1 00:00:00,240 --> 00:00:11,760 Speaker 1: Bloomberg Audio, Studios, podcasts, radio news. This is Bloomberg Intelligence 2 00:00:11,840 --> 00:00:13,920 Speaker 1: with Scarletfoo and Paul Sweeney. 3 00:00:14,000 --> 00:00:16,120 Speaker 2: How do you think the FED is looking at tariffs? 4 00:00:16,239 --> 00:00:17,440 Speaker 2: The uncertainty of terriffs. 5 00:00:17,560 --> 00:00:20,000 Speaker 3: Let's take a look at the sectors and how they performed. 6 00:00:20,040 --> 00:00:23,040 Speaker 2: A lot of investors getting whipsaled every day by news events. 7 00:00:22,800 --> 00:00:26,520 Speaker 1: Breaking market headlines and corporate news from across the globe. 8 00:00:26,560 --> 00:00:29,160 Speaker 3: Could we see a market disruption of market events? 9 00:00:29,240 --> 00:00:31,240 Speaker 2: So people just too exuberant out there? 10 00:00:31,400 --> 00:00:33,920 Speaker 3: You see some so called low quality stocks driving this 11 00:00:34,040 --> 00:00:34,800 Speaker 3: short term rally. 12 00:00:34,840 --> 00:00:39,640 Speaker 1: Bloomberg Intelligence with Scarletfoo and Paul Sweeney on Bloomberg Radio, 13 00:00:39,800 --> 00:00:41,720 Speaker 1: YouTube and Bloomberg Originals. 14 00:00:42,520 --> 00:00:44,760 Speaker 2: On today's Bloomberg Intelligence Show, we dig inside the big 15 00:00:44,800 --> 00:00:47,120 Speaker 2: business story is impacting Wall Street and the global markets. 16 00:00:47,320 --> 00:00:49,560 Speaker 3: Each and every week, we provide in depth research and 17 00:00:49,640 --> 00:00:51,479 Speaker 3: data on some of the two thousand companies and one 18 00:00:51,560 --> 00:00:54,080 Speaker 3: hundred and thirty industries are analysts cover worldwide. 19 00:00:54,120 --> 00:00:56,440 Speaker 2: Today, we'll look at why Advanced micro Devices suffered its 20 00:00:56,440 --> 00:00:58,440 Speaker 2: worst stock decline in nearly nine years. 21 00:00:58,240 --> 00:01:00,240 Speaker 3: Plus to look at why PayPal shares ex He's the 22 00:01:00,240 --> 00:01:02,160 Speaker 3: biggest interdate drop in more than four years. 23 00:01:02,360 --> 00:01:04,000 Speaker 2: At first, we begin with some news at the media 24 00:01:04,000 --> 00:01:05,560 Speaker 2: and entertainment giant Walt. 25 00:01:05,240 --> 00:01:08,720 Speaker 3: Disney, and that's because Disney announced Josh Tomorrow will succeed 26 00:01:08,760 --> 00:01:10,080 Speaker 3: Bob Iger as CEO. 27 00:01:10,440 --> 00:01:12,959 Speaker 2: Tomorrow, a twenty eight year vetteran of Disney, was chosen 28 00:01:13,000 --> 00:01:15,840 Speaker 2: from among several internal candidates to lead the company at 29 00:01:15,880 --> 00:01:18,960 Speaker 2: a critical time as it transitions from traditional TV viewing 30 00:01:19,080 --> 00:01:19,920 Speaker 2: to the streaming era. 31 00:01:20,200 --> 00:01:22,200 Speaker 3: Iiger will stay on the board and serve as a 32 00:01:22,200 --> 00:01:25,360 Speaker 3: senior advisor until he retires on December thirty. First, we 33 00:01:25,360 --> 00:01:28,160 Speaker 3: were joined by Geithrong and Aten Bloomberg, intelligence analyst on 34 00:01:28,319 --> 00:01:29,039 Speaker 3: US Media. 35 00:01:29,120 --> 00:01:32,280 Speaker 2: Well first asked Githa about this succession plan and how 36 00:01:32,280 --> 00:01:34,679 Speaker 2: it might differ from previous plans. 37 00:01:34,959 --> 00:01:37,640 Speaker 4: Yeah, I think it was a very different time. March 38 00:01:37,680 --> 00:01:41,959 Speaker 4: twenty twenty, everything closes down, including you know, Disney parks 39 00:01:42,480 --> 00:01:45,440 Speaker 4: because of the pandemic. So it was kind of unfortunate. 40 00:01:45,480 --> 00:01:48,400 Speaker 4: The timing was all wrong, I would say for Bob Japek. 41 00:01:49,360 --> 00:01:53,680 Speaker 4: And what happened then is, of course movies were shut down, 42 00:01:54,040 --> 00:01:56,240 Speaker 4: a big part of Disney's business, movies as well as 43 00:01:56,280 --> 00:01:59,200 Speaker 4: the parks again. But then what really kind of shot 44 00:01:59,240 --> 00:02:01,720 Speaker 4: into prominence at that point was the streaming business. A 45 00:02:01,800 --> 00:02:05,160 Speaker 4: business that Bob Chapik was not really very familiar with, 46 00:02:06,080 --> 00:02:09,040 Speaker 4: and while he did have some experience in content, obviously 47 00:02:09,040 --> 00:02:11,359 Speaker 4: it was not enough, and we had a whole bunch 48 00:02:11,400 --> 00:02:16,040 Speaker 4: of different missteps with the content part of the business, 49 00:02:16,440 --> 00:02:19,280 Speaker 4: which kind of led to the whole you know mess 50 00:02:19,320 --> 00:02:23,079 Speaker 4: that we saw, you know follow I think this time 51 00:02:23,480 --> 00:02:25,639 Speaker 4: we're in a very very different position. I think at 52 00:02:25,639 --> 00:02:27,560 Speaker 4: that point Disney was still kind of trying to figure 53 00:02:27,560 --> 00:02:29,400 Speaker 4: out what it really was. Was it a TV company, 54 00:02:29,520 --> 00:02:31,160 Speaker 4: was it a studio, was it a theme park company? 55 00:02:31,240 --> 00:02:33,320 Speaker 4: Or was it really a streaming player? And I think 56 00:02:33,360 --> 00:02:36,240 Speaker 4: now the pieces have kind of fallen in place. We 57 00:02:36,280 --> 00:02:39,120 Speaker 4: are on much more steady ground. I would say, you know, 58 00:02:39,160 --> 00:02:42,119 Speaker 4: they have their clear mandates, whether it isn't streaming, whether 59 00:02:42,200 --> 00:02:45,720 Speaker 4: it's in studio, you know, the clear What has really 60 00:02:45,760 --> 00:02:49,040 Speaker 4: emerged clearly right now, Scarlett, is that parks is the 61 00:02:49,080 --> 00:02:52,079 Speaker 4: main core growth engine of the company, and I think 62 00:02:52,080 --> 00:02:55,000 Speaker 4: that is reflected in this choice with Josh Tomorrow. 63 00:02:54,960 --> 00:02:55,400 Speaker 1: So Keithan. 64 00:02:55,440 --> 00:02:59,239 Speaker 2: Josh is a twenty eight year veteran of Disney running 65 00:02:59,240 --> 00:03:01,840 Speaker 2: the parks, But of course the other big part of 66 00:03:01,880 --> 00:03:07,120 Speaker 2: the company is it's you know, entertainment business. Dana Walden, 67 00:03:07,680 --> 00:03:10,880 Speaker 2: who runs the big part of that business, great reputation 68 00:03:10,960 --> 00:03:14,600 Speaker 2: in Hollywood. It's important to keep her at the Walt 69 00:03:14,680 --> 00:03:17,480 Speaker 2: Disney Company. Are they going to be able to do that? 70 00:03:18,960 --> 00:03:21,360 Speaker 4: I absolutely think so. So, you know, they obviously this 71 00:03:21,480 --> 00:03:23,799 Speaker 4: was a very clever move by the board to kind 72 00:03:23,840 --> 00:03:27,200 Speaker 4: of create this new role for Dana Walden, make her 73 00:03:27,240 --> 00:03:30,320 Speaker 4: the president and the chief creative officer. They've never had 74 00:03:30,360 --> 00:03:33,760 Speaker 4: this post before, but they specifically created this one for 75 00:03:33,840 --> 00:03:37,320 Speaker 4: Dana Walden, so that I think really kind of I 76 00:03:37,320 --> 00:03:39,800 Speaker 4: think dispels a lot of fears about what would happen 77 00:03:39,880 --> 00:03:43,400 Speaker 4: from a creative perspective. You know, last time, this was 78 00:03:43,440 --> 00:03:46,080 Speaker 4: the same problem that you know, many investors raised when 79 00:03:46,120 --> 00:03:49,040 Speaker 4: Bob Chapek became CEO. So having her there in the 80 00:03:49,040 --> 00:03:53,000 Speaker 4: creative role, I think definitely plays very well with Hollywood, 81 00:03:53,000 --> 00:03:55,640 Speaker 4: with the creative community, and ensures that, you know, Disney 82 00:03:55,680 --> 00:03:58,680 Speaker 4: will still have a top tier content coming to its 83 00:03:58,720 --> 00:04:01,000 Speaker 4: streaming platforms for the foreseeable future. 84 00:04:02,640 --> 00:04:06,760 Speaker 3: So Josh Tomorrow takes the job on March eighteenth, that's 85 00:04:06,800 --> 00:04:09,760 Speaker 3: when the succession is effective. And we talked about how 86 00:04:09,840 --> 00:04:12,680 Speaker 3: yesterday Disney came out with a forecast that was fairly tepid, 87 00:04:12,760 --> 00:04:14,960 Speaker 3: And one way of looking at that is it kind 88 00:04:14,960 --> 00:04:17,960 Speaker 3: of you know, clears the deck. Lets him start off 89 00:04:17,960 --> 00:04:20,640 Speaker 3: with the clean say and set expectations and kind of 90 00:04:20,680 --> 00:04:23,440 Speaker 3: manage it for investors a way that he sees fit. 91 00:04:23,839 --> 00:04:27,679 Speaker 3: At what point does he own everything that happens to Disney. 