WEBVTT - Broadcom Follows Oracle in Disappointing AI-Focused Investors 0:00:02.520 --> 0:00:13.119 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a 0:00:13.200 --> 0:00:16.960 live from Coast to Coast with Caroline Hyde in New 0:00:17.040 --> 0:00:19.520 York and vlave Low in sentences go. 0:00:22.520 --> 0:00:24.040 This is Bloomberg Tech coming up. 0:00:24.079 --> 0:00:27.360 Broadcom suffers a stock slide after its sales outlook or 0:00:27.480 --> 0:00:30.800 lack of failed to meet investors lofty expectations. 0:00:30.920 --> 0:00:34.440 Plus, China I is the largest ever state MATCHIP incentives, 0:00:34.440 --> 0:00:36.920 with as much as seventy billion dollars of state money 0:00:37.040 --> 0:00:38.440 incident for the pivotal sector. 0:00:39.600 --> 0:00:42.960 And our conversation with White House ais are David Sachs 0:00:43.080 --> 0:00:47.360 on President Trump's executive order aimed at limiting state level 0:00:47.400 --> 0:00:48.280 regulation of AI. 0:00:48.800 --> 0:00:52.159 First, and we check on these markets that are dictated 0:00:52.479 --> 0:00:55.319 by tech, dictated by them, and we say that where 0:00:55.320 --> 0:00:57.360 we're off by eight tenths one point eight percent, let's 0:00:57.400 --> 0:00:59.160 look at it and the Nastak one hundred, we are 0:00:59.240 --> 0:01:02.480 under pressure. We consider not just the macro perspective, and 0:01:02.560 --> 0:01:05.400 vonn yields move what's happening underneath the surface. I'm looking 0:01:05.440 --> 0:01:08.240 at the Golden Dragon Index. Look, this is showing what 0:01:08.360 --> 0:01:10.640 Chinese names trade in the US in terms that eight 0:01:10.760 --> 0:01:11.319 hors are up to. 0:01:11.720 --> 0:01:15.559 What a dichotomy. We've got going what a juxtaposition, China higher, we'll. 0:01:15.400 --> 0:01:18.360 Get to that news later, US lower, and in large 0:01:18.360 --> 0:01:19.440 part it's by one key stock. 0:01:19.480 --> 0:01:24.559 You're looking at some breaking news Bloomberg reporting citing sources 0:01:24.840 --> 0:01:28.440 that Oracle has pushed back some of the completion dates 0:01:28.720 --> 0:01:32.640 of data centers that's developing with and for open AI. 0:01:32.840 --> 0:01:36.840 That pushback is to twenty twenty eight from an earlier 0:01:36.880 --> 0:01:39.240 plan of twenty twenty seven. The market reacted. Look at 0:01:39.240 --> 0:01:41.800 the right hand side of the squiggly line. It's paired 0:01:41.840 --> 0:01:43.840 some of that decline, but at one point session low 0:01:43.880 --> 0:01:45.000 well beyond six percent. 0:01:45.520 --> 0:01:46.880 I think car relating the show. 0:01:46.720 --> 0:01:48.640 We're going to get an opportunity to talk to Brody Ford. 0:01:48.920 --> 0:01:51.600 You broke that story. Get more of the details. Right now, 0:01:51.640 --> 0:01:54.520 the top story is Broadcom. It is on track for 0:01:54.560 --> 0:01:59.400 its biggest decline since January of this year, a seventy 0:01:59.400 --> 0:02:03.040 three billion dollar backlog AI specific, but what the street 0:02:03.080 --> 0:02:06.200 wanted was a very different number. During a conference call, 0:02:06.600 --> 0:02:11.519 CEO Hoc Tan held off giving an annual AI revenue forecast, 0:02:11.800 --> 0:02:13.760 saying it was quote a moving target. 0:02:13.760 --> 0:02:14.240 Listen to this. 0:02:15.600 --> 0:02:18.960 It's hard for me to pinpoint what twenty six is 0:02:18.960 --> 0:02:21.880 going to look like precisely. So I'd rather not give 0:02:21.919 --> 0:02:24.400 you guys any guys, and that's why we don't give 0:02:24.440 --> 0:02:30.240 you guys, but we do give it for two one. 0:02:29.240 --> 0:02:32.720 Carle Ackerman, Managing director of semi Conductors and Networking Hardware 0:02:32.720 --> 0:02:35.040 at BNP Pariber joins us for more is new price 0:02:35.120 --> 0:02:38.000 target four hundred and seventy five dollars, among the highest 0:02:38.000 --> 0:02:41.080 now for analysts covering the stock. So that's the point. 