WEBVTT - Cisco Slips and Walmart Rises Post-Earnings 0:00:02.600 --> 0:00:09.600 Bloomberg Audio Studios, podcasts, radio news from Marhard. 0:00:09.760 --> 0:00:14.200 We're Innovation, Money and Power Collie in Silicon Valley, NBN. 0:00:14.520 --> 0:00:18.560 This is Bloomberg Technology with Caroline Hyde and Ed lud Love. 0:00:32.080 --> 0:00:34.640 I'm Caroline Heyde a Bloomberg's World headquarters in New York, 0:00:35.120 --> 0:00:36.800 and I'm Ed Lodlow in San Francisco. 0:00:36.880 --> 0:00:38.800 This is Bloomberg Technology coming up. 0:00:38.960 --> 0:00:42.880 Full earnings coverage ahead. We've got Cisco. It's sliding because 0:00:42.880 --> 0:00:45.120 analysts dub its outlook conservative. 0:00:45.320 --> 0:00:47.320 We'll hear from the CFO Plust. 0:00:47.320 --> 0:00:50.040 We dig into Walmart's results as the commerce giant posts 0:00:50.040 --> 0:00:52.120 a big jump in its online business. 0:00:52.280 --> 0:00:54.640 Only We're just sitting down with the CEO of hot 0:00:54.720 --> 0:00:58.760 Ai search startup Perplexity to discuss growing competition in the 0:00:58.800 --> 0:01:01.920 search space and a new set of board advisors in 0:01:02.000 --> 0:01:03.880 the here and then now is to dig in to 0:01:04.440 --> 0:01:08.080 investor sentiment more broadly. We can do that across geographies, 0:01:08.160 --> 0:01:11.559 across industry groups, but really to really tackle these record highs, 0:01:11.560 --> 0:01:14.720 where with Principal Asset Management Chief Global Strategist Sema Shah 0:01:15.040 --> 0:01:17.960 joining us and look, I mean game on today from 0:01:17.959 --> 0:01:21.000 a macro perspective and will it carry on into the 0:01:21.120 --> 0:01:22.440 tech outperformance. 0:01:22.480 --> 0:01:27.040 Do you think hi creator the honesty. Look, it's clearly 0:01:27.040 --> 0:01:30.560 it's a good risk one day. I think there's fundamental 0:01:30.560 --> 0:01:32.600 reasons for that. You know, of course there's a discussion 0:01:32.600 --> 0:01:35.760 about rape cuts coming back onto the agenda. But I 0:01:35.760 --> 0:01:38.560 think more fundamentally, we can see that from the economic 0:01:38.640 --> 0:01:42.200 data it's slowing, but we're not talking about a weak 0:01:42.280 --> 0:01:44.760 economy as yet at least, so this is still a 0:01:44.760 --> 0:01:48.360 fundamentally strong economy, which means it and should be fairly 0:01:48.400 --> 0:01:50.640 solid as we go through THEA and that should translate 0:01:51.040 --> 0:01:53.320 into a broadening of the rally, which is why we're 0:01:53.320 --> 0:01:54.240 seeing so many of them. 0:01:54.240 --> 0:01:55.840 Disease reach record highs. 0:01:57.040 --> 0:02:00.480 As Sebahad dead in San Francisco. Looking at all the 0:02:00.560 --> 0:02:03.960 index level energy so far yere today, right and you 0:02:04.000 --> 0:02:06.080 look at the NAZAQ one hundred s and P five hundred. 0:02:06.160 --> 0:02:08.760 I can't believe we showed the Dow Jones Industrial average 0:02:08.800 --> 0:02:11.840 and the top of this program today. But I think 0:02:11.919 --> 0:02:13.639 what I'm trying to find out is if there's any 0:02:13.720 --> 0:02:17.440 commonality in the direction of the market and strip out 0:02:17.520 --> 0:02:19.600 the mag seven, because I know that that's top of 0:02:19.680 --> 0:02:22.640 mind for so many people. Is there something in common 0:02:22.720 --> 0:02:25.480 for this market, or is it still dominated by our 0:02:25.600 --> 0:02:27.360 view of those single technology names. 0:02:28.919 --> 0:02:31.639 So I think those single technous they are clearly still 0:02:31.680 --> 0:02:32.639 dominating the market. 0:02:33.600 --> 0:02:34.440 They're driving a lot. 0:02:34.520 --> 0:02:36.560 But what you have seen from the most recent earning 0:02:36.639 --> 0:02:39.639 season is that this good performance is spreading out to 0:02:39.720 --> 0:02:40.600 other parts of the economy. 