92 00:04:29,040 --> 00:04:30,919 Speaker 4: So actually a lot of the things that we're seeing 93 00:04:31,000 --> 00:04:35,880 Speaker 4: right now with the parks has been under Josh Tomorrow's watch. Remember, 94 00:04:35,960 --> 00:04:40,920 Speaker 4: once Bob Chapek was promoted to the CEO position, Josh 95 00:04:41,000 --> 00:04:45,000 Speaker 4: Tomorrow assumed the role of chief of the Parks, and 96 00:04:45,040 --> 00:04:47,359 Speaker 4: so all of the different initiatives that we've seen, you know, 97 00:04:47,400 --> 00:04:49,840 Speaker 4: whether it's Lightning Lan and whether it's Genie, whether it's 98 00:04:49,880 --> 00:04:53,479 Speaker 4: the sixty billion dollar expansion, a lot of that has 99 00:04:53,640 --> 00:04:57,280 Speaker 4: been you know, Josh Tomorrow's doing. So yeah, I mean, 100 00:04:57,360 --> 00:04:59,080 Speaker 4: of course we're you know, I think the street is 101 00:04:59,080 --> 00:05:00,839 Speaker 4: definitely going to give him a few quarters to kind 102 00:05:00,839 --> 00:05:04,120 Speaker 4: of settle in. But he has pretty much been the architect, 103 00:05:04,160 --> 00:05:06,360 Speaker 4: along with Bob Ayeger I'm sure, and the rest of 104 00:05:06,560 --> 00:05:09,560 Speaker 4: you know, the management team in kind of instituting the 105 00:05:09,560 --> 00:05:13,560 Speaker 4: strategy and making the parks a prominent part of the 106 00:05:13,600 --> 00:05:17,080 Speaker 4: portfolio going forward. So very soon you know the shot 107 00:05:17,080 --> 00:05:19,599 Speaker 4: answer Scarlett is very soon. I think he owns pretty 108 00:05:19,680 --> 00:05:21,239 Speaker 4: much all of this right away. 109 00:05:21,240 --> 00:05:24,240 Speaker 2: In fact, Keith, if I were Josh Tomorrow, day one 110 00:05:24,279 --> 00:05:27,320 Speaker 2: of my tenures CEO, I would go and I would say, Hey, 111 00:05:27,920 --> 00:05:31,080 Speaker 2: explain to me why we are not spinning out our 112 00:05:31,120 --> 00:05:34,120 Speaker 2: broadcasting cable networks. They are businesses that are in a 113 00:05:34,120 --> 00:05:37,760 Speaker 2: secular decline. They're dragging down our multiple Let's cut them loose. 114 00:05:38,200 --> 00:05:40,040 Speaker 2: Do you think that's even an option for the Walt 115 00:05:40,080 --> 00:05:40,720 Speaker 2: Disney Company. 116 00:05:42,080 --> 00:05:44,520 Speaker 4: I think it is. I think everybody is considering that 117 00:05:44,720 --> 00:05:47,800 Speaker 4: right now. I mean we've just seen what you know, 118 00:05:47,880 --> 00:05:50,960 Speaker 4: Warner Brothers Discovery has been able to achieve by kind 119 00:05:50,960 --> 00:05:53,840 Speaker 4: of separating out its studio and streaming from the TV 120 00:05:53,880 --> 00:05:56,920 Speaker 4: network's business. So I definitely would not rule that out. 121 00:05:56,960 --> 00:05:59,960 Speaker 4: I'm sure Disney will consider and Josh Tomorrow will consider 122 00:06:00,160 --> 00:06:02,480 Speaker 4: all options once he becomes CEO. 123 00:06:03,760 --> 00:06:07,640 Speaker 3: What happens to Jimmy Pataro over at ESPN, I mean, 124 00:06:07,680 --> 00:06:10,160 Speaker 3: does that become part of the spinouts as Paul was 125 00:06:10,160 --> 00:06:12,880 Speaker 3: talking about it, because there's different parts of Disney's media 126 00:06:12,920 --> 00:06:15,520 Speaker 3: business that are slowing down, that are no longer the 127 00:06:15,520 --> 00:06:17,680 Speaker 3: crown rules the way they once were. Whether you're talking 128 00:06:17,720 --> 00:06:21,440 Speaker 3: about the network television, or whether you're talking about ESPN, 129 00:06:21,560 --> 00:06:23,080 Speaker 3: or whether you're talking about the movie business. 130 00:06:24,320 --> 00:06:27,040 Speaker 4: Yeah, I think sports is still very core to Disney. 131 00:06:27,080 --> 00:06:29,479 Speaker 4: I mean they are so if you just kind of 132 00:06:29,520 --> 00:06:33,480 Speaker 4: look at the US sports landscape, ESPN actually owns majority 133 00:06:33,560 --> 00:06:37,279 Speaker 4: of the marquee US sports right almost about forty percent 134 00:06:37,400 --> 00:06:40,920 Speaker 4: of all sports viewing happens on ESPN platforms, So obviously 135 00:06:40,960 --> 00:06:43,400 Speaker 4: it's still very core to the company. As far as 136 00:06:43,480 --> 00:06:46,440 Speaker 4: Jimmy Pittaro is concerned. Scarlett, I mean, yes, he was 137 00:06:46,480 --> 00:06:49,880 Speaker 4: one of the you know, candidates that they were considering 138 00:06:49,960 --> 00:06:51,960 Speaker 4: to take on this job, but I think he himself 139 00:06:52,000 --> 00:06:54,680 Speaker 4: had many times indicated that he was not really interested 140 00:06:54,760 --> 00:06:57,160 Speaker 4: in the top spot. I think he kind of carries 141 00:06:57,200 --> 00:07:00,480 Speaker 4: on business as usual with ESPN. You know, it's a 142 00:07:00,480 --> 00:07:02,640 Speaker 4: little bit of a wait and watch what exactly happens 143 00:07:02,640 --> 00:07:05,359 Speaker 4: with the strategy. It is really instrumental, I think, to 144 00:07:05,400 --> 00:07:07,880 Speaker 4: their streaming business because you know, as they kind of 145 00:07:07,920 --> 00:07:10,480 Speaker 4: mentioned on their earnings call, you know a lot of 146 00:07:10,480 --> 00:07:13,960 Speaker 4: people taking the bundle the ESPN streaming plus the Disney 147 00:07:14,000 --> 00:07:16,160 Speaker 4: plus the Hulu. So it is a critical portion of that. 148 00:07:16,440 --> 00:07:20,160 Speaker 4: So I'm not really sure how exactly a spinout would work. 149 00:07:20,760 --> 00:07:23,400 Speaker 4: But of course, again, you know, we are in a 150 00:07:23,520 --> 00:07:26,520 Speaker 4: very very different time and age, and everybody is thinking 151 00:07:26,520 --> 00:07:30,000 Speaker 4: about all possible options when it comes to a media. 152 00:07:30,160 --> 00:07:32,400 Speaker 3: Our thanks to KEITHA. Rong Andathan, she is our US 153 00:07:32,440 --> 00:07:33,160 Speaker 3: media analyst. 154 00:07:33,320 --> 00:07:35,640 Speaker 2: We've moved to some news in the energy space. 155 00:07:35,440 --> 00:07:38,480 Speaker 3: And this week the German energy company Siemens Energy announced 156 00:07:38,480 --> 00:07:41,240 Speaker 3: it will invest a billion dollars in manufacturing capacity in 157 00:07:41,240 --> 00:07:44,280 Speaker 3: the US over the next two years as power demand surges. 158 00:07:44,440 --> 00:07:46,240 Speaker 2: The company said most of the funds will be spent 159 00:07:46,280 --> 00:07:50,080 Speaker 2: on expanding existing sites in North Carolina, Florida, Texas, Alabama, 160 00:07:50,160 --> 00:07:52,720 Speaker 2: and New York, as well as a new plant in Mississippi. 161 00:07:52,880 --> 00:07:55,200 Speaker 3: We are joined by Siemens Energy CEO Christian bra. 162 00:07:55,480 --> 00:07:57,960 Speaker 2: We first asked Christian what the goal of the Semens 163 00:07:58,080 --> 00:07:59,840 Speaker 2: Energy investment is Trouthol. 164 00:08:00,200 --> 00:08:02,000 Speaker 5: It's a goal to keep up with a fantastic growth 165 00:08:02,000 --> 00:08:05,480 Speaker 5: which we see currently in the electricity market. And you know, Guest, 166 00:08:05,520 --> 00:08:11,080 Speaker 5: Turbine's great making sure that the AI transformation can really 167 00:08:11,080 --> 00:08:13,560 Speaker 5: be fueled with electricity as one of the hottest markets 168 00:08:13,560 --> 00:08:15,840 Speaker 5: you can see globally at the moment, and we are 169 00:08:15,880 --> 00:08:18,640 Speaker 5: obviously trying to keep up with our customers and we're 170 00:08:18,640 --> 00:08:21,200 Speaker 5: trying to bring all this equipment what is needed guest turbine, 171 00:08:21,320 --> 00:08:25,520 Speaker 5: transformers and the likes. This means we are expending a 172 00:08:25,600 --> 00:08:28,320 Speaker 5: lot of our industrial footprint here. We are hiring people 173 00:08:28,840 --> 00:08:33,160 Speaker 5: adding factories to keep up with that, and this is 174 00:08:33,200 --> 00:08:36,199 Speaker 5: obviously one important step really to create also this energy 175 00:08:36,240 --> 00:08:38,000 Speaker 5: dominance what the US is looking for. 176 00:08:38,800 --> 00:08:41,440 Speaker 2: You recently met with President Trump. What was the takeaway 177 00:08:41,440 --> 00:08:43,920 Speaker 2: from your meeting there? How related is that meeting to 178 00:08:44,040 --> 00:08:45,800 Speaker 2: your announcement in the investments in the US. 179 00:08:45,880 --> 00:08:48,160 Speaker 5: Well, there was a let's say reception and others right, 180 00:08:48,200 --> 00:08:50,760 Speaker 5: which was a big group meeting. So what for me 181 00:08:50,920 --> 00:08:54,160 Speaker 5: is important that the Trump administration is very approachable for 182 00:08:54,280 --> 00:08:56,880 Speaker 5: us and I have to say I'm very grateful for that. 183 00:08:57,559 --> 00:09:00,040 Speaker 5: At the moment, my key interactions is really with the 184 00:09:00,120 --> 00:09:02,680 Speaker 5: secretaries in terms of really understanding, hey, what needs to 185 00:09:02,679 --> 00:09:07,040 Speaker 5: be done, how do we need looking forward on the opportunities, 186 00:09:08,000 --> 00:09:12,679 Speaker 5: and this is taken up excellently at the moment. That 187 00:09:12,840 --> 00:09:15,679 Speaker 5: is my main interaction also with the Trump administration. 