0:02:41.360 --> 0:02:43.680 You have different sets of data. They gave us a 0:02:43.680 --> 0:02:48.320 figure which was a seventy three billion dollar backlog this morning. 0:02:48.400 --> 0:02:50.799 Quite clearly the market would like to see a revenue 0:02:51.080 --> 0:02:52.280 number that's forward looking. 0:02:52.600 --> 0:02:54.440 Yep, yeah, that's true. 0:02:54.600 --> 0:02:56.880 So so you're right, I think the I think what's 0:02:56.919 --> 0:02:59.480 interesting here the reason why brad Armer is down is 0:02:59.520 --> 0:03:02.840 not about out the It's not about how revenue has 0:03:02.840 --> 0:03:04.880 perhaps missed expectations. First and forem with some of the 0:03:04.880 --> 0:03:10.720 company actually beaten raised guidance AI sales or above expectations. 0:03:10.800 --> 0:03:12.760 The outlook for next quarter of eight point two billion 0:03:12.840 --> 0:03:15.280 farc City consensus of six point eight billion of AI sales, 0:03:15.320 --> 0:03:18.920 which doubled on ear of your basis. When queried, the 0:03:18.960 --> 0:03:22.680 company indicated that how Co indicated that revenue could perhaps 0:03:22.680 --> 0:03:25.960 accelerate into fiscal twenty six versus that one hundred percent 0:03:26.000 --> 0:03:29.040 accelerated growth number. We have over fifty billion of AI 0:03:29.240 --> 0:03:32.000 sales in fiscal twenty five. I think the reason why 0:03:32.040 --> 0:03:35.720 the stock is down ed, however, is in part because 0:03:35.840 --> 0:03:38.880 there are some investors a bit worried about the margin 0:03:39.000 --> 0:03:42.960 structure of the Entropic deal. So of that seventy three 0:03:43.000 --> 0:03:46.640 billion in AI sales, twenty one billion will go to 0:03:46.640 --> 0:03:49.480 an Entropic as part of a TPU system sale, and 0:03:49.520 --> 0:03:52.360 that TPU system sale is going to be lower margin 0:03:52.440 --> 0:03:54.160 than what brought Com generates content. 0:03:54.320 --> 0:03:56.120 How much of the content of a server do you 0:03:56.160 --> 0:03:57.560 own beyond just the chair? 0:03:57.720 --> 0:03:59.080 But you like this name right? 0:03:59.120 --> 0:04:01.320 Like you've just rate the price target to full seventy 0:04:01.320 --> 0:04:05.240 five from three to eighty five, that right map, Well, 0:04:05.240 --> 0:04:06.280 what is it you like about? 0:04:06.320 --> 0:04:07.280 Brokem sure? 0:04:07.360 --> 0:04:09.480 I mean Broadcom I think is in a llegue of 0:04:09.480 --> 0:04:12.800 its own, akin to in video. Really where Nvidia and 0:04:12.800 --> 0:04:17.000 Broadcom dominate two of the three main buckets of AI 0:04:17.000 --> 0:04:21.320 infrastructure spending. Those include compute, memory, and networking. They of 0:04:21.320 --> 0:04:24.520 course control two of them, networking and compute more than 0:04:24.520 --> 0:04:28.360 anyone else, And I think, what's what is happening here? 0:04:28.440 --> 0:04:31.880 What the what the investment community I think is overlooking 0:04:31.920 --> 0:04:34.600 today on this on the selloff is the fact that 0:04:34.680 --> 0:04:39.000 Broadcom is moving toward a full solution stack akin to 0:04:39.040 --> 0:04:43.359 what in Video is doing on I'm providing AI compute 0:04:43.400 --> 0:04:46.560 and AI networking as we move to scale up domain 0:04:47.040 --> 0:04:51.000 where you're going to need optical for both the for 0:04:51.080 --> 0:04:53.760 the both the networking A six and the and the compute. 0:04:53.800 --> 0:04:57.720 And they offer that entire IP stack in house. And 0:04:57.760 --> 0:05:01.039 that is what I think people are over miss missing today. 0:05:01.160 --> 0:05:03.040 You're calling it short sighted, Karl. 0:05:03.600 --> 0:05:05.400 I know you don't cover in Video as a name, 0:05:05.440 --> 0:05:09.480 but does broadcom success come at the expense of others 0:05:09.480 --> 0:05:10.040 in the market? 