WEBVTT - BI Weekend: Rocket Deal, Restaurant Spending, Gen AI 0:00:00.280 --> 0:00:11.440 Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Intelligence 0:00:11.560 --> 0:00:13.680 with Alex Steel and Paul Sweeney. 0:00:13.760 --> 0:00:17.000 The real app performance has been in US corporate high yield. 0:00:17.160 --> 0:00:19.520 Are the companies lean enough? Have they trimmed all the fats? 0:00:19.600 --> 0:00:22.800 The semiconductor business is a really cyclical. 0:00:22.320 --> 0:00:26.560 Business, breaking market headlines and corporate news from across the globe. 0:00:26.600 --> 0:00:29.040 Do investors like the M and A that we've seen? 0:00:29.240 --> 0:00:32.199 These are two big time blue chip companies. 0:00:32.479 --> 0:00:36.199 Window between the peak and cunt changing super fast. 0:00:36.120 --> 0:00:41.160 Bloomberg Intelligence with Alex Steel and Paul Sweeney on Bloomberg Radio. 0:00:42.680 --> 0:00:44.959 On Today's Boomberg Intelligence Show, we dig inside the big 0:00:44.960 --> 0:00:47.240 business stories impacting Wall Street and the global markets. 0:00:47.440 --> 0:00:49.320 Each and every week we provide in depth research and 0:00:49.400 --> 0:00:51.159 data on some of the two thousand companies and one 0:00:51.240 --> 0:00:53.800 hundred and thirty industries our analysts cover worldwide. 0:00:53.880 --> 0:00:55.160 Today, we'll look at a big deal in the M 0:00:55.160 --> 0:00:57.279 and A space that will create a mortgage behemoth. 0:00:57.560 --> 0:00:59.720 Plus we're going to discuss the rising costs of food 0:00:59.760 --> 0:01:01.400 and wow that's effecting the consumer. 0:01:01.600 --> 0:01:04.600 But first we begin with research. Bloomberg Intelligence recently put 0:01:04.640 --> 0:01:06.840 out on ten companies to watch for in the second 0:01:06.880 --> 0:01:08.759 quarter of twenty twenty five and for more on this. 0:01:08.840 --> 0:01:10.600 Liz Paul and I were joined by Tim Craig, head 0:01:10.600 --> 0:01:13.440 Bloomberg Intelligence Global Chief Content Officer. 0:01:13.720 --> 0:01:15.959 We first asked him to give us a broad scope 0:01:16.000 --> 0:01:17.120 of the company he's looking at. 0:01:17.720 --> 0:01:20.800 So just as a reminder, these are all based off 0:01:20.840 --> 0:01:25.000 of focus ideas, which for us in Bloomberg Intelligence are 0:01:25.240 --> 0:01:29.520 high conviction out of consensus views where we see catalysts 0:01:29.600 --> 0:01:34.040 ahead that can actually change the market's mindset around these companies. 0:01:34.959 --> 0:01:40.280 So you've talked about the weight on consumer sentiment and 0:01:40.319 --> 0:01:45.240 things along those lines. Well, Dollar Rama, which is a 0:01:45.360 --> 0:01:51.560 dollar store up in Canada has yeah, exactly, They're going 0:01:51.640 --> 0:01:57.080 to face slower wage growth, higher inflation. We've not seen 0:01:57.280 --> 0:02:00.080 estimate cuts yet for Dollar Rama, like we've seen a 0:02:00.200 --> 0:02:04.760 dollar Tree and dollar stores and whatnot. We think that's coming. 0:02:05.280 --> 0:02:08.920 Another one that is interesting if you want to throw 0:02:09.000 --> 0:02:12.400 on as well the whole tariff concept is PDD. You 0:02:12.480 --> 0:02:14.240 might not have heard of this, but this is one 0:02:14.280 --> 0:02:17.640 of the big Chinese companies that trade tech companies that 0:02:17.760 --> 0:02:23.120 trades in New York. They own Timu, which is that 0:02:23.480 --> 0:02:28.840 ultra low priced e commerce platform in the States. There's 0:02:29.520 --> 0:02:34.600 their bigger platform is one in China, they're going to 0:02:34.680 --> 0:02:37.200 have constraints on what they can bring in at the 0:02:37.320 --> 0:02:41.000 right price, and they're also investing pretty heavily outside the 0:02:41.120 --> 0:02:44.680 US to grow their non US platform beyond China. So 0:02:45.000 --> 0:02:47.360 again we think that there's estimate cuts there to come. 0:02:47.960 --> 0:02:49.600 Hey, Tim, One of the more looking at this list, 0:02:49.680 --> 0:02:53.400 one of the more controversial calls, I think is Tesla. 