188 00:09:16,360 --> 00:09:20,559 Speaker 2: Christian, how would you characterize the US energy grid here 189 00:09:20,600 --> 00:09:23,880 Speaker 2: as you get set to increase your investment here? 190 00:09:24,240 --> 00:09:26,040 Speaker 5: Yeah, I mean, first of all, what you see the 191 00:09:26,120 --> 00:09:28,880 Speaker 5: US market on the grid side is influenced by two things. 192 00:09:28,880 --> 00:09:31,320 Speaker 5: The one thing is that you have a massive investment 193 00:09:31,360 --> 00:09:35,800 Speaker 5: with ongoing just for replacement refurbishment of existing facilities. This 194 00:09:35,880 --> 00:09:38,280 Speaker 5: is very much utility driven business, which is very active, 195 00:09:38,280 --> 00:09:41,720 Speaker 5: which sometimes gets overlooked seeing the data center discussion. And 196 00:09:41,800 --> 00:09:44,240 Speaker 5: at the same time, you obviously have an unprecedented growth 197 00:09:44,240 --> 00:09:48,360 Speaker 5: in electricity on the data center side, which does require 198 00:09:48,520 --> 00:09:51,360 Speaker 5: heavy investments into the grid side as well, and we 199 00:09:51,440 --> 00:09:54,840 Speaker 5: need to understand also how do we operate all the things. 200 00:09:54,880 --> 00:09:58,239 Speaker 5: I mean, everybody easily talks about gigawards of additional electricity. 201 00:09:58,720 --> 00:10:01,240 Speaker 5: There's not so many sites in the US which like 202 00:10:01,280 --> 00:10:04,880 Speaker 5: a one gigable type of consumption. This will require grid 203 00:10:04,920 --> 00:10:08,440 Speaker 5: stabilization and this is what we all try to contribute. 204 00:10:08,480 --> 00:10:12,160 Speaker 5: So what we're doing here is building factories for switch gear, 205 00:10:12,320 --> 00:10:17,120 Speaker 5: transformers components which supply to that industry, and obviously also 206 00:10:17,160 --> 00:10:21,040 Speaker 5: bringing up people who can help to do this overarching 207 00:10:21,080 --> 00:10:24,959 Speaker 5: design on the grid side. We believe that is let's say, 208 00:10:25,000 --> 00:10:27,000 Speaker 5: really a long run and we will see it for 209 00:10:27,040 --> 00:10:30,960 Speaker 5: a long time because electricity grate is an important backbone 210 00:10:31,000 --> 00:10:34,400 Speaker 5: of the critical infrastructure, and this is why. I feel 211 00:10:34,480 --> 00:10:36,679 Speaker 5: very comfortable with the investment we're doing, and I'm very 212 00:10:36,720 --> 00:10:37,760 Speaker 5: happy with the market here. 213 00:10:37,960 --> 00:10:39,480 Speaker 3: So I want to pick up on where you just 214 00:10:39,760 --> 00:10:42,720 Speaker 3: left off, bring in more people to design some of 215 00:10:43,280 --> 00:10:46,719 Speaker 3: the grid work there. Talk to us about jobs. How 216 00:10:46,720 --> 00:10:50,679 Speaker 3: many jobs will your initiatives create, What kinds of jobs 217 00:10:50,720 --> 00:10:52,760 Speaker 3: are they going to be, what level, what kind of 218 00:10:52,840 --> 00:10:55,520 Speaker 3: education is needed, how much training will there be in 219 00:10:55,640 --> 00:10:58,240 Speaker 3: order for you to find the right people. 220 00:10:57,960 --> 00:10:58,600 Speaker 1: For those jobs. 221 00:10:58,720 --> 00:11:01,800 Speaker 5: Yeah, I mean, we had today an organization with around 222 00:11:01,840 --> 00:11:03,880 Speaker 5: twelve thousand people in the US right and we're going 223 00:11:03,960 --> 00:11:06,760 Speaker 5: to add another fifteen hundred on top of that. And 224 00:11:06,800 --> 00:11:09,920 Speaker 5: this will be accompanied by a lot of education and 225 00:11:09,960 --> 00:11:11,680 Speaker 5: training programs. So a lot of this will be blue 226 00:11:11,679 --> 00:11:14,320 Speaker 5: color working jobs, also on the factories, making sure that 227 00:11:14,360 --> 00:11:17,040 Speaker 5: we can produce and also that we have people going 228 00:11:17,080 --> 00:11:20,240 Speaker 5: out in the fields and fixing things. So this will 229 00:11:20,800 --> 00:11:23,640 Speaker 5: go through training academies which we build up in parallel 230 00:11:23,720 --> 00:11:26,120 Speaker 5: in this. You know, we have one big new facility 231 00:11:26,120 --> 00:11:32,400 Speaker 5: coming up in Jackson, Mississippi, which will obviously also will 232 00:11:32,440 --> 00:11:35,480 Speaker 5: be with one training center. We have a big site 233 00:11:35,520 --> 00:11:38,640 Speaker 5: in Charlotte which we also will increase on that at 234 00:11:38,679 --> 00:11:42,760 Speaker 5: the same time building up factories is also then coming 235 00:11:42,800 --> 00:11:45,280 Speaker 5: with some engineering work on the white color side, so. 236 00:11:45,200 --> 00:11:45,960 Speaker 6: It will be both. 237 00:11:46,400 --> 00:11:48,000 Speaker 5: But the big thing, and this is why we went 238 00:11:48,080 --> 00:11:51,000 Speaker 5: out is really hey, this is I would call it 239 00:11:51,000 --> 00:11:53,360 Speaker 5: a blue color wave. Now in terms of really getting 240 00:11:53,480 --> 00:11:56,880 Speaker 5: educated workers. That is my biggest constraint at the moment, 241 00:11:56,920 --> 00:11:58,679 Speaker 5: also on the market, and it goes down to the 242 00:11:58,720 --> 00:12:01,839 Speaker 5: construction workers, people in the factories. And we should never 243 00:12:01,920 --> 00:12:06,360 Speaker 5: ever underestimate the need to finally get something done and 244 00:12:06,400 --> 00:12:11,240 Speaker 5: that will require more people, more skilled labor, and we 245 00:12:11,280 --> 00:12:13,840 Speaker 5: will definitely contribute to that and to help to build 246 00:12:13,920 --> 00:12:14,600 Speaker 5: up that workforce. 247 00:12:14,880 --> 00:12:17,760 Speaker 3: Our thanks to Semen's Energy CEO Christian Buruh, coming up 248 00:12:17,760 --> 00:12:20,280 Speaker 3: a look at why obesity data from drug maker Pfizer 249 00:12:20,480 --> 00:12:21,679 Speaker 3: underwhelmed investors. 250 00:12:21,920 --> 00:12:24,800 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 251 00:12:24,800 --> 00:12:26,960 Speaker 2: depth research and data on two thousand companies and one 252 00:12:27,040 --> 00:12:28,120 Speaker 2: hundred and thirty industries. 253 00:12:28,240 --> 00:12:31,280 Speaker 3: You can access Bloomberg Intelligence via bi go on the terminal. 254 00:12:31,360 --> 00:12:32,520 Speaker 3: I'm Scarlet Foo and. 255 00:12:32,440 --> 00:12:34,480 Speaker 2: I'm Paul Sweeney, and this is Bloomberg. 256 00:12:38,600 --> 00:12:43,080 Speaker 1: This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney 257 00:12:43,480 --> 00:12:44,800 Speaker 1: on Bloomberg Radio. 258 00:12:45,440 --> 00:12:47,440 Speaker 2: We move to some news in the biotech sector. 259 00:12:47,640 --> 00:12:49,959 Speaker 3: This week, shares a Pfizer fell after the drug maker 260 00:12:50,000 --> 00:12:53,040 Speaker 3: revealed limited data from one of its new obesity treatments. 261 00:12:53,080 --> 00:12:55,319 Speaker 2: It showed people lost up to twelve point three percent 262 00:12:55,360 --> 00:12:57,839 Speaker 2: of their body weight compared to those on a placebo 263 00:12:57,920 --> 00:12:58,800 Speaker 2: at twenty eight weeks. 264 00:12:58,840 --> 00:13:01,240 Speaker 3: And of course this comes after Eyer battled to buy 265 00:13:01,240 --> 00:13:03,760 Speaker 3: weight loss startup met Sarah late last year. With no 266 00:13:03,800 --> 00:13:06,880 Speaker 3: new drug approvals expected this year, and the limited data 267 00:13:06,880 --> 00:13:10,040 Speaker 3: released means the prospects for Metsara's farthest long drug do 268 00:13:10,160 --> 00:13:10,880 Speaker 3: remain unclear. 269 00:13:11,240 --> 00:13:13,520 Speaker 2: For more on this and the latest in the biotech sector, 270 00:13:13,679 --> 00:13:16,600 Speaker 2: we heard from Sam Fazeli, Bloomer Intelligence, director of Research 271 00:13:16,600 --> 00:13:19,240 Speaker 2: for Global Industries and senior pharmaceuticals analysts. 