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Speaker 5: Aage in every week we provide in depth research and
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Speaker 5: hundred and thirty industries are analysts cover worldwide.
Speaker 2: Today we'll look at al Paramount buying the rights to
Speaker 2: UFC fights will impact it's streaming service.
Speaker 5: Well, it's a look at earnings from the networking bell
Speaker 5: Weather Cisco Systems.
Speaker 2: First, we look at third quarter earnings from the farm
Speaker 2: at machinery leader Deer.
Speaker 5: This week, Deer reported earnings that beat analyst projections, but
Speaker 5: the company trimmed its projected net income for twenty twenty five.
Speaker 5: This comes as customers were made cautious due to trade
Speaker 5: uncertainty and the health of the US economy.
Speaker 2: For more, Lisa and I were joined by Chris Chielino,
Speaker 2: Bloomberg Intelligence Senior US machinery analyst. We first asked Christopher's
Speaker 2: key takeaways from Deer earnings.
Speaker 4: Listen, I mean, this really wasn't a particularly great quarter.
Speaker 4: Three key results were mixed at best. It was really
Speaker 4: a low quality earnings beat, primarily driven by a lower
Speaker 4: tax rate. And as you alluded to, they did cut
Speaker 4: their twenty to twenty five guidance, But to be honest,
Speaker 4: I don't think that really changes the investment thesis here.
Speaker 4: You know, we still expect earnings to bottom this year.
Speaker 4: We're still looking at a very you know, gradual recovery
Speaker 4: as twenty twenty six unfolds. The reduction in the outlook
Speaker 4: was really driven by weakness in their construction business, and
Speaker 4: it appears to us that it was really more of
Speaker 4: a function of some of the higher tariffs and costs
Speaker 4: coming through. We knew that construction forestry was really going
Speaker 4: to bear the brunt of the tariff impact, but this
Speaker 4: court just came in, you know, a little bit more
Speaker 4: of a headwind that we anticipated. It doesn't appear to
Speaker 4: be that there's been much of a change in terms
Speaker 4: of you know, farm fundamentals and their appetite to go
Speaker 4: out and buy equipment.
Speaker 5: Hey, Qrich, can you get more into the struggle that
Speaker 5: farmers are facing that that's impacting deer.
Speaker 4: Sure, you know, we've been in this kind of prolonged
Speaker 4: downturn in the ag ecotomy. Crop prices continued to deteriorate,
Speaker 4: farm fundamentals remain weak, interest rates remain high. We have
Speaker 4: the you know, the overhanger, the uncertainty around the trade
Speaker 4: environment and export market access. Really there's really no signs
Speaker 4: or i would, you know, say green shoots yet that
Speaker 4: we're at this inflection point. I think the positive takeaway
Speaker 4: is that, you know, inventories are coming down, deer's not
Speaker 4: going to have to massively underproduce a retail demand next year.
Speaker 4: So even if we're looking at a flatish type of
Speaker 4: environment in terms of underlying retail demand. We're still looking
Speaker 4: at probably higher production and some pricing coming through, which
Speaker 4: should still generate some operating leverage in the business.
Speaker 2: So, Chris, when demand is down for their core farm equipment,
Speaker 2: what does deer typically do? Do they let inventories build?
Speaker 2: Do they get promotional to move inventory out the door?
Speaker 2: How did they usually manage that?
Speaker 4: Yeah, so this is it's a delicate balancing act, right.
Speaker 4: I mean, it's almost impossible to time the cycle. And
Speaker 4: what they've been doing, you know, for the better part
Speaker 4: of this year, and even at the end of last year,
Speaker 4: they had been underproducing retail demand to bring down those
Speaker 4: elevated inventories. They've done really a commendable job on new equipment.
Speaker 4: The big issue right now is still on the used
Speaker 4: equipment inventory side, particularly on tractors, which are still quite elevated.
Speaker 4: And you're right, they are allocating more merchandising programs and
Speaker 4: pool funds to help address that issue and move the equipment.
Speaker 4: And I think you see that partly reflected in their
Speaker 4: production precision ad business this quarter and pricing actually flip negative,
Speaker 4: which was a surprise to us. It does appear that
Speaker 4: this is you know, relatively transitory. We should expect pricing
Speaker 4: to bounce back next quarter. But yeah, it's been a
Speaker 4: you know, they've done a real good job of managing inventories.
Speaker 4: It's just you know, when you're slogging along through the
Speaker 4: bottom of the cycle here, it does become quite challenging.
Speaker 5: So then I got to follo up, are you still
Speaker 5: cautious about the pace of their recovery?
Speaker 4: Yes, you know, I would say signs of a recovery
Speaker 4: are still you know, pretty elusive to us. And if
Speaker 4: you just look over the last couple of months, you know,
Speaker 4: you continue to see further downward pressure on crop prices,
Speaker 4: which at the end of the day is one of
Speaker 4: the bigger drivers of deer's business and farmer cash receipts.
Speaker 4: We had a pretty ugly WASDI report this week. You know,
Speaker 4: it looks like we're going to get another year of
Speaker 4: record corn production, so those stockpiles continue to build, which
Speaker 4: is really going to keep a you know, somewhat of
Speaker 4: a stealing on crop prices here in the near term.
