WEBVTT - Magnificent Seven Performance and Snap Layoffs 0:00:01.560 --> 0:00:02.280 From Mahard. 0:00:02.400 --> 0:00:06.840 We're Innovation, Money and Power colle in Silicon Valley, NBN. 0:00:07.200 --> 0:00:11.240 This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 0:00:24.680 --> 0:00:27.160 I'm Caroline Heide and Bloomberg's world headquarters in New York, 0:00:27.520 --> 0:00:29.320 and I'm Ed Ludlow in San Francisco. 0:00:29.560 --> 0:00:30.880 This is Bloomberg Technology. 0:00:30.960 --> 0:00:31.360 Coming up. 0:00:31.400 --> 0:00:33.560 We'll take the pulse of the market and get a 0:00:33.600 --> 0:00:36.760 read on appetite of those Magnificent seven as one name 0:00:36.920 --> 0:00:39.560 struggles to keep up with the pack and. 0:00:39.600 --> 0:00:43.200 Snap joining the courus of technology companies announcing job cuts 0:00:43.200 --> 0:00:46.760 with plans to slash ten percent of its global workforce. 0:00:46.800 --> 0:00:47.720 Details ahead us. 0:00:47.760 --> 0:00:48.960 We'll get a check in on the state of the 0:00:48.960 --> 0:00:52.040 semiconductor industry as global chip sales that protected to hit 0:00:52.080 --> 0:00:53.200 a record this year. 0:00:53.440 --> 0:00:55.520 The CEOs of on Semian Element. 0:00:55.280 --> 0:00:58.279 Solutions join the program. But first let's check in on 0:00:58.360 --> 0:01:00.960 these markets. And it's a day of mac affecting some 0:01:01.040 --> 0:01:03.280 of the individual names. At the moment the market takes 0:01:03.280 --> 0:01:05.080 a turner is once again we're running too hot. The 0:01:05.319 --> 0:01:08.320 ICM number really coming in strong, Services going well and 0:01:08.400 --> 0:01:11.800 indeed the cost of services employment as well. 0:01:11.840 --> 0:01:12.880 What does this all mean. 0:01:12.760 --> 0:01:15.280 In terms of overall inflatory pressure. We know that, of course, 0:01:15.560 --> 0:01:18.839 joining CBS over the weekend was one FED chair Pale 0:01:18.880 --> 0:01:20.680 and he was talking back against any sort of rake 0:01:20.680 --> 0:01:23.119 cups coming as soon as March. Add in that job 0:01:23.160 --> 0:01:25.560 to the overall strong economic data and we turn on 0:01:25.600 --> 0:01:28.880 the nasdag off by eight ten percent. Interesting volatile play 0:01:29.000 --> 0:01:31.120 going over in China. Remember as the SMP hit a 0:01:31.160 --> 0:01:33.800 record on Friday, we actually saw a five year low 0:01:33.840 --> 0:01:35.920 for Chinese stocks, and all of this as we see 0:01:35.959 --> 0:01:39.800 once again China trying to curtail any selling coming and 0:01:39.880 --> 0:01:42.760 indeed betting against the market over there and trying to 0:01:42.800 --> 0:01:44.800 push back against that volatility. We're off about bout ten 0:01:44.840 --> 0:01:47.360 percent in terms of the overall Chinese names traded here 0:01:47.360 --> 0:01:50.200 in the US tenure yield it crushes ever higher up 0:01:50.280 --> 0:01:53.040 fifteen basis points. This as we of course get that 0:01:53.080 --> 0:01:55.160 strong economic data and the read across to the FED. 0:01:55.360 --> 0:01:56.560 Move on and have a look at what's having in 0:01:56.560 --> 0:01:57.800 the world of crypto though for a moment. 0:01:57.800 --> 0:01:59.680 Ed because look, as we see a strong. 0:01:59.520 --> 0:02:01.880 Dollar, so bitcwingo's a little bit lower, off by four 0:02:01.920 --> 0:02:04.160 tenths of a percent, but still training about forty two 0:02:04.240 --> 0:02:06.920 to thousand dollars. What have you got on the individual names. 0:02:07.560 --> 0:02:09.600 Well, one name where there is still some buoyancy is 0:02:09.600 --> 0:02:12.880 in video. Even when the market turned post im Video 0:02:12.919 --> 0:02:15.959 is still up almost three percent and is extending those 0:02:16.040 --> 0:02:19.639 record highs that it hit Goldman boosting this price target 0:02:19.639 --> 0:02:21.600 on the stock to eight hundred dollars a share, And 0:02:21.600 --> 0:02:23.520 they're basically saying, we look at what's to come in 0:02:23.520 --> 0:02:26.280 the year, and we still think that there's going to 0:02:26.280 --> 0:02:28.840 be spending by the hyperscalers and in the cloud context. 