272 00:13:19,280 --> 00:13:22,280 Speaker 3: We began by asking Sam about how investors were impacted 273 00:13:22,280 --> 00:13:23,880 Speaker 3: by this limited obesity data. 274 00:13:24,360 --> 00:13:26,760 Speaker 7: Yeah, yeah, so look, they paid ten point one billion 275 00:13:26,800 --> 00:13:28,880 Speaker 7: dollars for this, and if it all to do with that, 276 00:13:29,000 --> 00:13:31,520 Speaker 7: there is it people being reminded again that the next 277 00:13:31,520 --> 00:13:36,240 Speaker 7: three four years there's a major headwind from generated drugs 278 00:13:36,280 --> 00:13:39,880 Speaker 7: coming for there some of the products on the market 279 00:13:39,880 --> 00:13:44,720 Speaker 7: eye brands, ex standy, et cetera. So that's partly the issue. 280 00:13:44,760 --> 00:13:47,640 Speaker 7: And you know in order to deal with that, you 281 00:13:47,679 --> 00:13:49,840 Speaker 7: need assets and drugs that are going to try and 282 00:13:49,880 --> 00:13:52,920 Speaker 7: hopefully fill the gap. And maybe this is the problem 283 00:13:52,920 --> 00:13:55,320 Speaker 7: with the data. The thing is, we've looked at the data. 284 00:13:55,360 --> 00:13:57,880 Speaker 7: As you know, we have very deep obesity analysis. We've 285 00:13:57,880 --> 00:14:01,760 Speaker 7: looked at the data and it's not terrible. But as 286 00:14:01,800 --> 00:14:04,840 Speaker 7: I said the other day when Rash reported, there's some numbers, 287 00:14:05,200 --> 00:14:08,920 Speaker 7: I think folks are getting over this percentage here, percentage there. 288 00:14:09,480 --> 00:14:11,560 Speaker 7: You can only dis the point going for what you 289 00:14:11,600 --> 00:14:13,960 Speaker 7: can't mean unless you give out somebody who are thirty 290 00:14:14,040 --> 00:14:17,800 Speaker 7: forty weights, which of course nobody wants. So this is 291 00:14:17,800 --> 00:14:20,960 Speaker 7: getting to a point where now it comes to the nuance, 292 00:14:20,960 --> 00:14:22,840 Speaker 7: and unfortunately we don't have a lot of the nuance 293 00:14:22,880 --> 00:14:26,160 Speaker 7: that we need to know about this data set tolerability. 294 00:14:26,600 --> 00:14:29,200 Speaker 7: And it is good because it's a once monthly injection 295 00:14:29,320 --> 00:14:32,000 Speaker 7: after the first few weeks, so it's well set up. 296 00:14:32,280 --> 00:14:34,520 Speaker 7: But the market obviously doesn't like it because they're not 297 00:14:34,560 --> 00:14:38,520 Speaker 7: getting enough information about how good actually it is. Sam. 298 00:14:38,560 --> 00:14:40,040 Speaker 2: It seems like if you want to be an investor 299 00:14:40,040 --> 00:14:42,840 Speaker 2: in big cap farmer, you really have to be a 300 00:14:42,880 --> 00:14:45,520 Speaker 2: stock picker. I've got stocks like Pfizer and Bristol on 301 00:14:45,560 --> 00:14:48,600 Speaker 2: a trailing twelve month basis that are down. But I've 302 00:14:48,640 --> 00:14:51,320 Speaker 2: got stocks like Johnson and Johnson and Eli Lilly and 303 00:14:51,400 --> 00:14:54,680 Speaker 2: abby V. They're are big. And is that just because 304 00:14:54,920 --> 00:14:58,320 Speaker 2: they've got the right portfolio of drugs and the others don't. 305 00:14:59,240 --> 00:15:02,960 Speaker 7: Entirely entirely about that is what you don't want is 306 00:15:03,000 --> 00:15:06,160 Speaker 7: looking into the abyss of generic drugs coming for your 307 00:15:06,240 --> 00:15:10,800 Speaker 7: big earners with no obvious pipeline. Versus, let's take a 308 00:15:10,880 --> 00:15:14,200 Speaker 7: Johnson and Johnson in this case, and they have a 309 00:15:14,400 --> 00:15:17,840 Speaker 7: phenomenal set of drugs for the multiple my looma space 310 00:15:18,560 --> 00:15:22,440 Speaker 7: or a whole you know, other oncology spaces. This is 311 00:15:22,480 --> 00:15:25,040 Speaker 7: a powerhouse. And of course they've also still got the 312 00:15:25,120 --> 00:15:30,440 Speaker 7: other divisions medical devices growing quite nicely so and no 313 00:15:30,920 --> 00:15:33,840 Speaker 7: massive I mean, there's one that's coming up, a big 314 00:15:33,880 --> 00:15:37,280 Speaker 7: hole that's coming in terms of generics, but they've still 315 00:15:37,280 --> 00:15:39,840 Speaker 7: got these things that are growing at phenomenal speed. And 316 00:15:39,880 --> 00:15:43,280 Speaker 7: one of their drugs, Dartlects, is very close to twenty 317 00:15:43,320 --> 00:15:46,960 Speaker 7: billion dollars and that's just one indication in multiple myloma. 318 00:15:47,120 --> 00:15:49,560 Speaker 7: So they've done everything right in that case, and that's 319 00:15:49,600 --> 00:15:50,800 Speaker 7: what the market likes. 320 00:15:51,040 --> 00:15:53,160 Speaker 3: So in other words, Sam, this is something that can 321 00:15:53,200 --> 00:15:56,680 Speaker 3: be managed. The fact that Pfizer hasn't managed this well 322 00:15:57,040 --> 00:16:00,200 Speaker 3: raises a lot of questions here because I mean, it's 323 00:16:00,240 --> 00:16:02,120 Speaker 3: not like just one day they woke up and oh, 324 00:16:02,240 --> 00:16:05,280 Speaker 3: you know, there's suddenly a lot of competition for some 325 00:16:05,320 --> 00:16:07,760 Speaker 3: of their best selling drugs, or people are no longer 326 00:16:07,800 --> 00:16:12,040 Speaker 3: paying up for COVID treatments COVID vaccines. In terms of management, 327 00:16:12,280 --> 00:16:16,240 Speaker 3: do investigate a question whether adviser has a right management 328 00:16:16,280 --> 00:16:16,640 Speaker 3: in place. 329 00:16:18,080 --> 00:16:21,160 Speaker 7: Yeah, I mean, look, this is a tough game, right 330 00:16:22,040 --> 00:16:24,360 Speaker 7: not the game, of course, this is a very tough 331 00:16:24,440 --> 00:16:29,320 Speaker 7: set of issues to deal with. Creating pipeline takes a 332 00:16:29,360 --> 00:16:33,120 Speaker 7: lot of effort. Let's take Eli Lilly. For years, nobody 333 00:16:33,280 --> 00:16:36,240 Speaker 7: was paying too much attention to their potential margin expansion 334 00:16:36,240 --> 00:16:39,160 Speaker 7: that was coming, and they were arguing for it, et cetera. 335 00:16:39,440 --> 00:16:42,000 Speaker 7: Maybe they were lucky they hit on these obesity drugs. 336 00:16:42,040 --> 00:16:44,520 Speaker 7: Look at Ask for Zeneca. It took quite a lot 337 00:16:44,560 --> 00:16:48,320 Speaker 7: of pain for Pascal Soio you should write that ship 338 00:16:48,360 --> 00:16:51,520 Speaker 7: when he took it. So management's part of it. Then 339 00:16:51,560 --> 00:16:54,520 Speaker 7: you need to be lucky. You cannot have just one 340 00:16:54,640 --> 00:16:57,560 Speaker 7: or the other. And pipeline. You know, we'll see what 341 00:16:57,680 --> 00:17:01,000 Speaker 7: Fizer shows us over time, they have assets early development 342 00:17:01,160 --> 00:17:03,520 Speaker 7: that we need to start seeing the fruit our. 343 00:17:03,440 --> 00:17:06,240 Speaker 2: Thanks to Sam Fizzelli, Bloomberg Intelligence, Director of Research for 344 00:17:06,280 --> 00:17:09,160 Speaker 2: Global Industries and senior pharmaceuticals. 345 00:17:08,480 --> 00:17:10,879 Speaker 3: Analyst, we moved to some news in the tech space. 346 00:17:11,000 --> 00:17:13,919 Speaker 3: This week. Advanced micro Devices suffered its worst stock declined 347 00:17:13,960 --> 00:17:17,440 Speaker 3: in almost nine years after its sales forecast underwhelmed investors. 348 00:17:17,840 --> 00:17:20,000 Speaker 3: It's a sign that AMD is not making the AI 349 00:17:20,080 --> 00:17:21,880 Speaker 3: inroads that Wall Street had anticipated. 350 00:17:22,200 --> 00:17:26,399 Speaker 2: Separately, the semiconductor manufacturers Texas Instruments reach an agreement to 351 00:17:26,400 --> 00:17:29,640 Speaker 2: buy the US chip firm Silicon Laboratories for about seven 352 00:17:29,680 --> 00:17:30,760 Speaker 2: point five billion dollars. 353 00:17:30,880 --> 00:17:34,359 Speaker 3: This deepens TIS exposure to several long standing markets for chips, 354 00:17:34,359 --> 00:17:37,880 Speaker 3: including the home appliance, power, industrial, and medical device sectors. 355 00:17:38,080 --> 00:17:39,840 Speaker 2: For more on all of this, guest host John Tucker 356 00:17:39,840 --> 00:17:42,440 Speaker 2: and I were joined by Ku John Sobandi, Bloomberg Intelligence 357 00:17:42,440 --> 00:17:43,800 Speaker 2: senior semiconductor analysts. 358 00:17:43,960 --> 00:17:47,280 Speaker 3: We began by asking Konjohn of investors overreacted or if 359 00:17:47,320 --> 00:17:50,480 Speaker 3: there is actually something fundamentally wrong with AMD's latest report. 360 00:17:50,800 --> 00:17:54,760 Speaker 8: There was nothing fundamentally wrong in this report. There were 361 00:17:54,800 --> 00:17:56,679 Speaker 8: a lot of good things to take away, but it 362 00:17:56,720 --> 00:17:59,040 Speaker 8: comes down to you know when you become an ar darling. 