0:02:53.520 --> 0:02:57.120 Steve Manner, the analyst for Bloomberg Intelligence covering the auto business, 0:02:57.240 --> 0:03:01.040 he's pretty positive on Tesla here despite the stock price 0:03:01.080 --> 0:03:04.040 in there. I guess the concern about Elon Muskin is focus. 0:03:04.720 --> 0:03:08.040 Yeah, you know, you could throw this in with tariffs, 0:03:08.080 --> 0:03:11.640 with policy, et cetera, and clearly it's taken a shellacking 0:03:11.720 --> 0:03:15.400 from a stock price perspective. We see two things going 0:03:15.440 --> 0:03:19.280 on here. Number One, there's been a lot of talk 0:03:19.320 --> 0:03:22.200 about how their sales have been disappointing as of Leyden. 0:03:22.360 --> 0:03:26.760 Is that because of politics, We think, frankly it's because 0:03:26.760 --> 0:03:30.600 of the model transition with the new Model Y coming out, 0:03:30.919 --> 0:03:34.200 orders even in China have been good, and we would 0:03:34.200 --> 0:03:36.520 expect to see sales to pick up as we proceed 0:03:36.520 --> 0:03:40.119 through the second quarter and on ind to midyear. You've 0:03:40.160 --> 0:03:46.160 also got a really underappreciated battery storage business that is 0:03:46.280 --> 0:03:49.360 also starting to ramp up. So we see two catalysts 0:03:49.400 --> 0:03:52.360 here to play out that people aren't focused on because 0:03:52.400 --> 0:03:53.480 of all the other noise. 0:03:53.920 --> 0:03:57.280 And here's one for Paul here Cracker Barrel, Oh yeah, 0:03:57.440 --> 0:03:59.560 is on your list again. I've never been. 0:04:00.120 --> 0:04:01.800 Now, Tim, he lives in London. 0:04:02.000 --> 0:04:04.640 You go to New. 0:04:04.560 --> 0:04:06.560 York City, man like, I don't know what I'm going 0:04:06.600 --> 0:04:06.920 to see. 0:04:06.960 --> 0:04:10.360 Tim grew up in southwest Virginia. He knows. 0:04:10.920 --> 0:04:12.800 I mean I'll eat it. If you buy it and 0:04:12.880 --> 0:04:14.360 eat it, I mean give it to me, I'll eat it. 0:04:14.440 --> 0:04:16.480 Let's put it that way, all right, talk to us about. 0:04:16.279 --> 0:04:24.440 Really good I've crack. Cracker Barrel falls into the restructuring 0:04:25.000 --> 0:04:28.719 reorganization bucket. And there's another one on the list as 0:04:28.760 --> 0:04:32.200 well that actually may be good for you, Alex. I'll 0:04:32.200 --> 0:04:35.880 come back to But cracker Barrel three years of estimate cuts. 0:04:36.320 --> 0:04:39.440 There's next to no buys on this on this stock. 0:04:39.880 --> 0:04:44.560 And from an underlying business perspective, they've made some wholesale revamps, 0:04:44.960 --> 0:04:49.680 the menu, their approach to service. Uh, they're remodeling stores, 0:04:49.920 --> 0:04:52.440 and we think that there's an inflection to come from 0:04:52.520 --> 0:04:57.560 the standpoint of earnings trends. Notwithstanding the economy, this one's 0:04:57.560 --> 0:04:59.760 already been beaten down, and we think that there's an 0:04:59.800 --> 0:05:04.560 up decided to come Carrying's the other one carrying? Yeah? 0:05:04.720 --> 0:05:07.600 So again three years of estimate cuts, you think who 0:05:07.680 --> 0:05:11.960 is carrying? Well, their biggest label is Gucci. There you go, 0:05:12.040 --> 0:05:13.560 Alex and if. 0:05:13.640 --> 0:05:15.760 I only discount him, let's be clear. 0:05:15.960 --> 0:05:21.520 Yeah, So new CEO at Gucci, a new head designer 0:05:21.560 --> 0:05:25.400 at Gucci. We think there's a rejuvenation at hand, and 0:05:25.440 --> 0:05:26.800 it's not in the estimates. 0:05:27.480 --> 0:05:30.000 So again, Tim, let's just step back a little bit. 0:05:30.640 --> 0:05:34.359 European markets really performing well, certainly relative to the US market. 0:05:34.400 --> 0:05:35.440 What are your clients saying here? 0:05:36.839 --> 0:05:41.760 So I think there are a couple of things coalescing. Three. 