Speaker 4: So we think this recovery is going to look much
Speaker 4: more modest or subdued than what we typically see during
Speaker 4: a normal cycle. Right now, we're still anticipating you know,
Speaker 4: a modest you know, flat to up five percent. Next
Speaker 4: here in terms of underlying retail demand for lar Jack,
Speaker 4: particularly in North America.
Speaker 5: All right, thanks to Chris Chielino, Bloomberg Intelligence Senior US
Speaker 5: machinery analyst.
Speaker 2: We moved next to a conversation about the global fintech
Speaker 2: company ny X. NYAX trades on the NASDAC under the
Speaker 2: ticker NYAX.
Speaker 5: The company is focused on payment software and devices for
Speaker 5: the self service space where no cashier is present, and
Speaker 5: the company recently reported second quarter profit that more than
Speaker 5: doubled analyst expectations.
Speaker 2: This week, guest host Normal Lind and I were joined
Speaker 2: by nyak's chief financial officer, Segit Manure, and we began
Speaker 2: the conversation by asking Segite for more background on what
Speaker 2: NIAX does.
Speaker 6: So we are actually the global leader in payment and
Speaker 6: management solution for the unattended market. And what does it
Speaker 6: mean unattended? It's really the vending machine massals chair ev
Speaker 6: chargers when it's just you in front of the machine,
Speaker 6: does not cashier in between. And in fact, if you
Speaker 6: bought a drink in a vending machine lately at the JFKA,
Speaker 6: you probably used one of our Nayaks Yellow devices. So
Speaker 6: we have more than hundred thousand customers. We sell our
Speaker 6: product in more than one hundred and twenty countries, and
Speaker 6: we have a very simple mission statement to.
Speaker 3: Help our customers grow the business. What does it mean?
Speaker 6: Increase their revenue, decrease their cost and through loyalty, create
Speaker 6: that stickness with our customers with their customers.
Speaker 7: How do you stay ahead in today's fintech landscape? Of
Speaker 7: course there's a lot of players now.
Speaker 6: So actually in our area there's not a lot of competition.
Speaker 6: I'm talking about the payment and in the unattended space.
Speaker 6: So in fact, you know, we are the only global,
Speaker 6: as I said, a player in this unattended space. It's
Speaker 6: a very fragmented business and decentralized, so there's a lot
Speaker 6: of small players and we are with our global solution
Speaker 6: basically integrated hardware, payment and services all together, we can
Speaker 6: bring that to the local market. It's also a very
Speaker 6: highly regulated market, so there's a lot of barriers to entry,
Speaker 6: so whether it's a regulation on payment, whether it's privacy,
Speaker 6: and with our global solution, with us being there for
Speaker 6: twenty years, we were able to overcome that. We look
Speaker 6: at ourselves as a payment company, and what do you
Speaker 6: need as a payment company?
Speaker 3: You need basically three things.
Speaker 6: You need the trust, you need the scalability, and you
Speaker 6: really need the easy doing business. So from a trust perspective,
Speaker 6: we build that trust over the twenty years. We have
Speaker 6: a very strong brand. Look now for the yellow devices.
Speaker 6: You would see that everywhere from an easy to do
Speaker 6: business with it's again it's a bit to B to see.
Speaker 6: So we have a very you know, it's a high
Speaker 6: profile company. You go to whether it's the cow wash
Speaker 6: to the vending machine and you see us. So B
Speaker 6: to B it's all about regulation and we were able
Speaker 6: to overcome that. When it comes to B to see,
Speaker 6: as I said, it's in front of us and you
Speaker 6: want that in a nanosecond to get your snack, to
Speaker 6: get your coffee. So on scalability, this is where we
Speaker 6: are focusing right. This is what takes time to build.
Speaker 6: And we've showed that we are using more than eighty
Speaker 6: distributors all around the world right, so we are setying
Speaker 6: our products straight to the OEM. So when the vending machine,
Speaker 6: the massage share, the kid ride are coming from the manufacturers,
Speaker 6: it will already bring that NIX device.
Speaker 2: Talk to us about the EV business electric vehicle business.
Speaker 2: How are you guys approaching that? What is your expectation
Speaker 2: for how that business will grow for you?
Speaker 3: So great question.
Speaker 6: EV is definitely one of the three main growth drivers
Speaker 6: as we look into twenty twenty five and even beyond.
Speaker 3: There was a few elements there.
Speaker 6: It can be as easy as any unattended verticals that
Speaker 6: we're already in and we're already working with the ivy
Speaker 6: Goo Electrified America Electrifi Canada where we are providing the
Speaker 6: payment device, but it can.
Speaker 3: Also be where we are developed.
Speaker 6: The management suite, the electricity management suite that has a
Speaker 6: lot of regulations around it, and we were able to
Speaker 6: accommodate that as well. And then for small businesses which
Speaker 6: I haven't mentioned that, but most of our customers.
Speaker 3: Are small and small and medium businesses.
Speaker 6: That's where we provide the old solution, the hard well,
Speaker 6: the management electricity basically as well as payment. So iv
Speaker 6: we just signed announced the agreement with Hotel which is
Speaker 6: a potential of one hundred thousand ivy charging stations to
Speaker 6: be deployed in North America and also in Europe and
Speaker 6: many other contracts like that. That shows the potential with
Speaker 6: the fact that we are a global company, so it
Speaker 6: can be done in France or in the state of
Speaker 6: California and you have the same exact product all around
Speaker 6: the globe.