363 00:17:59,119 --> 00:18:02,760 Speaker 8: You set up really really high expectations, and when you 364 00:18:02,840 --> 00:18:06,159 Speaker 8: take out the China revenue, which was not included in 365 00:18:06,200 --> 00:18:10,280 Speaker 8: the guidance and the expectations, the beat came out pretty modest, 366 00:18:10,320 --> 00:18:12,919 Speaker 8: which I guess people didn't like, and then was not 367 00:18:13,040 --> 00:18:15,800 Speaker 8: at power against the really high expectations that you have 368 00:18:15,920 --> 00:18:17,520 Speaker 8: now every quarter from these companies. 369 00:18:18,160 --> 00:18:21,119 Speaker 6: Like they used to ask in the old Westerns, you know, 370 00:18:21,400 --> 00:18:23,040 Speaker 6: is there room enough for the two of us in 371 00:18:23,080 --> 00:18:25,920 Speaker 6: this town? Is there room enough for them? And in 372 00:18:26,000 --> 00:18:27,840 Speaker 6: Nvidia there is right now. 373 00:18:27,880 --> 00:18:30,440 Speaker 8: I mean, look, all the tide is lifting all boats. 374 00:18:30,520 --> 00:18:34,359 Speaker 8: There's so much demand for accelerator chips that there's room 375 00:18:34,440 --> 00:18:37,440 Speaker 8: for a MD as a GPU provider. There's even room 376 00:18:37,480 --> 00:18:40,680 Speaker 8: for other folks like Broadcomming mar Well as an AS provider. 377 00:18:40,720 --> 00:18:42,760 Speaker 8: So there's a plenty of demand right now. 378 00:18:43,480 --> 00:18:46,439 Speaker 2: Do we like management least as Sue? I think is 379 00:18:46,480 --> 00:18:48,879 Speaker 2: just when I just see your interviews, it seems super 380 00:18:48,920 --> 00:18:49,520 Speaker 2: on top of it. 381 00:18:49,800 --> 00:18:53,360 Speaker 8: Yeah, I mean, like I said, fundamentally, nothing changed their 382 00:18:53,400 --> 00:18:57,399 Speaker 8: their CPU story continues to become stronger. Nobody's paying attention 383 00:18:57,480 --> 00:18:59,159 Speaker 8: to do it right now because all the focus is 384 00:18:59,200 --> 00:19:01,760 Speaker 8: on GPU and competing with n media. But people are 385 00:19:01,800 --> 00:19:04,440 Speaker 8: forgetting inherently. I when you look at two years back, 386 00:19:04,440 --> 00:19:07,920 Speaker 8: this was really a CPU company. Their GPU story line 387 00:19:07,960 --> 00:19:11,920 Speaker 8: remains intact. We didn't expect any fireworks coming into this earnings. 388 00:19:11,960 --> 00:19:14,960 Speaker 8: We don't expect it until really four q F twenty 389 00:19:15,000 --> 00:19:18,080 Speaker 8: twenty six, so the market is aware of this. We 390 00:19:18,200 --> 00:19:21,280 Speaker 8: really have to wait until the four q twenty twenty six. 391 00:19:21,320 --> 00:19:23,760 Speaker 8: This is when they will be really put to tests 392 00:19:23,800 --> 00:19:27,600 Speaker 8: if they can really execute their first server level solution 393 00:19:27,760 --> 00:19:30,680 Speaker 8: or not. So there's nothing changed that we saw should 394 00:19:30,760 --> 00:19:32,160 Speaker 8: really concern us. 395 00:19:32,880 --> 00:19:35,600 Speaker 6: How important is China in all this? I thought the 396 00:19:35,640 --> 00:19:38,640 Speaker 6: export restrictions were lifted. I mean, what's what's taking so long? 397 00:19:38,920 --> 00:19:42,240 Speaker 8: Well, so the expert restrictions are different for each chip, 398 00:19:42,320 --> 00:19:44,520 Speaker 8: so that the Mi three to eight which they were 399 00:19:44,520 --> 00:19:50,440 Speaker 8: able to ship, had already licenses approved prior, so that's 400 00:19:50,440 --> 00:19:53,560 Speaker 8: a different chip. The newer chips that now is in 401 00:19:53,640 --> 00:19:55,399 Speaker 8: the news when it comes to in media is that 402 00:19:55,600 --> 00:19:58,159 Speaker 8: H two hundreds and equivalent. It will be the MI 403 00:19:58,480 --> 00:20:02,120 Speaker 8: three twenty five for those have not been granted yet. 404 00:20:02,119 --> 00:20:04,480 Speaker 8: Even though the White House has said that yes, these 405 00:20:04,520 --> 00:20:08,480 Speaker 8: companies can start shipping these products, yet the formal licenses 406 00:20:08,520 --> 00:20:09,840 Speaker 8: have not been granted. 407 00:20:09,680 --> 00:20:12,920 Speaker 2: Ku John some m and A in your space. Texas 408 00:20:12,920 --> 00:20:16,119 Speaker 2: Instruments has reached an agreement to buy Silicon Laboratories for 409 00:20:16,160 --> 00:20:20,040 Speaker 2: about seven point five billion dollars. Here what's going on 410 00:20:20,080 --> 00:20:21,560 Speaker 2: here with ti. 411 00:20:21,680 --> 00:20:24,040 Speaker 8: Yeah, so just to give some context, this is sort 412 00:20:24,080 --> 00:20:26,160 Speaker 8: of this size of the deal they have not done 413 00:20:26,160 --> 00:20:28,160 Speaker 8: in the past. The last time they did a deal 414 00:20:28,200 --> 00:20:31,280 Speaker 8: like this was buying National for about six seven billion 415 00:20:31,320 --> 00:20:35,119 Speaker 8: dollars in twenty eleven. So this is not their typical nature, 416 00:20:35,119 --> 00:20:38,600 Speaker 8: so a bit of a surprise. Strategically, it fits well. 417 00:20:39,160 --> 00:20:42,360 Speaker 8: Their industrial segment, which is their largest segment and that's 418 00:20:42,400 --> 00:20:44,840 Speaker 8: where they want to be focused, has a missing piece 419 00:20:44,880 --> 00:20:48,160 Speaker 8: when it comes to wireless connectivity in IoT, so Silicon 420 00:20:48,240 --> 00:20:51,480 Speaker 8: Lab gives them that portfolio. Financially, however, it's a lot 421 00:20:51,520 --> 00:20:54,680 Speaker 8: more important. They have retreated that this has not change 422 00:20:54,720 --> 00:20:57,680 Speaker 8: their pre cash foot trajectory, this has not changed their 423 00:20:57,680 --> 00:21:00,960 Speaker 8: dividend path, and this does not increase The most important 424 00:21:00,960 --> 00:21:03,560 Speaker 8: thing is the capech so all those things we really like. 425 00:21:04,000 --> 00:21:06,720 Speaker 8: If they're able to execute to that yet the cost synergies, 426 00:21:06,760 --> 00:21:09,119 Speaker 8: then this will be a really good deal for them. Also, 427 00:21:09,160 --> 00:21:11,679 Speaker 8: remember TIA has been on a spending spree for the 428 00:21:11,720 --> 00:21:14,159 Speaker 8: last three to five years building up a lot of capacity. 429 00:21:14,359 --> 00:21:18,280 Speaker 8: So this will help bring more loading to the internal factories, 430 00:21:18,520 --> 00:21:23,639 Speaker 8: bring more manufacturing internal to own TI, and help with utilization. 431 00:21:24,119 --> 00:21:28,240 Speaker 2: Our thanks to Kunjan Sabani, Bloomberg Intelligence Senior Semiconductor analyst. 432 00:21:28,160 --> 00:21:30,560 Speaker 3: We moved out to some news from fintech company PayPal. 433 00:21:30,920 --> 00:21:33,760 Speaker 2: This week, PayPal reported quarterly profit and revenue that missed 434 00:21:33,760 --> 00:21:38,399 Speaker 2: analyst expectations. The company also said HP CEO Enrique Lauris 435 00:21:38,640 --> 00:21:41,640 Speaker 2: will take the top job from Alex Chris, whose turnaround 436 00:21:41,640 --> 00:21:43,240 Speaker 2: plan failed to meet targets. 437 00:21:43,600 --> 00:21:45,959 Speaker 3: Jamie Miller, who is the payments firm's chief financial and 438 00:21:45,960 --> 00:21:49,120 Speaker 3: operating officer, will serve as interim CEO until Lauris takes 439 00:21:49,160 --> 00:21:52,040 Speaker 3: over on March. First. Shares a PayPal tumbled as much 440 00:21:52,040 --> 00:21:54,639 Speaker 3: as nineteen percent after the news. It was the biggest 441 00:21:54,680 --> 00:21:56,000 Speaker 3: drop in more than four years. 442 00:21:56,359 --> 00:21:58,040 Speaker 2: More on this I was joined by Dick sha gera 443 00:21:58,160 --> 00:22:01,560 Speaker 2: Bloomberg Intelligence Global Fintech and payments analyst. I first answer 444 00:22:01,560 --> 00:22:03,480 Speaker 2: her to break down the latest news at PayPal. 445 00:22:03,960 --> 00:22:07,080 Speaker 9: Like two big headlines hit at once missed four Q 446 00:22:07,240 --> 00:22:11,240 Speaker 9: expectations and then announced a CEO change. So on the 447 00:22:11,280 --> 00:22:15,680 Speaker 9: print side, adjusted EPs was about a four percent miss 448 00:22:15,720 --> 00:22:18,480 Speaker 9: and the revenue came in one percent lower, and I 449 00:22:18,480 --> 00:22:21,480 Speaker 9: should highlight this is like their first miss in two years. 450 00:22:22,040 --> 00:22:26,399 Speaker 9: But I think the bigger issue is forward looking branded checkout, 451 00:22:26,440 --> 00:22:29,840 Speaker 9: which is the main core high margin business for PayPal, 452 00:22:30,040 --> 00:22:32,520 Speaker 9: that has slowed to one percent in the fourth quarter. 