Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
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Speaker 2: anywhere else you listen, and as always on the Bloomberg
Speaker 2: Terminal and the Bloomberg Business App. Chris Harvey of Wells Fargo,
Speaker 2: the most bullish man on Wall Street s and P
Speaker 2: five hundred price target of seven thousand and seven, and
Speaker 2: he joins us now for more.
Speaker 3: Good morning, Chris, Good, good morning.
Speaker 2: You're uncomfortable with that. I want to give you some
Speaker 2: credit before we start. Credit to you for not changing
Speaker 2: this call in the tariff storm of early April. So
Speaker 2: let's start there.
Speaker 4: Why did you stick with it so nine months in
Speaker 4: the financial market. That's an eternity. The other thing we
Speaker 4: had seen Trump one point zero. We know his style.
Speaker 4: It's to go out to the end degree and then
Speaker 4: to come back in Furthermore, the underlying fundamentals were still fine,
Speaker 4: and our EPs and our price target wasn't predicated on
Speaker 4: a strong economy. What we're seeing is the winners continue
Speaker 4: to win. The ubercap companies have the higher margins, are
Speaker 4: gaining more market share. There is a real secular trade
Speaker 4: in AI that will continue. I was here during the nineties.
Speaker 4: This is not a fair comparison. It is much stronger
Speaker 4: and the fundamentals are much better than today than they
Speaker 4: were back then.
Speaker 2: Seven K is not tariff dependent, It is not August
Speaker 2: one dependent.
Speaker 4: No, So people ask, well, what's the fear.
Speaker 5: The fear is.
Speaker 4: There's a couple of fears. One is do taras start
Speaker 4: to flare back up? And that's possible, right, we just
Speaker 4: can't can't predict that. The other fear, which is much
Speaker 4: more real fear, is what's happening with the Fed? Do
Speaker 4: we worry about the Fed and confidence in the Fed?
Speaker 4: Because the back and forth between the Fed and White House,
Speaker 4: that's not healthy, right, and that can cause problems in
Speaker 4: the bond market, and that can cause problems with competence.
Speaker 4: But overall, we're starting to see M and A activity
Speaker 4: kick up. We think that M and A will continue
Speaker 4: to be very, very healthy up and down the capitalization.
Speaker 4: We do think the FEDS are going to cut. Fundamentals
Speaker 4: are fine, the consumers okay, And we're not seeing the
Speaker 4: kind of price increases that people are talking about. We're
Speaker 4: seeing people say surgical when they're talking about price increases
Speaker 4: and selectively.
Speaker 1: So there's a lot to unpack there. And we'll get
Speaker 1: to the FED independence in just a second. And what
Speaker 1: point yields have to rise to before that really triggers
Speaker 1: some sort of response and equity markets, what about valuations,
Speaker 1: the idea that you're talking about an eleven percent gain
Speaker 1: from where we are right now, and the S and
Speaker 1: P five hundred, after already reaching record highs amid a
Speaker 1: wall of orion, frankly growth that is expected to slow.
Speaker 4: So we talk about this all the time because people say, oh,
Speaker 4: look at twenty years ago, look at twenty five years ago.
Speaker 4: The SMP is not the same as it was twenty
Speaker 4: five years ago. The constittioning the S and P five
Speaker 4: hundred is much more growthy, it's much more techy, The
Speaker 4: multiples are much higher, the productivity is much better. The
Speaker 4: people running the companies are much more uh attuned and
Speaker 4: and the acumen is much higher, and so the valuation,
Speaker 4: yes it's high, but it's justified in our minds. And again,
Speaker 4: we don't need to see a whole lot of multiple
Speaker 4: expansion to get to that level. We're not very far
Speaker 4: from that level at this point in time.