Speaker 7: Are there any particular market gaps or audiences that are
Speaker 7: underserved that you're targeting right now?
Speaker 6: So in the unattended space, which is the majority of
Speaker 6: our revenue today, definitely there's a place on the EV
Speaker 6: to grow and the electric vehicle charges, smart coolers is
Speaker 6: a very fast growing area parking as well micro market,
Speaker 6: So this is in the unattended, but we also are
Speaker 6: stepping in into more of areas, like as I said,
Speaker 6: the EV charger, that is beyond the payment or even
Speaker 6: the retail. What we've learned over the twenty years that
Speaker 6: we're doing business business with small businesses is that they're
Speaker 6: still in the attendant, inside the store, inside the whatever
Speaker 6: it is that you're selling does not a good product
Speaker 6: for those small businesses, and we are extending that into
Speaker 6: other countries as well.
Speaker 5: Our thanks to Nayak's chief financial officer, Sagit Manor coming
Speaker 5: up a look at where we are with robotaxis in
Speaker 5: the US and the rest of the world.
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
Speaker 2: depth research and data on two thousand companies and one
Speaker 2: hundred and thirty industries.
Speaker 5: You can access Bloomberg Intelligence via Bigo on the terminal.
Speaker 5: I'm Lisa Matteo and.
Speaker 8: I'm Paul Sweeney.
Speaker 2: This is Bloomberg.
Speaker 1: You're listening to Bloomberg Intelligence with Paul Sweeney on Bloomberg Radio.
Speaker 5: I'm Paul Sweeney and I'm Lisa Matteo filling in on
Speaker 5: Bloomberg Intelligence.
Speaker 2: We move next to some news in the media and
Speaker 2: entertainment space.
Speaker 5: This week we heard that Paramount has acquired the exclusive
Speaker 5: rights to show all events from the Ultimate Fighting Chain
Speaker 5: Championship in the US over the next seven years. It's
Speaker 5: a seven point seven billion dollar deal designed to boost
Speaker 5: Paramount plus streaming service for more.
Speaker 2: Lisa and I were joined by Getha Ranganath and Bloomberg Intelligence.
Speaker 2: Analysts on US media were first to ask Etha if
Speaker 2: the UFC can be considered a good deal for Paramount.
Speaker 9: No one saw this coming. I mean, the Paramount Skuydiance
Speaker 9: transaction just closed last week August seventh, and we were
Speaker 9: still kind of waiting for some inkling of what the
Speaker 9: go to strategy or the go forward strategy would be
Speaker 9: from you know, David Ellison's team. And here you go
Speaker 9: with the bank, you know, paying almost eight billion dollars
Speaker 9: for UFC rights. Now they are premier sports rights, so
Speaker 9: they're definitely making a big statement here. Yes, you're absolutely right.
Speaker 9: UFC has over one hundred million fans in the United States.
Speaker 9: Their current deal is with ESPN. They were getting paid
Speaker 9: about five hundred million a year, so this is you know,
Speaker 9: more than one hundred and twenty percent search so it
Speaker 9: is definitely a pretty penny And what Paramount is hoping
Speaker 9: is that this really gets them onto the sports so
Speaker 9: makes them a must have platform. And we're talking here
Speaker 9: about Paramount Plus, which is their streaming platform, which is
Speaker 9: known for really some great scripted content and some sports.
Speaker 9: But this is really a big way for them to
Speaker 9: kind of make a statement, make a really bold splash
Speaker 9: on the sports streaming stage.
Speaker 5: All right, KEITHA, I'm trying to take this in stride
Speaker 5: because my husband is a big UFC fan, so he
Speaker 5: watches it on ESPN. So does this mean that I
Speaker 5: have to get Paramount Plus on time? Don't tell me.
Speaker 6: That, GIP.
Speaker 9: Sorry, Lisa, Yes, you do because everything all of the
Speaker 9: UFC contents. So you know, what we'd initially thought was
Speaker 9: that UFC was kind of going to split this packages.
Speaker 9: You know, they have the Fight Night, which is the
Speaker 9: weekly bi weekly kind of you know matchups that you see,
Speaker 9: and then they have their big Marquee events, which are
Speaker 9: the numbered events with you know, the likes of O'Connor
Speaker 9: McGregor all these other big superstar players and you got
Speaker 9: to pay out of your pocket for that pay per view.
Speaker 9: They're actually now making all of that content, both the
Speaker 9: market events as well as the Fight Nights, all available
Speaker 9: to Paramount Plus subscribers, so there's no pay per view anymore.
Speaker 9: But yeah, unfortunately your husband's going to have to subscribe
Speaker 9: to Paramount Plus.
Speaker 2: Well, this is what I think you do. Every streamer
Speaker 2: you put on, you have to take one off, go
Speaker 2: to the family. Okay, we're putting on Paramount Plus.
Speaker 8: What are you giving back?
Speaker 5: What are we giving back?
Speaker 8: Yeah, exactly that's how you do it. Thank you, Gaitha.
Speaker 2: What is realistically the buld case for Paramount sky Dance Corporation.