453 00:22:33,240 --> 00:22:36,320 Speaker 9: And PayPal is also flagging in earnings decline for twenty 454 00:22:36,359 --> 00:22:39,640 Speaker 9: twenty six. So those were the key forward looking problem areas, 455 00:22:40,800 --> 00:22:43,760 Speaker 9: and the CEO change definitely was a surprise. I mean, 456 00:22:43,760 --> 00:22:49,280 Speaker 9: the guidance division was driven by their investments in some 457 00:22:49,320 --> 00:22:52,439 Speaker 9: of the merchant business that they're doing, But I think 458 00:22:51,840 --> 00:22:56,600 Speaker 9: the market reaction goes beyond that. I think it goes 459 00:22:56,640 --> 00:23:00,840 Speaker 9: more around some of the serious gaps that appear to 460 00:23:00,880 --> 00:23:04,240 Speaker 9: have been discovered, especially with Apple pay and all the 461 00:23:04,280 --> 00:23:09,080 Speaker 9: product advancements that the competition has come through. And I think, yeah, 462 00:23:09,240 --> 00:23:10,679 Speaker 9: lots to unpack that today. 463 00:23:11,480 --> 00:23:14,680 Speaker 2: So just give us a sense of the competitive landscape 464 00:23:14,720 --> 00:23:17,679 Speaker 2: of the businesses that paypals and the financial technology and 465 00:23:17,720 --> 00:23:19,639 Speaker 2: kind of where do they fit in what are they 466 00:23:19,680 --> 00:23:20,800 Speaker 2: maybe not doing right here? 467 00:23:21,600 --> 00:23:25,960 Speaker 9: So PayPal has two parts of the ecosystem. It works 468 00:23:26,000 --> 00:23:28,240 Speaker 9: with the merchants where you see the PayPal button when 469 00:23:28,280 --> 00:23:30,760 Speaker 9: you check out and it works with the consumers through 470 00:23:30,800 --> 00:23:34,919 Speaker 9: its app, the PayPal app and the Venmo app. What 471 00:23:35,080 --> 00:23:40,160 Speaker 9: is very interesting is that management kept highlighting execution, discipline 472 00:23:40,200 --> 00:23:44,400 Speaker 9: and prioritization, but honestly, like that is the main game. 473 00:23:44,480 --> 00:23:48,760 Speaker 9: PayPal's biggest value ad is the two sided network. They 474 00:23:48,800 --> 00:23:52,040 Speaker 9: could not have afforded to either drop the merchant or 475 00:23:52,920 --> 00:23:55,240 Speaker 9: forget about the consumer. So it's been like it's a 476 00:23:55,359 --> 00:24:00,399 Speaker 9: very competitive landscape. You have Stripe, Aden, Apple pay You 477 00:24:00,440 --> 00:24:05,600 Speaker 9: would have noticed recently they revised their partnership from they 478 00:24:05,600 --> 00:24:08,919 Speaker 9: moved from Goldmans to JP Morgan. So everyone is charging 479 00:24:09,000 --> 00:24:11,760 Speaker 9: FIRS step and PayPal needs to show up on that. 480 00:24:12,080 --> 00:24:14,160 Speaker 9: And I thought they were getting there, but I think 481 00:24:14,160 --> 00:24:18,600 Speaker 9: this new CEO to change definitely puts a multi year 482 00:24:18,680 --> 00:24:20,280 Speaker 9: transformation back in the play now. 483 00:24:20,560 --> 00:24:23,640 Speaker 2: So what do you think is the is the next 484 00:24:23,720 --> 00:24:26,600 Speaker 2: step for this company here? I mean a can of 485 00:24:27,119 --> 00:24:30,360 Speaker 2: kind of remain competitive in this business going forward. Does 486 00:24:30,359 --> 00:24:33,320 Speaker 2: it need to think about a new structure or a 487 00:24:33,359 --> 00:24:35,520 Speaker 2: new strategy. What do you think needs to happen here? 488 00:24:36,280 --> 00:24:38,320 Speaker 9: Yeah, that's the million dollar question, Paul. I think so 489 00:24:38,359 --> 00:24:41,120 Speaker 9: there are two things. One is I think investors need 490 00:24:41,200 --> 00:24:44,600 Speaker 9: really need clarity now on how PayPal reaccelerates its core 491 00:24:44,720 --> 00:24:49,359 Speaker 9: checkout business. Is it conversion, is it pricing merchant value proposition, 492 00:24:49,800 --> 00:24:52,840 Speaker 9: because that's still the core engine. But I think secondly 493 00:24:53,080 --> 00:24:57,160 Speaker 9: is whether the new leadership really signals a broader strategic shakeup, 494 00:24:57,200 --> 00:25:00,000 Speaker 9: like do they streamline initiatives, are they going to step 495 00:25:00,200 --> 00:25:03,920 Speaker 9: cost discipline or capital return or if it doesn't work out, 496 00:25:03,960 --> 00:25:08,360 Speaker 9: maybe they'd consider like big assets like Venmo. You know, strategically, 497 00:25:08,520 --> 00:25:10,120 Speaker 9: the performance doesn't inflect from that. 498 00:25:10,520 --> 00:25:13,639 Speaker 3: Our thanks to Dick Shagaratt Bloomberg Intelligence, Global Fintech and 499 00:25:13,640 --> 00:25:16,240 Speaker 3: Payments analyst, coming up a look at why the food 500 00:25:16,240 --> 00:25:18,600 Speaker 3: and beverage company PepsiCo is cutting prices by up to 501 00:25:18,680 --> 00:25:20,600 Speaker 3: fifteen percent for some key brands. 502 00:25:20,680 --> 00:25:23,560 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 503 00:25:23,560 --> 00:25:25,719 Speaker 2: depth research and data on two thousand companies and one 504 00:25:25,800 --> 00:25:26,800 Speaker 2: hundred and thirty industries. 505 00:25:26,880 --> 00:25:29,760 Speaker 3: You can access Bloomberg Intelligence through Bigo on the terminal. 506 00:25:29,840 --> 00:25:31,040 Speaker 3: I'm Scarlett Foe. 507 00:25:30,760 --> 00:25:32,800 Speaker 2: And I'm Paul Sweeney, and this is Bloomberg. 508 00:25:40,400 --> 00:25:44,920 Speaker 1: This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney 509 00:25:45,240 --> 00:25:46,560 Speaker 1: on Bloomberg Radio. 510 00:25:47,200 --> 00:25:48,760 Speaker 2: We move next to some news in the food and 511 00:25:48,800 --> 00:25:49,399 Speaker 2: beverage space. 512 00:25:49,520 --> 00:25:52,119 Speaker 3: This week, PepsiCo announced it is cutting prices by up 513 00:25:52,160 --> 00:25:55,359 Speaker 3: to fifteen percent for key brands, including Lays anden Doritos. 514 00:25:55,640 --> 00:25:58,440 Speaker 3: It's a bid to lift sales by offering more affordable products. 515 00:25:58,600 --> 00:26:00,840 Speaker 2: Pepsco has struggled to grow itales of North American in 516 00:26:00,880 --> 00:26:02,800 Speaker 2: recent years. The company, like many of its peers in 517 00:26:02,800 --> 00:26:05,560 Speaker 2: the food space, raised prices during the pandemic and its 518 00:26:05,600 --> 00:26:07,280 Speaker 2: aftermath to offset high inflation. 519 00:26:07,520 --> 00:26:10,360 Speaker 3: So we brought in Ken Shape, Bloomberg Intelligence Senior consumer 520 00:26:10,400 --> 00:26:11,160 Speaker 3: products analyst. 521 00:26:11,440 --> 00:26:13,840 Speaker 2: We first asked Ken for his take on Pepsi's earnings. 522 00:26:14,080 --> 00:26:17,320 Speaker 10: I think the broad takeaway for investors is that PepsiCo 523 00:26:17,640 --> 00:26:21,760 Speaker 10: is committed to bringing better focus to this company. You know, 524 00:26:21,800 --> 00:26:24,680 Speaker 10: I've covered this company a long time and it's it's 525 00:26:24,720 --> 00:26:28,840 Speaker 10: primary competitors Coca Cola, here, doctor Pepper, you can say Primo, 526 00:26:28,960 --> 00:26:31,720 Speaker 10: water Monster. How they different from PepsiCo is the much 527 00:26:31,760 --> 00:26:37,679 Speaker 10: more focused particularly specific categories. But PepsiCo, with the urging 528 00:26:37,840 --> 00:26:41,879 Speaker 10: of the activists urging them on, is bringing more focus 529 00:26:41,880 --> 00:26:44,639 Speaker 10: to this company. And what I mean is they're rationalizing 530 00:26:44,680 --> 00:26:48,160 Speaker 10: a lot of the SKUs that really aren't contributing much. 531 00:26:48,880 --> 00:26:54,240 Speaker 10: They're consolidating plans they are bringing more rationality to the 532 00:26:54,359 --> 00:26:57,000 Speaker 10: trade spending. So when I hear things that, like, you know, 533 00:26:57,080 --> 00:27:00,359 Speaker 10: cutting price, that's that's tactical. That's just a way to 534 00:27:00,760 --> 00:27:02,840 Speaker 10: move the need a little bit with near term sales. 535 00:27:02,880 --> 00:27:05,480 Speaker 10: But I think the bigger picture is to bringing more 536 00:27:05,520 --> 00:27:07,160 Speaker 10: focus to this enterprise. 537 00:27:06,960 --> 00:27:10,160 Speaker 3: Right, I mean, investors are excited about it strategy as 538 00:27:10,160 --> 00:27:12,159 Speaker 3: opposed to just kind of moving forward with the way 539 00:27:12,200 --> 00:27:15,560 Speaker 3: it's always been. When it comes to those price cuts, though, 540 00:27:15,600 --> 00:27:17,679 Speaker 3: I wonder if this is going to spark any kind 541 00:27:17,720 --> 00:27:21,359 Speaker 3: of price war, will other snack makers feel the pressure 542 00:27:21,440 --> 00:27:24,000 Speaker 3: to also reduce prices, even if they've gone up quite 543 00:27:24,040 --> 00:27:25,359 Speaker 3: a bit since the pandemic. 