WEBVTT - Arm Disappoints with Outlook, Vanguard Slashes Fees 0:00:00.840 --> 0:00:05.080 From the heart of where innovation, money and power collide 0:00:05.360 --> 0:00:10.640 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.800 --> 0:00:15.480 Caroline Hyde and Ed Ludlow. 0:00:26.480 --> 0:00:29.160 Like from New York, I'm Caroline Hyde and I'm Jackie 0:00:29.160 --> 0:00:30.360 Devalis in San Francisco. 0:00:30.440 --> 0:00:32.520 This is Bloomberg Technology coming up. 0:00:32.840 --> 0:00:36.360 Arm shares are down after a conservative forecast. We get 0:00:36.400 --> 0:00:40.239 the CEO's take on the strength of smartphone and AI demand, 0:00:40.600 --> 0:00:44.239 plus Roadblock shares slump after users and engagement slide. We 0:00:44.320 --> 0:00:46.800 dissect the worst cell of since May, and the CEO 0:00:46.800 --> 0:00:49.800 of Vanguard joins to discuss the company's record fee cuts 0:00:49.840 --> 0:00:52.720 for dozens of mutual funds and ets. But first we 0:00:52.800 --> 0:00:55.920 look at these broader markets. Right now, we're wobbling around 0:00:56.000 --> 0:00:56.720 gains and losses. 0:00:56.720 --> 0:00:57.720 On the NASAQ one hundred. 0:00:57.760 --> 0:00:59.720 More broadly muted, we're up just about a tenth of 0:00:59.760 --> 0:01:02.440 a There are some big moves when you look underneath 0:01:02.480 --> 0:01:04.720 the hood and video on the points upside. Here on 0:01:04.760 --> 0:01:07.200 the downside, we're a little bit anxious about TESLO. Get 0:01:07.240 --> 0:01:09.120 into that later, but move on to see what the 0:01:09.120 --> 0:01:12.319 individual moves are from an earnings perspective. Qui com off 0:01:12.360 --> 0:01:14.120 by four point eight percent one of the biggest points 0:01:14.200 --> 0:01:16.679 drags to the downside. Look, they managed to beat in 0:01:16.760 --> 0:01:18.399 terms of earnings, they've beate in. 0:01:18.400 --> 0:01:19.280 Terms of forecast. 0:01:19.480 --> 0:01:21.720 But the outlook for the smartphone market is where it 0:01:21.800 --> 0:01:25.520 does into investor anxiety. Are we flatlining only seeing flat 0:01:25.560 --> 0:01:26.760 to single digit growth there? 0:01:27.040 --> 0:01:27.120 That? 0:01:27.240 --> 0:01:29.600 Of course smartphone anxiety does feed in a little bit 0:01:29.760 --> 0:01:32.920 to armholdings as well. Key chip designer out there of 0:01:32.959 --> 0:01:34.360 course down some four percent. 0:01:34.720 --> 0:01:37.080 Look, they too beat the street on earnings, on. 0:01:37.080 --> 0:01:39.720 Earnings for share basis, you look at revenue dialing up 0:01:39.720 --> 0:01:40.679 almost twenty percent. 0:01:40.920 --> 0:01:42.160 But again it's a world a. 0:01:42.160 --> 0:01:45.680 Conservative forecast and what this means not only for smartphones, 0:01:45.760 --> 0:01:48.000 but what it means for AI demand as well. We've 0:01:48.000 --> 0:01:51.000 got to get to it with Arms CEO Rene Haas, 0:01:51.040 --> 0:01:53.440 who joins us now. And I put it to you, 0:01:53.440 --> 0:01:56.440 you've been out everywhere at the moment. There's deals being 0:01:56.480 --> 0:01:58.240 done of course, a soft bank and open AI that 0:01:58.280 --> 0:02:01.280 will dig into. But what a this forecast and what 0:02:01.320 --> 0:02:03.480 it signals for your business? Is it just you being 0:02:03.520 --> 0:02:05.320 conservative as a newly public company. 0:02:06.720 --> 0:02:10.440 Thanks Kerley and appreciate you having me on this morning. Yeah, 0:02:10.440 --> 0:02:13.600 I don't know if I agree with the dialogue. Muted forecast. 0:02:14.240 --> 0:02:19.280 We beat our projections for Q three and we actually 0:02:19.360 --> 0:02:23.440 raise guidance for Q four and for the year, and 0:02:23.480 --> 0:02:26.560 we're looking at about four billion dollars of annual revenue, 0:02:26.960 --> 0:02:29.160 which is about twenty five percent. 