0:05:12.200 --> 0:05:14.599 Thanks Carolyn, It's a good question, you know, I think 0:05:15.279 --> 0:05:18.400 I think it's in a vacuum. You know, we try 0:05:18.400 --> 0:05:21.960 and pigeonhole broad conferences in Vidia or broad conferences AMD 0:05:22.120 --> 0:05:26.240 or GPUs versus customer accelerators. I think what we found 0:05:26.240 --> 0:05:29.000 out is that it is not a it is not 0:05:29.120 --> 0:05:32.239 a winner take Hall, It is not a singular approach. 0:05:32.640 --> 0:05:36.200 What you're seeing is that hyper scales are adopting custom 0:05:36.560 --> 0:05:42.200 compute as well as GPUs for frontier model training, and 0:05:42.360 --> 0:05:45.560 that will continue to progress as we move toward inferencing, 0:05:45.680 --> 0:05:50.560 So it's not so clear sighted there. I think what's 0:05:50.600 --> 0:05:54.160 important here is that Broadcom offers the full solution stack 0:05:54.760 --> 0:06:00.479 across networking and compute, and similar to Nvidia, those are 0:06:00.480 --> 0:06:04.080 about the only two companies in all of tech, including Semis, 0:06:04.440 --> 0:06:05.680 that offer that capability. 0:06:06.560 --> 0:06:10.680 Of course, hocktans very much aligned in terms of his 0:06:10.760 --> 0:06:14.839 own pay package with hitting certain revenue numbers for AI 0:06:14.960 --> 0:06:18.400 in particular. But from your perspective, is there a supply 0:06:18.480 --> 0:06:19.400 side headache going on. 0:06:19.360 --> 0:06:19.760 At the moment. 0:06:19.839 --> 0:06:22.640 We're hearing reports that Dell, for example, is having to 0:06:22.720 --> 0:06:25.040 jack up pricing because of the pricing that it's feeding 0:06:25.040 --> 0:06:27.080 on memory were Broadly, we're seeing the breaking news that 0:06:27.120 --> 0:06:29.400 Oracle's having to delay some of its data centers. There 0:06:29.560 --> 0:06:33.119 is a tussle for the infrastructure that's necessary right now, 0:06:33.440 --> 0:06:35.240 and is that just not going to happen in the 0:06:35.279 --> 0:06:37.280 overnight way that the market is anticipating. 0:06:39.720 --> 0:06:42.440 Great question, Carolyn, I think what's interesting to hear is 0:06:42.839 --> 0:06:45.040 I would like to tie in this idea that are 0:06:45.080 --> 0:06:47.560 we in a bubble of AI infrastructure? 0:06:47.560 --> 0:06:51.280 I think that's no. The answer is definitive. No, I think. 0:06:53.080 --> 0:06:58.400 Gigawatt capacity and announcements take time to ramp that ramp 0:06:58.440 --> 0:07:04.320 in that qualification and filling up that fab is now 0:07:04.360 --> 0:07:07.280 extending the visibility across the entire supply chain, whether it's 0:07:07.600 --> 0:07:11.680 hard drives, whether it's memory, whether it's networking, whether it's compute, 0:07:12.000 --> 0:07:16.120 and that is giving companies like Broadcom, companies like Nvidia, 0:07:16.200 --> 0:07:18.360 companies like everyone across the supply chain. 0:07:18.400 --> 0:07:19.480 Very long visibility. 0:07:20.680 --> 0:07:24.760 And right now things are very tight, and so some 0:07:24.760 --> 0:07:26.920 of the areas that are the most tight in our 0:07:27.560 --> 0:07:32.800 AI ecosystem coverage include lasers for optical transceiver components. There 0:07:32.840 --> 0:07:36.960 are ways to ameliorate those that tightness among the supply chain, 0:07:37.400 --> 0:07:42.400 and Hawk and Broadcom announced how they have the sufficient 0:07:42.480 --> 0:07:45.720 capacity for their chips to meet the demand that they 0:07:45.800 --> 0:07:49.080 see in fiscal twenty six and in fiscal twenty seven. 0:07:49.480 --> 0:07:50.880 Who doesn't love talking lasers. 0:07:51.080 --> 0:07:54.440 Kyle Ackerman of BNP paraba, it's been great getting your take. 0:07:54.520 --> 0:07:57.640 As we do see stocks fallswe the NASDAK more broadly 0:07:57.680 --> 0:08:01.040 now under pressure is some two percent pop. The discussion 0:08:01.040 --> 0:08:03.880 that's happening between the US and China, because look, chip 0:08:03.920 --> 0:08:06.040 markets are in the eye of the storm. They're China 0:08:06.080 --> 0:08:08.280 planning to pour up to seventy billion dollars of state 0:08:08.320 --> 0:08:11.840 money into the sector, dem pivotal to its technological conflict 0:08:12.040 --> 0:08:15.200 with the United States. Bloomberg's Maggie Eastland joins US now, 0:08:15.520 --> 0:08:19.720 and seventy billion dollars would be an extraordinary amount of 0:08:19.760 --> 0:08:21.840 government support that we've ever seen worldwide. 