Speaker 9: Yes, I think you know, we we really need of course,
Speaker 9: you know, this kind of tells us that They're definitely
Speaker 9: going to keep the streaming platforms. See some of the
Speaker 9: some of the concerns Paul before, you know, before the
Speaker 9: deal actually closed, was what is sky Dance really interested in?
Speaker 9: So they don't really have any expertise in running TV assets.
Speaker 9: All that they really cared about was the Paramount Studio
Speaker 9: because you know, sky Dance is a big studio and
Speaker 9: they were really really interested in the studio assets. So
Speaker 9: we really didn't have any direction in terms of what
Speaker 9: they were going to do with the cable networks. Viacom
Speaker 9: has a bunch of those. You have the CBS broadcast network,
Speaker 9: you have the Paramount Plus streaming platform. What this deal
Speaker 9: signals is they're definitely interested in the streaming platform and
Speaker 9: the CBS broadcast network because you know, they did say
Speaker 9: that they're going to simulcast some of those UFC games
Speaker 9: on the CBS broadcast networks. I think that is going
Speaker 9: to be a core part of their portfolio. What we're
Speaker 9: still not clear about is what they're going to do
Speaker 9: with some of the cable networks. So you know, whether
Speaker 9: it's a BET or an MTV or a Comedy Central,
Speaker 9: we really don't know what the strategy is there. Chances
Speaker 9: are they might look to monetize those assets, you know,
Speaker 9: sell them. But really I think the big play for
Speaker 9: a paramount is going to come down to make these
Speaker 9: bigger and bigger investments. If they really want to be
Speaker 9: a credible you know, streamer, they have to obviously go
Speaker 9: after these big deals, which is exactly what they did
Speaker 9: with the UFC. We'll have to wait and watch and
Speaker 9: see exactly what their aspirations are, but it depends if
Speaker 9: they're if they're willing to kind of make these big investments,
Speaker 9: they could become you know, arguably one of the top
Speaker 9: three or one of the top four platforms.
Speaker 5: Our Thanks to Geitha Ranganath and Bloomberg Intelligence analyst on US.
Speaker 2: Media, we've moved next to an M and A deal
Speaker 2: in the apparel space.
Speaker 5: This week, we heard that the Canadian clothing company Guilden
Speaker 5: Activewear agreed to buy the US underwear maker Haines Brand
Speaker 5: for about two point two billion dollars in cash and stock.
Speaker 5: Gilden is aiming to double its annual sales with the transaction.
Speaker 2: For more guest host Normal Lind and I were joined
Speaker 2: by Abigail guildbartin Bloomberg Intelligence Footwear and ath leisure analyst.
Speaker 2: We first asked Abbaga able to discuss who Guilden is
Speaker 2: and why they're buying an underwear company.
Speaker 10: I think a lot of people probably own Guilden and
Speaker 10: don't know it right because it's really a basic apparel manufacturer.
Speaker 10: So they create the T shirts that then they sell
Speaker 10: to your favorite sports teams or to Walmart, and then
Speaker 10: they put the logos on it. So they're heavily in
Speaker 10: the printware space. They do have exposure to innerwear, which
Speaker 10: is what Haines is, Haynes' is, you know, the basics underwears,
Speaker 10: bras teas, and they used to be in activewear till
Speaker 10: they spun off Champion, so they're very complimentary. Yes, they
Speaker 10: spent off Champion about a year.
Speaker 7: Okay, interesting and I definitely remember Gilden. As you mentioned,
Speaker 7: when you just start to look into the tags of
Speaker 7: your T shirts, you'll start to see the name pop
Speaker 7: up there. But I mean, what's the latest with consolidation
Speaker 7: more broadly in your industry. I know you have a
Speaker 7: lot of names that you cover that are doing a
Speaker 7: lot of mergers.
Speaker 10: Yeah, definitely, I think you know it comes out of
Speaker 10: time with tariffs and costs looming as well as I
Speaker 10: mean for this acquisition, I think it's been considered for
Speaker 10: a while as actually there was a whole proxy battle
Speaker 10: about it a few years ago where they actually ousted
Speaker 10: the CEO over it, and then he has returned since
Speaker 10: then and they completely changed the board over So this
Speaker 10: didn't come completely out of nowhere. But I think it
Speaker 10: makes a lot of sense just in terms of, you know,
Speaker 10: Gilden's building out their whole manufacturing footprint and it's once
Speaker 10: again really complimentary. They already kind of make everything that
Speaker 10: Haines does, but on a larger scale at a lower cost.
Speaker 2: And Haines Brand's based in Winston Salem, North Carolina. Yeah,
Speaker 2: I'm sure Sarah talk to us about you mentioned the tariffs.
Speaker 2: How is it impacting your world, because I would think
Speaker 2: that would be immediate.
Speaker 10: Yes, so it definitely is impacting my world with you know,
Speaker 10: the footwear brands, but for Guilden and Haines. Actually, Guilden
Speaker 10: is one of the largest users of US cotton, so yes,
Speaker 10: they are probably one of the largest ones, and so
Speaker 10: that is actually going to help them not have to
Speaker 10: deal with as many tariff costs just since products are
Speaker 10: made with US cotton, so they're subject to a lower
Speaker 10: teriff rate, so that's actually something that they can benefit from.