0:02:40.639 --> 0:02:43.280 Other sectors have done pretty well. So if that can 0:02:43.360 --> 0:02:45.120 be maintained, and particularly if you. 0:02:45.200 --> 0:02:47.519 Do actually start adding in those ratee puts towards the 0:02:48.000 --> 0:02:50.720 last part of the year, that will help the story, 0:02:50.800 --> 0:02:53.160 particularly for certain segments of the market. I mean, even 0:02:53.160 --> 0:02:54.960 if you just thinking about small caps, they need those 0:02:55.040 --> 0:02:59.799 rate cuts. But overall this is a broad good story. 0:03:00.040 --> 0:03:02.000 We still probably need to see a little bit more 0:03:02.919 --> 0:03:05.839 evidence in order to secure that perspective, but at least 0:03:05.880 --> 0:03:08.239 for now, the evidence that is coming in suggests that 0:03:08.360 --> 0:03:10.840 this isn't just a year for the mag seven but 0:03:10.919 --> 0:03:13.000 it's going to be a year for the broad act market. 0:03:14.080 --> 0:03:17.600 What about the valuations of well, they're fewer than seven 0:03:17.680 --> 0:03:20.519 now when they're magnificent, But more broadly, let's call it 0:03:20.639 --> 0:03:23.639 chip stocks, let's call it the winning formula of Nvidia, 0:03:23.800 --> 0:03:26.799 of Well, Alphabet, even Apple getting some lift again. 0:03:26.919 --> 0:03:28.880 Now, are those valuations out of whack. 0:03:30.360 --> 0:03:30.880 It's interesting. 0:03:30.919 --> 0:03:33.519 I was traveling across the US last week and I 0:03:33.600 --> 0:03:36.520 was with investors everywhere, and that was a question that 0:03:36.640 --> 0:03:38.800 still keeps coming up, is you know, do we think 0:03:38.880 --> 0:03:42.600 of this as overvalued and is a time for a correction? 0:03:43.000 --> 0:03:45.400 So we would definitely push back on that. Yes, it's 0:03:45.440 --> 0:03:48.080 a little bit frothy, but do we make comparisons to 0:03:48.160 --> 0:03:48.920 the dot com bubble? 0:03:49.320 --> 0:03:53.360 Absolutely not. These earnings are somewhat believable, maybe a. 0:03:53.360 --> 0:03:55.840 Little bit frothy, as I said, but there's actually something 0:03:55.960 --> 0:03:57.800 fundamental in those valuations. 0:03:57.840 --> 0:03:58.960 So it doesn't really concern us. 0:03:59.440 --> 0:04:01.680 Inevitably with this kind of market, when there's so much 0:04:01.720 --> 0:04:05.280 good news priced in, there's always going to be risk 0:04:05.440 --> 0:04:07.440 of a bit of a pullback, But we look at 0:04:07.480 --> 0:04:09.760 the tech story as a long term play, and from 0:04:09.760 --> 0:04:12.760 a long term play, we still it's still one of 0:04:12.840 --> 0:04:14.360 our favored areas of the market. 0:04:15.320 --> 0:04:17.679 It talks about the good news that's priced in. Seema. 0:04:18.040 --> 0:04:20.080 I don't want to bring the mood down, but something 0:04:20.120 --> 0:04:21.880 we've been talking a lot about recently on the show 0:04:22.400 --> 0:04:25.160 is the relationship between the US and China, whether it's 0:04:25.240 --> 0:04:29.120 constructive or otherwise. Is that a headwind you're factoring in 0:04:29.320 --> 0:04:31.719 right now, particularly when you look at the technology sector, 0:04:33.839 --> 0:04:35.200 so Ineffe, it's. 0:04:35.080 --> 0:04:36.960 Something that we do to consider, especially when you're going 0:04:37.040 --> 0:04:39.920 into the presidential election, where China is going to be 0:04:40.760 --> 0:04:42.960 top of the news as we get close from closer 0:04:43.000 --> 0:04:46.400 to that point. So it is something we consider, but 0:04:46.480 --> 0:04:48.640 I think it's very much on a single stock name basis, 0:04:48.680 --> 0:04:50.840 because there's some which are going to be particularly