WEBVTT - Tesla's Disappointing Results and Google's Shares Dip 0:00:01.400 --> 0:00:02.239 From Marhart. 0:00:02.279 --> 0:00:06.640 We're Innovation, Money and Power Collie in Silicon Valley, Nbon. 0:00:07.040 --> 0:00:11.559 This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 0:00:25.840 --> 0:00:29.160 Now from London in San Francisco. This is Bloomberg Technology 0:00:29.400 --> 0:00:33.760 coming up. Full coverage of Tesla's disappointing second quarter results. 0:00:34.440 --> 0:00:37.720 Flask Google investors still waiting for an AI payoff. 0:00:37.880 --> 0:00:40.239 We bring you the details and an. 0:00:40.240 --> 0:00:43.839 Update from CrowdStrike on the global IT outage. But Ed, 0:00:44.200 --> 0:00:48.000 we get straight to it. A big fall in Tesla stock. 0:00:48.640 --> 0:00:50.400 Yeah, I mean the chart on the screen tells the 0:00:50.479 --> 0:00:53.280 story right. We're down around twelve percent thirteen percent in 0:00:53.320 --> 0:00:56.120 the session intraday. That would be the biggest drop since 0:00:56.160 --> 0:00:59.360 January twenty fifth on a closing basis, a decline of 0:00:59.360 --> 0:01:01.600 about twelve half percent I think is the biggest drop 0:01:01.640 --> 0:01:04.800 going back to September of twenty twenty. There's a lot 0:01:04.800 --> 0:01:09.360 of anxiety in the misunderstanding here. Fourth consecutive quarter of 0:01:09.520 --> 0:01:13.000 EPs missing estimates, but a record revenue quarter where we 0:01:13.040 --> 0:01:15.839 return to urine year growth. Despite the estimate we would 0:01:15.840 --> 0:01:18.440 see a declining growth. There's a lot to pass over. 0:01:18.520 --> 0:01:20.120 I think robotaxis at the heart of it. 0:01:20.200 --> 0:01:24.839 Carric Yeah of course, the delay being the key watchword. 0:01:25.040 --> 0:01:26.760 Here's a Musk had to say about the delay of 0:01:26.760 --> 0:01:27.480 the robotaxi. 0:01:28.800 --> 0:01:31.080 I wanted to make some important changes that I think 0:01:31.080 --> 0:01:37.200 would improve the big the sort of the robotaxi. That 0:01:37.280 --> 0:01:38.560 think that I think that were the main thing that 0:01:38.560 --> 0:01:41.640 we're going to show and we're also going to show 0:01:41.720 --> 0:01:43.000 up a couple of other things. 0:01:44.800 --> 0:01:47.640 We turned to Craig Trudell because Craig, it was your team, 0:01:47.680 --> 0:01:50.560 It was Ed plus your team that broke down the 0:01:50.560 --> 0:01:53.040 fact that there would be this delay in robotaxis. This 0:01:53.200 --> 0:01:57.840 is the future of the AI underpinning of Tesla. Why 0:01:57.920 --> 0:01:59.920 are we so worried about this quarter's results? 0:02:01.320 --> 0:02:04.520 Yeah, I think you know, it wouldn't normally be a 0:02:04.600 --> 0:02:07.200 huge cause for concern for an event to be pushed 0:02:07.240 --> 0:02:09.200 back by all of two months. I mean, you know 0:02:09.280 --> 0:02:12.240 how material is that for the company, except you know, 0:02:12.280 --> 0:02:15.800 Elon Musk has has really leaned into this being you know, 0:02:15.840 --> 0:02:18.800 the way forward for Tesla, and you know the reason 0:02:18.840 --> 0:02:22.000 why you should or shouldn't you know, invest in the stock, 0:02:22.040 --> 0:02:26.600 and so the slightest delay of you know, this event 0:02:26.720 --> 0:02:31.200 to showcase you know what he's essentially betting the company 0:02:31.240 --> 0:02:36.320 on as the company continues to have deteriorating earnings, is 0:02:36.480 --> 0:02:39.720 you know, cause for concern, especially in light of the 0:02:39.760 --> 0:02:42.120 move and the stock and the lead up to these earnings. 