0:02:28.960 --> 0:02:30.160 Increase over the last year. 0:02:30.560 --> 0:02:33.440 So we're super happy with the trajectory of the business 0:02:33.440 --> 0:02:34.360 and super happy. 0:02:34.080 --> 0:02:34.720 With the performance. 0:02:35.440 --> 0:02:38.960 Maybe just investors are too exuberant. 0:02:39.000 --> 0:02:41.239 They're too exuberant around the fact that you've already said 0:02:41.280 --> 0:02:43.920 your compute platform is going to help open ai and 0:02:44.000 --> 0:02:47.480 SoftBank make good on their Advanced Enterprise AI, the optimism 0:02:47.480 --> 0:02:50.079 around your AI future, as well as how integral you 0:02:50.120 --> 0:02:53.239 are to smartphones. So is it that are people too 0:02:53.280 --> 0:02:55.320 excited about the AI opportunity here. 0:02:57.240 --> 0:02:59.440 I'm going to try to decouple what the market is 0:02:59.440 --> 0:03:01.760 saying about it results and just talk about the results 0:03:01.919 --> 0:03:05.280 in general, which we are again incredibly pleased by. We 0:03:05.320 --> 0:03:08.600 are seeing extremely strong demand for our products across the board. 0:03:09.200 --> 0:03:11.960 We had record royalties. We were up twenty three percent 0:03:12.040 --> 0:03:16.200 year on year. Our Version nine compute subsystems, which drive 0:03:16.240 --> 0:03:19.720 higher world tier rates. We're just growing faster than the market, 0:03:19.960 --> 0:03:22.919 which is what we told investors when we went public 0:03:22.960 --> 0:03:25.240 back in analyst day A year and a half ago plus, 0:03:25.760 --> 0:03:29.440 So yeah, we're not seeing any slow down demand quite frankly, Carolin. 0:03:29.440 --> 0:03:32.480 In fact, we're seeing an acceleration in it, particularly driven 0:03:32.480 --> 0:03:36.040 by all things around artificial intelligence Renee. 0:03:36.480 --> 0:03:39.160 Speaking of future growth, one of the things that ARM 0:03:39.240 --> 0:03:43.800 is also banking on is its high profile partnership in Stargate, 0:03:44.040 --> 0:03:46.200 and you're a big player in that. Could you kind 0:03:46.200 --> 0:03:49.680 of tell us what investors can expect this year to 0:03:49.800 --> 0:03:51.120 gain from that venture. 0:03:52.480 --> 0:03:54.800 I can say, broadly speaking, the way you think about 0:03:54.800 --> 0:03:58.520 Stargate is it's an infrastructure project unlike any other five 0:03:58.560 --> 0:04:02.360 hundred billion dollars one hundred billion dollars will spend initially, 0:04:02.800 --> 0:04:05.280 and these are to build out the world's largest AI 0:04:05.400 --> 0:04:08.600 data centers for training and inference. We are the key 0:04:08.640 --> 0:04:10.640 technology partner around CPU. 0:04:10.720 --> 0:04:11.560 We're the only. 0:04:11.440 --> 0:04:15.120 CPU technology partner that was named, which is terrific obviously 0:04:15.120 --> 0:04:18.680 for us. One can imagine going forward a lot of 0:04:18.800 --> 0:04:22.240 opportunity for technology innovation there. But in a near term 0:04:22.680 --> 0:04:25.120 we'll be linked with the Grace Blackwell ship using the 0:04:25.240 --> 0:04:28.400 Gray CPU which is ARM based and the Blackwell GPU, 0:04:28.400 --> 0:04:31.920 which is video based. But these large frontier models are 0:04:31.920 --> 0:04:34.839 going to require Jackie a huge amount of power for 0:04:35.000 --> 0:04:38.080 training and inference, and we're just so excited about being 0:04:38.080 --> 0:04:39.680 involved in this. It's going to be fantastic. 0:04:40.640 --> 0:04:43.039 Well, at the same time, this project also kind of 0:04:43.080 --> 0:04:47.160 puts you in the middle of this US China tech rivalry. 