Speaker 1: So valuation concerns don't really uh spend You don't spend
Speaker 1: a lot of time on those. I do want to
Speaker 1: go to the FED independent side, though, there is a
Speaker 1: question of what point yields have to rise to before
Speaker 1: it triggers true concern in stock markets because we've asked
Speaker 1: that questions many times. People give us a level and
Speaker 1: then we pass that level and stock markets struggled off
Speaker 1: and say healthy, healthy, good. Yeah.
Speaker 4: I I it's hard for me to really answer that question.
Speaker 4: The I think what's happening right now is you had
Speaker 4: Trump come out and say I'm not going to fire powers, right,
Speaker 4: and I think he needs to go out and say
Speaker 4: that right. There's a lot of talk and uh rumors
Speaker 4: and situations in the marketplace. At the end of the day,
Speaker 4: we need the FED. We need the FED to be independent,
Speaker 4: We need to be the FED to be apolitical because
Speaker 4: it is a very important part of our marketplace, and
Speaker 4: as long as we can do that, that's great. I
Speaker 4: don't know if raids really have a play in this.
Speaker 4: I think it's just cooler heads and need to prevail.
Speaker 6: You read Trump correctly when it comes to tariffs. He
Speaker 6: put out a truth over the weekend about what best
Speaker 6: potentially laid out to him. When it comes to the
Speaker 6: market impact of firing Besset, people don't explain to me.
Speaker 6: I explained to them, says the President of the United States.
Speaker 6: Did you take that as him basically acknowledging he understands
Speaker 6: the negative impacts that could have on financial markets.
Speaker 4: I think his team understands. I think he understands. I
Speaker 4: think if you go back and one of them, when
Speaker 4: we were on the show a while ago, we were
Speaker 4: talking about will the feedback loop close? Right? Will the
Speaker 4: administration see what's happening that capital markets and react to that?
Speaker 4: And they did so. I do think they understand. But
Speaker 4: I also think that he feels like he's playing with
Speaker 4: a very stronghand, and to a certain degree he is.
Speaker 4: And one of the things we are beginning to worry
Speaker 4: about it is he's looking at tariff's as a revenue generator. Right,
Speaker 4: We have what we have with the deficit and saying, hey,
Speaker 4: this could be a good way to reduce the deficit.
Speaker 4: We haven't seen the real impact to the economy. What's
Speaker 4: the big deal?
Speaker 6: In that same truth, he said, if it weren't for him,
Speaker 6: the market wouldn't be at record highs right now. But
Speaker 6: if it weren't for him, would potentially ready be at
Speaker 6: your seven double host seven mark.
Speaker 4: Yeah, there's a lot of speculation on speculation there. I
Speaker 4: think we could have done this. Talking my book, one
Speaker 4: of the things I said, one of the things I
Speaker 4: believe is you could have put a ten percent tariffon
Speaker 4: and then just walked away.
Speaker 7: Right.
Speaker 4: We talked about how there was a seller's tariff and
Speaker 4: how people whether it's through Airbnb or Amazon, they understand
Speaker 4: that you had Congress put that ten percent tariffon, walk
Speaker 4: away and we can do something more productive. But we
Speaker 4: chose this path and it's okay, it's a little bit bumpy,
Speaker 4: but we're getting there.
Speaker 2: Mike and bumpy. A pityshev accountemy. Without the markets pressuring
Speaker 2: the administration, why would they pull back going it's the
Speaker 2: next month?
Speaker 1: Well, this to me is the key question. How much
Speaker 1: is this administration playing chicken on tariffs with the market.
Speaker 1: If the market's looking past something that hasn't happened yet,
Speaker 1: does that push them to potentially go even harder because
Speaker 1: they could extract more that could off set the deficit
Speaker 1: concerns from the one big, beautiful bill.