0:08:21.920 --> 0:08:25.440 Right, Yes, this is a huge number. 0:08:25.560 --> 0:08:29.560 This would be you know, China's biggest semiconductor specific packaging. 0:08:29.600 --> 0:08:32.480 And according to Bloomberg reporting, that number could be anywhere 0:08:32.559 --> 0:08:35.480 between as you said, seventy billion, and it could go 0:08:35.520 --> 0:08:37.199 down to twenty eight billion, So it depends. 0:08:37.240 --> 0:08:38.680 Here we'll see how large it is. 0:08:38.760 --> 0:08:42.800 That compares to the US effort at industrial policy for semiconductors, 0:08:42.840 --> 0:08:44.400 which is fifty two billion dollars. 0:08:44.679 --> 0:08:45.240 So this is a. 0:08:45.200 --> 0:08:48.440 Similar scale to what the US has undertaken in recent years. 0:08:49.559 --> 0:08:52.080 Maggie, there are some questions to which we just don't 0:08:52.160 --> 0:08:55.400 have answers, and that largely relates to what China specifically 0:08:55.440 --> 0:08:57.960 will do with the funds and where they'll go. But 0:08:58.080 --> 0:09:01.559 within that Bloomberg reporting, where do we think China is 0:09:01.600 --> 0:09:04.720 going to prioritize using the funding to you know, which 0:09:04.840 --> 0:09:06.600 champions is it going to elevate. 0:09:08.400 --> 0:09:10.760 Yes, So of course China is always really looking to 0:09:10.800 --> 0:09:13.720 support it's AI chip makers that compete with in Vidia, 0:09:13.800 --> 0:09:17.640 so that includes companies like Huawei and Camber kN But 0:09:17.720 --> 0:09:21.520 there are other chip companies including SMIC or Smith which 0:09:21.640 --> 0:09:26.720 does the manufacturing, so that would be the corollary to TSMC. 0:09:27.040 --> 0:09:30.120 So there's a range of companies that could see this investment. 0:09:30.600 --> 0:09:33.400 But China will face headwinds because it still has restrictions 0:09:33.480 --> 0:09:36.719 on many of the equipment technologies and the foundries that 0:09:36.800 --> 0:09:37.960 can't access TSMC. 0:09:38.040 --> 0:09:39.480 For those advanced node chips. 0:09:39.960 --> 0:09:43.200 You have many worrying about just what yields are like 0:09:43.840 --> 0:09:46.679 from an SMIC from a SMICK when they're actually producing 0:09:46.679 --> 0:09:49.520 these homegrown, domestically made chips. But I'm looking at video 0:09:49.640 --> 0:09:52.600 under pressure again today, Maggie. Well, broadly, are we getting 0:09:52.600 --> 0:09:55.000 any sense whether this is meaning that China will say 0:09:55.040 --> 0:09:56.680 no thank you to the H two hundreds in the 0:09:56.679 --> 0:09:58.199 same way that they did the H twenties. 0:10:00.320 --> 0:10:03.120 As you know, China has certainly never been shy about 0:10:03.160 --> 0:10:06.000 saying no to US technology when they have their own 0:10:06.120 --> 0:10:09.920 local champions. But what I will say is we don't 0:10:10.000 --> 0:10:12.560 know the exact number of AGE two hundreds China will 0:10:12.600 --> 0:10:15.240 accept if any What we do know is they're clearly 0:10:15.280 --> 0:10:17.600 not backing down on their commitment to their own chip 0:10:17.640 --> 0:10:20.040 supply chain, and they're not going to readily give way 0:10:20.080 --> 0:10:23.720 to this US strategy of selling advanced DAIDE chips in 0:10:23.840 --> 0:10:26.520 order to undermine their local competitors. So we'll have to 0:10:26.520 --> 0:10:28.280 wait and see what happens on h two hundreds. 