WEBVTT - SpaceX Lower, Carmakers Fall, Micron Jumps

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<v Speaker 1>Bloomberg Audio Studios. Podcasts. Radio. News. The Stock Movers Report.

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<v Speaker 1>Your roundup of companies making moves in the stock market.

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<v Speaker 1>Harnessing the power of Bloomberg data.

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<v Speaker 2>I'm Carol Master along with Lisa Mateo. Let's get to

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<v Speaker 2>some stocks on the move. Lucky for us, Danica Sokova

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<v Speaker 2>is with us, Bloomberg News cross-asset reporter, joining us here

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<v Speaker 2>in our studio.

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<v Speaker 1>SpaceX.

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<v Speaker 2>I feel like the SpaceX story is it giveth, they

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<v Speaker 2>take it away.

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<v Speaker 3>It's given, they take it away. And it's actually more

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<v Speaker 3>of a credit story this time than it is to stocks.

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<v Speaker 3>Everyone has been worried about the funding when it comes

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<v Speaker 3>to the AI CapEx. And clearly what we're getting the

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<v Speaker 3>news for SpaceX is they're seeking $ 40 billion for NVIDIA chips. Obviously,

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<v Speaker 3>this is kind of early reporting. We're seeing that they're

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<v Speaker 3>going to get $ 10 billion in bank loans, $ 30 billion

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<v Speaker 3>in investment-grade debt. Nevertheless, the reaction hasn't been great. The

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<v Speaker 3>stock fell as much as 3.7% today. there has definitely

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<v Speaker 3>been a lot of pressure in the equity market. But

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<v Speaker 3>if we actually look in the CDS market, what we're

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<v Speaker 3>seeing is that the pressure is even bigger. We see

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<v Speaker 3>some of the credit gauges spiking to levels which we

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<v Speaker 3>really haven't seen since June. It's very interesting how the

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<v Speaker 3>CDS market has become more jittery than the equity market

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<v Speaker 3>when it comes to this AI spending.

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<v Speaker 2>But it's important to watch.

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<v Speaker 3>Yes, exactly. It's important to watch. But you know, How

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<v Speaker 3>some of those big names before you wouldn't necessarily see

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<v Speaker 3>their CDS moves that much. The move we saw today

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<v Speaker 3>is 17 basis points. So currently SpaceX CDS sits at

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<v Speaker 3>200 basis points, which is pretty incredible.

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<v Speaker 1>Big move.

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<v Speaker 3>And clearly investors are very worried and jittery about what's

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<v Speaker 3>happening there.

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<v Speaker 2>Yeah, I get it, right? At least as the spending continues. Well,

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<v Speaker 2>it hasn't been confirmed, but Apollo probably would lay the deal,

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<v Speaker 2>help sell the debt to a broad case of investors.

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<v Speaker 1>So we'll see what happens.

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<v Speaker 2>We'll see what happens. Nothing has been confirmed yet. But yeah,

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<v Speaker 2>the stock down more than 2.5% right now. Yeah, and

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<v Speaker 2>I think we just increasingly are looking at the amount

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<v Speaker 2>of money that's being raised. It was equity markets, but

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<v Speaker 2>now it's debt markets increasingly, and it's starting to add up.

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<v Speaker 2>And they're just not alone. All right, let's go on

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<v Speaker 2>over to Ford, which we're seeing under pressure today.

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<v Speaker 3>Yeah, car makers. So interesting, we're seeing from UBS downgrade

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<v Speaker 3>for both Ford and General Motors. Not downgrade, but a

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<v Speaker 3>price cut. Both stocks are down today. A lot of pressure.

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<v Speaker 3>Ford is a very interesting name that had such a

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<v Speaker 3>massive rally. in May. It was about more than 40%.

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<v Speaker 3>It was all about AI build-out and infrastructure. It was

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<v Speaker 3>kind of very surprising.

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<v Speaker 1>I know, it came very fast.

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<v Speaker 3>It lasted a few weeks. Ever since, the stock is

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<v Speaker 3>actually down 30%. And more broadly, analysts were actually pretty

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<v Speaker 3>excited about the stroke. There was very strong sentiment. I

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<v Speaker 3>think it has about eight buy ratings. So A lot

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<v Speaker 3>of optimism there. But what we're seeing from UBS is

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<v Speaker 3>they're not so optimistic about some of their earnings. They're

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<v Speaker 3>cutting some of their estimates due to higher costs. And

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<v Speaker 3>what we're seeing is that the current price tag they

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<v Speaker 3>have for them is $ 15. It used to be $ 17.

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<v Speaker 3>And then we realized the car making industry has been

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<v Speaker 3>under constant pressure from so many different macro themes. And

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<v Speaker 3>it seemed like the AI build-out was one kind of

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<v Speaker 3>nice boost to that industry. And even that theme didn't

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<v Speaker 3>last too long.

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<v Speaker 2>All right, what about Micron? Is this more analyst chat

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<v Speaker 2>or is there more to this story?

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<v Speaker 3>Micron is a very interesting story talking about the AI build-out.

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<v Speaker 3>It's definitely... A straight.

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<v Speaker 2>High view, right?

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<v Speaker 3>Of course, it's like $ 3, 000. It's just incredible, incredible target.

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<v Speaker 3>It's been very interesting to follow that story. I think

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<v Speaker 3>the old target was about $ 15, 000. $ 100. So it's very

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<v Speaker 3>interesting how fast it has grown.

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<v Speaker 2>$ 2, 100. Yeah. So we're talking about 187% increase from Micron's

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<v Speaker 2>last close. And this one's already, what, an outperformer in

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<v Speaker 2>a big way. So I'm looking at, too, the analyst,

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<v Speaker 2>I guess, met with Micron's management and concluded that investors

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<v Speaker 2>are early in their journey of understanding how Micron's value

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<v Speaker 2>and believe that journey will lead them to assigning a

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<v Speaker 2>far higher multiple. This is just, you know, big time, uh,

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<v Speaker 2>Danica just playing into this bet, uh, in a way.

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<v Speaker 2>And DA Davidson is pretty optimistic to say the least.

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<v Speaker 3>Pretty optimistic. And they've been on this never ending rally. Uh,

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<v Speaker 3>and clearly actually their margins are pretty good for AI company.

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<v Speaker 3>And that's why analysts have been pretty optimistic on that name.

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<v Speaker 2>Micron up 280% year to date.

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