0:02:42.160 --> 0:02:44.800 This was a stock that was really battered when they 0:02:44.880 --> 0:02:47.959 last reported results and has come roaring back over the 0:02:48.040 --> 0:02:50.880 last few months. So right, I'm not surprised to see 0:02:50.880 --> 0:02:51.800 the shares doing this. 0:02:52.400 --> 0:02:55.200 And we underscore it's the delay of an event where 0:02:55.200 --> 0:02:57.600 we were going to unveil or see publicly for the 0:02:57.639 --> 0:03:01.280 first time, a purpose built ROBOTAXI actually debt Gray. They 0:03:01.320 --> 0:03:03.600 went some way to explain the manufacturing process. It's going 0:03:03.680 --> 0:03:07.200 to be this what they call revolutionary unboxed manufacturing strategy, 0:03:07.240 --> 0:03:09.320 but the inference is that that will be post twenty 0:03:09.360 --> 0:03:13.600 twenty five, right, Automotive Gross Margein taught me through where 0:03:13.600 --> 0:03:15.240 the cell side is focused on that. 0:03:16.600 --> 0:03:19.040 Yeah, there's a real concern here that you know, not 0:03:19.080 --> 0:03:23.240 only has has Tesla cut prices, but it's cut prices 0:03:23.280 --> 0:03:26.560 and only seen sales shrink and so uh, that means 0:03:26.639 --> 0:03:30.200 you have to to continue to cut costs, which you know, Tesla, 0:03:30.240 --> 0:03:33.800 to its credit, has has done that very consistently for years, 0:03:34.240 --> 0:03:37.440 but it also needs a product to reinvigorate sales, and 0:03:38.200 --> 0:03:40.640 you know, Musk has has really you know spoken to 0:03:40.680 --> 0:03:44.120 the importance of being able to offer people more affordable 0:03:44.200 --> 0:03:46.960 evs in order for them to you know, be adopted 0:03:46.960 --> 0:03:50.840 by a wider, you know set of consumers. But he 0:03:50.960 --> 0:03:53.680 really has not you know, been willing to to sort 0:03:53.680 --> 0:03:56.680 of back that up with with product we've we've seen 0:03:56.760 --> 0:03:58.560 you know, the cyber truck roll out, but you got 0:03:58.560 --> 0:04:01.640 to pay six figures to buy that truck. You know, 0:04:01.880 --> 0:04:04.920 where is the model too, as people like to refer 0:04:05.000 --> 0:04:07.120 to it, the vehicle that would be cheaper than the 0:04:07.160 --> 0:04:07.720 Model three. 0:04:07.840 --> 0:04:09.120 And that's a real. 0:04:08.960 --> 0:04:12.360 Concern for folks who you know, are willing to credit 0:04:12.480 --> 0:04:16.520 him with his you know vision and give him, you know, 0:04:16.560 --> 0:04:20.919 some time to you know, realize robotaxis. But he needs 0:04:21.000 --> 0:04:23.400 to sort of deliver in the here and now more 0:04:23.520 --> 0:04:26.159 affordable electric vehicles for Tesla to grow again. 0:04:27.600 --> 0:04:30.800 Bloomber's cry Tudew Global Auto's editor in London, thank you 0:04:30.880 --> 0:04:34.479 so much. Let's get reaction to Tesla's second quarter from 0:04:34.480 --> 0:04:37.600 an investor, but this time a retail or. 0:04:37.600 --> 0:04:38.640 Individual investor. 0:04:38.680 --> 0:04:44.120 Alexandra Metz aka Tesla Booma Mama holds thousands of shares 0:04:44.160 --> 0:04:46.760 of Tesla and has done so since twenty twenty. She's 0:04:46.760 --> 0:04:49.960 had previous careers in finance and as an investment analyst, 0:04:49.960 --> 0:04:52.839 but now works as a visa consultant in California and 0:04:52.880 --> 0:04:56.039 on x, the social platform owned by Mask. Is a 0:04:56.040 --> 0:04:59.000 prominent voice in that large body of individuals who do 0:04:59.240 --> 0:05:03.080 back elon Mask and a bullish on Tesla's long term Alexandre, 0:05:03.120 --> 0:05:06.440 good morning to you, Welcome to Bloomberg Technology. The most 0:05:06.480 --> 0:05:09.240 important takeaway from earnings of the earning score for you. 0:05:09.160 --> 0:05:13.240 Please well, thank you ED for having me. For me, 0:05:13.320 --> 0:05:16.280 the most important was actually that we're moving on into 0:05:16.360 --> 0:05:20.440 this next phase of Tesla's growth, and all the markers 0:05:20.520 --> 0:05:24.080 that we have laid there are still there and are 0:05:24.160 --> 0:05:27.400 moving