0:02:29.160 --> 0:02:32.720 So that name continues to charge higher fresh record highs, 0:02:33.400 --> 0:02:35.519 and it's just become this jugglele. We're going to dig 0:02:35.560 --> 0:02:37.400 a bit deeper later in the show car of course, 0:02:37.440 --> 0:02:41.640 about the outlook overall for this industry in twenty twenty four, 0:02:41.680 --> 0:02:44.760 but AI still calls that story a moving to the 0:02:44.760 --> 0:02:45.480 downside or. 0:02:45.480 --> 0:02:48.120 In a different direction. Is snap, this is interesting. 0:02:48.160 --> 0:02:50.720 The company is going to trim ten percent of its 0:02:50.760 --> 0:02:53.840 global workforce. Later in the program, we'll speak to Bloomberg 0:02:53.880 --> 0:02:56.280 Intelligence is mandep sing and kind of get engauge in 0:02:56.320 --> 0:02:58.880 what's going on. When the headline's first cross, there was 0:02:58.960 --> 0:03:01.800 kind of a spike on the shares in pre market, 0:03:01.800 --> 0:03:04.280 but we are firmly lower now down three point nine percent. 0:03:04.720 --> 0:03:07.000 Yeah, and that's notable, isn't it considering the read across 0:03:07.000 --> 0:03:09.640 some Meta and just their phenomenal move we saw in 0:03:09.720 --> 0:03:12.200 that company's shares after its earnings on Friday. 0:03:12.200 --> 0:03:13.680 And let's just talk more broadly about. 0:03:13.520 --> 0:03:16.760 What's happening with big tech with those magnificent seven names 0:03:16.960 --> 0:03:19.280 and ultimately the read across some bond yields two tech 0:03:19.280 --> 0:03:20.880 stocks bluemogs Isabel. 0:03:20.639 --> 0:03:23.079 Lee is here with actually a great story talking. 0:03:23.120 --> 0:03:25.560 I love the headline Elon just lost his cage fight 0:03:25.600 --> 0:03:29.120 with Zuckerberg. This was all about how ultimately Tesla's market 0:03:29.120 --> 0:03:31.440 cap has really diverged from that of say a Meta, 0:03:31.440 --> 0:03:33.040 which has just been on the upper and not particularly 0:03:33.040 --> 0:03:36.880 post its numbers. Friday, Tech managed to outperform despite bon 0:03:36.960 --> 0:03:38.360 yields going high and not the same today. 0:03:38.840 --> 0:03:42.120 It's not the same today, and then usualness must highlight it. Indeed, Friday, 0:03:42.120 --> 0:03:45.760 because bond yields surge thanks to a strong bond jobs report, 0:03:46.040 --> 0:03:48.800 what happened through tex sharees They areso surge And usually 0:03:48.800 --> 0:03:51.360 this doesn't really go hand in hand because history would 0:03:51.360 --> 0:03:55.320 tell us that higher long term yields aren't really the 0:03:55.480 --> 0:03:58.960 particularly harmful to companies that are longer duration, which are 0:03:58.960 --> 0:04:01.920 tech shares because they've most of their values they put 0:04:02.080 --> 0:04:04.640 into the future. So usually when bond yield, search textures 0:04:04.640 --> 0:04:07.520 are down basically, but we didn't see that on Friday 0:04:07.560 --> 0:04:09.119 and in the past weeks. And this is why Bank 0:04:09.160 --> 0:04:12.040 of America's Michael Hartnett is saying that this is reminiscent 0:04:12.360 --> 0:04:14.640 to the dot com bubble, that he's seen the rush 0:04:14.640 --> 0:04:18.599 into tech stocks, the irrational exuberance, and one can't really 0:04:18.920 --> 0:04:20.600 make sense of it, like why is it like this? 0:04:21.279 --> 0:04:24.320 On one hand, maybe because AI is just a contained 0:04:24.920 --> 0:04:27.799 situation on its own, and maybe those tech stocks aren't 0:04:27.800 --> 0:04:30.520 moving in conjunction with markets. But for the most part, 0:04:30.720 --> 0:04:32.479 a lot of unusual things are happening. 