exposed 0:04:51.640 --> 0:04:53.760 and others which are not so much. The good news 0:04:53.839 --> 0:04:56.320 from a China stundpoint, though, is from the most recent 0:04:56.400 --> 0:04:58.680 data that we're seeing come in there does seem like 0:04:58.720 --> 0:05:00.560 it's a bit of a sickle club term, nothing to 0:05:00.720 --> 0:05:04.159 rave on about, but something at least to lift at 0:05:04.240 --> 0:05:07.560 least expectations. If that is carried through then certainly for 0:05:07.640 --> 0:05:11.000 a lot of those bigger multinational tech companies which have 0:05:11.120 --> 0:05:13.960 got so much exposure to China, it does suggest. 0:05:13.640 --> 0:05:16.160 That they are a little bit less at risk than 0:05:16.200 --> 0:05:17.160 we would have considered. 0:05:17.400 --> 0:05:19.719 But certainly the geopolitics is something we always have to watch, 0:05:20.920 --> 0:05:22.680 but it's not yet at that point where it's changing 0:05:22.760 --> 0:05:24.800 up perspective on positivity about the sector. 0:05:25.080 --> 0:05:28.280 I like that we go global because look, it's not 0:05:28.400 --> 0:05:30.800 just US stocks have done particularly well of late Japanese 0:05:30.839 --> 0:05:33.320 stocks on a tear, European stocks at Sandraman and at 0:05:33.320 --> 0:05:37.479 a record as well. Where are you liking other geographies 0:05:37.600 --> 0:05:37.960 right now? 0:05:39.040 --> 0:05:40.920 Yeah, And it's a great question because at the moment, 0:05:41.000 --> 0:05:42.400 I mean, at least for the last couple of weeks, 0:05:42.400 --> 0:05:44.560 what we've been challenged with in the market is that 0:05:44.720 --> 0:05:46.720 although I think a lot of people continue to believe 0:05:46.760 --> 0:05:50.000 in use exceptionalism, they have been confounded by the fact 0:05:50.040 --> 0:05:53.359 that the rat debate continues. We're not very sure about 0:05:53.360 --> 0:05:55.920 where that's going. When you think about the growth story, 0:05:55.920 --> 0:05:58.800 you're suddenly the economic downside surprises in the US, and 0:05:58.880 --> 0:06:01.479 then of course there's evaluation. So then this is probably 0:06:01.520 --> 0:06:03.400 a good time to start thinking outside of the US, 0:06:03.480 --> 0:06:04.520 and there are some good stories. 0:06:04.560 --> 0:06:06.440 So if you think about Europe, which. 0:06:06.320 --> 0:06:09.880 Is the perennial disappointment, but now you're seeing that we 0:06:10.080 --> 0:06:11.880 know what the ECB is going to do, we have 0:06:12.120 --> 0:06:14.160 I think pretty much good confidence that there's going to 0:06:14.160 --> 0:06:17.080 be cut in June, and then thereafter we know that 0:06:17.160 --> 0:06:20.760 we're starting to see a cyclical economic upside upside surprise, 0:06:21.000 --> 0:06:23.680 not an acceleration, but at least we're seeing some good 0:06:23.760 --> 0:06:25.760 news come through, and then valuations more attractive. 0:06:26.080 --> 0:06:28.320 So if you look across Europe, that's fairly good news. 0:06:28.360 --> 0:06:32.120 And even in China, as I said, given where sentiment was, 0:06:32.720 --> 0:06:34.760 you couldn't get much worse than that. And now with 0:06:34.839 --> 0:06:39.160 the economic data seeing some signs of brightness, that is 0:06:39.240 --> 0:06:41.040 looking like a more attractive part of the market too. 0:06:42.120 --> 0:06:45.080 A Seema, you're a regular on Bloomberg Television. You're a 0:06:45.160 --> 0:06:48.240 regular here on Bloomberg Technology away from the market, So 0:06:48.279 --> 0:06:50.400 I wanted to ask you about how you're using AI 0:06:50.839 --> 0:06:52.920 at work or at home. You know we're going to 0:06:52.960 --> 0:06:55.600 be talking later about AI driven search. What have you 0:06:55.720 --> 0:06:57.440 been up to in the world of AI. 0:06:59.200 --> 0:07:01.520 Look, I mean, I think any company out there has 0:07:01.600 --> 0:07:03.960 to be embracing AI and trying to figure out where 0:07:04.040 --> 0:07:04.520 they can. 0:07:04.880 --> 0:07:07.480 Use it in any parts of working home. 0:07:07.560 --> 0:07:10.600 So from a work perspective, of course, trying to adopt 0:07:10.760 --> 0:07:14.280 AI into our models, trying to analyze the companies from 0:07:14.320 --> 0:07:17.360 a single sector, single stock perspective. That is going to 0:07:17.360 --> 0:07:20.120 be the easiest way to try and do full analysis 0:07:20.640 --> 0:07:23.080 and get a full complete level of information. 0:07:23.480 --> 0:07:25.080 So that is something that we're trying to bring into work. 0:07:25.200 --> 0:07:27.480 I have some more children. AI is the stuff that 0:07:27.560 --> 0:07:29.080 they talk about it at school. As well, so you 0:07:29.120 --> 0:07:32.200 can see that this is everywhere. It's not just dominated 0:07:32.240 --> 0:07:33.200 by the finance news. 0:07:34.400 --> 0:07:38.000 Princevill Asset Management, Chief Global Strategy as semashark Ai everything 0:07:38.120 --> 0:07:39.320 all the time and markets. 0:07:39.360 --> 0:07:42.040 What more can you ask for? On Bloombo Technology. 0:07:42.480 --> 0:07:44.200 Coming up on the show, we're going to hear from 0:07:44.240 --> 0:07:47.720 the Cisco CFO Scott Heron is the company's slides and 0:07:47.880 --> 0:07:51.840 its outlook is being seen as conservative as coming up next, 0:07:51.880 --> 0:07:53.600 Stick with us because we'll be right back. 0:07:53.880 --> 0:07:55.080 This is Bloombo Technology. 0:08:08.760 --> 0:08:09.400 Got to talk. 0:08:09.440 --> 0:08:13.040 Cisco because it's been quite the volatile trade after hours 0:08:13.080 --> 0:08:15.080 and in today's training. We're now off by one point 0:08:15.120 --> 0:08:18.600 seven percent, moving lower well despite the forecast actually showing 0:08:18.800 --> 0:08:22.200 a return of customer spending of networking gear, analysts dubbing 0:08:22.240 --> 0:08:25.280 the outlook perhaps a little conservative. Wiliam had got the 0:08:25.640 --> 0:08:27.679 chance to discuss all of the results earlier with Cisco 0:08:27.800 --> 0:08:29.280 CFO Scott Heron Tickulasen. 0:08:30.280 --> 0:08:32.400 So this was our fiscal third quarter that we announced. 0:08:32.400 --> 0:08:34.839 Then normally I wouldn't guide fiscal twenty five until we 0:08:34.880 --> 0:08:37.439 get to the fourth quarter earnings call. But you know, 0:08:37.480 --> 0:08:40.280 we just acquired Splunk. So the big news for us 0:08:40.440 --> 0:08:42.760 is we acquired Splunk. We got a closed mid quarter, 0:08:43.240 --> 0:08:45.240 and I think the analysts are all trying to adjust 0:08:45.280 --> 0:08:47.400 now to what does the combined company look like. 0:08:48.400 --> 0:08:49.560 So what I wanted to do is kind of. 0:08:49.520 --> 0:08:51.440 Get ahead of that with fiscal twenty five and without 0:08:51.480 --> 0:08:55.480 doing a fulsome guide, just get enough information out there 0:08:55.520 --> 0:08:58.240 so that they could narrow down their expectations for fiscal 0:08:58.280 --> 0:09:01.959 twenty five conservative. I think it's a first view of 0:09:02.040 --> 0:09:04.880 where that's going, you know. I think the encouraging thing 0:09:05.000 --> 0:09:09.679 for us is we've worked through the supply chain disruptions 0:09:09.880 --> 0:09:11.839 that we had that caused us to build up a 0:09:11.920 --> 0:09:14.480 huge backlog, and then we're able to clear as we 0:09:14.600 --> 0:09:17.000 got the components in, we're able to clear that backlog, 0:09:17.440 --> 0:09:19.719 revenue spiked, and now we're having to compare to those 0:09:19.880 --> 0:09:22.640 to those compare points, so the year on years are 0:09:22.679 --> 0:09:25.160 a little bit difficult to actually discern what's happening in 0:09:25.160 --> 0:09:27.800 the underlying business. We spent some time trying to unpack 0:09:27.880 --> 0:09:30.719 that for the for investors yesterday, and we'll do some 0:09:30.800 --> 0:09:33.600 more of that with the byside later. So first view, 0:09:33.640 --> 0:09:35.959 but really just trying to give them enough insight so 0:09:36.040 --> 0:09:38.200 that the models would start to converge on what we think. 