ahead in the same timeline with the same vigor 0:05:27.960 --> 0:05:32.200 then anticipated. So as a retail investor, I mean I 0:05:32.680 --> 0:05:36.719 acknowledge that the market and your typical audience probably doesn't 0:05:36.760 --> 0:05:41.240 have the same large time horizon than we have, but 0:05:41.400 --> 0:05:44.000 for us, it is really as a retail investor, just 0:05:44.040 --> 0:05:47.680 another buying opportunity. Also, do remember we were at these 0:05:47.720 --> 0:05:49.920 prices at the beginning of the month, right when we 0:05:49.960 --> 0:05:52.840 got the delivery and production numbers. The share price was 0:05:52.839 --> 0:05:57.600 about at the same level when your channel broke the 0:05:57.640 --> 0:06:01.040 news that the Robotech Seed Day Taxi event was going 0:06:01.120 --> 0:06:03.480 to be delayed by two months. We were already a 0:06:03.480 --> 0:06:06.680 little bit higher. That's where we saw first fluctuations in 0:06:06.720 --> 0:06:09.760 the stock price. Well, now it is confirmed for October tenth, 0:06:09.920 --> 0:06:12.920 so it is a mere two months. Your colleague Greg 0:06:13.000 --> 0:06:17.000 is completely right. It is not a long delay, and 0:06:18.279 --> 0:06:20.680 there are technical reasons for it. But I also think 0:06:20.760 --> 0:06:22.880 you know, Tesla wants to be ready, wants to be 0:06:22.960 --> 0:06:27.840 sure to show whatever is necessary to convince the market, 0:06:27.960 --> 0:06:32.560 the retail investors about autonomy and that being the crucial 0:06:32.720 --> 0:06:34.440 part to Tesla's future. 0:06:35.480 --> 0:06:38.719 Can you con well sell to us a little bit more? 0:06:38.800 --> 0:06:43.359 Confirm to us how you understand full self driving, the 0:06:43.440 --> 0:06:48.320 focus on AI to eventually become some robotaxi fleet where 0:06:48.400 --> 0:06:51.280 suddenly we've got to ride hailing app out of Tesla's 0:06:51.640 --> 0:06:56.640 How does that become to bear in a good use, 0:06:56.920 --> 0:07:00.000 efficient business strategy way for you? 0:07:01.040 --> 0:07:03.599 Well, I have mine model and I'm very happy to 0:07:03.600 --> 0:07:06.560 share it with us, but we don't have Tesla's model yet. Right. 0:07:06.640 --> 0:07:09.880 That is what is going to be the quintessence of 0:07:10.280 --> 0:07:13.200 October tenth. So what I'm going to bring forward is 0:07:13.280 --> 0:07:18.520 my interpretation from former speetures of Elon and the Tesla team, 0:07:18.680 --> 0:07:21.760 So this may not be the current version, but for me, 0:07:21.880 --> 0:07:24.920 it seems very clear there's going to be a threefold 0:07:25.720 --> 0:07:30.400 business model. One Tesla's own fleet, meaning cars that are 0:07:30.440 --> 0:07:36.760 either already in Tesla's possession, people handing back their leases 0:07:37.080 --> 0:07:40.200 or whatever else, you know, inventory cars, whatever else they 0:07:40.520 --> 0:07:43.120 they have in their own fleet that are going to 0:07:43.240 --> 0:07:46.640 operate autonomously, and that are going to be strategically put 0:07:46.760 --> 0:07:51.560 in cities at spots where they will have the best 0:07:51.920 --> 0:07:56.840 yield of a robotaxi business could be airports, could be 0:07:56.880 --> 0:08:00.280 shopping malls, whatever I mean. That's probably to be to 0:08:00.320 --> 0:08:04.360 be tried out and found out how it's gone up right, 0:08:04.400 --> 0:08:06.360 So that is one part of it. The second part 0:08:06.480 --> 0:08:10.880 is that owners like me can participate and can enroll 0:08:11.000 --> 0:08:14.400 their cars. Instead of standing here in front of my house, 0:08:14.520 --> 0:08:17.200 it can just you know, travel around the day and 0:08:17.600 --> 0:08:20.560 pick up clients and bring them to the places they 0:08:20.640 --> 0:08:22.480 want to be brought to. And that's going to be 0:08:22.520 --> 0:08:25.920 a revenue sharing model. And then the third one is 0:08:26.000 --> 0:08:29.360 going to be the purpose built robotaxis. So those are 0:08:29.360 --> 0:08:29.960 the ones. 0:08:30.000 --> 0:08:34.439 Alexander, right, which is why the date of availing and 0:08:34.520 --> 0:08:36.439 seeing it was important. Just real quick, I want to 0:08:36.440 --> 0:08:38.360 think about the cell side for a second. One of 0:08:38.400 --> 0:08:42.679 Tesla's biggest balls is basically moving to the sidelines after earnings. 