0:04:33.279 --> 0:04:33.520 You know. 0:04:33.880 --> 0:04:37.160 The comparison that the article puts in front of us 0:04:37.240 --> 0:04:41.440 is whether Tesla should be magnificent or if it's less 0:04:41.480 --> 0:04:46.440 than magnificent. The number I look at is EPs growth, right, 0:04:46.480 --> 0:04:49.200 because if you look at the six x Tesla, we 0:04:49.279 --> 0:04:51.760 saw really big year on your EPs growth in Meta's case, 0:04:51.880 --> 0:04:54.600 like more than two hundred percent. Tesla was the exception 0:04:54.720 --> 0:04:57.520 to that rule. It's sort as EPs dropped forty percent 0:04:57.600 --> 0:05:00.719 year on year. Both were having interests comps with an 0:05:00.800 --> 0:05:04.240 interesting period twelve months ago. What is the case for 0:05:04.360 --> 0:05:08.880 Tesla being not magnificent? To your mind as well. 0:05:08.120 --> 0:05:11.719 There is a lot of case being Tesla not being magnificent, 0:05:11.760 --> 0:05:14.160 But there is also a lot of cases about how 0:05:14.200 --> 0:05:17.360 this whole sector should be even seen or group Magnificent 0:05:17.400 --> 0:05:19.800 seven Super seven Elite seven, because if you look at it, 0:05:20.120 --> 0:05:23.840 the magnificent Magnificent seven companies carry a thirty three percent 0:05:23.920 --> 0:05:27.520 premium to the index when it comes to forward PE earnings, 0:05:27.520 --> 0:05:29.920 But then should they even be looked at as Magnificent 0:05:29.960 --> 0:05:32.120 seven as a whole? We know that last year this 0:05:32.400 --> 0:05:35.719 Super seven Elite seven powered the NASSAC index fifty four 0:05:35.760 --> 0:05:39.120 percent higher, and those gained some of them really trickled 0:05:39.160 --> 0:05:40.960 into the new year. But last week we saw a 0:05:41.040 --> 0:05:45.200 divergence when we have Meta and Amazon reported they really 0:05:45.240 --> 0:05:48.360 had historic days. Meta saw one hundred and ninety billion 0:05:48.560 --> 0:05:50.920 in one day, which is the most that we've seen 0:05:51.120 --> 0:05:54.240 in the history of US doocs. But we have some 0:05:54.600 --> 0:05:58.080 like Microsoft and Apple. Yes they beat mind you, but 0:05:58.120 --> 0:06:00.839 then we saw Shar's fault because people were just really 0:06:01.000 --> 0:06:04.720 more optimistic. People had more lofty ambitions for those AI shares. 0:06:04.800 --> 0:06:07.560 So maybe people are now being more discerning. If you 0:06:07.600 --> 0:06:09.880 look at Magnificent seven as a whole, they are big. 0:06:10.040 --> 0:06:12.320 Here's around them Tied Bittory. It was in the article 0:06:12.480 --> 0:06:15.000 the Magnificent Seven as a whole are worth more than 0:06:15.040 --> 0:06:21.960 the copined combined GDP of New York, Tokyo, La, London, Paris, Soul, Chicago, 0:06:22.120 --> 0:06:24.040 San Francisco, Osaka and Shanghai. 0:06:24.200 --> 0:06:25.640 So they're really huge. 0:06:25.680 --> 0:06:28.000 But then maybe we should stop seeing or looking at 0:06:28.040 --> 0:06:29.160 them as one whole group. 0:06:29.200 --> 0:06:32.120 Now ed, it's an interesting if you start thinking about 0:06:32.120 --> 0:06:35.640 the words concentration and risk Bloombers Isabel Lee just fantastic 0:06:35.760 --> 0:06:36.640 data analysis. 0:06:36.800 --> 0:06:37.080 Thank you. 0:06:37.120 --> 0:06:40.000 Let's keep the conversation going about the technology sector with 0:06:40.080 --> 0:06:43.159 Lisa Ericson, head of Public Markets Group a US Bank 0:06:43.200 --> 0:06:46.000 Wealth Management, and I think we also better address what's 0:06:46.040 --> 0:06:49.120 happening in the moment. So when ism numbers hit the 0:06:49.200 --> 0:06:52.000 market turned, we're now significantly lower on then as that 0:06:52.000 --> 0:06:54.400 one hundred and about one percent. But if you drill 0:06:54.440 --> 0:06:58.039 into the data, basically the concern is the price is 0:06:58.040 --> 0:07:01.040 paid on materials and the idea that the FED still 0:07:01.040 --> 0:07:04.000 has some way to go to fight inflation. Put that 0:07:04.080 --> 0:07:09.560 into context for us of the technology sector, well, certainly. 