0:05:42.080 --> 0:05:45.920 In fact, you take tariffs and all the concern that's 0:05:45.960 --> 0:05:50.440 going on. You take deep seek and that raising the 0:05:50.520 --> 0:05:53.599 specter of g Is there a different dynamic in the 0:05:53.640 --> 0:05:58.000 world of tech that's been driving US markets and US exceptionalism. 0:05:58.440 --> 0:06:02.479 And then you have a big European defense initiative and 0:06:02.560 --> 0:06:07.560 imperative with Germany coming out with what people around here 0:06:07.560 --> 0:06:11.520 are calling the Bazooka. And you add these together, there's 0:06:11.560 --> 0:06:16.200 a growth idea developing in Europe. There's concern about what's 0:06:16.200 --> 0:06:18.000 going on in the US. And if you look at 0:06:19.320 --> 0:06:22.240 our economists, they see as much of a hit on 0:06:22.520 --> 0:06:27.080 US growth and inflation as they see it anywhere outside 0:06:27.120 --> 0:06:29.760 of Mexico and Canada. So you know, all of that 0:06:30.080 --> 0:06:34.560 weighs on the US and Europe is an alternative, and 0:06:35.040 --> 0:06:38.680 obviously we've talked a lot about how it's valued relative 0:06:38.720 --> 0:06:41.720 to the States. I think that creates a money flow issue, 0:06:42.040 --> 0:06:44.360 a money flow opportunity, just like it does for China. 0:06:44.720 --> 0:06:45.000 All right. 0:06:45.000 --> 0:06:47.599 Thanks to Tim Craig had Bloomberg Intelligence, a global Chief 0:06:47.680 --> 0:06:51.039 Content Officer, Each week we look at research from Bloomberg 0:06:51.240 --> 0:06:54.279 n EF previously known as New Energy Finance. They're the 0:06:54.279 --> 0:06:57.120 team at Bloomberg that tracks and analyzes the energy transition 0:06:57.279 --> 0:07:01.240 from commodities to power, transport, industries, building, and ag sectors. 0:07:01.520 --> 0:07:05.000 This week we looked at the growing enthusiasm for nuclear 0:07:05.120 --> 0:07:06.120 power for more. 0:07:06.279 --> 0:07:09.360 Guest hosts Isabelle Lee and I were joined by Chris Gaddomski, 0:07:09.480 --> 0:07:12.600 Bloomberg and EF lead nuclear analysts. We first to ask 0:07:12.680 --> 0:07:14.960 Chris what his thoughts are on nuclear power as a 0:07:15.040 --> 0:07:17.000 source to fuel AI expansion. 0:07:17.280 --> 0:07:24.240 It's a great technology for supplying clean, carbon free twenty 0:07:24.240 --> 0:07:29.080 four to seven base load power. However, there's a mismatch 0:07:29.360 --> 0:07:33.920 between the demand for the electricity. Data centers say they 0:07:33.920 --> 0:07:37.760 would like to have the electricity right away tomorrow, if 0:07:37.800 --> 0:07:42.840 not sooner, and any new nuclear capacity in the US 0:07:42.960 --> 0:07:46.560 is not going to come online until after twenty thirty. 0:07:46.720 --> 0:07:48.920 I mean you may have one or two outliers come 0:07:48.960 --> 0:07:53.880 on beforehand, but before you have a reliable demonstration of 0:07:53.960 --> 0:07:57.080 the technology. Because these are all new technologies being built, 0:07:58.080 --> 0:08:01.280 we'll be looking for after twenty thirty, So possibly we 0:08:01.320 --> 0:08:05.920 could miss the first wave of advanced reactor contribution to 0:08:05.960 --> 0:08:08.600 the AI developments. 0:08:09.080 --> 0:08:12.360 Why is nuclear construction in the West barely budgeting, whereas, 0:08:12.440 --> 0:08:15.000 in for instance, Asia Pacific region it's booming. 0:08:15.720 --> 0:08:19.760 There's two big reasons for that. One, the price at 0:08:19.880 --> 0:08:23.400 which the Chinese, for example, can build a nuclear power 0:08:23.440 --> 0:08:26.920 plant is much lower than we can in the US, 0:08:26.960 --> 0:08:29.360 and that's the function the fact that China right now 0:08:29.400 --> 0:08:33.439 is building twenty eight nuclear power plants. We have built 0:08:33.600 --> 0:08:37.000 two in the last ten or fifteen years, and so 0:08:37.360 --> 0:08:40.800 they will build six nuclear power plants at the same site, 0:08:40.880 --> 0:08:43.920 and the construction team moves from one reactor to the 0:08:43.920 --> 0:08:47.640 next reactor to the next reactive reactor h reactor subsequently 0:08:47.679 --> 0:08:51.120 costs less than the first. So to China to build 0:08:51.160 --> 0:08:53.840 reactors for maybe one fifth to one quarter of what 0:08:53.920 --> 0:08:56.280 the US can build, it makes sense for them to 0:08:56.280 --> 0:08:58.920 build a lot of nuclear power plants. We've lost the 0:08:59.760 --> 0:09:03.160 x tease and the desire to build a lot of 0:09:03.240 --> 0:09:07.720 large nuclear power plants. To cite some advantages and significant 0:09:08.120 --> 0:09:10.680 benefits to the technology, talk to. 0:09:10.720 --> 0:09:14.840 Us about small modular reactors. Is that a solution. 