0:04:47.320 --> 0:04:49.920 You're at the front lines of it, being the top 0:04:49.960 --> 0:04:53.159 supplier to American AI companies. And I'm curious if you 0:04:53.200 --> 0:04:56.960 think that perhaps tying your fortunes so closely to Opening 0:04:57.040 --> 0:04:57.839 Eye is a risk. 0:04:59.320 --> 0:05:01.000 I'm not sure I think about it quite that way. 0:05:01.279 --> 0:05:05.159 Open Ai is a fantastic partner. Arguably, they're the leader 0:05:05.400 --> 0:05:08.160 at the moment in terms of adoption of chat, GPT 0:05:08.400 --> 0:05:12.080 and their APIs and their enterprise suite. We work with everyone, 0:05:12.120 --> 0:05:14.200 though we work very closely with Google, we work closely 0:05:14.279 --> 0:05:17.800 with Meta Aws, you know all the partners. But we're 0:05:17.920 --> 0:05:20.760 very thrilled to be involved with open Ai. They have phenomenal. 0:05:20.279 --> 0:05:24.400 Technology, Renee, We're going to lean into that China US 0:05:24.480 --> 0:05:27.560 story deep seek extraordinary. 0:05:27.240 --> 0:05:29.280 The push and pull it has in the narratives. 0:05:29.520 --> 0:05:32.400 Can you explain as to whether you think we are 0:05:32.480 --> 0:05:35.240 going to need as much compute as we all foresaw before. 0:05:36.520 --> 0:05:39.440 Oh, I think unquestionably, Caroline, And in fact I think 0:05:39.760 --> 0:05:41.920 even more than we probably have been thought about. So 0:05:42.600 --> 0:05:44.919 why is that, Well, if you look at what deep 0:05:44.960 --> 0:05:47.400 Seek has done, which is an amazing by the way 0:05:47.440 --> 0:05:51.159 piece of work they've done what's called distillation, and distillation 0:05:51.360 --> 0:05:54.360 is building on top of an existing frontier model, which 0:05:54.440 --> 0:05:58.440 takes lots of power and lots of compute to generate. 0:05:58.520 --> 0:06:02.200 If you think about GPT four which was hundreds of megawatts, 0:06:03.000 --> 0:06:06.560 GBT five sixty seven, these are in the gigawats. So 0:06:06.880 --> 0:06:09.520 even though you may have models that can distill or 0:06:09.520 --> 0:06:12.880 build a con the frontier models, the frontier models still 0:06:12.880 --> 0:06:15.280 need a lot of power. And then with that that 0:06:15.360 --> 0:06:18.159 drives a huge demand for inference, which is really where 0:06:18.160 --> 0:06:21.919 the larger use loads are. And more efficient inference means 0:06:21.960 --> 0:06:26.480 you can drive AI to much smaller devices, to smartphones, earbuds, 0:06:27.360 --> 0:06:30.960 devices that don't have a lot of capability for power. 0:06:31.279 --> 0:06:33.760 It's great for armed because that's where we are today, 0:06:33.839 --> 0:06:35.720 is where we exist, and now you can run those 0:06:35.760 --> 0:06:39.039 AI workloads on the CPU. So I think actually, what 0:06:39.120 --> 0:06:41.520 deep seat proves is that we're just going to see 0:06:41.560 --> 0:06:43.919 an even more accelerant towards towards compute. 0:06:45.040 --> 0:06:47.800 Well, on that front, you know you have a significant 0:06:47.800 --> 0:06:51.479 business in China. Are you concerned at all about perhaps 0:06:51.839 --> 0:06:56.440 how the slowing smartphone business might affect Arm's future growth. 0:06:58.000 --> 0:06:59.080 Yeah, it's a great question. 0:06:59.200 --> 0:07:01.400 And you know again and what we've seen in smartphones 0:07:01.480 --> 0:07:05.240 with your single digits type of growth, we're in the 0:07:05.360 --> 0:07:08.480 double digits growth in terms of royalties, in some cases 0:07:08.520 --> 0:07:09.479 twenty percent growth. 0:07:09.480 --> 0:07:10.560 And why is that? 0:07:11.240 --> 0:07:14.200 We're putting more technology into these phones, our version nine, 0:07:14.240 --> 0:07:18.280 our compute subsystems drive higher royalty rates, So we're just 0:07:18.320 --> 0:07:21.320 growing faster than the market, and particularly in the premium segment, 0:07:21.360 --> 0:07:24.640 which requires more and more compute. So while the units 0:07:24.640 --> 0:07:27.040 have been slowed in some areas, it actually hasn't impacted 0:07:27.080 --> 0:07:27.640 us very much. 0:07:27.720 --> 0:07:29.000 Just look at our record royalties. 