0:07:09.200 --> 0:07:11.720 We've had a couple of strong prints with the non 0:07:11.800 --> 0:07:14.920 farm payrolls report on Friday and then again to your point, 0:07:15.000 --> 0:07:18.559 a better than expected ism number this morning. And really, 0:07:18.560 --> 0:07:20.720 I think what's going on with the market with respect 0:07:20.760 --> 0:07:24.960 to how that impacts overall equity pricing and technology in particular, 0:07:25.600 --> 0:07:29.840 is that investors are simply concerned again that these positive 0:07:29.920 --> 0:07:33.240 rate cut expectations that they've had on the FED really 0:07:33.280 --> 0:07:36.400 may need to be ratcheted down. We certainly saw that Friday, 0:07:36.480 --> 0:07:39.320 we saw it again this morning, and investors are just 0:07:39.360 --> 0:07:42.640 simply concerned that if rates don't come down as quickly 0:07:43.080 --> 0:07:46.360 as they think they could again that could impact per 0:07:46.440 --> 0:07:50.920 Isabel's point, really, these technology sector valuations because most of 0:07:50.960 --> 0:07:53.360 their growth is further out in the future, and to 0:07:53.440 --> 0:07:56.680 the extent that rates provide more competition, that just makes 0:07:56.680 --> 0:07:57.200 it tougher. 0:07:57.640 --> 0:08:03.400 Lisa was managed to ultimately send these companies higher. Has 0:08:03.400 --> 0:08:06.360 been the distinguishing factor of artificial intelligence being able to 0:08:06.360 --> 0:08:09.320 be that silver lining amid the cloud that is the macroeconomy, 0:08:09.400 --> 0:08:13.200 higher rates, concerns about jobs. Can AI still manage to 0:08:13.240 --> 0:08:15.840 lift these boats despite the valuations already being toppy. 0:08:17.400 --> 0:08:20.520 We certainly see that long term case for AI. Obviously, 0:08:20.600 --> 0:08:23.360 we're very early in the cycle, and we are seeing, 0:08:23.400 --> 0:08:26.520 for example, even in the near term that continuing to 0:08:26.640 --> 0:08:30.239 bolster some of these earnings reports, whether it's on data 0:08:30.680 --> 0:08:35.600 center spending or whether it's on a continued investment into 0:08:35.679 --> 0:08:40.480 cloud services. However, to your point, that doesn't necessarily mean 0:08:40.520 --> 0:08:43.560 that the road is going to be smooth going into 0:08:43.600 --> 0:08:46.400 the full year, and that is because we have had 0:08:46.480 --> 0:08:48.440 quite a bit of run up on that AI and 0:08:48.480 --> 0:08:51.319 so I think some of that uneven response that you've 0:08:51.320 --> 0:08:54.600 seen to the earnings reports here with the fourth quarter 0:08:54.720 --> 0:08:57.360 reports is reflective of the fact that some of that 0:08:57.440 --> 0:08:59.960 optimism has already been priced into the ship. 0:09:01.160 --> 0:09:04.440 The context also being that these companies are winning the 0:09:04.520 --> 0:09:07.280 rewards of investors, particularly if we take like a matter 0:09:07.760 --> 0:09:10.120 because of the cost discipline at the same time as 0:09:10.120 --> 0:09:12.760 they've been talking up their AI bets. And when you 0:09:12.920 --> 0:09:15.520 look at Snap today at more job cuts to come, 0:09:15.800 --> 0:09:18.640 how much do you think the overall microeconomy can continue 0:09:18.679 --> 0:09:21.280 to see strong jobs where we do see companies taking 0:09:21.280 --> 0:09:22.560 this sort of disciplinary action. 0:09:24.200 --> 0:09:27.280 Well, certainly we have seen a very strong jobs market, 0:09:27.320 --> 0:09:29.120 and there were a number of prints last week that 0:09:29.200 --> 0:09:32.000 really reinforced that message. Whether it was from the Non 0:09:32.040 --> 0:09:36.240 farm Payrolls Report or the JOLTS or the Employment Cost Index. 