0:08:42.800 --> 0:08:44.000 I'm talking about New Streets. 0:08:44.000 --> 0:08:44.680 Pf fer agree. 0:08:44.720 --> 0:08:48.160 He's drapped, downgraded Tesla to neutral and is writing that 0:08:48.520 --> 0:08:50.800 the stock is at the target price they had trading 0:08:50.800 --> 0:08:54.120 at fifty times their twenty twenty six estimates. They see 0:08:54.160 --> 0:08:59.120 limited and unreliable valuation upside, etc. Now we have you 0:08:59.160 --> 0:09:03.480 on the program, retail or individual shareholder, how closely do 0:09:03.520 --> 0:09:06.400 you follow those kind of fundamental analyzes that the sales 0:09:06.440 --> 0:09:06.920 side make. 0:09:07.200 --> 0:09:10.520 And characters like Pierre Well I form. 0:09:10.320 --> 0:09:12.760 A peer a lot his French. I've lived a lot 0:09:12.800 --> 0:09:15.200 in France, so I love him. I love his accent, 0:09:15.200 --> 0:09:16.680 I love the way he's doing that. I think at 0:09:16.720 --> 0:09:19.760 this point he's wrong, And actually I liked how he 0:09:21.000 --> 0:09:23.720 formulated his post because he was not saying that he 0:09:23.920 --> 0:09:27.280 downgraded Tesla, but that Newstreet did it. So there was something. 0:09:27.040 --> 0:09:27.680 Bizarre about it. 0:09:27.720 --> 0:09:29.319 But let's put that aside. 0:09:29.880 --> 0:09:33.520 He doesn't see in the next twelve months major developments 0:09:33.520 --> 0:09:35.480 that could bring the stock higher. That's why they are 0:09:35.520 --> 0:09:38.520 putting it to neutral, I completely disagree. I think we're 0:09:38.559 --> 0:09:41.840 having in October, on October tenth, the ROBOTEXI Day. We'll 0:09:41.880 --> 0:09:44.800 also have in October obviously Q three numbers, and then 0:09:44.800 --> 0:09:47.520 we're going to move into twenty twenty five with a 0:09:47.520 --> 0:09:50.520 lot of announcement, actually three of them. We will have 0:09:51.440 --> 0:09:54.959 the model too, how Craig called it, the cheaper version 0:09:54.960 --> 0:09:58.680 of a Tesla be presented in early twenty twenty five. 0:09:58.960 --> 0:10:01.559 Will have production of Optimus at the end of twenty 0:10:01.640 --> 0:10:02.079 twenty five. 0:10:02.120 --> 0:10:02.880 So there is a. 0:10:02.880 --> 0:10:05.960 Lot of things happening. And he actually differ referred to 0:10:06.200 --> 0:10:10.840 energy being and it's already twenty percent part of the 0:10:10.880 --> 0:10:15.720 profit of it's about seventeen percent. Only there is much 0:10:15.760 --> 0:10:17.599 more margin and energy. I mean, if you want to 0:10:17.640 --> 0:10:21.040 give me a minute to talk about energy revenues and profits, 0:10:21.040 --> 0:10:24.520 because they are not like a car immediately consumed at 0:10:24.520 --> 0:10:28.040 the moment of sales. They're actually over time because when 0:10:28.040 --> 0:10:30.760 you sell energy, you actually get in the revenues and 0:10:30.800 --> 0:10:34.240 get in the profits in installments. And so there is 0:10:34.280 --> 0:10:38.360 a lot of waiting revenues and waiting profits already there, 0:10:38.760 --> 0:10:40.480 and there is much more to come. And I'm very 0:10:40.480 --> 0:10:42.040 surprised that Pierre didn't take care. 0:10:41.920 --> 0:10:45.520 Of that, alex I'm really glad Alexandre that you bring 0:10:45.640 --> 0:10:48.960 up the other parts of just the cars, the optimist 0:10:49.000 --> 0:10:50.840 side of things, the energy side of things. There's also 0:10:50.840 --> 0:10:53.760 the dojo side of things, and many trying to understand 0:10:53.760 --> 0:10:54.400 the logic there. 