Speaker 6: And there we go, and you see these countries lining
Speaker 6: up to really want to do deals and getting a
Speaker 6: little bit nervous when you have Howard Latnach, the Commerce Secretary,
Speaker 6: coming on a Sunday show saying August first is hard
Speaker 6: to stop deal. Also, he's already telling us what to
Speaker 6: expect next year. He said, of course, we're going to
Speaker 6: renegotiate USMCA, so we could prepare for more headwinds in
Speaker 6: terms of Canada, Mexico and United.
Speaker 2: It's gonna keep coming. It's gonna keep coming. Chris, just
Speaker 2: to wrap it up, the US versus the rest of
Speaker 2: the world, what if you mighte to that debate over
Speaker 2: the YSIFA.
Speaker 4: So we thought that was possible, We thought that was
Speaker 4: probable early in the year. It happened. Now we're just
Speaker 4: walking away, which you just don't. We're done, We're good.
Speaker 4: You had that repricing. Now let's go back to fundamentals.
Speaker 4: And the fundamentals are telling you back to the US,
Speaker 4: back to back to growth.
Speaker 2: Chris Halveylstfagapre Siedaser. Let's continue the conversation. Claudia Sama of
Speaker 2: New Century Advisors joins us. Now for more. Claudia, welcome
Speaker 2: back to the show. It's good to see you, as always.
Speaker 2: Want to pick up on that space from Governor Waller
Speaker 2: what he said before our conversation with him, looking across
Speaker 2: the soft and hard data, I get a picture of
Speaker 2: a labor market on the edge. Do you get a
Speaker 2: picture of a labor market on the edge.
Speaker 7: That's what I would characterize the labor market.
Speaker 5: But I think demon and Waller lays out a very
Speaker 5: reasonable argument for reading the data right there.
Speaker 7: Labor market has had some crap, has some weaknesses to it.
Speaker 5: I mean, I think they were maybe more apparent last
Speaker 5: year's you know, the unemployment rate has been rising.
Speaker 7: But he pays a picture and he ties it to data. Again,
Speaker 7: I think it's.
Speaker 5: Really unfortunate that it becomes wrapped in this conversation of
Speaker 5: it as a politicized view.
Speaker 7: Of his I don't see it that way, but just
Speaker 7: to have that.
Speaker 5: Kind of injective of the conversation does tend to undermine
Speaker 5: what he's saying.
Speaker 1: Claudia, do you think, from your perspective, in your years
Speaker 1: of experience studying the labor market and how that affects
Speaker 1: FED policy, do you think that right now weakening in
Speaker 1: the labor market really is a greater concern than a prolonged,
Speaker 1: protracted inflationary push from the tariffs and from strength that
Speaker 1: we have seen ongoing in corporate America.
Speaker 5: So I would agree that there are several threats on
Speaker 5: the growth side to policies have been put in place.
Speaker 5: I mean, kars have an aspect of weakening growth throughout
Speaker 5: the higher prices we've seen, immigration policy. I mean, there's
Speaker 5: a whole set of reasons why you look out at
Speaker 5: this year. We've seen growth slow this year, and that
Speaker 5: will eventually show up in the labor markets. You definitely
Speaker 5: can see those risks. And if one, as Christopher Waller
Speaker 5: laid out, looks at the potential inflation risks and says
Speaker 5: these are tempered, we can look through these, then I
Speaker 5: think you would be right back.
Speaker 7: To where we were.
Speaker 5: You know in twenty nineteen, where does thateral reserve base
Speaker 5: with care? They tu preamptively, which is we're not in
Speaker 5: an environment where inflation is subdued. It's actually been above
Speaker 5: target for more than four years. There are real rists there.
Speaker 5: We still don't know what the terear policy actually is.
Speaker 5: It could be going higher, it could not, like, so
Speaker 5: there's just a lot of uncertainy. I think with the
Speaker 5: way that the kind of majority of.
Speaker 7: The FED is lining up their arguments makes a lot
Speaker 7: of sense.
Speaker 5: But there is a real perspective, and I would agree
Speaker 5: that the diversity of thought on the ped and making
Speaker 5: those arguments carefully with data like that's a good thing.