0:07:29.840 --> 0:07:31.720 To have this kind of number in a market where 0:07:31.720 --> 0:07:35.240 people think things are slowing down, just phenomenal record royalties. 0:07:35.320 --> 0:07:36.400 Upside in licensing. 0:07:36.680 --> 0:07:38.560 I would just want to get to the litigation if 0:07:38.600 --> 0:07:41.160 I'm met here, Naam, and briefly, perhaps it hasn't gone 0:07:41.280 --> 0:07:42.520 the way that you thought with Qualcom. 0:07:42.600 --> 0:07:44.160 What does it mean for the future earnings? 0:07:45.600 --> 0:07:49.320 Really, there's no impact on future earnings, Caroline. The trial 0:07:49.400 --> 0:07:51.600 was a mistrial on one of the verdicts, so the 0:07:51.640 --> 0:07:54.240 dispute is still open. But to your question, in terms 0:07:54.240 --> 0:07:56.560 of the future forecast, we have no impact whatsoever. 0:08:00.120 --> 0:08:03.360 Rene Ha, CEO of ARM, thank you for joining us. 0:08:03.440 --> 0:08:06.160 Coming up more with tech earnings with a Yako yoshioga 0:08:06.200 --> 0:08:09.640 from Wealth and here the speaker Caroline, let some quick. 0:08:09.480 --> 0:08:12.200 Check on some other earnings that we've had on deck. 0:08:12.320 --> 0:08:15.600 Peloton is one of them. No, I'm afraid revenue is down, 0:08:15.680 --> 0:08:19.560 but profitability is better. A new management team managed to 0:08:19.800 --> 0:08:22.960 lift the optimism around this name. We're fourteen percent higher, 0:08:23.000 --> 0:08:25.160 but it's only trading at eight dollars sixty eight from 0:08:25.200 --> 0:08:35.760 New York, San Francisco. This's a Bloomberg Technology. 0:08:38.080 --> 0:08:41.000 Back to earnings with roadblocks out this morning and reporting 0:08:41.080 --> 0:08:43.720 daily active users for the fourth quarter that fell short 0:08:43.800 --> 0:08:47.120 of estimates. Let's bring in Bloomberg Cecilia Denastasio to break 0:08:47.160 --> 0:08:50.200 down the numbers. Cecilia break it down for us what 0:08:50.360 --> 0:08:52.880 went wrong here that ultimately spooped investors. 0:08:54.559 --> 0:08:57.640 After many quarters of growth and daily active users, Roeblocks 0:08:57.720 --> 0:09:02.760 unfortunately reported a disap winning decline in how many people 0:09:02.800 --> 0:09:06.520 are accessing the platform in the last quarter. In an 0:09:06.559 --> 0:09:11.200 earnings call today, Roblox's chief financial officer partially attributed that 0:09:11.280 --> 0:09:17.280 decline to Roblox's ban in Turkey over concerns over child safety. 0:09:17.360 --> 0:09:21.600 And what's interesting is child safety affecting Turkey? Of course 0:09:21.640 --> 0:09:24.360 the key country here, But it wasn't long ago that 0:09:24.400 --> 0:09:27.760 Hindenburg research acuse roadblocks have also inflating user numbers and 0:09:27.880 --> 0:09:30.880 time played. Is there any hint that read across in 0:09:30.960 --> 0:09:31.880 these numbers, Cecilia. 0:09:32.840 --> 0:09:36.199 Lots of analysts have cast doubt on those allegations against 0:09:36.320 --> 0:09:39.800 Roblox's user number inflation. Unfortunately, I don't have anything original 0:09:39.880 --> 0:09:44.319 to report on that currently, but Roblox's growth has been 0:09:44.600 --> 0:09:48.360 pretty consistent for a long time. People are very disappointed 0:09:48.600 --> 0:09:49.120 by these. 0:09:49.000 --> 0:09:53.560 Results, Cecilia. What's competition looking like in this space? 0:09:55.480 --> 0:09:56.000 Sure so? 0:09:56.280 --> 0:09:56.760 Right now? 0:09:56.920 --> 0:10:00.160 Growth in the games industry broadly is very challenged. The 0:10:00.200 --> 0:10:03.480 cost of developing Triple A games, your Spider Man's, you 0:10:03.520 --> 0:10:07.600 Know Your overwatches is skyrocketing, and at the same time 0:10:08.040 --> 0:10:10.800 a lot of investors are seeing potential in user generated 0:10:10.840 --> 0:10:13.840 games like the ones that people create on roadblocks. These 0:10:13.880 --> 0:10:16.720 games are often created by amateurs or by very small 0:10:16.760 --> 0:10:20.200 teams using tools that the companies themselves provide. Epic Games, 0:10:20.240 --> 0:10:23.320 which makes Fortnite, has its own platform along these lines. 