0:10:54.440 --> 0:10:56.079 Just take a listen to what Elo said last night. 0:10:56.920 --> 0:11:01.280 We are going to double down on dojo and we 0:11:01.400 --> 0:11:03.800 do see a path to being competitive with in video 0:11:03.840 --> 0:11:07.200 with with dojo, and I think we kind of have 0:11:07.240 --> 0:11:08.439 no choice because. 0:11:09.679 --> 0:11:12.640 The demand for in videos. 0:11:12.240 --> 0:11:12.600 So I. 0:11:14.400 --> 0:11:17.760 In video shares down, as is most of the market today. 0:11:17.800 --> 0:11:20.200 But some saying, look, because maybe this is a lack 0:11:20.240 --> 0:11:22.600 of demand that's going to come from Tesla going forward. 0:11:23.000 --> 0:11:25.920 Was that a surprise ultimately that they're really going to 0:11:25.920 --> 0:11:28.160 be ramping up dojo because they are worried about the 0:11:28.200 --> 0:11:29.040 supply side. 0:11:29.760 --> 0:11:32.040 I'm so pleased you're bringing this up, Carolina, Thank you 0:11:32.080 --> 0:11:34.880 so much. Well, it is actually funny because over the 0:11:34.960 --> 0:11:37.360 last five six years, dojo was always one of those 0:11:37.360 --> 0:11:39.640 topics in the earnings call, so shall I do it? 0:11:39.640 --> 0:11:40.160 Shall I not? 0:11:40.400 --> 0:11:41.040 And I do not? 0:11:41.200 --> 0:11:44.280 It was really going It was a dance and I've 0:11:44.320 --> 0:11:47.120 actually done about a six months ago, a whole timeline 0:11:47.160 --> 0:11:49.800 of non committal. We would like to do it, but 0:11:49.880 --> 0:11:51.959 we're really not sure. Don't bet on it. Dojo is 0:11:52.000 --> 0:11:55.839 really not so clear yet. This is the first time 0:11:56.120 --> 0:11:58.600 that Elon clearly said we actually have no choice. We're 0:11:58.600 --> 0:12:00.400 going to double down on it. We're going to do it. 0:12:00.440 --> 0:12:01.320 And this is a. 0:12:01.240 --> 0:12:06.040 Fabulous news because Alexis supercomputers are so far ahead and 0:12:06.160 --> 0:12:09.840 will make will make the whole Tesla infrastructure, the whole 0:12:10.720 --> 0:12:15.880 digestion of videos and output so much more profitable, rather 0:12:15.920 --> 0:12:17.880 than purchasing the Nvidia chips. 0:12:18.040 --> 0:12:19.439 Alexandro, we're running out of time. 0:12:19.480 --> 0:12:20.679 We have a lot to get to, so I want 0:12:20.679 --> 0:12:25.240 to ask, would you vote in favor of Tesla investing 0:12:25.400 --> 0:12:28.880 in Xai per the poll in the Exchange last night. 0:12:30.280 --> 0:12:33.000 I love that you did the yes. Thank you very much. 0:12:33.240 --> 0:12:35.439 I appreciate all of those. So we're close to sixty 0:12:35.520 --> 0:12:38.720 nine percent, which is always a fun number, isn't it. Yes, 0:12:38.760 --> 0:12:41.319 I would actually vote for it, but not unconditionally, you 0:12:41.679 --> 0:12:44.640 know how I like doing the analysis of things. This morning, 0:12:44.679 --> 0:12:48.160 we just had news that Open Ai will probably produce 0:12:48.160 --> 0:12:51.200 another five billion dollar loss this year. I think these 0:12:51.240 --> 0:12:54.839 AI companies need to be thoroughly analyzed in principle. 