Speaker 5: It's just is extremely unfortunate the environment. By having the
Speaker 5: White House and the President very directly say what they
Speaker 5: want to.
Speaker 7: See in terms of rapes, it's kind of created this.
Speaker 5: You know, It's made it really difficult for the fend
Speaker 5: to have this kind of discipline data conversation.
Speaker 1: And it's even more difficult by the fact that the
Speaker 1: data is really confusing and it can paint a different
Speaker 1: story depending on how you read it. I mean, we
Speaker 1: keep kind of wondering what the labor market is showing us,
Speaker 1: whether it does show some sort of more dramatic weakening,
Speaker 1: or whether the housing market is kind of ringing a
Speaker 1: five alarm fire alarm, saying, hey, we're clearly as a problem.
Speaker 1: I mean, at what point do you think that keeping
Speaker 1: rates at this level would really create a weakness that
Speaker 1: currently hasn't manifested itself in the economy.
Speaker 5: We're likely pointed in that direction. I mean, the economy
Speaker 5: has proven quite resilience. I mean this is not just
Speaker 5: talking about this year, but in recent years. The higher
Speaker 5: interest rates, and there are probably a lot of different
Speaker 5: reasons for that, but eventually, you know, and we do
Speaker 5: see an interest rates that sensitive sectors like how do
Speaker 5: we do see these.
Speaker 7: Rates weighing down the question?
Speaker 5: The reason that the federal funds rate is elevated is
Speaker 5: because it is trying to push down on inflation.
Speaker 7: Once the inflation issue is taken.
Speaker 5: Care of, well, then there's no reason to have the
Speaker 5: rates as high as they are, and you should see
Speaker 5: them coming down, and that then tells us that the
Speaker 5: direction they're pointed in, they're just not ready to take
Speaker 5: that move.
Speaker 7: But you know, there are.
Speaker 5: Costs, There are costs in the economy to the said
Speaker 5: having interest rates as high.
Speaker 7: As they are, and we will see those costs build
Speaker 7: as interest.
Speaker 5: Rates, say higher, So well, We're not looking at some
Speaker 5: dramatic falling off a cliff. We're looking at more of
Speaker 5: a slow grind and it does impact certain parts of
Speaker 5: the economy, certain consumers, people trying to buy homes. Like
Speaker 5: that is where the effect is. But the goal is
Speaker 5: to get you know, inflation down. Unfortunately, you know, we've
Speaker 5: got data that moving in the wrong directions. That may
Speaker 5: be temporary, but like there's a reason the rates are
Speaker 5: where they are.
Speaker 7: It's not.
Speaker 5: Government but that there are costs.
Speaker 6: Governor Waller though, is looking at these cracks in the
Speaker 6: labor market. Even individuals like Mary Daily is talking about
Speaker 6: it's reasonable to expect two cuts this year, Claudia, when
Speaker 6: do you expect the FED to first move?
Speaker 5: So it will absolutely depend on the data as they
Speaker 5: go forward, but there is certainly a case, and I think,
Speaker 5: you know, keep an eye on the inflation data that's
Speaker 5: not connected to TARRAF. I mean, I think that's actually
Speaker 5: been part of the encouraging cases that we've seen some
Speaker 5: weakness in you know, some discretionary spending areas.
Speaker 7: That housing has.
Speaker 5: Certainly shown some cooling off.
Speaker 7: So I think they're building the data, are building the case.
Speaker 5: As long as you know, the terrorists don't really like
Speaker 5: move much higher. You know, things really go dramatically sideways.
Speaker 5: I think they're on track for September or October. You know,
Speaker 5: as the data come in and Governor Walla could absolutely
Speaker 5: be correct, and we see some employment numbers that are
Speaker 5: not as positive as recent ones, and that that doesn't
Speaker 5: move them much more quickly to the cut. But I
Speaker 5: think this is the data thus far have supported their
Speaker 5: let's wait and see, and I think that's where they're
Speaker 5: going to come down as a group next week. But
Speaker 5: of course, you know, you can look at the data
Speaker 5: differently and they are pointed in the direction of cuts.