0:09:16.559 --> 0:09:20.160 Yeah, it is a solution because the not dynamic has 0:09:20.360 --> 0:09:24.120 has has changed in the past. We've seen let's build 0:09:24.200 --> 0:09:27.640 large reactors to get economies of scale in size. The 0:09:27.679 --> 0:09:30.679 conversations talk, well, let's build a lot of small reactors 0:09:30.679 --> 0:09:33.720 and get down the learning curve as quickly as we can. 0:09:34.120 --> 0:09:38.600 So there are only two small modi reactors operating modern 0:09:38.640 --> 0:09:41.400 ones operating in the world, one in China, one in Russia. 0:09:41.760 --> 0:09:44.880 China is building another one. Russia is planning to build 0:09:44.880 --> 0:09:47.839 another one, but they haven't yet broken ground on that. 0:09:48.800 --> 0:09:52.440 So it's a technology that presents a lot less risk 0:09:52.720 --> 0:09:56.839 to the utility or the hyperscaler who is buying it. 0:09:57.080 --> 0:10:02.560 There's no big deployment risk. There is technology risk because 0:10:02.720 --> 0:10:05.160 these are all first of a kind, and so with 0:10:05.240 --> 0:10:07.440 the first of a kind project, especially in the nucle 0:10:07.520 --> 0:10:10.680 power business, there's a lot of uncertainty with regards to 0:10:10.720 --> 0:10:14.400 schedule and cost, and so people are thinking about this. 0:10:14.960 --> 0:10:17.520 A lot of the utilities of are making plans to 0:10:17.600 --> 0:10:20.680 go forward. The US and Canada the UK are leading 0:10:20.720 --> 0:10:23.240 the effort, and so it's going to take some time 0:10:23.360 --> 0:10:27.080 before those first reactors, small, major reactors, and advanced reactors 0:10:27.440 --> 0:10:28.760 across the finish line. 0:10:29.640 --> 0:10:33.160 We know that new nuclear projects are coming online slower, 0:10:33.559 --> 0:10:35.920 But do you think this administration will change that or 0:10:36.000 --> 0:10:37.240 is it going to be status quo. 0:10:37.840 --> 0:10:44.160 The Trump administration in its first time first term was 0:10:44.360 --> 0:10:49.120 very very pro developing uranium the equivalent of drill baby 0:10:49.200 --> 0:10:54.240 drill from the uranium sector, and to a certain extent 0:10:54.320 --> 0:10:58.320 that uranium has bounced back up. The current administration now 0:10:58.800 --> 0:11:02.720 is favorable towards nuclear. Chris Wright, the Secretary of Energy, 0:11:02.760 --> 0:11:05.720 has a pedigree from Berkeley and MIT to the leading 0:11:06.120 --> 0:11:09.959 academic institutions regarding nuclear, and I think that they are 0:11:10.080 --> 0:11:14.720 very pro nuclear. However, the big question is how much 0:11:14.880 --> 0:11:19.600 government funding will be used to support nuclear reactor construction. 0:11:19.760 --> 0:11:22.000 That's something that we're still working out and trying to 0:11:22.120 --> 0:11:23.920 understand Chris. 0:11:23.920 --> 0:11:26.680 I finished the first season of the TV show Landman, 0:11:26.800 --> 0:11:29.439 so I now consider myself an expert in the oil 0:11:29.440 --> 0:11:33.080 and gas business, and I think my takeaway is, you know, 0:11:33.160 --> 0:11:36.520 listening to energy providers and energy users, we're going to 0:11:36.600 --> 0:11:39.480 need everything. We're going to need fossil fuels, We're gonna 0:11:39.480 --> 0:11:41.720 need the wind, We're going to need solar, all that 0:11:41.800 --> 0:11:45.360 kind of stuff. Maybe nuclear. How do you think about that? 0:11:47.040 --> 0:11:50.439 Yeah, my take is that we certainly do need nuclear. 