0:09:36.960 --> 0:09:40.040 As far as its ability to sustain, one really interesting 0:09:40.160 --> 0:09:44.360 fact is that many of those job gains are and 0:09:44.440 --> 0:09:47.679 openings continue to remain in companies with less than a 0:09:47.760 --> 0:09:52.040 thousand employees, so those mid and smaller sized companies. And 0:09:52.080 --> 0:09:55.120 again we saw that reinforced in the jolt's data last week. 0:09:55.520 --> 0:09:57.960 And so with that, even though we may be seeing 0:09:58.160 --> 0:10:01.720 some layoff notices from those large your companies, the ability 0:10:01.800 --> 0:10:04.840 of the smaller end of the companies to continue to 0:10:05.080 --> 0:10:07.920 post job gains as they continue to make up for 0:10:08.520 --> 0:10:10.280 less hiring than they would have liked you in the 0:10:10.360 --> 0:10:12.440 last couple of years, is still possibility. 0:10:13.880 --> 0:10:18.440 Before we called that group magnificent, we would basically say 0:10:18.920 --> 0:10:22.640 they have strong balance sheets in trenched market positions, and 0:10:22.640 --> 0:10:24.840 if there's going to be a recession, that's a great 0:10:24.880 --> 0:10:27.760 place to be because they'll be fine. But now the 0:10:27.800 --> 0:10:32.640 conversations change from hard landing, soft landing, to no landing, 0:10:33.040 --> 0:10:35.559 and I just wonder how you think about those names 0:10:35.559 --> 0:10:37.679 and some of the facts, as Caroline was talking about 0:10:38.040 --> 0:10:40.280 in the context of whether we actually just don't have 0:10:40.320 --> 0:10:43.760 any pullback in the economy at all. 0:10:43.840 --> 0:10:46.240 Well, we're really looking at more of a balance view 0:10:46.360 --> 0:10:49.840 right now on the US stock market and the economy. 0:10:50.280 --> 0:10:53.240 And the reason why is that while again the economic 0:10:53.280 --> 0:10:55.559 data and the jobs market to your point, has been 0:10:55.600 --> 0:10:59.280 better than most people have expected, we still have a 0:10:59.400 --> 0:11:04.520 number oftionary forces in place balancing some of those positive factors, 0:11:04.640 --> 0:11:10.120 and so we have had really the most rapid rate 0:11:10.600 --> 0:11:14.400 increases in quite some time, and to your point earlier, 0:11:14.480 --> 0:11:18.079 really the inflation fight is not quite done, just as 0:11:18.120 --> 0:11:20.760 we saw for example with some of the ism numbers 0:11:20.760 --> 0:11:24.040 this morning. And so with that, with that more balanced 0:11:24.120 --> 0:11:28.439 view of rewards and risk, we really continue to watch 0:11:28.520 --> 0:11:31.480 where that landing will go, whether it's no soft or 0:11:31.559 --> 0:11:34.679 heart And in the meantime, we're really just cautioning our 0:11:34.679 --> 0:11:37.800 investors to stay at whatever their strategic blitz would be 0:11:38.280 --> 0:11:41.160 in the equity asset class, again reflective of a more 0:11:41.200 --> 0:11:42.920 balanced reward risk ratio. 0:11:43.720 --> 0:11:45.560 Lisa, so great to catch up with you. 0:11:45.720 --> 0:11:48.560 Thank you for bringing your tech focus to the broader 0:11:48.559 --> 0:11:51.040 macro markets at the moment. Lisa Erikson head a public 0:11:51.040 --> 0:11:53.400 markets group over the US Bank Wealth Management. 0:12:01.920 --> 0:12:06.319 The Semiconductor Industry Association is forecasting the global ship industry 0:12:06.480 --> 0:12:09.440 will see sales jump to a record level this year, 0:12:09.679 --> 0:12:12.640 fueled by a greater need for the electrical components from 0:12:12.679 --> 0:12:15.200 a broad range of businesses. Joining me to break down 0:12:15.200 --> 0:12:18.320 the data, Bloombergsy and King here in SF. What took 0:12:18.280 --> 0:12:20.000 me by surprised about this report is I get the 0:12:20.040 --> 0:12:22.440 overall twenty twenty four is going to be good, because 0:12:22.440 --> 0:12:25.000 twenty twenty three was very bad. But it's not just 0:12:25.080 --> 0:12:27.600 one single thing they're not saying. It's AI and everything. 0:12:27.920 --> 0:12:30.520 They're saying across a lot of end markets things are 0:12:30.520 --> 0:12:31.640 looking pretty good. 0:12:31.800 --> 0:12:33.920 Well, you've got to remember that this is a projection 0:12:34.400 --> 0:12:35.920 via the Industry Association. 