544 00:27:26,560 --> 00:27:29,960 Speaker 10: That's possible, Scarlett. In the case of Free Too Lay though, 545 00:27:30,080 --> 00:27:32,560 Speaker 10: they have such a dominant market share, and they have 546 00:27:32,560 --> 00:27:35,879 Speaker 10: like sixty percent of the market in the measure channels, 547 00:27:36,119 --> 00:27:39,800 Speaker 10: and when we have that much of a share, you 548 00:27:39,880 --> 00:27:43,920 Speaker 10: deserve a premium. Particularly with Pestico's direct store delivery system, 549 00:27:44,560 --> 00:27:47,360 Speaker 10: what that means is that they help their retailers much 550 00:27:47,400 --> 00:27:50,040 Speaker 10: more than a lot of their competitors, and that is 551 00:27:50,800 --> 00:27:53,400 Speaker 10: they actually go to the store quickly, respond to out 552 00:27:53,400 --> 00:27:57,800 Speaker 10: of stocks, They help you know, position the product, they 553 00:27:57,800 --> 00:28:00,439 Speaker 10: create the end caps in the store, or they do 554 00:28:00,520 --> 00:28:03,840 Speaker 10: a lot more for the retailer than their competitors, and 555 00:28:03,880 --> 00:28:08,280 Speaker 10: so that's how they are helped to get premium pricing. So, yes, 556 00:28:08,280 --> 00:28:11,360 Speaker 10: they're rolling back some prices. You know, it's no secret 557 00:28:11,400 --> 00:28:13,600 Speaker 10: that price increases have been up quite a bit since 558 00:28:13,600 --> 00:28:18,399 Speaker 10: the pandemic. A lot of it's cost driven, and private 559 00:28:18,520 --> 00:28:22,000 Speaker 10: label has encroached a little bit on PepsiCo's share. But 560 00:28:22,040 --> 00:28:24,639 Speaker 10: to answer your question directly, they are the dominant player. 561 00:28:25,280 --> 00:28:27,680 Speaker 10: I would not expect them to give back too much 562 00:28:28,160 --> 00:28:32,960 Speaker 10: over time. And while their competitors may cut prices as well, 563 00:28:33,480 --> 00:28:37,680 Speaker 10: I think retail would be alienating consumers if they push 564 00:28:37,760 --> 00:28:40,200 Speaker 10: too hard on Petsico's price increases. 565 00:28:40,240 --> 00:28:42,760 Speaker 2: Down the road, Ken talk to us about Elliott management. 566 00:28:42,800 --> 00:28:45,360 Speaker 2: They've been in this company, they've owned this stock here 567 00:28:45,360 --> 00:28:48,200 Speaker 2: pushing for some change. How much of an impactor are 568 00:28:48,240 --> 00:28:48,640 Speaker 2: they having. 569 00:28:50,480 --> 00:28:52,960 Speaker 10: I think on the margin there's an impact Paull maybe 570 00:28:53,160 --> 00:28:56,520 Speaker 10: to the degree that Petsico is hastening. It's moved to 571 00:28:56,600 --> 00:28:59,000 Speaker 10: more focus. You know a lot of the things that 572 00:28:59,040 --> 00:29:02,680 Speaker 10: it's been doing all along, and that is upgrading their 573 00:29:02,680 --> 00:29:06,800 Speaker 10: portfolio with more functionality. This is some of the things 574 00:29:06,800 --> 00:29:09,280 Speaker 10: we talked about in the past, they're bringing more protein 575 00:29:09,360 --> 00:29:13,480 Speaker 10: to their mix and bringing more protein by restaging muscle milk, 576 00:29:14,520 --> 00:29:21,240 Speaker 10: so bringing more value to the beverages. So they've always 577 00:29:21,280 --> 00:29:24,000 Speaker 10: been doing that, but to your question, Elliott is pushing 578 00:29:24,040 --> 00:29:27,200 Speaker 10: them to do things like, Okay, you can still do that, 579 00:29:27,360 --> 00:29:30,440 Speaker 10: but also cut costs a little more aggressively. You know, 580 00:29:30,440 --> 00:29:32,400 Speaker 10: maybe maybe you don't need all of these plants, Maybe 581 00:29:32,440 --> 00:29:35,600 Speaker 10: you can consolidate some. Maybe there's some SKUs, you know, 582 00:29:35,640 --> 00:29:38,200 Speaker 10: some products that aren't selling, well, you can roll those back. 583 00:29:38,640 --> 00:29:42,320 Speaker 10: Be a little more nimble when it comes to getting 584 00:29:42,400 --> 00:29:44,480 Speaker 10: rid of some products that aren't winners, because at the 585 00:29:44,560 --> 00:29:46,080 Speaker 10: end of the day, you have to grab as much 586 00:29:46,080 --> 00:29:49,280 Speaker 10: shelf space as the retailer as possible, and when you 587 00:29:49,280 --> 00:29:51,040 Speaker 10: have products on the shelf that aren't moving, you're not 588 00:29:51,160 --> 00:29:55,040 Speaker 10: helping them, you know, with their business. So be more 589 00:29:55,040 --> 00:29:58,840 Speaker 10: a little more aggressive with that. So it's helping and 590 00:29:59,600 --> 00:30:01,360 Speaker 10: I think that's a positive thing for shareholders. 591 00:30:01,880 --> 00:30:03,680 Speaker 3: Is this a company that's going to have to separate 592 00:30:03,720 --> 00:30:05,520 Speaker 3: its drinks business from its snack business. 593 00:30:07,320 --> 00:30:09,600 Speaker 10: Well, that's the age old question we've been talking about 594 00:30:09,640 --> 00:30:12,480 Speaker 10: for a while. And as I mentioned, if it can 595 00:30:12,560 --> 00:30:15,600 Speaker 10: prove to the market that this increased focus that they 596 00:30:15,680 --> 00:30:19,120 Speaker 10: have with just doing their you know, daily business or 597 00:30:19,200 --> 00:30:22,760 Speaker 10: running these operations, they can improve them. I think the 598 00:30:22,800 --> 00:30:24,320 Speaker 10: heat will be off for them to go to the 599 00:30:24,600 --> 00:30:29,120 Speaker 10: draconian measure of breaking up food and beverages. That's always, 600 00:30:29,240 --> 00:30:31,080 Speaker 10: you know, the wild card, I think down the road, 601 00:30:31,360 --> 00:30:32,800 Speaker 10: and I think will be well received by the market 602 00:30:32,880 --> 00:30:36,280 Speaker 10: quite frankly, but I don't think it's necessary at this point. 603 00:30:37,000 --> 00:30:40,440 Speaker 2: What are you consumer products companies telling you ken about 604 00:30:40,560 --> 00:30:41,920 Speaker 2: just the consumer out there? 605 00:30:44,080 --> 00:30:46,040 Speaker 10: Well, all Trea just the other day. I mean, it's 606 00:30:46,040 --> 00:30:48,600 Speaker 10: a different market with cigarettes, you know. They noted that 607 00:30:48,640 --> 00:30:51,800 Speaker 10: consumers are still hesitant in paying up for a premium 608 00:30:51,800 --> 00:30:55,840 Speaker 10: products and the cigarettes mention isn't the same category as 609 00:30:55,840 --> 00:31:00,520 Speaker 10: salty snacks, but they do note that consumers are reaching 610 00:31:00,560 --> 00:31:03,520 Speaker 10: for the private label, the low priced alternative, more than 611 00:31:03,520 --> 00:31:05,720 Speaker 10: they've done in the past, and so the extent that 612 00:31:06,120 --> 00:31:09,880 Speaker 10: carries over to snacks and beverages. I can see some 613 00:31:09,920 --> 00:31:14,520 Speaker 10: parallel lines here, and as more companies release their numbers, 614 00:31:14,640 --> 00:31:16,360 Speaker 10: I think that could be a common theme here that 615 00:31:16,480 --> 00:31:19,680 Speaker 10: private labels encroaching and maybe there needs to be some 616 00:31:19,720 --> 00:31:24,800 Speaker 10: more deceleration in the reliance on price increases to stimulate 617 00:31:24,840 --> 00:31:25,520 Speaker 10: sales growth. 618 00:31:25,920 --> 00:31:29,240 Speaker 3: That was ken Ja Bloomberg Intelligence senior consumer products analysts. 619 00:31:29,280 --> 00:31:32,120 Speaker 2: We moved next to Research. Bloomberg Intelligence recently put out 620 00:31:32,120 --> 00:31:34,400 Speaker 2: on global communications and networking equipment. 621 00:31:34,720 --> 00:31:37,760 Speaker 3: According to BI, the global networking sector heads into twenty 622 00:31:37,800 --> 00:31:41,480 Speaker 3: twenty six with multiple spending tailwinds led by cloud AI 623 00:31:41,560 --> 00:31:44,640 Speaker 3: infrastructure buildouts, and the money spent on networking gear is 624 00:31:44,680 --> 00:31:47,280 Speaker 3: expected to grow twenty percent according to the six to 625 00:31:47,360 --> 00:31:47,920 Speaker 3: fifty Group. 626 00:31:48,120 --> 00:31:50,880 Speaker 2: For more, I was joined by Woujenho, Bloomberg Intelligence, Senior 627 00:31:50,880 --> 00:31:53,840 Speaker 2: Hardware networking analyst. I first asked which to talk about 628 00:31:53,880 --> 00:31:56,080 Speaker 2: how investors are now looking at AI. 629 00:31:56,640 --> 00:32:00,400 Speaker 11: It's fairly straightforward, right, It's a very fairly concentrated space. 630 00:32:01,120 --> 00:32:04,080 Speaker 11: The AI networking space is expected to grow ninety one 631 00:32:04,080 --> 00:32:08,720 Speaker 11: percent on the switching hardware alone to twenty one billion dollars. Right. 632 00:32:09,200 --> 00:32:11,800 Speaker 11: The way to play it is fairly straightforward. It's a 633 00:32:12,400 --> 00:32:14,400 Speaker 11: three c's, an A and an N. 634 00:32:14,560 --> 00:32:14,760 Speaker 4: Right. 