0:12:54.960 --> 0:12:55.440 I love it. 0:12:55.480 --> 0:12:58.600 I completely understand why it was a segregate identity from 0:12:58.640 --> 0:13:01.920 the start. Elon reeksplain yesterday those engineers don't want to 0:13:01.920 --> 0:13:03.760 be in a mega cup company. They want to have 0:13:03.840 --> 0:13:06.720 all the upside of a small startup, so it needed 0:13:06.760 --> 0:13:08.960 to be set up that way. But also I fully 0:13:09.040 --> 0:13:12.720 underscerent that Tesla needs groc needs all this input, and 0:13:12.960 --> 0:13:15.839 Tesla has at the moment thirty billion dollars offer a 0:13:15.920 --> 0:13:19.040 cash line, so investing five billion into XI could be 0:13:19.040 --> 0:13:19.920 a good idea. 0:13:20.000 --> 0:13:24.120 Okay, that was a screen grab of the poll, not 0:13:24.800 --> 0:13:27.520 any member of the Bloomberg Technology team voting yes on it. 0:13:27.600 --> 0:13:32.160 Alexandra Mehd's investor in Tesla, retail shareholder, thank you now. 0:13:32.200 --> 0:13:32.720 Some other news. 0:13:32.760 --> 0:13:35.360 Earlier this month, it was reported the Elon Musk had 0:13:35.360 --> 0:13:37.600 pledged in an eight forty five million dollars a month 0:13:37.760 --> 0:13:42.160 to a super pack supporting Trump's presidential campaign. On Tuesday, 0:13:42.559 --> 0:13:46.000 Musk confirmed on x that he would be making donations, however, 0:13:46.360 --> 0:13:49.120 at a much lower level than what had been reported. 0:13:49.360 --> 0:13:52.040 He did not say how much he had contributed. 0:13:52.080 --> 0:13:54.679 Carol, well done for clearing that up. 0:13:54.760 --> 0:13:57.360 Meanwhile, let's check in on these markets and NASLAK currently 0:13:57.400 --> 0:14:00.640 off by two point six percent. The worst daysis July seventeenth. 0:14:00.840 --> 0:14:03.040 We are training at the lowest as juloon the eleventh. 0:14:03.080 --> 0:14:06.240 Why are we lower? A worry that AI just isn't 0:14:06.240 --> 0:14:08.160 reaping the rewards in the here and now. So coming 0:14:08.200 --> 0:14:09.720 up we dive into that. We take a look at 0:14:09.720 --> 0:14:15.640 Alphabet's earnings. What it tells us if investors antsiness. 0:14:14.559 --> 0:14:16.080 About AI and its rewards. 0:14:16.240 --> 0:14:19.280 Ioko Yoshioka's with US well founded Enhancement Group. 0:14:19.960 --> 0:14:25.400 This is bluebig technology. 0:14:31.880 --> 0:14:36.440 Alphabet shares falling after the Google parents sunk more resources 0:14:36.480 --> 0:14:40.600 thirteen billion dollars worth. They expect into driving to outmatch 0:14:40.720 --> 0:14:44.920 rivals in artificial intelligence, fueling spending higher than analysts have 0:14:44.960 --> 0:14:48.800 been expecting. CFO Ruth Porat wanting to sound some reassurance 0:14:48.840 --> 0:14:51.400 on the call with media yesterday, saying quote, we are 0:14:51.440 --> 0:14:54.560 seeing the benefit of our strength in AI AI infrastructure 0:14:54.560 --> 0:14:58.200 as we generative AI solutions for cloud customers. There is 0:14:58.240 --> 0:15:00.680 no question customers are turning to us as they are 0:15:00.720 --> 0:15:02.160 building out the capabilities. 0:15:02.640 --> 0:15:03.560 Let's discuss all of this. 0:15:03.760 --> 0:15:06.720 Ioco Oshioka's with US put folio manager over at Wealth 0:15:06.800 --> 0:15:09.760 Enhancement Group. You hold shares of Alphabet they're down the 0:15:09.800 --> 0:15:14.760 most since February. Look, revenue up some fifteen percent, earnings 0:15:14.800 --> 0:15:18.080 per share jumping thirty one percent. But it seems to 0:15:18.120 --> 0:15:22.120 be this idea of plunging thirteen billion dollars per quarter 0:15:22.320 --> 0:15:24.200 into AI that is the real worry here. 0:15:25.720 --> 0:15:28.560 Sure, hi Caroline, thanks for having me. You know, in 0:15:28.640 --> 0:15:31.920 terms of Google, we thought it was a pretty solid quarter. 0:15:32.080 --> 0:15:35.200 You know, we had strength in revenues out of UH 0:15:35.240 --> 0:15:39.760 search and YouTube, and you know, Cloud was pretty strong. Now, 0:15:40.000 --> 0:15:43.440 the thirteen billion dollars that is being spent on capax 0:15:43.440 --> 0:15:45.560 and the twenty five billion that's been spent so far 0:15:45.760 --> 0:15:48.160 your date, you know, you t you take that and 0:15:48.240 --> 0:15:51.120 you say it's gonna be fifty billion for twenty twenty four. 0:15:51.880 --> 0:15:55.440 You know, Google still has eighty billion dollars of net 0:15:55.480 --> 0:15:58.200 cash on their balance sheet, and so, you know, I 0:15:58.240 --> 0:16:01.880 think the spend is warranted. That infrastructure is really needed. 