0:10:29.280 --> 0:10:32.600 Bloomberg's Maggie Eastland, who's been across China's chip efforts all 0:10:32.640 --> 0:10:35.400 week long, thank you very much. Coming up, we're going 0:10:35.440 --> 0:10:37.920 to get more on that breaking news report from Bloomberg 0:10:37.960 --> 0:10:42.640 about Oracle delaying open AI specific data center project by 0:10:42.640 --> 0:10:44.640 one year back to twenty twenty eight. It had an 0:10:44.679 --> 0:10:47.120 impact on the markets, and as that one hundred is 0:10:47.160 --> 0:10:50.120 now two percent actually Caroen as of Thursday night, the 0:10:50.160 --> 0:10:52.040 state of play was the NAS that one hundred was 0:10:52.080 --> 0:10:54.200 flat for the week, so we are now down two 0:10:54.240 --> 0:10:56.800 percent on the NAS that one hundred or weekly basis. 0:10:56.840 --> 0:11:01.160 Of course, the reaction to Broadcom and some other AI 0:11:01.600 --> 0:11:04.640 angst is part of what's weighing on this market, and 0:11:04.679 --> 0:11:05.920 we're going to go a lot more on that very 0:11:06.000 --> 0:11:06.400 very soon. 0:11:06.440 --> 0:11:07.040 Stay with us. 0:11:07.440 --> 0:11:24.280 This is Bloomberg Tech okay shares Oracle down almost five percent. 0:11:24.280 --> 0:11:27.160 They'd hit session loads of six point five percent decline 0:11:27.200 --> 0:11:30.520 after Bloomberg's Brodi Ford broke the story that the firm 0:11:30.520 --> 0:11:33.880 will be delaying data centers for open AI to twenty 0:11:33.920 --> 0:11:37.120 twenty eight instead of a previously planned twenty twenty seven. 0:11:37.360 --> 0:11:41.880 The reason labor and material shortages. Bluemo's Brody Ford runs 0:11:41.880 --> 0:11:44.600 to set and joins us. Now important reporting for you 0:11:45.000 --> 0:11:49.079 because this is what a part of Oracle's debate is. Okay, great, 0:11:49.120 --> 0:11:52.520 you have a great backlog of business, but we are 0:11:52.800 --> 0:11:56.600 very closely monitoring the ability to execute on it and 0:11:56.640 --> 0:11:58.640 then book revenue on it. And open AI is a 0:11:58.640 --> 0:12:01.280 big chunk of the exposure fill the banks for us. 0:12:01.320 --> 0:12:03.320 More reporting, What are the details have you got? 0:12:03.960 --> 0:12:07.400 These are unprecedented scale data centers, right, I mean, giggle 0:12:07.440 --> 0:12:10.600 watse scale data centers unprecedented, and Oracles trying to do 0:12:10.640 --> 0:12:13.400 effectively five and them at once. And so what we 0:12:13.480 --> 0:12:17.040 have today is that the initial completion dates, the initial 0:12:17.120 --> 0:12:20.600 full delivery dates have been pushed backed in some cases 0:12:20.640 --> 0:12:23.360 from twenty seven to twenty eight. And you know, I 0:12:23.360 --> 0:12:25.800 think if you've spoken with data center folks over the 0:12:25.880 --> 0:12:29.319 last couple of months. It's not a huge shocker because 0:12:29.360 --> 0:12:32.120 I mean, these are such crazy projects, right, and the 0:12:32.200 --> 0:12:34.600 idea of getting them done in two years was always 0:12:34.640 --> 0:12:37.240 going to be ambitious. So now getting them done by 0:12:37.280 --> 0:12:40.360 twenty eight it's still a tight timeline. It's still, frankly 0:12:40.400 --> 0:12:43.280 an impressive turnaround, but it's maybe just not as quick 0:12:43.320 --> 0:12:45.000 as the company had initially hoped. 0:12:45.360 --> 0:12:48.280 We're looking at Abelaine, Texas right now, where on the 0:12:48.320 --> 0:12:51.880 conference call doing earnings we had the co CEO one 0:12:51.920 --> 0:12:53.840 of them saying that they had more than ninety six 0:12:53.880 --> 0:12:56.880 thousand in video chips delivered, giving you the sense of scale. 0:12:56.920 --> 0:13:01.360 But is it a hindrance to what the revenue is 0:13:01.520 --> 0:13:05.000 ultimately for Oracle here or is it just investors having 0:13:05.000 --> 0:13:07.960 to be like, oh, it's still jammed tomorrow, not today. 0:13:08.559 --> 0:13:12.240 Right, I mean, Oracle, I'm sure will say that as 0:13:12.240 --> 0:13:15.520 you put they deliver these sites in chunks, right, And 0:13:15.559 --> 0:13:18.559 so Abilene is already being turned on this massive data center. 