Speaker 10: They also are less exposed to Asia and more in
Speaker 10: Central America as well as Haynes Brands. Their manufacturing footprints
Speaker 10: are very complementary and overlap, so they'll be able to
Speaker 10: kind of mitigate that pretty well. But for Haines Brands,
Speaker 10: its Guilden gives them a much more financial stability and opportunity.
Speaker 5: For that our thanks to Abigail gil Martin Bloomberg Intelligence,
Speaker 5: Footwear and at the Leisure Analyst.
Speaker 2: Each week we look at research from Bloomberg and EF
Speaker 2: previously known as New Energy Finance.
Speaker 5: They're the team at Bloomberg that tracks and analyzes the
Speaker 5: energy transition from commodities to transport, industries, buildings, and agriculture sectors.
Speaker 2: This week we look at the autonomous vehicles robotaxis. Guest
Speaker 2: host Normal Linden and I were joined by Andrew Grant
Speaker 2: be n EF, head of Intelligent Mobility.
Speaker 5: He discussed what's happening in the robotaxi space and some
Speaker 5: of the hot battlegrounds for developers.
Speaker 2: I began by asking Andrew where we are with robotaxis
Speaker 2: in the US. And the rest of the world.
Speaker 11: Wouldn't it be a great way to have a way
Speaker 11: to measure the progress that we have on the robotaxi
Speaker 11: side and the self driving vehicle side. Sometimes it could
Speaker 11: be quite difficult to monitor the sector, and there's a
Speaker 11: lot of promises made and there's a lot happening in
Speaker 11: the kind of AI black box, and what we try
Speaker 11: to do is measure things that you can actually see
Speaker 11: and count. So we've been looking at some real operational
Speaker 11: statistics that have been coming out from some of the
Speaker 11: robotaxi companies and coming up with a way to grade
Speaker 11: how serious an operation is. Can are these projects actually
Speaker 11: operating on public roads? Are they offering their rides to
Speaker 11: the general public or do you need to be on
Speaker 11: a selective weight lift? Are they putting their money where
Speaker 11: their mouths are and charging a fee for the service?
Speaker 11: Do they actually have a safety driver in the vehicle
Speaker 11: or human still supervising in the vehicle or have they
Speaker 11: pulled that? And are they able to operate in all
Speaker 11: weather conditions twenty four hours a day, seven days a week.
Speaker 11: And if they kind of score five out of five
Speaker 11: in our grade, that's a fully functional operational robotaxi service.
Speaker 11: We counted out eight of those operating different cities around
Speaker 11: around the world, I should say around the world. At
Speaker 11: the moment, it's just China in the US.
Speaker 7: Okay, so we're seeing China in the US as the
Speaker 7: two leaders here.
Speaker 11: Yeah, at the moment we have of four companies that
Speaker 11: have met those grades. We do have another sixteen projects
Speaker 11: that are kind of four out of five on our
Speaker 11: ranking metric there. I should mention that Tesla just gets too.
Speaker 11: But a lot of these companies are looking to expand
Speaker 11: outside their home markets, certainly expanding to places like Singapore
Speaker 11: and Middle East and UAE, and then of course Europe,
Speaker 11: which at the moment there's regulations that are kind of
Speaker 11: previncing a wider spread rollout of robotaxis. But a lot
Speaker 11: of these companies are targeting twenty twenty six for deployment
Speaker 11: across a number of European cities.
Speaker 2: So who are the leaders here at this early stage.
Speaker 11: I mean, really, you're talking about Weimer with the most
Speaker 11: projects that meet out grading of fully operational robotaxi services.
Speaker 11: But from the Chinese automakers, the China robotaxi developer side,
Speaker 11: you're also talking about by do we ride ponyai that
Speaker 11: are scoring highly on these metrics and looking to expand.
Speaker 7: What are some of the regulatory hurdles here? Are there
Speaker 7: any areas, in particular in the United States where it's
Speaker 7: a bit more open season.
Speaker 11: It's a very complex regulatory environment at the moment because
Speaker 11: you can kind of have these national federal level ambitions,
Speaker 11: but really it comes down to not just even state level,
Speaker 11: but down to city level, where you need to work
Speaker 11: really closely with a lot of these regulators to deploy
Speaker 11: these services in a tightly geffinced environment. So you need
Speaker 11: to be actively if you're a robotaxy developer, you need
Speaker 11: to be actively talking to a lot of these regulators
Speaker 11: and helping them understand what you're trying to do and
Speaker 11: how you're trying to complement what they want to do
Speaker 11: on the public transport side or on they transport infrastructure
Speaker 11: side to make this work and make it a valuable
Speaker 11: project for both for both entities. So I always describe
Speaker 11: the regulatory environment it's very iterative. You kind of need
Speaker 11: to take one box, proved to your regulators how you're doing,
Speaker 11: and then continue to grow that relationship and kind of
Speaker 11: build the regulations with them, and a lot of knowledge
Speaker 11: exchange needs to happen as you progress.
Speaker 2: Yeah, I'm just looking at yourself driving vehicle tractor at
Speaker 2: wwwwna dot com. Have to be a Bloomberg terminal user,
Speaker 2: I believe, yes, but very very cool. It's an interactive
Speaker 2: kind of model showing you where around the world. So
Speaker 2: what are the gating issues here? Andrew? It's for fuller
Speaker 2: and fuller deployment going out over the next several years.