0:10:23.120 --> 0:10:26.560 As well, and some of them get sold for an 0:10:26.600 --> 0:10:27.480 awful lot of money. 0:10:27.600 --> 0:10:30.079 Cecilia Denastasio, it's great to have you. Thank you for 0:10:30.160 --> 0:10:31.120 running us through roadblocks. 0:10:31.160 --> 0:10:33.720 Let's get more earnings takeaways with Ioko Yoshioka is with 0:10:33.800 --> 0:10:35.920 us for for any manager at the Wealth Enhancement Group. 0:10:36.280 --> 0:10:39.320 And there's been so much to digest. One theme that 0:10:39.320 --> 0:10:44.400 seems to be running through is AI anxiety and smartphone anxiety, 0:10:44.600 --> 0:10:45.920 and I just want to bring up with what we're 0:10:45.920 --> 0:10:48.760 seeing with qualcomon ARMED today and to worry about smartphones 0:10:48.760 --> 0:10:49.640 flatlining and what. 0:10:49.520 --> 0:10:51.199 That means for some of these chip providers. 0:10:51.760 --> 0:10:53.079 What do you make of it, Iaco, I know you 0:10:53.120 --> 0:10:55.280 don't hold qualcommon arm, but what would you make about 0:10:55.280 --> 0:10:55.760 the readA. 0:10:55.600 --> 0:10:57.960 Cross sure so high? 0:10:58.040 --> 0:11:02.760 Caroline? You know, in terms of the overall AI environment, 0:11:02.840 --> 0:11:05.480 I think we're focused on both the short term and 0:11:05.520 --> 0:11:08.440 the long term. Right in the short term for companies 0:11:08.480 --> 0:11:11.679 like Qualcom, you know, they're really impacted by the handset 0:11:11.800 --> 0:11:14.920 slow down. However, you know, I think if you look 0:11:15.000 --> 0:11:18.040 out longer term and where they're going to play is 0:11:18.120 --> 0:11:21.240 really in that you know, inference side, or you know 0:11:21.480 --> 0:11:25.880 where the chips will be able to be in smaller 0:11:25.920 --> 0:11:29.920 devices as the ARM CEO talked about, and things like 0:11:30.080 --> 0:11:33.920 new form factors with like metas ray band glasses. These 0:11:33.920 --> 0:11:37.679 are going to be where you know, Qualcom might have 0:11:37.800 --> 0:11:41.120 additional you know, exposure to which would be a positive 0:11:41.120 --> 0:11:41.800 for Qualcom. 0:11:42.080 --> 0:11:44.839 It's interesting the best points contributor on the day is 0:11:44.880 --> 0:11:47.520 in video and there's a note out of JP Morgan saying, actually, 0:11:47.960 --> 0:11:51.199 like these deep Seak moves, this less compute necessary is 0:11:51.200 --> 0:11:53.560 actually going to win out for them from an inference perspective. 0:11:53.800 --> 0:11:55.560 So where have you come out on this whole divide 0:11:55.559 --> 0:11:57.720 as to whether companies should be spending a lot on 0:11:57.800 --> 0:11:58.680 AIF structure. 0:12:00.080 --> 0:12:03.559 So I think the arms race is on and that 0:12:03.840 --> 0:12:06.280 most companies are going to spend in order to make 0:12:06.280 --> 0:12:10.480 sure that they have all the primary models set, all 0:12:10.520 --> 0:12:13.880 the frontier models that ARM talked about, and then it's 0:12:13.920 --> 0:12:16.600 going to be how best to access you know, all 0:12:16.640 --> 0:12:20.400 the efficiencies that Deep Seek brought are going to be 0:12:20.480 --> 0:12:23.160 you know, explored by many companies. And so I think 0:12:23.200 --> 0:12:27.080 there's a lot of ways to play AI. And you know, 0:12:27.160 --> 0:12:30.400 we're still trying to figure out what the landscape is 0:12:30.400 --> 0:12:34.160 really going to look like, and it's accelerating. It's just 0:12:34.280 --> 0:12:39.120 moving so quickly. You know, every month there's something new on. 0:12:39.080 --> 0:12:41.960 The cloud computing front. We've already seen some mixed numbers 0:12:42.000 --> 0:12:46.280 coming from the hyperscalers Alphabet, Microsoft. What are you expecting 0:12:47.200 --> 0:12:49.360 when Amazon reports later today? 