when it was at six fifty as opposed 0:12:17.000 --> 0:12:20.760 to today where it's really benefiting from the news. I 0:12:20.840 --> 0:12:23.360 might look to find some good entry points. But it's 0:12:23.360 --> 0:12:25.880 hard because every time I say that, the stock just 0:12:25.960 --> 0:12:27.760 keeps going up, and then people get mad at me 0:12:27.760 --> 0:12:29.840 because they missed the opportunity to buy in when it 0:12:29.880 --> 0:12:30.360 was cheaper. 0:12:30.880 --> 0:12:31.920 Shane, how about Cisco. 0:12:32.120 --> 0:12:34.240 That's kind of what I consider kind of a you know, 0:12:34.400 --> 0:12:36.559 old school tech name here, and I look at the 0:12:36.559 --> 0:12:38.319 over the last five years and it's had a compounded 0:12:38.320 --> 0:12:41.240 annual growth of about only about two and a half percent, 0:12:41.320 --> 0:12:43.319 with S and P up about fourteen and a half 0:12:43.360 --> 0:12:46.760 percent compounded. What's been the story at Cisco in terms 0:12:46.800 --> 0:12:48.840 of its underperformance from your perspective. 0:12:49.200 --> 0:12:52.440 Well, primarily it's been that they just haven't kept up 0:12:52.440 --> 0:12:55.880 with the trends. The technology that they provide isn't relevant 0:12:55.920 --> 0:12:58.560 to a lot of the latest and greatest trends like 0:12:58.640 --> 0:13:03.040 artificial intelligence. But they're trying to pivot and become more 0:13:03.080 --> 0:13:06.680 relevant and the stock is really cheap. So in my opinion, 0:13:06.679 --> 0:13:08.360 it's a stock that I've looked at and I own 0:13:08.400 --> 0:13:10.520 a small position, and it is a stock that I 0:13:10.559 --> 0:13:13.880 do like, but it is a stock that I don't 0:13:13.920 --> 0:13:16.320 know if I'm completely a bull, but it's just so 0:13:16.559 --> 0:13:19.880 cheap and they are trying hard to become more relevant 0:13:19.880 --> 0:13:22.920 in the space that I think they have an opportunity 0:13:23.160 --> 0:13:26.400 to at least improve their growth rate going forward, which 0:13:26.400 --> 0:13:30.360 should help the stock. It's trading at an ridiculously cheap multiple, 0:13:30.440 --> 0:13:33.680 especially when you consider tech as a whole, So I 0:13:33.679 --> 0:13:35.840 don't think there's a ton of downside in the stock, 0:13:36.440 --> 0:13:39.400 but you know, I'm still not sure it's a go 0:13:39.520 --> 0:13:41.520 to the moon like Nvidio kind of thing, But I 0:13:41.559 --> 0:13:43.960 do think there is an opportunity with the management chain 0:13:44.160 --> 0:13:46.680 really looking to focus and pivot the business to be 0:13:47.600 --> 0:13:49.720 more relevant in current trends today. 0:13:50.440 --> 0:13:52.640 What are you looking at in the pharmaceutical sector? 0:13:53.760 --> 0:13:58.160 So I really like Novartis and Veritex's pharmaceuticals. You know, 0:13:58.200 --> 0:14:00.360 one of the things that I find really interesting is 0:14:00.720 --> 0:14:03.200 if you haven't figured this out yet, I like looking 0:14:03.240 --> 0:14:05.640 at what the new emerging trends are, what's going to 0:14:05.679 --> 0:14:08.520 be the thing that you know, changes the world going forward. 0:14:08.600 --> 0:14:11.680 And when you look at drug development, there's really interesting 0:14:11.720 --> 0:14:15.000 things going on right now, especially in things like cancer research. 0:14:15.320 --> 0:14:19.480 So Novartists in particular has some absolutely groundbreaking oncology drugs. 0:14:20.120 --> 0:14:24.880 And the speed at which we're seeing new drugs come 0:14:24.880 --> 0:14:27.320 to the market that are really changing the game and cancer, 0:14:27.680 --> 0:14:31.160 where it's changing cancer from you know, a terminal illness 0:14:31.160 --> 0:14:34.400 to more like a chronic illness is remarkable. Novartis is 0:14:34.480 --> 0:14:36.600 kind of at the forefront for that. In the case 0:14:36.680 --> 0:14:41.440 of ver attacks. They have a very strong cystic fibrosisline 0:14:41.560 --> 0:14:44.640 which really doesn't have any competitors, and they really are 0:14:44.640 --> 0:14:47.160 trying to focus on those key areas