0:13:18.440 --> 0:13:19.160 In West Texas. 0:13:19.240 --> 0:13:22.120 Once you get the servers running open, AI uses them, 0:13:22.320 --> 0:13:24.920 that's revenue recognition, yeah, right, And so really what we're 0:13:24.960 --> 0:13:27.880 thinking about is the further out sites beyond Abilene. 0:13:27.920 --> 0:13:28.040 Right. 0:13:28.120 --> 0:13:32.679 We keep seeing these Stargate announcements for Michigan and New Mexico. Right, 0:13:33.040 --> 0:13:35.360 these sites which are still being kind of put together, 0:13:35.520 --> 0:13:38.760 and Oracle and other vendors too are finding that, Wow, 0:13:38.840 --> 0:13:42.240 there's a lot of stuff out there that's backlogged. 0:13:41.720 --> 0:13:42.600 NAMA for one of them. 0:13:42.679 --> 0:13:45.319 There's only so many electricians, right, I mean, you want 0:13:45.360 --> 0:13:48.439 to build in rural Texas, it's a smaller pool of 0:13:48.480 --> 0:13:49.600 people you have access to. 0:13:50.400 --> 0:13:52.800 It's a fascinating story. It's going to run and run. 0:13:52.880 --> 0:13:55.680 Blomberg's Brodie Ford with a real market moving bit of 0:13:55.679 --> 0:13:58.640 reporting that. Let's talk more about the market implications. We've 0:13:58.640 --> 0:14:00.600 got Margie Battel with us. You put any manager and 0:14:00.640 --> 0:14:03.760 headed capital allocation of all Spring Global investments to have 0:14:03.800 --> 0:14:06.640 six hundred twenty nine billion dollars an assets and advisement, 0:14:06.880 --> 0:14:11.479 and Margie, you worried these drip drip bits of information 0:14:11.600 --> 0:14:14.120 that maybe the revenue streams. 0:14:13.679 --> 0:14:15.120 Aren't able to be booked tomorrow. 0:14:15.200 --> 0:14:16.840 It has to be waited out a little bit more 0:14:16.880 --> 0:14:18.960 in terms of the returns on AI investment. 0:14:21.400 --> 0:14:24.080 No, I think the long term trends are still in place. 0:14:24.400 --> 0:14:27.800 I actually thought that Broadcom's numbers were quite good and 0:14:27.800 --> 0:14:29.760 people were just I think very nervous at the end 0:14:29.800 --> 0:14:32.960 of the year, particularly with some bad news we've seen, 0:14:33.000 --> 0:14:36.040 such as from Oracle, and I think it's really more 0:14:36.200 --> 0:14:39.520 just end of your jitters rather than anything fundamental. I 0:14:39.520 --> 0:14:41.480 think when you look out into twenty twenty six, you 0:14:41.520 --> 0:14:45.080 still have to like the tech sector, especially the semi 0:14:45.160 --> 0:14:48.480 the memory those companies. I think you still have to 0:14:48.480 --> 0:14:50.240 stick with them, that there are to continue to be 0:14:50.640 --> 0:14:54.800 high growers, and these little hiccups we have here and 0:14:54.840 --> 0:14:58.280 there don't change the fundamental trend of very very strong 0:14:58.320 --> 0:15:00.120 growth in a year, which would be very much lot 0:15:00.160 --> 0:15:03.000 of growth next year. So we still like the whole sector. 0:15:03.240 --> 0:15:05.160 So Maggie, on a day where BRAUN comes up by 0:15:05.160 --> 0:15:07.280 eleven percent when the nasdak's off by two percent, is 0:15:07.280 --> 0:15:08.720 that hacup a buying opportunity? 0:15:11.400 --> 0:15:13.440 Well, I think it is actually because if you look 0:15:13.480 --> 0:15:16.000 at the leading stocks that have stuck to their plan, 0:15:16.120 --> 0:15:20.520 that have great growth, great profit margins, great innovation, and 0:15:20.840 --> 0:15:23.640 they're down ten to fifteen, even twenty percent from their 0:15:23.640 --> 0:15:25.720 peaks of a few months ago. So I think that 0:15:25.800 --> 0:15:28.960 looks like a pretty attractive time to add to these names. 