Speaker 2: Is it regulatory? Is it technology? Is it capital? What
Speaker 2: are the key drivers for just I guess adoption over
Speaker 2: the next seple years.
Speaker 11: I mean, we talk a lot about the technology and
Speaker 11: the regulatory side, and both need to improve, and I
Speaker 11: think both will. What's probably doesn't get enough attention, and
Speaker 11: we're starting to see a lot more focus on that.
Speaker 11: At the moment. Is just the value chain really starting
Speaker 11: to take shape. Building a car, building the software and
Speaker 11: the related hardware that goes into powering a self driving vehicle,
Speaker 11: matching the vehicle with users owning the vehicle. These are
Speaker 11: all things that have different skill sets from a company perspective.
Speaker 11: They have different capital requirements, and they have different paid
Speaker 11: back periods. So we're starting to see different roles for
Speaker 11: in this part of value chain. You're seeing the many
Speaker 11: deals that say Uber has signed over the last eighteen months.
Speaker 11: They've signed deals with at least ten different self driving
Speaker 11: vehicle developers across the taxi and truck space and the
Speaker 11: delivery blot space, I should say as well. And they're
Speaker 11: really trying to put the best foot forward to borrow
Speaker 11: the Jeff Bezos expression just focus on what makes the
Speaker 11: beer taste better and really specialize in the different areas.
Speaker 11: So we're really starting to see a more robust and
Speaker 11: definitive shape form for the robotaxidatty chain.
Speaker 5: Our thanks to Andrew Grant being af head of intelligent
Speaker 5: mobility coming up and in depth look at Treasury Secretary
Speaker 5: Scott Bessen then his role in the Trump administration.
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing research
Speaker 2: and data on two thousand companies in one hundred and
Speaker 2: thirty industries.
Speaker 5: You can access Bloomberg Intelligence via Big on the terminal.
Speaker 5: I'm Lisa Matteo and Paul Sweeney.
Speaker 8: This is Bloomberg.
Speaker 1: You're listening to Bloomberg Intelligence with Paul Sweeney on Bloomberg Radio.
Speaker 5: And I'm Lisa Matteo filling in on Bloomberg Intelligence.
Speaker 2: We move next to news from the networking Bill Weather
Speaker 2: Cisco Systems. This week, Cisco reported fourth quarter earnings that
Speaker 2: narrowly beat analyst expectations.
Speaker 5: The company also gave a forecast for the current fiscal year,
Speaker 5: with sales between fifty nine and sixty billion dollars. That's
Speaker 5: roughly in line with analysts expectations, and the lukewarm forecast
Speaker 5: disappointed investors who hoped for a boost from massive AI
Speaker 5: data center projects.
Speaker 2: For more on ess, Lisa and I were joined by
Speaker 2: wou Jinho, Bloomberg Intelligence senior technology analysts. The first ask
Speaker 2: Wooje for his takeaways on Cisco earnings.
Speaker 12: At the end of the day, the guidance was a
Speaker 12: reminder that they are still tied to IT spending, and
Speaker 12: you know, I viewed it as more as prudent conservatism
Speaker 12: because they don't know what's happening on the second half
Speaker 12: of the year given where we are, you know, we
Speaker 12: have little visibility in terms of rates as well as
Speaker 12: tire still.
Speaker 2: So the company recognized about one billion dollars in AI
Speaker 2: revenue on fiscal twenty twenty five, and I guess AI
Speaker 2: infrastructure or for large from large cloud of providers who
Speaker 2: are over eight hundred million in the quarter. So where
Speaker 2: do we think these numbers can go?
Speaker 12: Yeah, Look, Paul, they forecasted a billion dollars in orders
Speaker 12: for fiscal twenty five. They double that in fiscal twenty six.
Speaker 12: Recognize the billion of it this year. I wouldn't be
Speaker 12: surprised if AI revenues grow at least another fifty percent
Speaker 12: from here. And they're penetrating multiple pockets right not only
Speaker 12: into the cloud, but if you think about a longer term,
Speaker 12: when enterprise adoption really starts kicking in, there is going
Speaker 12: to be a growth driver.
Speaker 1: So we have to.
Speaker 12: See where it'll be in twenty six and twenty seven
Speaker 12: when enterprise grows. But the partnership with then video should
Speaker 12: be beneficial to the longer term.
Speaker 5: What is it AI sector? Is it just to competitive?
Speaker 5: I mean, who are some of their peers? How are
Speaker 5: they doing against them?
Speaker 12: Well, if we think about it, well, they have multiple
Speaker 12: they're in AI in multiple vectors right, so from a
Speaker 12: networking space as one of the bigger competitors, as well
Speaker 12: as a smaller company called Celestica from they also they're
Speaker 12: also very very big on optical components, and they're coming
Speaker 12: up against companies like Marvel as well as Siena, and
Speaker 12: they also provide AI servers, and think about Dell and HPE.
Speaker 12: So look, is it competitive, yes, but they're one of
Speaker 12: the few American vendors that can actually supply components all
Speaker 12: the way to the system hardware.
Speaker 2: Which what what are companies like Cisco and and Dell
Speaker 2: and some other big American companies throughout the tech stack chain?