Speaker 5: I mean some aren't even looking for this year. But
Speaker 5: I mean that's you know, they have a lot.
Speaker 7: Of coherence in what they're thinking. It's just timing is hard.
Speaker 5: It's it's really hard to figure out because timing is
Speaker 5: hard in the economy.
Speaker 2: Cloda, I appreciate itsime. Clodia sound that new century of
Speaker 2: signed chasms a signical the ISSUS has this to say.
Speaker 2: Our vice case has been and remains. The US President
Speaker 2: Donald Trump will not dismiss Fedchad to run PAL at
Speaker 2: the very least until after the September FMC meeting chance
Speaker 2: John to snap for Moss, so challengeing given us the
Speaker 2: best case two months. What happens after that if they
Speaker 2: haven't reduced interest rights?
Speaker 3: Yeah, if the FED doesn't cut at the September meeting,
Speaker 3: I think the President moves forward with a shadow chair
Speaker 3: nominee announcement and continues to build the case to dismiss
Speaker 3: Pale for cause, hoping that Powell will resign. I don't
Speaker 3: think Powell will resign, but I think that case will
Speaker 3: continue to be built. What the President really wants is
Speaker 3: for the FED chair to resign, and you know Pal's
Speaker 3: not going to do that most likely. And the other
Speaker 3: part of this process is the President really trying to
Speaker 3: socialize with the markets, this idea of replacing the FED chair.
Speaker 3: The only guardrail working in the United States today in
Speaker 3: terms of a check on executive power is the bond market,
Speaker 3: and I think that's what they're most worried about. The
Speaker 3: September FOMC meeting is critical and we'll see what the
Speaker 3: FED does. Otherwise we have a shadow FED chair.
Speaker 6: Well, wouldn't it be even harder though, for the collective
Speaker 6: body of the FOMC to cut if he was to
Speaker 6: get rid of the FED chair or say he was
Speaker 6: going to fire him after the September meeting.
Speaker 3: Absolutely, I think you know, everyone in the markets understands
Speaker 3: that it's a twelve member FOMC vote. It's not just
Speaker 3: the FED chair. But the President sees Palell as the obstacle,
Speaker 3: and he really wants a FED chair in, whether it's
Speaker 3: shadow or if Palell resigns. Even if Palell resigns, by
Speaker 3: the way, the FOMC picks the FED chair, So I
Speaker 3: think what the President's really doing is using Palell as
Speaker 3: the punching bag for higher rates. He's also worried. I
Speaker 3: think that even though the administration doesn't believe the terris
Speaker 3: will be inflationary, that if inflation does pick up over
Speaker 3: the next several months, you can blame the FED, blame Pale.
Speaker 3: But ultimately I think this shadow FED chair idea, which
Speaker 3: even three or four months ago sounded really far out
Speaker 3: there or deeply concerning for markets, is now being socialized
Speaker 3: and probably happens after September.
Speaker 6: Well, the Treasury Secretary talked about the fact that there
Speaker 6: could be confusion with a shadow FED chair if j.
Speaker 6: Powell doesn't step down after his chairmanship is over, but
Speaker 6: he still has a governor seat until twenty twenty eight.
Speaker 6: Do you have any indication that he would stay the
Speaker 6: course until twenty twenty eight?
Speaker 3: Absolutely? I think Chair Powell will stay on the board
Speaker 3: after his chair term ends, and he stays on the
Speaker 3: board until the end of.
Speaker 6: His term in twenty twenty eight, wouldn't that look very political,
Speaker 6: Trembles Charles, That would look incredibly political. Most chairs step down.