where they have 0:14:47.480 --> 0:14:49.800 a true edge. So those that's why I like those 0:14:49.800 --> 0:14:52.920 two stocks in particular. But you know, we have like 0:14:53.160 --> 0:14:57.400 Nova Noordis and Eli Lilly who are benefiting from, you know, 0:14:57.480 --> 0:15:00.920 the ozembic trends, and Eli li also has some great 0:15:00.920 --> 0:15:03.120 oncology drugs. It's just a little pricey right now, which 0:15:03.120 --> 0:15:04.120 is why it's not on my list. 0:15:04.360 --> 0:15:06.680 How about energy here, I'm looking at WTI crude oil 0:15:06.840 --> 0:15:11.000 at seventy eight dollars per barrel. How do you think 0:15:11.000 --> 0:15:13.480 about the energy space here. The stocks have been quite 0:15:13.520 --> 0:15:15.360 good over the last several years. Hey, what do you 0:15:15.360 --> 0:15:16.240 think going forward here? 0:15:17.080 --> 0:15:19.880 Well, inflation has helped energy stocks, and if you looked 0:15:19.880 --> 0:15:22.960 at the latest PPI and CPI numbers, energy was one 0:15:23.000 --> 0:15:25.600 of the main reasons why some of those numbers are 0:15:25.640 --> 0:15:29.240 one of the only areas that we saw decline in 0:15:29.240 --> 0:15:31.880 inflation if you look at it with energy and food. 0:15:32.640 --> 0:15:35.080 So obviously gas prices have come down. That's good for 0:15:35.120 --> 0:15:37.280 the consumer. And so I don't know if there's a 0:15:37.360 --> 0:15:39.800 huge till end to the entire sector, but I do 0:15:39.920 --> 0:15:43.120 like a stock like saying like Diamondback Energy because they 0:15:43.160 --> 0:15:46.280 don't need oil to be one hundred dollars a barrel 0:15:46.560 --> 0:15:50.080 to have good revenue and good profitability. I think their 0:15:50.120 --> 0:15:53.280 break even is fifty dollars a barrel, and so there's 0:15:53.640 --> 0:15:56.440 quite a bit of opportunity for a stock like Fang 0:15:56.520 --> 0:15:59.640 to do well in an environment where other energy companies 0:15:59.680 --> 0:16:01.080 aren't doing as well. 0:16:01.280 --> 0:16:04.160 Paul, I don't know if you know this, but Shana 0:16:04.520 --> 0:16:06.920 actually has a nickname. It doesn't have to deal with 0:16:07.120 --> 0:16:12.600 single stocks. She is also known as the Queen of Alternatives. 0:16:12.640 --> 0:16:15.920 Oh nice, So let's get your perspective on the outlook 0:16:15.960 --> 0:16:18.440 for alts in twenty twenty four. Is there anything in 0:16:18.480 --> 0:16:21.400 particular that jumps out to you as attractive for this year. 0:16:22.480 --> 0:16:24.600 Yeah, I think that. You know, we've spent a lot 0:16:24.640 --> 0:16:26.840 of time over the last couple of years being really 0:16:26.880 --> 0:16:30.640 excited about that venture capital and private equity space, and 0:16:31.760 --> 0:16:34.240 we're not seeing as much of a tailwind in either 0:16:34.280 --> 0:16:36.280 one of those spaces right now. Private equity has not 0:16:36.320 --> 0:16:39.280 performed as well as the overall public markets, and venture 0:16:39.280 --> 0:16:42.200 capital has a ton of headwinds to it. So you 0:16:42.280 --> 0:16:44.560 gotta think a little bit outside the box. And there's 0:16:44.680 --> 0:16:47.680 areas in the alternative space that I think are really interesting, 0:16:48.080 --> 0:16:51.320 some of the more diversifying kind of names in the 0:16:51.360 --> 0:16:54.960 hedge fund space, like equity market neutral, some event driven 0:16:55.080 --> 0:16:57.240 things of that nature. But also if you look at 0:16:57.280 --> 0:17:00.000 private credit and private debt in the environment we're in now, 0:17:00.120 --> 0:17:03.400 where I think we're at peak interest rates. I'm not 0:17:03.480 --> 0:17:05.399 saying that I think the Fed's going to cut anytime soon, 0:17:05.400 --> 0:17:07.040 because I don't think that, but I do think there's 0:17:07.080 --> 0:17:09.280 better opportunity for yield than some of the private credit 0:17:09.280 --> 0:17:13.600 and private debt markets because banks as a whole are 0:17:13.600 --> 0:17:18.639 not as open to smaller businesses and to startups and 0:17:18.640 --> 0:17:20.760 things of that nature. So they're going to other markets, 0:17:21.000 --> 0:17:24.480 and the biggest beneficiary of that are private debt, debt 0:17:24.480 --> 0:17:25.200 and private credit. 