Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
Speaker 2: The Stock Movers Report, your roundup of companies making moves
Speaker 2: in the stock market harnessing the power of Bloomberg Data.
Speaker 1: Let's take a look down at some stocks making news
Speaker 1: in the week ahead. I'm Nathan Hager with Man Deep Saying,
Speaker 1: globalhead of Tech Research at Bloomberg Intelligence. Great to have
Speaker 1: you on as we're going to be looking ahead to
Speaker 1: a lot more big tech stocks in the week ahead.
Speaker 1: What are we expecting when it comes to earnings from
Speaker 1: Google parent Alphabet?
Speaker 2: Mandy?
Speaker 3: Look, I mean what we saw with Meta was you know,
Speaker 3: accelerating top line growth, and in the case of Google,
Speaker 3: both the search business as well as the YouTube business
Speaker 3: have I would say modest expectations going in the quarter,
Speaker 3: you know, low to mid teen's growth. So, I mean
Speaker 3: we've felt double digit growth for Alphabet over the last
Speaker 3: few or was very impressive given you know the threat
Speaker 3: from Chat GPT, but I think Meta has really raised
Speaker 3: the bar in terms of digital ad growth in the
Speaker 3: fourth quarter, So I would be looking for accelerating top
Speaker 3: line growth at least high teens growth for YouTube and
Speaker 3: you know, low to midteens growth for the core search business.
Speaker 3: Of Alphabet.
Speaker 1: Since you mentioned meta platforms, we should say that the
Speaker 1: AI spend from Microsoft seemed to spook a lot of
Speaker 1: investors last week. Given that Alphabet has its Google Cloud business,
Speaker 1: could that be a concern for investors there when it
Speaker 1: comes to AI spend in the.
Speaker 3: Cloud, You're right. I mean, what Microsoft Sprint has shown
Speaker 3: is you can't really miss the cloud growth numbers. So
Speaker 3: in the case of Alphabet, expectations or Google Cloud will
Speaker 3: have at least thirty five percent growth. And based on
Speaker 3: the work that we have done, I mean, Google really
Speaker 3: has had some very impressive, impressive deal wins this quarter
Speaker 3: in their cloud segments, so chances are they should do better.
Speaker 3: And remember Google has their TPUs, so they shouldn't be
Speaker 3: as supply constrained as Microsoft probably was in the quarter
Speaker 3: with the GPU situation. So my guess is Google Cloud
Speaker 3: segment would see sequential acceleration and they should be the
Speaker 3: consensus number handedly And how.
Speaker 1: Do you see Google's TPU processors fairing compared to the
Speaker 1: GPUs that we get from Nvidia.
Speaker 3: I mean, if there's one theme that we have heard
Speaker 3: so far this earning season is AI infrastructure demand remains
Speaker 3: insatiable and all these companies are wanting to get as
Speaker 3: much you know, compute capacity as they can. So Google's
Speaker 3: TPUs you know, are used both internally for Google Overviews
Speaker 3: and across their family off app as well as they're
Speaker 3: used on Google Cloud. And so from that perspective, I
Speaker 3: do think, you know, Google should be able to show
Speaker 3: the most efficiency when it comes to AI infrastructure, and
Speaker 3: that should get reflected in their gross margins, which I
Speaker 3: expect to be better than the rest of the hyperscalers.
Speaker 1: We're also going to hear from Amazon this week they
Speaker 1: report their earnings. What are you expecting from their cloud
Speaker 1: unit AWS?
Speaker 3: Yeah, I mean you want to see all these cloud
Speaker 3: companies show sequential acceleration. It didn't happen with Microsoft, hence
Speaker 3: we saw that negative reaction, and in the case of AWS,
Speaker 3: I would say expectations again are like for low twenty
Speaker 3: percent growth. So given they are the largest cloud provider,
Speaker 3: I mean they should be able to beat those numbers.
Speaker 3: But look, what we have heard so far is supply
Speaker 3: constraints are real when it comes to AI compute capacity,
Speaker 3: and that may have a bearing on whether ADA BLUs
Speaker 3: ends up beating those consensus numbers or not.
Speaker 1: Is low twenty percent enough to wow investors.
Speaker 3: No, but you want to see that sequential acceleration. So
Speaker 3: I mentioned about the size of Ada BLUs, So that's
Speaker 3: almost one hundred and thirty five billion dollar rundrate business
Speaker 3: for Amazon. Contrast that with Microsoft, which is more one
Speaker 3: hundred billion, and Google Cloud is like sixty billion rund rates.
Speaker 3: So given their size, I mean, low twenty percent would
Speaker 3: be in line, but anything more than that would be impressive,
Speaker 3: and I think that would help those dock.
Speaker 1: And along with Amazon and Alphabet. Another a in big
Speaker 1: tech reports this week advanced micro devices. How's the computer
Speaker 1: chip business looking right now, Mandy.
Speaker 3: I mean, look, Meta just told us they planned to
Speaker 3: spend up to one hundred and thirty five billion dollars
Speaker 3: in CAPEX, which is a seventy percent increase from what
Speaker 3: they spent in twenty twenty five. So we were modeling
Speaker 3: like fifty percent increase in CAPEX from hyperscalers going into
Speaker 3: twenty twenty six. Chances are that number will be revised upward,
Speaker 3: and so it will trickle down to the likes of AMD,
Speaker 3: which is the you know, the second biggest GPU provider
Speaker 3: after Nvidia, and so to my mind, AMDs deal with
Speaker 3: open Ai and some of the other business that they
Speaker 3: have won over the last few months should help, you know,
Speaker 3: exceed expectations when they print their results.
Speaker 1: Does AMD need to show more market share compared to Nvidia.
Speaker 3: I think this is such a big market that everyone
Speaker 3: is realizing that you don't need to, you know, win
Speaker 3: market share from Nvidia as long as you have a
Speaker 3: good product that you know companies are in trusted in buying.
Speaker 3: And open Ai has that deal with AMD. Now that
Speaker 3: is a big leap of faith in terms of MD's
Speaker 3: capabilities to supply six gigawatts of power that has all
Speaker 3: AMD chips, and I think that should help them win
Speaker 3: more enterprise business over time.
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