WEBVTT - Chipmakers Rise, Mosaic Falls on Iran War

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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<v Speaker 2>in the stock market, harnessing the power of Bloomberg data.

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<v Speaker 3>Let's take a look at some stocks on the move today.

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<v Speaker 3>Alexander Semenova joins US. Now, so what is on your

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<v Speaker 3>radar today?

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<v Speaker 1>That would have been a perfect segue, guys, to go

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<v Speaker 1>from peanuts and snacks to chips, because all about chips,

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<v Speaker 1>not the kind that you eat, the kind that are

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<v Speaker 1>making some people very, very rich. Given the parabolic moves

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<v Speaker 1>that we've seen in some of these run away by

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<v Speaker 1>the move up in this group exactly. I mean I

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<v Speaker 1>was just looking at Intel. When I last looked at it,

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<v Speaker 1>it was up something like one percent. Now it's up

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<v Speaker 1>two point eight percent. Also, Amd is up again more

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<v Speaker 1>than two percent. In Nvidia is climbing about two point

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<v Speaker 1>seven percent. This entire group has just been on a tear.

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<v Speaker 1>The Philadelphia Semiconductor Stock Exchange Index is up something like

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<v Speaker 1>sixty percent over the last six weeks, and by every metric,

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<v Speaker 1>these valuations are getting incredibly extreme. These stocks are getting overbought.

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<v Speaker 1>Michael Burry issued another learning about the group, talking about

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<v Speaker 1>how this feels a little bit like nineteen ninety nine,

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<v Speaker 1>but it's not stopping people from buying. We had retail investors.

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<v Speaker 3>Would people buy I just want to point out the difference.

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<v Speaker 3>Would we push back a little bit, just to play

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<v Speaker 3>Devil's advocate? Would people push back on that and say,

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<v Speaker 3>we actually have earnings with these companies?

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<v Speaker 4>Right?

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<v Speaker 1>You have the earnings you have for these data centers

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<v Speaker 1>and the hardware that is building out AI infrastructure.

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<v Speaker 3>A lot of the companies that went parabolic in the

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<v Speaker 3>dot com boom had no earning.

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<v Speaker 4>Yeah, there was nothing to back them.

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<v Speaker 1>And bubbles can keep inflating for a very long time.

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<v Speaker 1>Trying to time these kinds of things can really lead

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<v Speaker 1>you to miss out on a lot of outsized gains.

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<v Speaker 1>But the thing is when you are at these extreme

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<v Speaker 1>levels buying and then the risks of fortunes reversing are

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<v Speaker 1>very high. Right, if things go in the wrong direction,

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<v Speaker 1>if we get one bad report from one of these companies,

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<v Speaker 1>that things can turn very quickly.

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<v Speaker 4>Our customer pulls back and we know the supply chain

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<v Speaker 4>has been constrained. We're going to actually come back to

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<v Speaker 4>this in a moment because it just speaks to the

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<v Speaker 4>moment in time when it comes to semiconductors. Let's get

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<v Speaker 4>to another name, Mosaic. You're also watching.

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<v Speaker 1>Yeah, this is a really interesting company. So the war

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<v Speaker 1>in Iran has sent fertilizer prices soaring, and this fertilizer producer,

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<v Speaker 1>actually you would think that it would be a boon

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<v Speaker 1>for the company, but it's really struggled through the conflict

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<v Speaker 1>through the closure of the Straight of Horror moves because

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<v Speaker 1>any potential revenue gains that it would have gotten from

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<v Speaker 1>higher prices from fertilizer were actually offset by supply chain bottlenecks.

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<v Speaker 1>So Mosaic reported a three hundred and seventy three million

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<v Speaker 1>dollar operating loss. It also reported adjusting earnings per share

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<v Speaker 1>that came in well below Wall Street estimates. And this

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<v Speaker 1>is because of the surging raw costs for raw materials

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<v Speaker 1>like sulfur ammonia and sulfuric asset. So that was all

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<v Speaker 1>offsetting those potential revenue gains and this created bottlenecks for

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<v Speaker 1>the company. About a fifth of global phosphate trade UH

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<v Speaker 1>and nearly half of the world's sulfur trade depends on

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<v Speaker 1>the Strait of Hormones, which has been yeah closed.

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<v Speaker 3>I'm adding this one to my decliners. That's a really

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<v Speaker 3>good one.

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<v Speaker 1>That is a really good company. You're not talking about

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<v Speaker 1>fertilizer every day, very well, we have been.

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<v Speaker 3>Talking about them a lot because of the strait of Hormons.

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<v Speaker 3>I think a lot of people, you know, ten weeks ago,

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<v Speaker 3>thought oh, we're just gonna be talking about oil and gas.

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<v Speaker 3>But the downstream effects of this being closed, people are

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<v Speaker 3>learning a lot about phosphates, yes, exactly, other things, other

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<v Speaker 3>things from sophomore year chemistry class, yes, in high school.

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<v Speaker 4>That bring out the charts right, Yeah.

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<v Speaker 3>To periodic table.

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<v Speaker 4>We said we were going to kind of come back

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<v Speaker 4>to the semiconductor space because we do have. First of all,

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<v Speaker 4>the IPO markets come back, right. We've certainly start to

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<v Speaker 4>see a lot of listings this year. There's a big

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<v Speaker 4>one that we are watching in the AI infrastructure space.

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<v Speaker 1>Yeah, Cerebrace Systems. So it increased the size of its IPO.

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<v Speaker 1>It is now seeking to raise as much as four

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<v Speaker 1>point eight billion dollars. So this is as demand for

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<v Speaker 1>the company's shares are starting to kind of explode. And

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<v Speaker 1>just a testament of that is apparently it was asking

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<v Speaker 1>institutional investors how many shares they want and how much

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<v Speaker 1>they're willing to pay for them to gauge kind of

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<v Speaker 1>the outside demands that they're experiencing. And for context, the

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<v Speaker 1>company is offering thirty million shares for one hundred and

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<v Speaker 1>fifty t one hundred and sixty dollars a pop. Just

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<v Speaker 1>recently and marketed twenty eight million shares for about one

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<v Speaker 1>hundred and fifteen dollars each. This is, according to SEC filings.

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<v Speaker 3>Topic of a company. Could this be once it goes

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<v Speaker 3>public a gigantic Yeah, this is like really really massive

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<v Speaker 3>I've been talking about.

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<v Speaker 1>This is another huge IPO and another testament of the

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<v Speaker 1>demand for AI built.

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<v Speaker 4>Yeah. I think what's interesting too, write another chip maker

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<v Speaker 4>coming on, and you do wonder what it means for

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<v Speaker 4>some of the existing players, because I do feel like

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<v Speaker 4>we slowly are getting a narrative of Yeah, Nvidia is

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<v Speaker 4>the behemoth in the space, it's the AI chip company.

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<v Speaker 4>But you do wonder if there's other companies they're going

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<v Speaker 4>to start to kind of pick apart theirs.

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<v Speaker 1>And videos GPUs, all these other companies are also.

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<v Speaker 4>Piling in nice stuff. All right, we'll look forward.

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<v Speaker 2>To that one. The Stockmover's report from Bloomberg Radio check

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