0:12:50.559 --> 0:12:53.760 Sure, so I think everybody's focused again on what the 0:12:53.840 --> 0:12:57.960 Capex guide might be, any sort of color commentary on Capex. 0:12:58.320 --> 0:13:02.320 You know, everybody's looking at that Capex trajectory to see, 0:13:02.400 --> 0:13:05.840 you know, is everybody getting that return. 0:13:05.559 --> 0:13:06.480 On that spend. 0:13:06.880 --> 0:13:09.720 But you know, I think the demand for cloud computing 0:13:09.800 --> 0:13:13.120 continues to increase, and so it makes sense from a 0:13:13.120 --> 0:13:16.440 long term perspective for many of these hyperscalers to continue 0:13:16.480 --> 0:13:19.040 to spend on increasing capacity in the cloud. 0:13:20.080 --> 0:13:22.800 Speaking of demand, one of the things that always surprised 0:13:22.800 --> 0:13:25.600 me about Alphabet's cloud unit is that it had a 0:13:25.600 --> 0:13:29.240 good chunk of business coming from smaller, more nimble AI startups, 0:13:29.679 --> 0:13:31.400 And with some of the numbers that it put out, 0:13:31.400 --> 0:13:34.360 I'm curious if you are thinking if that kind of demand, 0:13:34.360 --> 0:13:37.079 if that vector of growth has kind of run its course. 0:13:38.520 --> 0:13:39.240 I don't think so. 0:13:39.440 --> 0:13:43.080 I think AI is still so relatively new that I 0:13:43.120 --> 0:13:46.280 think there's going to be new innovative players that are 0:13:46.320 --> 0:13:49.600 going to want to access you know, that that AI 0:13:49.800 --> 0:13:55.640 platform through Google, Google or through Microsoft or AWS. I think, 0:13:55.760 --> 0:13:58.720 you know, there's going to be different companies that explore 0:13:58.760 --> 0:14:01.760 different platforms just see what's best for them. 0:14:02.360 --> 0:14:06.320 What's so interesting is Amazon has been making its own chips, 0:14:06.880 --> 0:14:10.200 and so too Alphabet. Actually, even though it shares fell 0:14:10.240 --> 0:14:13.199 on its earnings, broad Com sword because of the CAPEX 0:14:13.720 --> 0:14:16.440 spending and what it means for chip makers for some 0:14:16.480 --> 0:14:19.280 of these cloud computing companies. What do you make of 0:14:19.360 --> 0:14:27.160 how the getting into the vertically AI focus. 0:14:24.760 --> 0:14:28.560 In terms of the overall spend, I think, you know, 0:14:28.600 --> 0:14:32.800 it's just going to continue. That spend going to a 0:14:32.840 --> 0:14:37.320 lot of these you know, chip makers, so whether it's 0:14:37.400 --> 0:14:41.880 Nvidia or Broadcom. Eventually it will come to Qualcomm as well. 0:14:42.520 --> 0:14:45.000 But I think it's going to continue. You know, there's 0:14:45.040 --> 0:14:49.240 so many ways to access AI and build it out. 0:14:49.880 --> 0:14:52.800 I think that it's going to continue to develop over 0:14:52.840 --> 0:14:53.600 the long term. 0:14:54.240 --> 0:14:57.160 The thing that everyone's trying to wrestle with is the valuations. 0:14:57.480 --> 0:15:00.240 So with all this optimism, arm trades that are undred 0:15:00.320 --> 0:15:03.200 times future ournings. Maybe that's why it pulls back from 0:15:03.240 --> 0:15:06.960 the day on what the market says is slightly muted forecasts. 0:15:07.120 --> 0:15:09.440 What do you make of the valuation levels since the 0:15:09.520 --> 0:15:11.480 sell off from deep seacone and video for example. 