Speaker 3: Absolutely, but I think it would be a really strong
Speaker 3: statement by Chair Powell, encouraged by some of the other
Speaker 3: members of the FOMC, perhaps as a statement of very
Speaker 3: strong independence. And that's why I think he stays on Charles.
Speaker 1: There's the question of what happens if, let's say Chair
Speaker 1: Powell is fired and for cause, let's get get smired
Speaker 1: in all sorts of legal disputes. There's this issue of
Speaker 1: does Congress confirm whoever President Trump nominates to replace him?
Speaker 1: How much unity is there right now among Republican Congress members.
Speaker 3: Well, I think you know, whoever is nominated has to
Speaker 3: be confirmed in the Senate. The Senate, including the Republican
Speaker 3: Caucus and the Republican leadership, do take fed independence very seriously.
Speaker 3: So whoever is nominated will be a very respectable and
Speaker 3: acceptable and very positive person for the markets. It'll be
Speaker 3: one of the folks that are auditioning very publicly for it.
Speaker 3: You know, But in the end, I don't think that's
Speaker 3: going to be the issue that person will get confirmed.
Speaker 3: The issue is, you know, will they try to sway
Speaker 3: the FMC to be more dubbish.
Speaker 2: Charles Moss a second of glove that fives as Chiles.
Speaker 2: Thank you, Seth Angela. So you know I CFIRA has
Speaker 2: a buy rising on chance of alphabbat at two ten
Speaker 2: Friest talk and Angela, welcome to the program. That ad
Speaker 2: model at alphabet How insulated is it right now?
Speaker 8: Yes, thanks for having me John. As far as kind
Speaker 8: of the ad model is concerned, I mean, listen, I
Speaker 8: think they're doing a lot of great things as far
Speaker 8: as what's going on across search as well as YouTube
Speaker 8: integrating AI across the ecosystem. You've got AI mode ramping
Speaker 8: here on search AI overviews. So overall, I think the
Speaker 8: monetization potential looks pretty good as far as their AD
Speaker 8: based businesses and AI integrating across that ecosystem. You know,
Speaker 8: clearly there is a risk as we kind of go
Speaker 8: on here over the next couple of years, eventually open
Speaker 8: ai and others out there will probably have some sort
Speaker 8: of ad supported models, and that is you know, clearly
Speaker 8: a risk here for alphabet So sitting here today, I mean,
Speaker 8: we do think their ads. Google's ad supported businesses probably
Speaker 8: grow around in line with the broader digital ad market,
Speaker 8: let's call it high single digit growth. But you know, ultimately,
Speaker 8: as we kind of go into some of these forward
Speaker 8: looking years twenty twenty six, twenty twenty seven, we're looking
Speaker 8: at the growth pace of you know, something like search
Speaker 8: to grow at about half the pace of the digital
Speaker 8: ad market, just because you're going to have some you know,
Speaker 8: increasing competitive pressures out there.
Speaker 1: Angela, are we underestimating the speed of the adoption of
Speaker 1: open ai, of chatchpt and some of these algorithmic models
Speaker 1: that some people find superior to the classic search model.
Speaker 1: I mean, I was listening to John and man deep talking,
Speaker 1: and I'm thinking to myself, I've known so many people
Speaker 1: over the past six months that have utterly transformed their
Speaker 1: workflow because of chat GPT. Is the timeframe a little
Speaker 1: bit faster potentially than what we're talking about.
Speaker 8: I mean potentially, I mean, well, I guess we'll see here.
Speaker 8: I mean, ultimately, people are doing search and you know,
Speaker 8: in a different way than they have historically. But when
Speaker 8: we think about just overall, what app Alphabet has, you know,
Speaker 8: across their ecosystem as well, I don't think it should
Speaker 8: be underestimated. I think Gemini is an enormously powerful tool.
Speaker 8: I mean, I'm personally a power user of Gemini. I
Speaker 8: do love the fact that it's across their entire eco
Speaker 8: system out there. There is an advantage out there to that.