635 00:32:14,760 --> 00:32:21,959 Speaker 11: That's my new networking fang Cisco, Celestica, Corning and CNSO. 636 00:32:21,960 --> 00:32:26,360 Speaker 11: Four c's Arista and Nvidia, right, and those are going 637 00:32:26,440 --> 00:32:29,680 Speaker 11: to be the leading beneficiaries for the networking space in AI. 638 00:32:30,080 --> 00:32:33,200 Speaker 2: So give us a sense of kind of how investors 639 00:32:33,240 --> 00:32:36,440 Speaker 2: should think about the investment cycle for AI. I mean, 640 00:32:36,600 --> 00:32:39,719 Speaker 2: I'm going to say we're two three years into it. 641 00:32:40,440 --> 00:32:42,480 Speaker 2: I'm just not sure. How do you guys think about 642 00:32:42,480 --> 00:32:43,200 Speaker 2: the duration here? 643 00:32:44,040 --> 00:32:47,400 Speaker 11: Yeah, you know, it's it's quite odd, right, because you know, 644 00:32:47,640 --> 00:32:50,120 Speaker 11: some of us say it's two three years into it. 645 00:32:50,640 --> 00:32:53,680 Speaker 11: Michael Dell had this interesting quote a couple of weeks ago, 646 00:32:54,200 --> 00:32:58,440 Speaker 11: saying what inning are we and his response was, we're 647 00:32:58,480 --> 00:32:59,520 Speaker 11: just entering the stadium. 648 00:32:59,760 --> 00:33:00,000 Speaker 10: Wow. 649 00:33:00,160 --> 00:33:00,360 Speaker 8: Right. 650 00:33:00,720 --> 00:33:02,800 Speaker 11: He still thinks it's early on in terms of the 651 00:33:02,840 --> 00:33:05,320 Speaker 11: investment phase, and networking is going to be one of 652 00:33:05,040 --> 00:33:06,960 Speaker 11: the leading beneficiars of it. 653 00:33:07,240 --> 00:33:10,440 Speaker 2: So how are the networking equipment companies that you follow, 654 00:33:11,120 --> 00:33:13,800 Speaker 2: how are they financing some of their capex? Because again, 655 00:33:13,840 --> 00:33:16,600 Speaker 2: I think most of us grew up when technology companies 656 00:33:16,600 --> 00:33:19,800 Speaker 2: had so much cash flow that they could self fund 657 00:33:19,840 --> 00:33:22,080 Speaker 2: their R and D, their capex, that type of stuff. 658 00:33:22,120 --> 00:33:24,880 Speaker 2: Now they many of them need to come to the 659 00:33:24,920 --> 00:33:25,680 Speaker 2: capital markets. 660 00:33:26,480 --> 00:33:30,360 Speaker 11: Yeah, fortunate for the networking guys. It's a low capex 661 00:33:32,000 --> 00:33:35,000 Speaker 11: type of business, right, We're talking about seb ten percent 662 00:33:35,520 --> 00:33:39,760 Speaker 11: of the cash flow to capex or ten percent to 663 00:33:39,880 --> 00:33:43,360 Speaker 11: capex ratio to sales, So it is a fairly self 664 00:33:43,360 --> 00:33:46,520 Speaker 11: funded business. And it's also high margin business as well. 665 00:33:47,320 --> 00:33:50,480 Speaker 11: As long as the hyper scale cloud providers as well 666 00:33:50,520 --> 00:33:53,640 Speaker 11: as the tier two cloud providers like the Neo clouds, 667 00:33:54,000 --> 00:33:56,960 Speaker 11: are funded, they'll be able to buy the networking gear. 668 00:33:58,080 --> 00:33:58,560 Speaker 10: So how do. 669 00:33:58,520 --> 00:34:01,440 Speaker 2: You I mean, it's interesting here. You think about the 670 00:34:01,480 --> 00:34:05,360 Speaker 2: tech space and it's hardware, it's software, it's the networking equipment. 671 00:34:05,360 --> 00:34:05,600 Speaker 6: Here. 672 00:34:06,960 --> 00:34:09,680 Speaker 2: Who's kind of driving this this AI thing? 673 00:34:09,800 --> 00:34:09,880 Speaker 1: Is? 674 00:34:10,320 --> 00:34:13,040 Speaker 2: Are your networking in communications companies? Are they kind of 675 00:34:13,080 --> 00:34:16,480 Speaker 2: dependent upon I don't know what the hyperscalers are doing 676 00:34:16,600 --> 00:34:18,400 Speaker 2: or what the chip makers are doing. Who's kind of 677 00:34:18,560 --> 00:34:19,040 Speaker 2: leading this? 678 00:34:19,800 --> 00:34:23,520 Speaker 11: So at the end of the day, it's how quickly 679 00:34:23,640 --> 00:34:27,440 Speaker 11: and how fast and how large of the investments that 680 00:34:27,480 --> 00:34:31,080 Speaker 11: the hyperscalers are making on the AI side. I will 681 00:34:31,080 --> 00:34:36,640 Speaker 11: tell you, as these language models grow and the scale 682 00:34:36,800 --> 00:34:40,640 Speaker 11: of these compute investments grow, you actually need a lot 683 00:34:40,640 --> 00:34:44,160 Speaker 11: more networking. And networking is if you think about it 684 00:34:44,200 --> 00:34:48,360 Speaker 11: as the arteries and the veins of a human body. 685 00:34:49,120 --> 00:34:51,520 Speaker 11: Networking is probably at the center of that right now, 686 00:34:51,520 --> 00:34:53,080 Speaker 11: and that's why you're having a lot of investment on 687 00:34:53,120 --> 00:34:53,839 Speaker 11: their networking front. 688 00:34:54,719 --> 00:34:56,879 Speaker 2: Who are I mean, how are they dealing with? 689 00:34:57,080 --> 00:34:57,279 Speaker 4: Again? 690 00:34:57,320 --> 00:35:00,520 Speaker 2: These networking companies, I think of these big global companies. 691 00:35:00,960 --> 00:35:03,759 Speaker 2: Is that manufacturing dispersed around the globe? Is there a 692 00:35:03,800 --> 00:35:04,680 Speaker 2: pressure to bring it. 693 00:35:04,640 --> 00:35:05,400 Speaker 1: To the US. 694 00:35:05,600 --> 00:35:07,640 Speaker 2: How are they dealing with some of the changes we've 695 00:35:07,680 --> 00:35:11,759 Speaker 2: seen in global logistics, whether it's tariffs or just you know, 696 00:35:11,840 --> 00:35:13,960 Speaker 2: most favorite nation status, those types of things. 697 00:35:14,440 --> 00:35:18,040 Speaker 11: Yeah, that's a fantastic question, Paul. I will tell you 698 00:35:18,080 --> 00:35:20,359 Speaker 11: that there's a couple of things. Right when we had 699 00:35:20,360 --> 00:35:23,480 Speaker 11: the tiraff situation number one, and also the COVID situation 700 00:35:24,400 --> 00:35:27,040 Speaker 11: a few years back, the companies have actually done a 701 00:35:27,040 --> 00:35:29,919 Speaker 11: good job rearranging the supply chain. A lot of manufacturings 702 00:35:29,960 --> 00:35:34,399 Speaker 11: happening out of Mexico. There's some manufacturing that's happening in 703 00:35:34,520 --> 00:35:37,560 Speaker 11: Taiwan as well as in Canada. So we're bypassing some 704 00:35:37,600 --> 00:35:40,279 Speaker 11: of the tiff situation. And quite frankly, tariffs have become 705 00:35:40,280 --> 00:35:44,480 Speaker 11: a non story for the majority of my networking guys. 706 00:35:44,560 --> 00:35:48,239 Speaker 11: And on top of that, the dram story is inconsequential 707 00:35:48,280 --> 00:35:49,399 Speaker 11: for the networking games as well. 708 00:35:49,920 --> 00:35:52,960 Speaker 2: How are the stocks performing here? We've seen so many 709 00:35:52,960 --> 00:35:55,960 Speaker 2: parts of the tech space just rip. How have your 710 00:35:56,000 --> 00:35:56,680 Speaker 2: stocks been doing? 711 00:35:57,600 --> 00:36:00,839 Speaker 11: I will tell you, if you know, if you looked 712 00:36:00,840 --> 00:36:04,439 Speaker 11: at the Celestica two years back, you're seeing a ten 713 00:36:04,520 --> 00:36:08,440 Speaker 11: time performer to to where it is right now. You 714 00:36:08,480 --> 00:36:10,799 Speaker 11: know it has slowed down because I think people are 715 00:36:10,800 --> 00:36:14,279 Speaker 11: starting to catch up to the name Arista. It's a 716 00:36:14,600 --> 00:36:18,240 Speaker 11: double from from two to three years back. And Cisco, 717 00:36:18,440 --> 00:36:22,480 Speaker 11: I mean we've finally got back to it's two thousand 718 00:36:22,520 --> 00:36:26,239 Speaker 11: and one highs because of the business has actually stabilized, 719 00:36:26,520 --> 00:36:30,240 Speaker 11: so the stocks in itself have done well, the multiples 720 00:36:30,239 --> 00:36:32,600 Speaker 11: have actually gotten a little bit rich. 721 00:36:33,120 --> 00:36:36,120 Speaker 3: That was Ujinho, our senior hardware and networking analyst. 722 00:36:36,400 --> 00:36:39,080 Speaker 2: That's this week's edition of Bloomberg Intelligence on Bloomberg Radio, 723 00:36:39,160 --> 00:36:41,640 Speaker 2: providing in depth research and data on two thousand companies 724 00:36:41,640 --> 00:36:43,000 Speaker 2: and one hundred and thirty industries. 725 00:36:43,080 --> 00:36:45,680 Speaker 3: And remember you can access Bloomberg Intelligence if b I 726 00:36:45,800 --> 00:36:48,000 Speaker 3: go on the terminal. I'm Scarlett Foo and. 727 00:36:47,920 --> 00:36:50,320 Speaker 2: I'm Paul Sweeney. Stay with us. Today's top stories and 728 00:36:50,360 --> 00:36:52,439 Speaker 2: global business headlines are coming up right now.