0:11:50.480 --> 0:11:53.960 If you look on a geopolitical basis, you have China 0:11:54.000 --> 0:11:57.720 building twenty eight reactors, large reactors. Also, as soon as 0:11:57.760 --> 0:12:01.559 it passes are post twenty third, they'll have more nuclear 0:12:01.679 --> 0:12:04.640 power plants operating than we do. The Russians are very, 0:12:04.720 --> 0:12:07.560 very aggressively building nuclear power plants not only in Russia 0:12:07.600 --> 0:12:10.559 but in Middle East and establishing one hundred year relations 0:12:10.600 --> 0:12:12.679 with that, and I think that has caused a lot 0:12:12.679 --> 0:12:15.160 of concern for the US government saying, hey, listen, we 0:12:15.240 --> 0:12:18.840 need to sort of offer a viable alternative option for 0:12:20.040 --> 0:12:22.760 new nuclear in the years ahead. And I think it's 0:12:22.800 --> 0:12:27.440 a very very solid ambition. Biden dedministration called for two 0:12:27.480 --> 0:12:31.320 hundred gigawats of extra nuclear capacity. That's tripling what we 0:12:31.440 --> 0:12:35.120 have right now, and so there is a tremendous need 0:12:35.160 --> 0:12:37.240 for it, and I think there has a place. It's 0:12:37.280 --> 0:12:40.040 not a solution for all the problems, but it works 0:12:40.160 --> 0:12:42.280 very well for many types of applications. 0:12:42.880 --> 0:12:47.000 Our thanks to Chris Gadomski, Bloomberg and EF lead nuclear analyst. 0:12:47.160 --> 0:12:48.520 All right, coming up, we're going to break down the 0:12:48.520 --> 0:12:50.760 future of AI empowering data centers. 0:12:50.960 --> 0:12:53.719 You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 0:12:53.800 --> 0:12:55.880 depth research and data on two thousand companies and one 0:12:55.960 --> 0:12:58.840 hundred and thirty industries. You can access Bloomberg Intelligence via 0:12:58.920 --> 0:13:00.839 bi go in the terminal Paul Sweeney and. 0:13:00.800 --> 0:13:02.840 I'm Alex Steele, and this is Bloomberg. 0:13:07.520 --> 0:13:11.200 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:13:11.280 --> 0:13:14.360 weekdays at ten am Eastern on Apple, Cocklay and Android 0:13:14.400 --> 0:13:17.680 Auto with the Bloomberg Business App. Listen on demand wherever 0:13:17.760 --> 0:13:20.880 you get your podcasts, or watch us live on YouTube. 0:13:21.840 --> 0:13:23.560 We move now to the M and A space. 0:13:23.960 --> 0:13:26.839 This week we heard that the online mortgage provider Rocket 0:13:26.880 --> 0:13:31.560 is acquiring mister Cooper Group, the country's largest mortgage servicer it's. 0:13:31.400 --> 0:13:34.120 An all stock deal valued about nine point four billion dollars, 0:13:34.120 --> 0:13:36.800 and this will create a mortgage behemoth that handles one 0:13:36.920 --> 0:13:39.360 in every six mortgages in the US. 0:13:39.559 --> 0:13:41.440 For more, guest host Isabelle Lee and I were joined 0:13:41.440 --> 0:13:45.160 by Page Smith, Bloomberg News consumer finance reporter. We first 0:13:45.160 --> 0:13:47.560 asked Page to explain the latest deal and what mister 0:13:47.679 --> 0:13:48.280 Cooper is. 0:13:48.960 --> 0:13:51.680 Mister Cooper is more is best known, I would say, 0:13:51.679 --> 0:13:54.080 in the mortgage servicing side of things, So it's sort 0:13:54.080 --> 0:13:56.680 of after the fact, you've got your mortgage, but who 0:13:56.720 --> 0:13:59.720 were you actually interacting with, you know, gears down the line, 0:13:59.720 --> 0:14:02.400 it's actually going to be mister Cooper. But this is 0:14:02.440 --> 0:14:05.680 a big deal for Rocket because they've kind of they've 0:14:05.720 --> 0:14:08.280 been trying to position themselves as sort of a one 0:14:08.400 --> 0:14:13.480 stop shop for consumers finance offerings, so think credit cards 0:14:13.559 --> 0:14:18.960 in addition to your mortgage and you know, now theoretically 0:14:19.000 --> 0:14:22.520 your mortgage servicing rights. So it's it's a pretty big 0:14:22.520 --> 0:14:25.080 deal for this company based in Detroit. Dan Gilbert a 0:14:25.120 --> 0:14:29.240 pretty prominent person in the finance yep, pretty big in 0:14:29.280 --> 0:14:32.920 sports as well. But nine point four billion dollars, it's 0:14:33.200 --> 0:14:34.320 a big deal for these folks. 