0:12:36.200 --> 0:12:36.320 Right. 0:12:36.480 --> 0:12:40.240 Their basic thesis is chips are everywhere, and that is 0:12:40.320 --> 0:12:45.120 broadly true, more things need semiconductors. But we're also, as 0:12:45.120 --> 0:12:46.840 we'll find out in a minute when you speak to 0:12:46.880 --> 0:12:50.240 the CEO on SEMI, there are countervailing forces here. There 0:12:50.280 --> 0:12:54.440 are the secular argument more chips, more chips per vehicle, 0:12:54.480 --> 0:12:58.120 more chips per industrial system against what's going on last year, 0:12:58.120 --> 0:13:00.360 and there's still with us to an next day, which 0:13:00.400 --> 0:13:03.319 is we still have inventory overhanging in certain areas. 0:13:04.040 --> 0:13:05.960 I was just looking at that chart fascinating. 0:13:06.000 --> 0:13:08.400 I in that Europe was basically the only area that 0:13:08.440 --> 0:13:11.720 posted growth last year. We sit here as originally three 0:13:11.760 --> 0:13:15.400 Europeans and it's kind of amazing that in their economic 0:13:15.480 --> 0:13:19.160 environment they saw gains where globally speaking, we meant to 0:13:19.160 --> 0:13:21.800 see the rebound. Is it all about China getting slightly better? 0:13:23.160 --> 0:13:25.880 I mean it is in theory. Everywhere you've got you've 0:13:25.880 --> 0:13:28.480 had markets that were really quite poor, which is like 0:13:28.559 --> 0:13:31.920 such as the PC and the smartphone. Now those markets 0:13:31.960 --> 0:13:35.080 have got through that inventory and in theory that you know, 0:13:35.080 --> 0:13:36.760 with a bit of consumer demand and a bit of 0:13:36.800 --> 0:13:40.400 end market demand, they're going to be very strong. Really speaking, 0:13:40.440 --> 0:13:42.760 though we're looking at AI, we're looking at the data center. 0:13:42.840 --> 0:13:45.640 The big concerns still in people's minds is what's going 0:13:45.679 --> 0:13:48.600 on with industrial and what's going on with automotive. And 0:13:48.640 --> 0:13:50.800 again you're going to be speaking to a CEO be 0:13:50.800 --> 0:13:52.480 able to tell you a little bit more about. 0:13:52.280 --> 0:13:52.880 That in a minute. 0:13:53.520 --> 0:13:56.160 That's do just that inking brilliant to catch up with you. 0:13:56.240 --> 0:13:59.080 Thank you for bringing us the industry report. We appreciate it. 0:13:59.080 --> 0:14:02.319 It's now deep into basically the highest performing. 0:14:02.000 --> 0:14:02.800 Chip stock of the day. 0:14:02.840 --> 0:14:05.480 It's more than eight percent the best performer on the 0:14:05.520 --> 0:14:07.840 socks at the moment on Semi joining us for reporting 0:14:07.920 --> 0:14:11.319 fourth quarter results that well seem to post forward an 0:14:11.360 --> 0:14:13.880 idea that in this quarter gone it was doing better 0:14:13.880 --> 0:14:16.520 than expected and indeed maybe though some of the forward 0:14:16.559 --> 0:14:19.160 looking guidance not being as bad as had been expected. 0:14:19.640 --> 0:14:21.440 Really to welcome Hassan al Kuri on. 0:14:21.440 --> 0:14:24.520 Semi CEO and has and when we're digging into some 0:14:24.600 --> 0:14:27.840 of the overall focus of your business, just where are 0:14:27.920 --> 0:14:31.600 you seeing particularly some of the optimism coming from the investor. 