Speaker 2: What are they saying just about the environment in terms
Speaker 2: of demand from their customers. Are they sensing waning demand
Speaker 2: or wavering demand? Just to see how some of these
Speaker 2: I don't know, teriffs other economic policies may work out.
Speaker 12: Sure, Paul, you know, Cisco is one of the first
Speaker 12: hardware belt weathers that came out. I will tell you
Speaker 12: from from the numbers that I've seen on the companies
Speaker 12: that have reported, you know, the IT spending environment has
Speaker 12: actually been more resilient than I had thought. I went
Speaker 12: into the quarter with my mediar outlook as being a
Speaker 12: little bit cautious and negative, and quite frankly, the results
Speaker 12: have come in better than I anticipated. The outlooks have
Speaker 12: come in better than I anticipated. But the fact of
Speaker 12: the matter is, I don't know what's going to happen
Speaker 12: past December, and I think the Cisco's guidance reflect that.
Speaker 12: We'll have a better sense in a couple of weeks
Speaker 12: from now when companies like Dell and then HPE after
Speaker 12: Labor Day when they.
Speaker 5: Report, did they talk about their guidance at all about
Speaker 5: the impacts? We mentioned tariff quickly, but did the impact
Speaker 5: of tariffs? If so, like, how do they intend to
Speaker 5: lessen that impact from tariffs?
Speaker 12: You know, you know, Cisco has been probably one of
Speaker 12: the better companies in terms of managing expectations of tariffs
Speaker 12: as well as maneuvering the supply chain with the tariff.
Speaker 12: So in terms of managing expectations, they embedded tariff impact
Speaker 12: in their guidance, and because came in a little bit
Speaker 12: lower than we had anticipated, that actually helped the EPs
Speaker 12: just a little bit going forward.
Speaker 8: You know, all of the guidance.
Speaker 12: Includes the tariff impact. Now, the one thing I will add,
Speaker 12: we're still waiting for the semiconductor rulings as it relates
Speaker 12: to Section two three to two. We'll see where it stands.
Speaker 12: If we do have a negative ruling there, that could
Speaker 12: not only affect Cisco's guidance and margins, but also the
Speaker 12: rest of the electronics space.
Speaker 5: All right, thanks to Woo Jinho, Bloomberg Intelligence Senior technology analyst.
Speaker 2: This week we focus on a Bloomberg Big Takes story
Speaker 2: entitled Scott Bessant on Taris, deficis and Trump's Economic Plan.
Speaker 5: You can find it on Bloomberg dot Com and The Terminal.
Speaker 5: It's also the cover story this week for the Bloomberg
Speaker 5: Business Week magazine.
Speaker 2: The story looks at how US Treasury Secretary Scott Besson
Speaker 2: has the ear of President Donald Trump and why nervous
Speaker 2: investors worldwide hope it stays that way.
Speaker 5: Bloomberg's Eric Shatsker and Daniel Flatley co wrote the story,
Speaker 5: and we're part of the team that recently interviewed Besson.
Speaker 8: Earlier in the week.
Speaker 2: Guest host Norman lind and I were joined by Eric Schatsker,
Speaker 2: editorial director for a Bloomberg New Economy. We began the
Speaker 2: conversation by asking Eric for his key takeaways from the
Speaker 2: best in interview.
Speaker 8: Well, first of all, the man is unbelievably busy. Spent
Speaker 8: a day at the Treasury Department with alcoholague, Dan Flatley
Speaker 8: and to observe how much he gets done in the
Speaker 8: course of the day, including spending an extended amount of
Speaker 8: time with US gives you a window into the life
Speaker 8: of the Treasury Secretary in the Trump administration. And it's
Speaker 8: important to emphasize in the Trump administration because this particular
Speaker 8: Treasury secretary has been given a whole host of responsibilities
Speaker 8: that go beyond that of the typical Treasury secretary. We
Speaker 8: know that the Treasury secretary in any administration is involved
Speaker 8: in tax policy, is involved in economic sanctions, is involved
Speaker 8: in financial regulation and the like. But President Trump has
Speaker 8: tasked Scott Besson with trade negotiations, with striking and not
Speaker 8: just any old trade negotiations China perhaps the most difficult
Speaker 8: negotiation of all, Japan, which was successful, South Korea, which
Speaker 8: was successful, in Indonesia, the list goes on. He's also
Speaker 8: the acting IRS Commissioner. He also crafted the deal that
Speaker 8: the very novel and original deal that the United States
Speaker 8: struck with Ukraine for a share of that country's mineral
Speaker 8: resource wealth back in April. These are not and furthermore,
Speaker 8: I have to add he was instrumental in getting the
Speaker 8: One Big Beautiful Bill through opposition in both among Republicans
Speaker 8: in both the House and the Senate in order to
Speaker 8: meet the president's self imposed July fourth deadline. So Scott
Speaker 8: Besson has taken on way more than your traditional Treasury
Speaker 8: secretary does, and much of that is because the President
Speaker 8: himself has asked him to do so.
Speaker 7: And it seems as though a lot of people see
Speaker 7: Beson as really having the president's ear here. And this
Speaker 7: is a really fantastic story. Okay, what was the most
Speaker 7: surprising element through your conversation with him?
Speaker 11: Oh?