0:14:34.680 --> 0:14:37.400 We have Rocket also striking a deal to acquire Redfin, 0:14:37.480 --> 0:14:40.560 which is a real estate brokerage. How will that build 0:14:40.760 --> 0:14:43.480 into this one or if they're even connected at all. 0:14:43.680 --> 0:14:46.760 Certainly it's it is basically sort of from a sort 0:14:46.800 --> 0:14:49.360 of a nose to nose to toe, if you will, 0:14:49.600 --> 0:14:53.520 of the home buying experience. Everything will sort of be 0:14:53.640 --> 0:14:58.040 under this Rocket umbrella. It you know Redfinn as you 0:14:58.400 --> 0:15:00.200 as I think a lot of folks will you know 0:15:00.320 --> 0:15:04.800 quite well, is this platform for buying and selling homes 0:15:04.840 --> 0:15:07.040 and it would be sort of a starting point for 0:15:07.080 --> 0:15:11.320 the home buying journey. Rocket is well known for originating, 0:15:11.360 --> 0:15:15.000 getting or creating mortgages, and now mister Cooper is well 0:15:15.040 --> 0:15:17.320 known for sort of the servicing of mortgages. So it's 0:15:17.360 --> 0:15:19.760 it is kind of from start to finish of the 0:15:19.760 --> 0:15:20.680 home buying process. 0:15:20.680 --> 0:15:23.480 Theoretically, they got a lot of debt on their bouncy 0:15:23.480 --> 0:15:25.480 because I being a former banker, I don't look at 0:15:25.520 --> 0:15:28.280 stock market values. I look at enterprise value to include 0:15:28.280 --> 0:15:30.880 the debt. It's eighteen point five billion dollars because that's 0:15:30.880 --> 0:15:32.800 what you get paid on. You get paid on enterprise 0:15:32.840 --> 0:15:37.480 a so that is a big, big number there. Talk 0:15:37.480 --> 0:15:39.600 to us about the mortgage business. I mean, is it 0:15:39.600 --> 0:15:41.440 doesn't seem like there's a lot of deals happening in 0:15:41.840 --> 0:15:42.680 the business. 0:15:42.960 --> 0:15:45.400 Well, I mean, I think we can look at interest rates. 0:15:45.400 --> 0:15:48.760 It's certainly been a tough time for home buyers and sellers, 0:15:48.800 --> 0:15:52.880 and that also weighs on these home on these home lenders. 0:15:53.520 --> 0:15:56.160 It's a tough time for folks who kind of have 0:15:56.280 --> 0:15:58.800 put their eggs all in one basket, which is the 0:15:58.840 --> 0:16:02.080 home lending business. But that's kind of what Rocket has 0:16:02.120 --> 0:16:04.560 been aiming to do, is to really branch out and 0:16:04.640 --> 0:16:09.040 diversify their business so they're not so interest rate reliant 0:16:09.720 --> 0:16:12.480 or exposed rather which they have been in the past. 0:16:12.520 --> 0:16:14.880 And frankly that's showed up in their earnings over the 0:16:14.880 --> 0:16:18.800 past couple of years. So I chatted with CEO U 0:16:18.800 --> 0:16:22.000 and Krishna over the summer. Actually we did kind of 0:16:22.000 --> 0:16:24.840 a deeper dive into Rocket and the company, and one 0:16:24.840 --> 0:16:27.920 thing that he told me then was that artificial intelligence 0:16:28.000 --> 0:16:30.440 is actually a big bet that they're making to really 0:16:30.480 --> 0:16:33.240 try to boost the business and make that home buying 0:16:33.280 --> 0:16:36.400 process truly as smooth as possible for the customers, to 0:16:36.560 --> 0:16:40.280 kind of amp up their offerings and we'll see how 0:16:40.280 --> 0:16:41.760 it works out. With for them in the end, But 0:16:41.880 --> 0:16:43.760 so far numbers look pretty good. 0:16:44.400 --> 0:16:47.600 What's this deal expected? Were you hearing chatter before? Did 0:16:47.600 --> 0:16:48.760 it's completely shock you? 0:16:49.080 --> 0:16:51.960 I was not hearing chatter before, and it seems like 0:16:52.000 --> 0:16:54.320 the market is responding in kind of an interesting way. 0:16:54.360 --> 0:16:57.040 But we're going to continue to follow the story and 0:16:57.080 --> 0:17:00.000 see how this kind of fits into the broader rockets. 