0:09:38.160 --> 0:09:39.400 Is the right set of numbers. 0:09:39.559 --> 0:09:41.600 So it sounds like you're not saying no, but making 0:09:41.640 --> 0:09:44.200 the point that it's very early. I mean, twenty twenty five, 0:09:44.480 --> 0:09:46.400 who knows what will happen. But let's talk a little 0:09:46.440 --> 0:09:47.600 bit more about inventory. 0:09:47.640 --> 0:09:49.560 You make the point that it feels like you've turned 0:09:49.600 --> 0:09:51.040 a corner when it comes to a lot of those 0:09:51.040 --> 0:09:55.080 supply chain disruptions, and what does that say about corporate spending. 0:09:55.120 --> 0:09:56.920 A lot of people looked at this report and said, 0:09:57.240 --> 0:09:59.320 there's screenshoots there, there's a bit of an uptick. 0:10:00.040 --> 0:10:02.439 That's the case. Where is that coming from? What kind 0:10:02.480 --> 0:10:04.360 of customers are we seeing that demand from? 0:10:04.559 --> 0:10:06.880 You know, what's really interesting for us? And of course 0:10:07.000 --> 0:10:09.240 we've got Splunk added in for just half a quarter. 0:10:09.440 --> 0:10:10.839 So if you net that out and look at what 0:10:10.920 --> 0:10:14.720 the core business apples to Apple's basis, looks like. Actually 0:10:14.920 --> 0:10:18.040 orders were flat overall, which is an improvement from where 0:10:18.040 --> 0:10:20.640 it's been as customers have been really trying to implement 0:10:21.080 --> 0:10:22.920 the huge amount of product that we shipped out to 0:10:23.000 --> 0:10:24.440 them in three consecutive quarters. 0:10:24.960 --> 0:10:25.760 We see that ending. 0:10:25.840 --> 0:10:28.640 We see them getting through implementing all of the product 0:10:28.679 --> 0:10:30.760 that we ship to them. By about the end of 0:10:30.800 --> 0:10:32.480 this fiscal quarter, which for US will end at the 0:10:32.520 --> 0:10:35.120 end of July, and as that happens, we're already starting 0:10:35.160 --> 0:10:38.079 to see demand return and product orders flat, I think 0:10:38.679 --> 0:10:43.080 encouragingly within that overall flat growth in security orders, growth 0:10:43.120 --> 0:10:46.440 in collaboration orders, but most importantly growth in data center 0:10:46.520 --> 0:10:49.400 networking orders, which has been a headwind for some time, 0:10:49.880 --> 0:10:51.960 and growth in campus switching. And I think the campus 0:10:51.960 --> 0:10:54.640 switching one surprised a lot of people that we're seeing 0:10:54.679 --> 0:10:57.160 growth there with the sense that you know, there's more 0:10:57.280 --> 0:10:59.959 vacant office space than there's ever been. How can campus 0:11:00.040 --> 0:11:02.560 switching be growing? So I think it's an encouraging sign. 0:11:02.880 --> 0:11:05.640 So some tailwinds there, and it took me through questions, 0:11:05.679 --> 0:11:05.880 but we. 0:11:05.920 --> 0:11:08.920 Have to talk about AI because of course a detail 0:11:09.000 --> 0:11:10.680 that caught a lot of people's eyes was the fact 0:11:10.679 --> 0:11:14.280 that you have about a billion dollars on AI infrastructure 0:11:14.360 --> 0:11:17.280 orders in sight. And I guess my question there is 0:11:17.640 --> 0:11:20.520 is that for a particular line of business, where would 0:11:20.520 --> 0:11:22.160 that spending actually be taking. 0:11:22.000 --> 0:11:22.960 Place within Cisco. 