0:15:29.000 --> 0:15:31.280 Because there's end of your uncertainty, a lot of short 0:15:31.360 --> 0:15:35.520 term traders who preserve their games cash out, And I 0:15:35.560 --> 0:15:37.800 think that's what you're seeing, is this pressure on the 0:15:37.840 --> 0:15:40.960 sector rather than the change in the fundamentals the cash flow. 0:15:41.040 --> 0:15:42.040 The big companies are so. 0:15:42.120 --> 0:15:45.880 Large, this isn't going to be derailed anytime soon. So 0:15:45.920 --> 0:15:47.520 I think next year looks pretty good. 0:15:47.560 --> 0:15:50.760 Sailing too, Margie, It's good to see you. 0:15:50.840 --> 0:15:53.360 It sounds like at your end you don't personally have 0:15:53.480 --> 0:15:56.120 many jitters. One of the best read stories on the 0:15:56.120 --> 0:15:59.960 Bloomberg Ternal today is about the debt and the lens 0:16:00.600 --> 0:16:05.080 that is behind the build out in that infrastructure, where 0:16:05.600 --> 0:16:09.440 the debt does debt as a factor in consideration sit 0:16:09.520 --> 0:16:12.280 for you when you are tracking all sorts of different 0:16:12.640 --> 0:16:14.960 hard and soft data sets to work out what's going 0:16:14.960 --> 0:16:15.440 on here. 0:16:17.600 --> 0:16:19.920 Well, I look at the debt as really a company's 0:16:20.000 --> 0:16:22.200 choice of how they want to allocate capital. Do they 0:16:22.240 --> 0:16:25.440 want to borrow, do they want to increase the dividend, 0:16:25.440 --> 0:16:28.720 do they want to do share buybacks? And particularly the 0:16:28.840 --> 0:16:32.920 large successful companies really have no need to borrow. Even 0:16:33.320 --> 0:16:35.880 paying for the CAPPAC, they still have plenty of excess 0:16:35.920 --> 0:16:39.240 cash flow that they have to decide how to utilize. 0:16:39.880 --> 0:16:43.560 Whereas I think Oracle has really taken on a lot 0:16:43.600 --> 0:16:45.920 of debt compared to their cash flow, But the rest 0:16:45.960 --> 0:16:47.120 I think all look pretty good. 0:16:47.360 --> 0:16:48.320 It's a vital. 0:16:48.080 --> 0:16:50.640 Sector and that's why the returns are higher, because you 0:16:50.680 --> 0:16:53.480 have to be prepared for these little down drafts in 0:16:53.600 --> 0:16:55.239 order to get the upside. 0:16:56.120 --> 0:17:00.000 Maggie Brodie's report and Oracle was very specific that Oracles 0:17:00.120 --> 0:17:03.520 delaying those projects by a year because of labor and 0:17:03.560 --> 0:17:07.679 material shortages elsewhere in the US economy. We have all 0:17:07.720 --> 0:17:10.399 the chips we need, clearly, are we good at the 0:17:10.400 --> 0:17:12.760 other stuff? And is the other stuff where it needs 0:17:12.760 --> 0:17:14.440 to be to support this build out? 0:17:17.200 --> 0:17:18.919 Yes, I think it is. I think when you have 0:17:19.040 --> 0:17:22.720 this explosion in demand of these very complex centers, I 0:17:22.720 --> 0:17:26.320 think you should expect there will be short term problems 0:17:26.320 --> 0:17:29.360 of supply and so forth. But really that's a good 0:17:29.359 --> 0:17:32.400 problem to have rather than lack of demand or pricing pressure. 0:17:32.440 --> 0:17:36.160 And we're really seeing very strong pricing for the summaris 0:17:36.160 --> 0:17:39.080 that are going into the data centers, so we think 0:17:39.119 --> 0:17:42.280 it's just nothing to worry about, and the fundamentals are 0:17:42.280 --> 0:17:43.240 still very strong. 0:17:43.840 --> 0:17:47.199 Briefly though, there's reports today from other outlets saying that 0:17:47.240 --> 0:17:48.920 Dell's going to have to Jack of its prices because 0:17:48.960 --> 0:17:51.879 of pricing and strength and memory. Are there areas of 0:17:51.880 --> 0:17:54.320 this AI trade that are overvalued that you shouldn't be 0:17:54.359 --> 0:17:56.440 piling into From a margin perspective. 0:17:58.359 --> 0:17:59.879 Well, I think when you look at check it's like 0:18:00.119 --> 0:18:03.959 any other sector. Is the best companies usually trade rather richly. 