0:15:12.360 --> 0:15:15.600 Well, and I think that's why Qualcomm's valuation is pretty 0:15:15.640 --> 0:15:18.120 interesting here. You know, it's still in the you know, 0:15:18.400 --> 0:15:21.280 mid teens, low double digits, and you know, I think 0:15:21.520 --> 0:15:24.320 that if you look out far enough, you'll see that 0:15:24.360 --> 0:15:27.520 there's potentially, you know, a lot more growth coming for 0:15:27.640 --> 0:15:31.040 Qualcom in the future. However, you know, you have to 0:15:31.040 --> 0:15:33.480 look at the valuations both in the near term. Nvidia 0:15:33.520 --> 0:15:37.600 does trade at high valuations as well, but again, if 0:15:37.640 --> 0:15:40.640 the buildout continues, if you're really going to need to 0:15:40.720 --> 0:15:45.120 continue to spend so much both you know, Broadcom and Nvidia, 0:15:45.560 --> 0:15:47.840 and probably you know, the earnings are going to grow 0:15:47.880 --> 0:15:48.600 and catch up with a. 0:15:48.680 --> 0:15:53.120 Multiple Ayako Yoshioka from the Wealth Enhancement Group, thank you 0:15:53.160 --> 0:16:00.280 for joining us. 0:16:01.280 --> 0:16:04.120 Elon Musk, who of course leads President Trump's government cost 0:16:04.200 --> 0:16:08.240 cutting efforts, will determine himself if there are conflicts of 0:16:08.280 --> 0:16:11.920 interest between his work reviewing federal spending and his overlapping 0:16:11.920 --> 0:16:14.520 empire of six companies. So all, according to the White 0:16:14.520 --> 0:16:16.920 House's bring in. Bloomberg News's reporter and co host of 0:16:16.960 --> 0:16:19.520 the elon Ink podcast, Max Chafkins. So he's going to 0:16:19.600 --> 0:16:20.440 be his own policeman. 0:16:20.840 --> 0:16:22.080 He's going to be his own policeman. 0:16:22.120 --> 0:16:24.400 And you know, while this is news because we've been 0:16:24.400 --> 0:16:26.480 wondering all along, what is the plan here? I mean, 0:16:26.560 --> 0:16:30.440 Musk has six companies, He is somebody who is his 0:16:30.640 --> 0:16:33.120 empire's rife with conflicts of interest. So it was kind 0:16:33.120 --> 0:16:34.920 of interesting to see how the White House was going 0:16:34.960 --> 0:16:37.560 to handle this, and we're learning basically they're not going 0:16:37.600 --> 0:16:40.520 to handle They're going to let Elon use his judgment, 0:16:40.720 --> 0:16:42.160 which I think was the plan all along. 0:16:42.240 --> 0:16:43.080 And I think. 0:16:42.920 --> 0:16:46.240 Even listening to things that President Trump said when he 0:16:46.280 --> 0:16:48.920 was on the Camp Trent pain Trail made clear that 0:16:49.080 --> 0:16:51.440 part of the point here is the fact that Elon 0:16:51.520 --> 0:16:54.000 Musk has these conflicts of interest. You know, Trump talked 0:16:54.040 --> 0:16:57.160 all about Mars that that is a thing that would 0:16:57.360 --> 0:17:01.280 necessarily involve some of Elon Musk's company. So so yeah, 0:17:01.280 --> 0:17:04.399 we're sort of learning something that I think was pretty clear, 0:17:04.480 --> 0:17:05.720 but we didn't know for sure. 0:17:06.800 --> 0:17:07.080 Max. 0:17:07.119 --> 0:17:09.480 I want to talk about the tech because Elon Musk 0:17:09.520 --> 0:17:11.680 has said that he wants to use AI to find 0:17:11.720 --> 0:17:15.359 cost savings, and he's already mining through medicare and medicaid 0:17:15.400 --> 0:17:18.040 data in search of fraud and abuse. Do we know 0:17:18.160 --> 0:17:20.520 if this is something he could use his own company 0:17:20.760 --> 0:17:21.840 XAI to do. 0:17:22.440 --> 0:17:24.800 We don't know what software they're using. 0:17:24.920 --> 0:17:27.080 It would not surprise me at all if he was 0:17:27.200 --> 0:17:31.480 using some modified version of GROC or you know, some 0:17:31.720 --> 0:17:35.040 some software that he has developed, or is that you know, 0:17:35.119 --> 0:17:37.280 is somehow associated with another one of his companies. 0:17:37.720 --> 0:17:39.040 Musk has done this all the time. 0:17:39.040 --> 0:17:42.320 We've seen you know, SpaceX engineers shuttled into Twitter. 0:17:42.800 --> 0:17:44.880 We're seeing you know, people from his. 0:17:45.200 --> 0:17:49.240 Business Empire now attached in various ways to this doje effort. 