0:17:00.320 --> 0:17:02.400 Who do they compete against? Do they compete against the 0:17:03.160 --> 0:17:05.119 banks that make the loans or the banks that make 0:17:05.119 --> 0:17:07.159 the loans usually just syndicate them away, right. 0:17:07.280 --> 0:17:09.359 Well, I kind of take a different take on that 0:17:09.640 --> 0:17:12.280 since I cover consumer and finance kind of broadly. I 0:17:12.280 --> 0:17:14.480 think of folks who are kind of trying to be 0:17:14.960 --> 0:17:19.480 that one one stop shop for consumer the consumer finance experience. 0:17:19.520 --> 0:17:21.960 So for me, I think of you know, so FI 0:17:22.119 --> 0:17:26.280 technologies for example, that is like a they have a 0:17:26.320 --> 0:17:29.879 lot of lending opportunities for consumers, but they do a 0:17:29.880 --> 0:17:33.000 heck of a lot of other business as well. Robinhood 0:17:33.040 --> 0:17:35.520 even coming at it from the investing side of things 0:17:35.680 --> 0:17:39.520 now offering banking products for folks, That's kind of how 0:17:39.560 --> 0:17:42.080 I think about it in terms of competitors. But that's 0:17:42.200 --> 0:17:45.240 just from a fintech consumer finance perspective when it comes 0:17:45.240 --> 0:17:48.200 to home lenders. You know, other big folks in the space, 0:17:48.440 --> 0:17:50.400 the space. I was just looking at some data by 0:17:50.760 --> 0:17:55.240 Inside Mortgage Finance that placed United Wholesale Mortgagees number one, 0:17:55.600 --> 0:17:58.640 Pennymac is number two, and Rocket as number three. 0:17:58.720 --> 0:18:02.399 Penny Mac is what I use. Anything that rings a bell? Okay, 0:18:02.760 --> 0:18:05.280 Dan Gilbert just for what it's worth. Kids on the 0:18:05.359 --> 0:18:08.000 rich top list of Bloomberg all the wealthy people, he 0:18:08.080 --> 0:18:10.680 comes in at number sixty two. Well they're not bad. 0:18:10.960 --> 0:18:13.879 Net worth of twenty eight point seven billion dollars up 0:18:13.880 --> 0:18:14.960 two point six billion. 0:18:14.760 --> 0:18:15.159 Year to date. 0:18:15.359 --> 0:18:18.439 Yeah, he's a force in Detroit. I would say some 0:18:18.560 --> 0:18:20.760 of our colleagues out of the Detroit Bureau did a 0:18:20.800 --> 0:18:22.960 great story on him last year. If you're interested in 0:18:23.040 --> 0:18:24.000 the terminal, All. 0:18:23.960 --> 0:18:26.760 Right, thanks to Paige Smith, Bloomberg News Consumer Finance Reporter, 0:18:27.280 --> 0:18:29.560 we move next to the artificial intelligence sector. 0:18:29.920 --> 0:18:32.600 Guest host Normal Linda and I were joined by John Lynn, 0:18:32.680 --> 0:18:34.440 chief business officer at Equinox. 0:18:34.760 --> 0:18:37.399 Equinex is the largest global data center provider and is 0:18:37.400 --> 0:18:40.160 listed on the Nasdaq Stock Exchange under the ticker symbol. 0:18:39.880 --> 0:18:41.159 E q i X. 0:18:41.520 --> 0:18:44.160 John lenn joined to discuss the future of AI empowering 0:18:44.240 --> 0:18:46.800 data centers, and I began the conversation by asking John 0:18:46.840 --> 0:18:48.720 to explain what Equinox does. 0:18:49.080 --> 0:18:52.679 We're really the fundamental digital infrastructure provider of the world, 0:18:52.800 --> 0:18:55.479 building two hundred and sixty eight data centers across seventy 0:18:55.480 --> 0:18:57.520 four market If you're the guys, we are the guys 0:18:57.600 --> 0:19:01.119 building and connecting all of these cloud provide and enterprises, 0:19:01.400 --> 0:19:03.240 making all of that data available for AI. 0:19:03.760 --> 0:19:05.840 And it's really interesting because I was just speaking with 0:19:05.920 --> 0:19:09.200 him during the break saying that I cover US real 0:19:09.280 --> 0:19:11.719 estate stocks, I cover real estate investment trusts, and that's 0:19:11.760 --> 0:19:14.880 exactly what falls in that patch. This is my guy. 0:19:15.880 --> 0:19:18.439 So