0:14:31.640 --> 0:14:33.280 Why are you managing to. 0:14:33.240 --> 0:14:36.280 Think that despite evs, for example, being an area we're 0:14:36.320 --> 0:14:39.960 worried about stagnation, you're still able to outperform in that area. 0:14:40.360 --> 0:14:42.600 Yeah, good morning, thanks again for having me. 0:14:42.960 --> 0:14:43.040 So. 0:14:43.120 --> 0:14:46.000 Yeah, we reported a quarter. I think the reaction you 0:14:46.040 --> 0:14:48.600 see in the stock, I think it's it's all based 0:14:48.600 --> 0:14:51.080 on where the expectation has been and really what a 0:14:51.080 --> 0:14:55.400 lot of our peers have already reported. What differentiates on 0:14:55.480 --> 0:14:58.960 Semi for the last I would say four to six quarters, 0:14:59.440 --> 0:15:04.280 we have being taken action to match and become more 0:15:04.320 --> 0:15:07.000 in line with what we see from an end demand, 0:15:07.000 --> 0:15:09.840 both an industrial and automotive. If you recall and the 0:15:09.960 --> 0:15:15.200 third quarter earnings I started talking about bottomotive softness, inventory 0:15:15.240 --> 0:15:19.320 digestion that extended. Therefore, it was not a surprise to 0:15:19.360 --> 0:15:22.360 what we announced today. It was more of an expectation 0:15:22.440 --> 0:15:25.640 and really better than expected. But nevertheless, it was a 0:15:25.680 --> 0:15:28.880 softness that we as a company have been very disciplined 0:15:28.920 --> 0:15:31.520 in addressing to get us to weather through it much 0:15:31.560 --> 0:15:33.440 better than a lot of our peers has. 0:15:33.640 --> 0:15:38.480 One criticism from Truest Securities this morning was that there 0:15:38.640 --> 0:15:43.440 wasn't anything said about the outlook what happens next in 0:15:43.480 --> 0:15:46.560 those end markets. So you just said we rebalanced to 0:15:46.600 --> 0:15:50.320 make sure our output match demand on industrial and automotive, 0:15:50.800 --> 0:15:54.000 But going forward, what are you hearing from those end 0:15:54.120 --> 0:15:58.720 market leaders and CEOs about what they think demand for 0:15:58.760 --> 0:16:00.280 their industry will be in twenty four. 0:16:01.000 --> 0:16:05.160 I think for us, the way we're managing twenty twenty four, 0:16:05.680 --> 0:16:08.720 we're not managing for a recovery, which if you take 0:16:08.800 --> 0:16:12.400 where we are today as a base, twenty twenty four 0:16:12.520 --> 0:16:15.000 is going to be basically down in all end markets 0:16:15.240 --> 0:16:17.800 versus twenty twenty three, which was a good year and 0:16:17.920 --> 0:16:21.960 a lot of the markets. So industrial, automotive and then 0:16:21.960 --> 0:16:26.200 the other end markets will remain soft. If the demand 0:16:26.200 --> 0:16:28.680 picks up in the second half, that's great. That's all 0:16:28.720 --> 0:16:34.240 tailwinds for us from fabriutilization that impacts margin, profitability, and revenue. 0:16:34.640 --> 0:16:35.640 We'd rather be in. 0:16:35.560 --> 0:16:39.560 This spot rather than prepare for a recovery that doesn't happen. 0:16:39.680 --> 0:16:42.720 Now you have a correction mid year. We're taking again 0:16:42.880 --> 0:16:45.440 a much more discipline approach which worked very well with 0:16:45.600 --> 0:16:48.440 us for US in Q four, coming into Q one. 0:16:49.480 --> 0:16:51.760 We use the case study of silicon carbide in the 0:16:51.800 --> 0:16:56.120 EV context, and Caroline quite rightly points out that we 0:16:56.160 --> 0:16:58.840 think there will be growth in twenty twenty four, it 0:16:58.880 --> 0:17:03.280 will just be slow growth. The growth is decelerating in 0:17:03.320 --> 0:17:04.600 global EV demand. 0:17:05.240 --> 0:17:06.760 Does your business reflect that? 0:17:08.400 --> 0:17:12.120 Yeah, I spoke about it earlier today, where the industry 0:17:12.160 --> 0:17:15.560 still projects a high number for EV growth in the 0:17:15.560 --> 0:17:20.240 thirty to forty what I believe based on customer engagement 0:17:20.240 --> 0:17:24.480 are really based on some of the leading OEMs in 0:17:24.520 --> 0:17:28.879 the automotive industry what they projected for their EV growth 0:17:28.920 --> 0:17:31.399 in twenty twenty four. We look at it more and 0:17:31.680 --> 0:17:37.159 twenty to thirty growth, So for me, I more trust 0:17:37.240 --> 0:17:39.960 what we see and that's what we're managing to still 0:17:40.240 --> 0:17:43.280 very heavy growth because what we also projected in light 0:17:43.480 --> 0:17:46.919 of that market growth is we will grow a silicon 0:17:47.000 --> 0:17:49.920 car by two x the market. So at this point 0:17:49.920 --> 0:17:53.080 in time in twenty twenty four, we're peck to and demand. 