0:17:49.480 --> 0:17:53.040 So yes, and of course that raises, you know, interesting questions. 0:17:53.040 --> 0:17:55.879 Where is this data being stored? Are they taking the 0:17:55.960 --> 0:18:01.639 proper precautions. We've definitely seen critics, including you know employees, 0:18:01.720 --> 0:18:04.560 government employees, as well as some of their unions, raise 0:18:04.680 --> 0:18:08.080 questions about this, you know, saying basically, is Elon Musk 0:18:08.520 --> 0:18:11.280 taking enough care of our private data? 0:18:11.359 --> 0:18:14.280 I wonder if investors are wondering whether they're taking enough 0:18:14.320 --> 0:18:18.840 care of his fiduciaries responsibility to Tesla. It's currently down 0:18:19.080 --> 0:18:21.440 almost ten percent on the beginning of the year. 0:18:21.800 --> 0:18:23.400 We're training the lowest since December. 0:18:23.800 --> 0:18:26.200 And meanwhile, he got byd in China announcing that it's 0:18:26.200 --> 0:18:29.359 getting into autonomous vehicles potentially, and Tesla takes another hit. 0:18:29.520 --> 0:18:29.680 Well. 0:18:29.680 --> 0:18:31.600 So, if two things are definitely true, one is that 0:18:31.640 --> 0:18:34.280 Elon Musk for sure is distracted. I mean, you know, 0:18:34.600 --> 0:18:37.440 I understand that he has like an endless amount of 0:18:37.440 --> 0:18:39.920 attention span. He's able to be very good at video 0:18:39.960 --> 0:18:42.439 games while running sales companies. But if you look, he 0:18:42.480 --> 0:18:44.960 has spent a ton of time in Washington, He's essentially 0:18:44.960 --> 0:18:47.400 been parked there in recent weeks. 0:18:47.560 --> 0:18:50.639 He's tweeting all day and all night about Doge. 0:18:51.160 --> 0:18:53.200 That said, so in that sense, you might say, wow, 0:18:53.320 --> 0:18:55.040 like these he's really distracted. 0:18:55.080 --> 0:18:56.240 He's taking his eye off the ball. 0:18:56.520 --> 0:18:59.199 On the other hand, there are clear ways that his 0:18:59.320 --> 0:19:02.800 companies can benefit from this partnership, and I think most 0:19:02.800 --> 0:19:05.399 investors understand that. And if you turn back the clock 0:19:05.440 --> 0:19:08.480 on that stock chart to like the beginning of November, 0:19:08.560 --> 0:19:09.359 you'll see that. 0:19:09.280 --> 0:19:10.960 The stock is still way up. 0:19:11.040 --> 0:19:14.840 So I think, yeah, some of the enthusiasms, some of 0:19:14.600 --> 0:19:17.679 the sense that oh my god, this Trump trade is 0:19:17.720 --> 0:19:20.199 like a home run, has worn off, although there are 0:19:20.240 --> 0:19:23.760 definitely still people who see this as beneficial to Musk 0:19:23.920 --> 0:19:24.840 and his companies. 0:19:25.560 --> 0:19:28.680 That's Bloomberg's match. Chafkin, thanks for joining us. 0:19:28.920 --> 0:19:29.080 Now. 0:19:29.160 --> 0:19:30.440 Today's Tech in. 0:19:30.400 --> 0:19:33.480 Depth newsletter takes a look at two different approaches in 0:19:33.520 --> 0:19:37.440 Silicon Valley on defense and war in Europe. Bloomberg's Mark 0:19:37.480 --> 0:19:38.399 Bergen has more. 0:19:38.880 --> 0:19:39.120 Mark. 0:19:39.359 --> 0:19:43.000 How are these conversations different in defense tech between the 0:19:43.119 --> 0:19:44.560 US and Europe. 0:19:45.720 --> 0:19:47.280 Yeah, I mean I was sort of jumping off. 0:19:47.280 --> 0:19:49.920 We saw a really interesting hire this week from Andresa 0:19:49.960 --> 0:19:53.480 in their American Dynamism Fund, which is their tech defense fund. 0:19:53.520 --> 0:19:56.600 They hired Daniel Penny, who was Gross Perraps most famous 0:19:56.800 --> 0:19:59.920 as he was involved in that choking incident in the subway. 0:20:00.080 --> 0:20:02.199 He was cleared of homicide but kind of became this 0:20:02.320 --> 0:20:04.320 cause celebrat and as far as they know, he's a 0:20:04.320 --> 0:20:07.120 marine veteran. Didn't have it a track record as an investor, 0:20:07.440 --> 0:20:10.000