wonderful to have this conversation. But I think that 0:19:18.480 --> 0:19:21.160 there's often people don't really when you think about data centers, 0:19:21.160 --> 0:19:23.600 they don't often think about the people that are actually 0:19:23.720 --> 0:19:25.960 providing the real estate for data centers. So can you 0:19:26.000 --> 0:19:29.280 talk a little bit about how equinics differs from maybe 0:19:29.280 --> 0:19:31.119 for thinking about a data center itself, but more or 0:19:31.200 --> 0:19:33.399 less the fact that you guys are acquiring properties and 0:19:33.440 --> 0:19:34.240 doing it that way. 0:19:34.440 --> 0:19:36.560 Yeah, you can think about it as full scope development, 0:19:36.560 --> 0:19:38.800 where I mean we're going from raw land getting their 0:19:38.920 --> 0:19:41.360 entitlements and then building the entire data center and then 0:19:41.520 --> 0:19:45.399 operating that for perpetuity essentially. And our focus is around 0:19:45.400 --> 0:19:48.200 making sure we're getting as many customers as possible into 0:19:48.240 --> 0:19:51.480 the facilities and really interconnecting their data flows together, which 0:19:51.520 --> 0:19:54.120 is pretty unique in the data center space, which has 0:19:54.200 --> 0:19:56.280 also been a great opportunity for us to participate in 0:19:56.280 --> 0:19:57.080 the AI growth. 0:19:57.720 --> 0:19:59.320 What are you guys seeing here? What are you seeing 0:19:59.320 --> 0:20:02.840 from your client and the people you talk to about 0:20:02.960 --> 0:20:05.080 kind of their needs going forward? Because right now, I 0:20:05.119 --> 0:20:07.240 think in the marketplace, if you look at like Nvidious 0:20:07.240 --> 0:20:09.200 stock and some of the other stocks that trade around 0:20:09.280 --> 0:20:11.639 the AI theme, twenty twenty five has not been a 0:20:11.640 --> 0:20:14.560 good year, after obviously phenomenal extraordinary growth in twenty three 0:20:14.600 --> 0:20:18.520 twenty four, maybe before that. How are you viewing the 0:20:18.600 --> 0:20:20.840 growth here in AI and from your end of the business, 0:20:20.840 --> 0:20:21.600 the real estate side. 0:20:21.760 --> 0:20:23.679 Yeah, First, I'd just say, you know, AI is a 0:20:23.720 --> 0:20:26.240 portion of the demand for data centers, but data center 0:20:26.240 --> 0:20:28.720 as a whole are powering everything that everybody is doing, 0:20:28.800 --> 0:20:31.600 right like listening to this broadcast, you know, ordering food 0:20:31.600 --> 0:20:35.040 for lunch, you know, trading, trading on the exchange, et cetera. 0:20:35.280 --> 0:20:38.080 I mean, you need computers for everything nowadays, and that's 0:20:38.080 --> 0:20:40.840 still continuing. I think, you know, digital transformation is not 0:20:40.880 --> 0:20:43.320 in the early stages anymore, but we're far from done, 0:20:43.320 --> 0:20:46.080 and so that is just the secular driver that will continue. 0:20:46.680 --> 0:20:49.600 From the eye landscape, I'd say obviously a huge amount 0:20:49.640 --> 0:20:52.080 of interest and excitement and I think the it caught 0:20:52.080 --> 0:20:55.399 the imagination of everyone, and I'd say, right now what 0:20:55.440 --> 0:20:59.320 we're seeing is like exciting use cases that are really 0:20:59.359 --> 0:21:02.160 providing durable value, right. And I think it's still early 0:21:02.240 --> 0:21:05.240 stages for many of that across the general business landscape, 0:21:05.320 --> 0:21:07.480 but that's what gets me fundamentally excited. You look at 0:21:07.520 --> 0:21:09.960 a company like a Bristol Meyers squib a customer of ours. 0:21:10.080 --> 0:21:14.240 They're doing drug discovery using videogpus and like being able 0:21:14.280 --> 0:21:18.560 to increase and accelerate their time to therapeutics. That's fundamentally 0:21:18.600 --> 0:21:20.560 going to improve like human life, right, and I think 0:21:20.600 --> 0:21:22.800 that there's so many different aspects that AI can improve 0:21:23.000 --> 0:21:23.640 based on that. 0:21:23.840 --> 0:21:25.879