0:17:25.440 --> 0:17:28.120 Yeah, that's certainly been just a tremendous area of growth 0:17:28.160 --> 0:17:31.320 really over the last ten to twelve years, private credit. 0:17:31.440 --> 0:17:33.240 As you know, the banks have kind of pulled back 0:17:33.240 --> 0:17:35.880 after the posts after the financial crisis. So a big, 0:17:35.920 --> 0:17:38.400 big market there. Shanna Sisso, thanks so much for joining us. 0:17:38.440 --> 0:17:41.639 Shana is president and CEO fan Ryan Capital Management. She 0:17:41.680 --> 0:17:44.640 joins us via zoom from Chicago, Illinois. 0:17:46.119 --> 0:17:49.960 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:17:50.040 --> 0:17:51.800 weekdays at ten am Eastern on. 0:17:51.960 --> 0:17:54.880 Fo car playing Enroud Auto with the Bloomberg Business app. 0:17:54.920 --> 0:17:58.120 Listen on demand wherever you get your podcasts, or watch 0:17:58.200 --> 0:18:00.400 us live on YouTube. 0:18:00.119 --> 0:18:02.400 Ye boy, it is Nvidia day. 0:18:02.440 --> 0:18:06.040 To say, the leases impacting not only at stock that sector, 0:18:06.080 --> 0:18:07.280 any overall market. 0:18:07.280 --> 0:18:07.399 Here. 0:18:07.480 --> 0:18:09.960 Let's get some perspective on it as only one b 0:18:10.080 --> 0:18:12.879 rid Holts can do. Barry Ridolt's host of Masters in 0:18:12.920 --> 0:18:15.080 Business on Bloomberg Grit. It's a little podcast like a 0:18:15.320 --> 0:18:17.400 jillion people will listen to every week. He gets great 0:18:17.400 --> 0:18:19.639 guests but his day job, he's a founder of a 0:18:19.720 --> 0:18:22.760 rid Holt's Wealth Management. Barry, I mean you and I 0:18:22.800 --> 0:18:25.760 we've been in this market a long time. I'm struggling 0:18:25.800 --> 0:18:28.919 to find a stock that had such an impact for 0:18:29.000 --> 0:18:31.760 such a period of time as in video. 0:18:31.840 --> 0:18:32.520 What do you make of it? 0:18:33.760 --> 0:18:37.720 Well, you know, I'm always perplexed when I see people 0:18:39.160 --> 0:18:44.879 sort of shrugging off new technology, new companies, shifts in 0:18:45.000 --> 0:18:49.399 how we operate. We should just stick with the you know, 0:18:49.480 --> 0:18:52.960 imagine someone in the nineteen twenty saying, what's with these 0:18:53.040 --> 0:18:58.000 new fangled you know, telephone and radio and aueomobiles. Let's 0:18:58.160 --> 0:19:01.960 just stick with the steam and leather belt companies. They've 0:19:02.000 --> 0:19:05.880 done great for so long. Hey, you know, technology is 0:19:06.119 --> 0:19:11.320 how wealth is created, how society moves forward, how humans 0:19:12.040 --> 0:19:16.600 dominate the planet. And it's pretty clear. Yeah, there's a 0:19:16.600 --> 0:19:20.199 lot of hype. I'll go back to computer companies in 0:19:20.280 --> 0:19:24.680 the eighties or automobile companies in the twenties. I can't 0:19:24.720 --> 0:19:27.080 tell you which of those companies are going to be 0:19:27.160 --> 0:19:31.560 the winners. And there's always hundreds of them, remember Gateway Computing. 0:19:33.280 --> 0:19:36.399 But somebody out of that complex is going to be 0:19:36.440 --> 0:19:39.520 a big winner, and it's going to drive a lot 0:19:39.560 --> 0:19:42.320 of the economic activity that takes place. 0:19:43.080 --> 0:19:47.280 Barry, what have you learned from in Video's earnings in 0:19:47.359 --> 0:19:50.600 terms of whether Nvidia is going to emerge as one 0:19:50.640 --> 0:19:53.800 of those winners. Paul's been asking pretty much every guest 0:19:53.880 --> 0:19:57.240 on this show today, you know what makes in video 0:19:57.400 --> 0:20:01.200 so different? Why are their chips attractive to so many 0:20:01.200 --> 0:20:07.040 corporations versus IBM's broad cooms. So where are we right 0:20:07.080 --> 0:20:09.040 now in terms of assessing weather and video is really 0:20:09.040 --> 0:20:10.920 going to emerge as one of these winners? 0:20:11.080 --> 0:20:17.520