0:11:23.520 --> 0:11:26.040 Yeah, it's a great question. That's not a new data 0:11:26.080 --> 0:11:28.600 point we put that out there. It's in the back end. 0:11:28.679 --> 0:11:30.360 So if you think of how these AI models get 0:11:30.400 --> 0:11:32.959 trained and then get used, which is called inferencing. It's 0:11:33.000 --> 0:11:35.240 in the back end, so it's networking and optics in 0:11:35.280 --> 0:11:37.600 the back end. A lot of that going to the big, 0:11:37.760 --> 0:11:39.959 large public clouds that you'd expect in the Tier two 0:11:40.720 --> 0:11:43.160 AI infrastructure build out is what drives them. 0:11:44.920 --> 0:11:49.719 Cisco CFO Scott Heron giving Frankly a classic class on 0:11:49.920 --> 0:11:53.160 being a CFO for a technology company. Let's get some 0:11:53.280 --> 0:11:57.320 clarity on Cisco It's technology and its endings. Efering Bloombergsy 0:11:57.400 --> 0:12:00.839 and King. There was a lot of CFO speaking on 0:12:01.040 --> 0:12:04.640 pick it for us and explain the quarter that's just gone. 0:12:04.880 --> 0:12:06.599 Yeah, I think the best way to view it is 0:12:06.679 --> 0:12:08.760 through the lens of what happened with the share price. 0:12:09.120 --> 0:12:12.280 We had an initial spike yesterday and after hours right 0:12:12.400 --> 0:12:15.160 exactly and after hours trading, and today we're sort of 0:12:15.440 --> 0:12:17.920 down moderately a little bit more sober. 0:12:18.240 --> 0:12:20.520 What really happened and Scott kind. 0:12:20.360 --> 0:12:24.000 Of alluded to that was the expectation for orders was 0:12:24.160 --> 0:12:27.280 that they would be down possibly as much as ten percent, 0:12:27.400 --> 0:12:28.160 maybe even. 0:12:28.080 --> 0:12:32.120 More in the quarter that they just reported came in. 0:12:32.600 --> 0:12:35.560 It's kind of okay, maybe up slightly when you include 0:12:35.600 --> 0:12:38.000 this new acquisition. So there was like, oh, things aren't 0:12:38.040 --> 0:12:40.839 as bad as we had feared. Kind of reaction that 0:12:40.960 --> 0:12:44.439 happened in the after hours. Then when we go through 0:12:44.480 --> 0:12:47.319 the numbers and listen to the call, we've seen a 0:12:47.400 --> 0:12:51.040 reaction this morning which is more like, yeah, okay, it's okay. 0:12:51.320 --> 0:12:53.920 But bearing in mind they've just done this massive acquisition, 0:12:54.080 --> 0:12:56.040 maybe they're not getting quite the kick from that. 0:12:56.720 --> 0:12:59.920 Yeah, I mean, we have to take Splunk into consideration here, 0:13:00.080 --> 0:13:02.920 and there's gonna be new role of president for example, 0:13:03.000 --> 0:13:05.880 in But what about some of the other partnerships natural 0:13:06.000 --> 0:13:07.560 M and A. But you know, they had this big 0:13:07.640 --> 0:13:11.079 fanfare of an end video deal and partnership has that 0:13:11.360 --> 0:13:13.480 bringing in any much needed revenue streams. 0:13:14.280 --> 0:13:16.040 Well that is still in the early day, so we 0:13:16.120 --> 0:13:18.600 don't really know. But you know, back to the conversation 0:13:18.760 --> 0:13:20.760 that was had with Scott and the big question of 0:13:20.840 --> 0:13:26.560 this billion dollar of AI related orders. Obviously Cisco wants 0:13:26.640 --> 0:13:29.040 to go to the party too at the moment though, 0:13:29.240 --> 0:13:31.600 and there were a lot of questions on the call yesterday, well, 0:13:31.640 --> 0:13:33.440 what exactly do you mean by a billion dollars? 0:13:33.600 --> 0:13:34.880 Who's giving you these orders? 0:13:35.080 --> 0:13:37.079 How sure are you that these are real orders and 0:13:37.200 --> 0:13:39.240 not just an aspirational goal, and there was a lot 0:13:39.280 --> 0:13:41.880 of to and fro with a leadership team about you 0:13:41.960 --> 0:13:44.320 know what that really means and whether this is real 0:13:44.679 --> 0:13:48.520 and really the bottom line is that investors aren't quite 0:13:48.600 --> 0:13:51.520 yet ready to let Cisco go into that AI party. 