0:16:02.120 --> 0:16:04.680 They needed it to do it for the cloud growth 0:16:04.720 --> 0:16:07.600 to begin with, and so you know, it is something 0:16:07.680 --> 0:16:10.520 that all the hyperscalers are continuing to do in twenty 0:16:10.600 --> 0:16:13.720 twenty four, and investors are just asking, you know, what 0:16:13.880 --> 0:16:17.520 is that return on investment? At some point in twenty 0:16:17.560 --> 0:16:19.400 twenty five Oka. 0:16:19.480 --> 0:16:21.200 When I was on the phone with Roofport, I asked 0:16:21.240 --> 0:16:23.200 her if she would give me a revenue run rate 0:16:23.280 --> 0:16:26.840 number like AWS. Did you probably remember last quarter? She said, 0:16:26.880 --> 0:16:29.120 I'm not going to do that because we'll address it 0:16:29.120 --> 0:16:31.880 on the Analyst school. On the Analyst CAOL, they said 0:16:31.960 --> 0:16:34.520 that year to date they had billions of dollars of 0:16:34.560 --> 0:16:37.640 revenue from AI infrastructure and generative AI. 0:16:38.080 --> 0:16:40.280 And I'm just curious for like and investigate you why. 0:16:40.280 --> 0:16:42.840 Wasn't that enough If it was so good for Amazon 0:16:42.880 --> 0:16:44.880 to give a number like that a few months ago. 0:16:46.640 --> 0:16:48.240 I think it's on the spending side. 0:16:48.280 --> 0:16:51.600 I think historically we've seen that, you know, companies that 0:16:51.760 --> 0:16:55.560 spend more on capex just have less room on their 0:16:55.600 --> 0:16:59.800 free cash flow to spend on money being returned to shareholders. So, 0:17:00.280 --> 0:17:03.360 you know, that's probably the reason why the stock selling 0:17:03.360 --> 0:17:03.640 off a. 0:17:03.600 --> 0:17:04.359 Little bit today. 0:17:04.440 --> 0:17:07.320 But over the long term, you know, the valuation for 0:17:07.400 --> 0:17:11.200 Google is not extreme. It still is a quality company, 0:17:11.560 --> 0:17:14.159 it still has a good business model, and I think 0:17:14.200 --> 0:17:16.000 it's pretty attractive at these levels. 0:17:17.840 --> 0:17:20.320 What's so interesting is it feels as though Alphabet and 0:17:20.359 --> 0:17:24.199 indeed slightly Tesla are just shaking all of our concerns 0:17:24.240 --> 0:17:27.280 about the AI hype and the fact that this isn't 0:17:27.359 --> 0:17:30.600 going to be hugely revenue generating in this quarter. 0:17:30.520 --> 0:17:31.159 Or the next. 0:17:31.880 --> 0:17:35.399 How is your patience for AI to pay off? Whether 0:17:35.440 --> 0:17:37.920 it's alphabet or whether it's in video or some of 0:17:37.960 --> 0:17:40.000 the other names. I have just gone stratospheric and the 0:17:40.040 --> 0:17:42.640 hope that AI is becoming a profitable reality. 0:17:44.040 --> 0:17:45.120 Sure, So I think. 0:17:44.960 --> 0:17:48.280 In the broader scheme of things, you know, this sell 0:17:48.320 --> 0:17:52.040 off in technology shares across all of tech, I think 0:17:52.080 --> 0:17:53.680 it's actually a healthy. 0:17:53.359 --> 0:17:54.280 Thing for markets. 0:17:54.359 --> 0:17:56.800 We're seeing, you know, the broadening out of markets that 0:17:56.800 --> 0:17:59.439 we've been talking about for so long, and you're seeing 0:17:59.480 --> 0:18:02.399 other of the market sort of pick up the slack, 0:18:02.640 --> 0:18:05.399 which is great to see, you know. I think for AI, 0:18:06.280 --> 0:18:09.240 Sunder Pitch I said it in terms of taking time, 0:18:09.400 --> 0:18:10.640 it's all going to take time. 0:18:11.080 --> 0:18:12.920 And when we look back at. 0:18:12.720 --> 0:18:16.400 The cloud and the growth of cloud, that also took time. 0:18:16.480 --> 0:18:19.720 I mean Aws, Microsoft Azure, and. 0:18:19.680 --> 0:18:21.960 You know, Google Cloud. We're all being built. 