Speaker 8: I think that Alphabet is getting extremely smart with Gemini,
Speaker 8: So you know, I don't think you can completely dismiss
Speaker 8: Alphabet specifically and what they're doing across the AI ecosystem,
Speaker 8: not to mention their infrastructure I think is better than
Speaker 8: just about anyone else's out there. But again that being said,
Speaker 8: I mean maybe to your point, with what open ai
Speaker 8: is doing with chet, GPT and and others out there
Speaker 8: as well, there are going to be more options out
Speaker 8: there in the market, and that is something that I think,
Speaker 8: you know, as an analyst, you can't underestimate and you
Speaker 8: do have to factor that into your future assumptions. But
Speaker 8: we do expect, you know, ultimately, their ad supported businesses
Speaker 8: to continue to grow. It's just not going to be
Speaker 8: at the pace that you know, maybe you're seeing from
Speaker 8: you know, the market here over time because of the
Speaker 8: broadening out and greater competitive pressures.
Speaker 1: A couple of months ago, there was a skepticis them
Speaker 1: on Wall Street about the amount of money that hyperscalers
Speaker 1: were spending on R and D on CAPEX, and there
Speaker 1: was this question of are they overspending? Meta had said
Speaker 1: we can't spend enough. Do you think this season you're
Speaker 1: going to see a rewarding by investors of companies they
Speaker 1: increase their CAPEX spend dramatically or do you think that
Speaker 1: that's going to be treated with the same skepticisms a
Speaker 1: couple of months ago.
Speaker 8: Well, I think what you're actually going to see this
Speaker 8: earning season. I think you're going to see CAPEX spending
Speaker 8: plan plans sustained and not increased. We actually saw Beta
Speaker 8: increase it last earning season. As far as their twenty
Speaker 8: twenty five CAPEX guidance, I think, you know, Microsoft has
Speaker 8: actually done a pretty good job here over the last
Speaker 8: couple of quarters, essentially kind of flatlining the CAPEX number,
Speaker 8: leveling it out. This is their year end, so we'll
Speaker 8: kind of see what type of guidance and outlook they
Speaker 8: decided to provide here for investors here over the next year.
Speaker 8: But I actually think for the most part, you're going
Speaker 8: to actually see more favorable return ROI metrics across kind
Speaker 8: of some of these cloud providers because of how they're
Speaker 8: spending on the cappet side of things, they are shifting
Speaker 8: more towards the server side of things here over the
Speaker 8: next couple of borders and years, and and you know,
Speaker 8: clearly the growth piece is you know, starting starting to
Speaker 8: kind of decelerate and level out a little bit here.
Speaker 8: So I think kind of the return on investments are
Speaker 8: going to see considerable improvement here, not only over the
Speaker 8: next you know, a couple of months, but you know,
Speaker 8: over the next couple of years, and I think investors
Speaker 8: will reward that. Maybe to your point, I think the
Speaker 8: other important point here or item to look out for
Speaker 8: here this earning season is something along the lines or
Speaker 8: you know, looking at the op X side of things,
Speaker 8: something that these companies have really been you know, holding
Speaker 8: kind of leveling out here over the last couple of years. Actually,
Speaker 8: if you look at employee headcount, whether it be from Google, Microsoft,
Speaker 8: announcing recently some of their head count reductions essentially down
Speaker 8: over the last kind of two to three years, flat
Speaker 8: to down, And I think it'll be interesting to kind
Speaker 8: of see how these all these companies comment relative to
Speaker 8: what we've seen here from Zuckerberg over the last couple
Speaker 8: of weeks and months. I think that's going to be
Speaker 8: really an important storyliner.
Speaker 2: As well, Angelo, I appreciate it. Angela's in O there
Speaker 2: as CFRA. This is the Bloomberg Surveillance podcast, bringing you
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