Speaker 8: Well, there's so many surprises. Say that the thing I
Speaker 8: didn't fully appreciate and which he spelled out for us
Speaker 8: and which others spelled out for us, is the degree
Speaker 8: to which this is something he sought after going back
Speaker 8: many years. Besen told us that he thought about joining
Speaker 8: the Trump campaign as early as twenty sixteen, but at
Speaker 8: that time he just started a new hedge fund, Key
Speaker 8: Square Group, and he didn't feel like he could abandon
Speaker 8: his employees or abandon his clients. But what he did
Speaker 8: do was start to get to know the people close
Speaker 8: to Trump almost immediately thereafter, starting with Steve Bannon and
Speaker 8: subsequently Peter Navarro, Stephen Moore, Kevin Hassett. For example, Trump's
Speaker 8: close economic advisors Art Laffer. He went down to see
Speaker 8: Art Laugher in the South, made a pilgrimage of starts
Speaker 8: to get Art Laugher's blessing for his ambitions to become
Speaker 8: Treasury secretary, and these he didn't make known to Trump
Speaker 8: until November of twenty two, three throws, so it was
Speaker 8: almost a six year period in which he was maneuvering
Speaker 8: to position himself that for a shot at Treasury secretary.
Speaker 8: And when he saw Trump in that November twenty twenty
Speaker 8: three meeting at mar A Lago, Trump asked him if
Speaker 8: he wanted the job, if he was interested in being
Speaker 8: fed chair, and Besen said, no, I have another job
Speaker 8: in mind. Very good.
Speaker 2: The Street Eric gives Scott Bessen a fair amount of
Speaker 2: credit for walking to President back from maybe some of
Speaker 2: the more difficult tariffs that were initially announced. Is that
Speaker 2: a valid point. Did Scott Besson play a big role
Speaker 2: in walking the president back a little bit and does
Speaker 2: he take credit for that or is he kind of demure?
Speaker 8: Besson insists that his job is not to explain things
Speaker 8: to the president or to advise the president. It is
Speaker 8: to present the president with a series of options. Here's
Speaker 8: path one, here's path two, here's here's path three. And
Speaker 8: I will explain to you where we get if we
Speaker 8: go down one, if we go down two, or if
Speaker 8: we go down three. And he leaves it ultimately for
Speaker 8: Trump to make the decision. That's very I wouldn't say
Speaker 8: that's unique to this president, but Trump has a very
Speaker 8: particular view of his role as a decider in chief
Speaker 8: in this administration that is perhaps different from what we
Speaker 8: saw with Biden, or with Obama, or even going back
Speaker 8: in history to other Republicans like George W. Bush and
Speaker 8: maybe even Ronald Reagan. So Besont does not claim credit
Speaker 8: for being the de escalationist, but it is clear talking
Speaker 8: to people around him and to understanding how the market
Speaker 8: thinks market psychology, if you will, which is one of
Speaker 8: his areas of expertise, having been a macro hedge fund
Speaker 8: manager for almost forty years. That is where it really counts.
Speaker 8: The market trusts him, and the market, based on its observations,
Speaker 8: draws these conclusions rightly or wrongly.
Speaker 2: Does he share any concerns he may have about just
Speaker 2: getting somehow involved in some of the crossfire that it
Speaker 2: happens around President Trump and getting into President Trump's bad
Speaker 2: graces or just kind of I mean, because it's such
Speaker 2: a perilous those people that fight fly close to President
Speaker 2: Trump historically have done at their own risk.
Speaker 8: Well, the former vice president, so.
Speaker 2: Yeah, how does he negotiate? Does he even acknowledge that
Speaker 2: that's a risk.
Speaker 8: What I divine from the conversations we had with the
Speaker 8: Treasury Secretary is that it there is a formula for
Speaker 8: success in the Trump administration, and it means making certain
Speaker 8: compromises if you will with yourself. You can come in
Speaker 8: with your own ideas, but it is not your job
Speaker 8: to advance that agenda. So you have to make some
Speaker 8: compromises if you don't. And Steven Minuchin, the former treasure secretary,
Speaker 8: points this out, if you cannot represent the president well,
Speaker 8: in other words, if you can't get behind what the
Speaker 8: president wants, the role has no power. What's the point
Speaker 8: of being in DC. What's the point of abandoning a
Speaker 8: forty year career in finance where your rose to be
Speaker 8: one of the most successful hedge fund managers? And have
Speaker 8: you know for it all to be worthless, had to
Speaker 8: have no power. No, you want to be able to
Speaker 8: wield influence and get things done. And that's very much
Speaker 8: in the back of Scott Besant's mind. What's my legacy
Speaker 8: as Treasury Secretary going.
Speaker 5: To be our Thanks to Eric Shatzker, editorial Director Bloomberg
Speaker 5: New Economy, that's.
Speaker 2: This week's edition of Bloomberg Intelligence on Bloomberg Radio, providing
Speaker 2: in depth research and data on two thousand companies in
Speaker 2: one hundred and thirty industries.
Speaker 5: And remember you can access Bloomberg Intelligence via b I
Speaker 5: go on the terminal. I'm Lisa Mattheo and.
Speaker 8: I'm Paul Sweeney.
Speaker 11: Stay with us.
Speaker 2: Today's top stories and global business headlines are coming up
Speaker 2: right now.