0:18:22.040 --> 0:18:24.760 You know, years and years ago, and we're just starting 0:18:24.800 --> 0:18:27.600 to see that benefit and they're still growing at you know, 0:18:27.640 --> 0:18:30.440 twenty five percent plus rates, and so, you know, I 0:18:31.240 --> 0:18:34.440 think that AI is probably on a similar trajectory. It's 0:18:34.560 --> 0:18:36.520 just not going to be in a straight line. 0:18:37.720 --> 0:18:38.080 Are ok. 0:18:38.400 --> 0:18:42.120 Weimo fifty thousand paid rides a week, so Alphabet puts 0:18:42.119 --> 0:18:44.000 another five billion dollars into it. 0:18:44.040 --> 0:18:44.840 Your reaction to. 0:18:44.800 --> 0:18:48.919 That, you know, I think, just as Tesla is putting 0:18:49.040 --> 0:18:52.600 money into the robotaxi side of things, I think autonomous 0:18:52.880 --> 0:18:56.720 driving cars are you know, something that is a long 0:18:56.800 --> 0:19:00.280 term growth driver for many of these companies, whether be 0:19:00.400 --> 0:19:04.000 Google or Tesla or even Nvidia in terms of the 0:19:04.119 --> 0:19:07.320 overall chips that will be installed in many of these cars. 0:19:07.680 --> 0:19:11.080 So I think it's still again another leg that maybe 0:19:11.400 --> 0:19:15.119 you know, again take more time that investors don't always 0:19:15.119 --> 0:19:19.480 have the patients for, but it is another growth avenue 0:19:19.520 --> 0:19:20.680 for many of these stocks. 0:19:22.520 --> 0:19:25.720 Oko Yahia, portfolio manager at Wealth Enhancement Group, thank. 0:19:25.600 --> 0:19:36.880 You today for our AI and Action segment. Let's bring 0:19:36.920 --> 0:19:40.400 in Alex retre CEO of Stainless is a company dedicated 0:19:40.440 --> 0:19:43.280 to building basically a platform for high quality, easy to 0:19:43.359 --> 0:19:48.000 use APIs by building software development kits SDKs for AI 0:19:48.080 --> 0:19:51.240 companies like Open Ai and Anthropic Company recently closed a 0:19:51.280 --> 0:19:52.760 three and a half million seed round. 0:19:53.080 --> 0:19:56.320 Let's bring in Alex And you know what prompted you? 0:19:56.320 --> 0:19:57.840 You were building and doing. 0:19:57.600 --> 0:20:00.840 This over at Stripe basically, and you've taken it broader. 0:20:01.240 --> 0:20:07.480 How different is it creating SDKs APIs over overt AI companies? 0:20:07.640 --> 0:20:08.720 How much more difficult? 0:20:10.119 --> 0:20:13.240 It's a great question. There's a lot of techniques that 0:20:13.280 --> 0:20:15.040 we use today. It's stay in lists that are similar 0:20:15.080 --> 0:20:18.120 to the techniques that we that I developed a Stripe 0:20:18.320 --> 0:20:21.159 empowered stripes stks, but a lot of things are different. 0:20:22.880 --> 0:20:25.159 For one thing, we need to support a much broader 0:20:25.240 --> 0:20:29.480 variety of API design patterns. And that's true for just 0:20:29.520 --> 0:20:33.119 building a platform that can support any company to build 0:20:33.160 --> 0:20:35.800 a great developer experience for their s API. That includes 0:20:35.840 --> 0:20:39.479 AI and non AI companies, but for companies like opening 0:20:39.520 --> 0:20:42.680 I and Thropic and wide variety of other AI companies 0:20:42.680 --> 0:20:44.800 that we support, we actually have to go a lot 0:20:44.880 --> 0:20:48.919 deeper to help developers really take full advantage of the 0:20:48.920 --> 0:20:52.400 full power of these APIs. They're much more advanced, they're 0:20:52.440 --> 0:20:56.840 richer with things like streaming and function calling, and that 0:20:56.960 --> 0:21:01.320 requires a lot more STK expertise. And then even fintech 0:21:01.359 --> 0:21:02.040 API is like. 0:21:02.000 --> 0:21:04.440 Straight, you're a team of ten with three and a 0:21:04.480 --> 0:21:06.720 half million dollars in the bank, Just talk to me 0:21:06.760 --> 0:21:08.080