0:17:53.480 --> 0:17:56.719 Products are out, qualifications are there, We're designed in all 0:17:56.760 --> 0:18:00.480 the platforms that we need to be designed into right now. 0:18:00.520 --> 0:18:03.600 It is an end demand signal. We will still take share, 0:18:03.720 --> 0:18:05.920 we will still grow ahead of market at two x. 0:18:06.240 --> 0:18:08.800 The question is what will the market do through twenty 0:18:08.800 --> 0:18:09.320 twenty four. 0:18:09.520 --> 0:18:12.040 And as you said in your call, electrification remains a 0:18:12.080 --> 0:18:15.000 content expansion opportunity for you as you two X, So 0:18:15.359 --> 0:18:16.720 who are the customers. 0:18:16.240 --> 0:18:17.760 That manage to outperform? 0:18:17.800 --> 0:18:20.400 Why have you managed to get the customers that are 0:18:20.520 --> 0:18:21.320 ramping production? 0:18:21.520 --> 0:18:23.200 Where in the world are they ramping production? 0:18:25.080 --> 0:18:28.040 Bottom line, I've always been consistent, you only win when 0:18:28.040 --> 0:18:31.040 you have the best technology. We've been providing the best 0:18:31.080 --> 0:18:34.879 technology at a high power packaging. So both device silicon 0:18:34.920 --> 0:18:38.240 carbide and the package we put in it the best 0:18:38.280 --> 0:18:41.120 technology out there as far as performance. That's why we've 0:18:41.160 --> 0:18:45.320 been winning. So we've been broadening our customer exposure to 0:18:45.440 --> 0:18:49.520 kind of reduce that lumpiness from too many focused customers. 0:18:50.000 --> 0:18:53.520 We have recognized revenue from over six hundred customers in 0:18:53.600 --> 0:18:58.159 twenty twenty three. That will keep extending into twenty twenty 0:18:58.160 --> 0:19:01.320 four as more of the European OI start ramping for US. 0:19:01.600 --> 0:19:05.240 So again a very broad base of gossmer very diversified 0:19:05.280 --> 0:19:09.160 regionally from China to North America, and like I said, 0:19:09.160 --> 0:19:12.040 in Europe, that gives us a very good base to 0:19:12.200 --> 0:19:15.360 clearly grow from as we manage through the short term 0:19:15.400 --> 0:19:16.359 lumpness of ev. 0:19:16.359 --> 0:19:21.240 Adoption hasan al Kuri on semi ceo best performing stock 0:19:21.680 --> 0:19:24.000 on the socks today. Very quickly, I want to check 0:19:24.040 --> 0:19:27.480 in on shares of coinbase down around nine percent their 0:19:27.520 --> 0:19:29.680 session loads down more than ten percent, on track for 0:19:29.720 --> 0:19:31.920 the biggest decline since June of last year. 0:19:31.920 --> 0:19:33.840 But I got to be honest with you, Caroline. 0:19:33.640 --> 0:19:35.919 We've got no idea what's going on, or no idea 0:19:35.960 --> 0:19:38.800 why there are no headlines on the terminal relating to 0:19:38.840 --> 0:19:40.240 the name. We're going to continue to dig in it 0:19:40.240 --> 0:19:42.200 and get the crypto team on that. But a big 0:19:42.240 --> 0:19:45.720 move to the downside coinbased off nine percent. This is 0:19:45.760 --> 0:20:07.160 Bloomberg technology. 0:20:05.160 --> 0:20:05.480 All right. 0:20:05.520 --> 0:20:06.360 Time for talking tech. 0:20:06.440 --> 0:20:10.560 First up, Samsung executive chairman Jy Lee has been acquitted 0:20:10.920 --> 0:20:15.000 of stock manipulation charges, removing the threat of jail time. 0:20:15.280 --> 0:20:17.960 That's loomed over one of Korea's most prominent business people 0:20:18.000 --> 0:20:20.520 for years and lifting a weight off of the company 0:20:20.640 --> 0:20:23.440 as it struggles with a global downturn and some more 0:20:23.440 --> 0:20:27.199 competition from Apple in the smartphone space, and shares in 0:20:27.320 --> 0:20:29.880 ATOS fell as much as thirty percent to a record 0:20:30.000 --> 0:20:33.359 low after the French it company dropped plans to sell 0:20:33.400 --> 0:20:36.920