0:18:04.320 --> 0:18:06.920 The cheap companies usually have problems. They don't have the 0:18:07.000 --> 0:18:09.480 leading edge, they don't have the innovation. And when you 0:18:09.520 --> 0:18:11.320 look at chech it's just and you can see even 0:18:11.359 --> 0:18:14.879 here with the data centers and concern about what approach 0:18:14.960 --> 0:18:18.960 that companies are using Broadcom or nvideo whatever in the 0:18:19.000 --> 0:18:21.720 new products. It's really about innovation and who are the 0:18:21.800 --> 0:18:24.480 leading innovators, and so the companies that don't have that 0:18:24.560 --> 0:18:26.840 innovation are just going to fall behind. So I think 0:18:27.240 --> 0:18:30.640 this year up till say the summer, everything moved up 0:18:30.920 --> 0:18:33.600 and now we're seeing a separation between the companies that 0:18:34.200 --> 0:18:36.480 have leading edge and the companies that are really falling 0:18:36.480 --> 0:18:38.120 behind and aren't going to catch up. So I think 0:18:38.119 --> 0:18:41.040 it'll be much more stock selection next year than we've 0:18:41.040 --> 0:18:42.680 had for the first part of this year. 0:18:43.280 --> 0:18:46.040 With a message that in tech there's nothing to worry about. 0:18:46.359 --> 0:18:49.000 Margie Patel from all Spring Global Investments. Great to have 0:18:49.040 --> 0:18:49.840 you back on the show. 0:18:50.200 --> 0:18:51.040 Thank you very much. 0:18:51.119 --> 0:18:53.480 Now coming up, we're going to bring you Bloomberg's exclusive 0:18:53.520 --> 0:18:58.600 conversation with Uber's CEO and the company's international ambitions, particular 0:18:58.680 --> 0:18:59.760 focus on Asia. 0:19:00.240 --> 0:19:02.200 Next this is Bloomberg Tech. 0:19:08.080 --> 0:19:09.520 Ouba si Jari Koswa. 0:19:09.560 --> 0:19:12.840 Shahi says the company expects to offer robotaxi services in 0:19:12.880 --> 0:19:14.880 more than ten markets by the end of next year. 0:19:15.160 --> 0:19:17.560 He spoke with Bloomberg Tech Asia's Annabel. 0:19:17.320 --> 0:19:20.960 Druders about why he's optimistic, in particular about growth potentially in. 0:19:20.920 --> 0:19:25.760 Asia, the APAC market and in particular the North Asia 0:19:25.840 --> 0:19:29.520 markets as well. They are huge growth markets for us, 0:19:29.680 --> 0:19:32.000 and if you look, for example, in the ride share business, 0:19:32.560 --> 0:19:36.280 over thirty percent of our global first trips coming into 0:19:36.359 --> 0:19:42.520 the category come from the Apac region. The area is 0:19:42.560 --> 0:19:45.879 growing very quickly, including taxi as well, which is actually 0:19:45.880 --> 0:19:49.240 one of our newest products on the platform. So for 0:19:49.359 --> 0:19:53.320 me coming here, seeing the teams, meeting with local business 0:19:53.320 --> 0:19:57.359 people and regulators and talking about how we can be 0:19:57.440 --> 0:19:59.960 part of the future growth of the region is really 0:20:00.040 --> 0:20:00.760 what my agenda is. 0:20:01.560 --> 0:20:03.920 Early this year, you also put out a statement on 0:20:04.720 --> 0:20:08.200 the robot taxi push as well, and so the Middle 0:20:08.200 --> 0:20:11.359 East and Asia were the markets for twenty twenty five 0:20:11.480 --> 0:20:13.880 to launch, and we've seen of course that initial deployment 0:20:13.880 --> 0:20:18.760 in the Middle East already. What's happening on the Asia side, well, lots. 0:20:18.480 --> 0:20:21.920 Of discussions on the Asia side. I think what's really 0:20:21.960 --> 0:20:26.320 important is to set up a regulatory framework to go forward. 0:20:27.119 --> 0:20:30.199 For example, Hong Kong has various trials and pilots going on, 0:20:30.280 --> 0:20:33.520 and in many other markets we're talking to regulators about 0:20:33.560 --> 0:20:36.600 how we can be a part of shaping right share 0:20:36.640 --> 0:20:40.280 and autonomous right shair going forward. The technology is absolutely 0:20:40.320 --> 0:20:44.160 getting there. These are the robot driver. It doesn't get tired, 0:20:44.520 --> 0:20:48.359 doesn't get distracted, and we very much look forward to 0:20:48.760 --> 0:20:53.080