0:13:52.040 --> 0:13:54.760 I and you broke a story literally as we started 0:13:54.760 --> 0:13:57.520 the show and before you walked on set about ampare 0:13:57.800 --> 0:14:02.679 the chip company teaming up with to make AI technology 0:14:02.720 --> 0:14:05.800 AI infrastructure. I didn't know that Qualcom was in that 0:14:06.000 --> 0:14:08.559 line of business. I do now give us the details. 0:14:08.640 --> 0:14:10.959 Yeah, I mean what's going on. There is Umpair, who 0:14:11.000 --> 0:14:13.679 we had at our tech conference flash It. They're an 0:14:14.000 --> 0:14:16.719 armed server chip company trying to get into all of 0:14:16.840 --> 0:14:20.640 the big hyperscalers. They're teaming up with Qualcomm to bring 0:14:20.720 --> 0:14:24.200 in this accelerator to try to basically bring a cheaper 0:14:24.240 --> 0:14:26.800 alternative to the kind of thing that Nvidia is selling 0:14:26.840 --> 0:14:27.760 for many tens. 0:14:27.560 --> 0:14:29.960 Of thousands of dollars. We'll see how well that goes. 0:14:30.000 --> 0:14:31.320 We'll see how well that performs. 0:14:31.760 --> 0:14:35.280 I mean, we sat with Renee James, both you and 0:14:35.360 --> 0:14:38.320 I individually at various points throughout that event last week. 0:14:38.400 --> 0:14:40.760 I and she has a brother fresh air in many 0:14:40.840 --> 0:14:43.640 ways to the area of computing and the startup side 0:14:43.640 --> 0:14:44.920 of things. But it looks like there's kind of a 0:14:44.960 --> 0:14:47.600 trifecta going on. They can't just do it alone. They've 0:14:47.600 --> 0:14:50.760 got to be working whether super Micro's involved, super Microcomputer 0:14:50.880 --> 0:14:55.480 alongside Qualcom, alongside a pair. But the key refrain coming 0:14:55.520 --> 0:14:58.000 from everyone is energy right efficiency. 0:14:57.560 --> 0:15:01.720 Here, Yeah, as you as you point out, Reno is 0:15:01.720 --> 0:15:04.680 pretty fired up about this, and she's making a point 0:15:04.720 --> 0:15:07.680 which many agree, which is we cannot carry on like this. 0:15:08.360 --> 0:15:10.760 The cost of AI in terms of power, in terms 0:15:10.800 --> 0:15:13.720 of money is just too great right now. We need 0:15:14.200 --> 0:15:17.920 technology answers to that problem. We need more efficient chips, 0:15:17.960 --> 0:15:20.560 we need cheaper chips, and she's trying to offer that 0:15:21.360 --> 0:15:23.600 her company as a solution to that problem. 0:15:24.560 --> 0:15:27.400 Well, certainly managing to come out to the market with 0:15:28.080 --> 0:15:30.600 a combination offering at the moment, Ian, it's brilliant that 0:15:30.600 --> 0:15:31.560 you got to break it for us. 0:15:31.640 --> 0:15:42.640 Thank you, Blue Meg's Ian King. Time now for talking tech. 0:15:42.800 --> 0:15:45.560 First up, Microsoft is said to have asked hundreds of 0:15:45.600 --> 0:15:48.320 its China based AI staff to consider relocating. 0:15:48.400 --> 0:15:49.880 That's all, according to the Wall Street Journal. 0:15:50.040 --> 0:15:52.360 Now, the tech giant has asked its employees based in 0:15:52.480 --> 0:15:55.480 China to move to a different country, perhaps US, but Ireland, 0:15:55.480 --> 0:15:58.280 Australia and New Zealand. It's all a growing tensions between 0:15:58.320 --> 0:16:01.200 the US and China on technology. Those who choose not 0:16:01.360 --> 0:16:05.000 to transfer could remain working in the country for now. Plus, 0:16:05.520 --> 0:16:08.960 Michael Varie's investment firm is doubling down on its Chinese 0:16:09.040 --> 0:16:11.680 investments JD dot Com, Ali barber Now. According to thirteen 0:16:11.800 --> 0:16:14.880 f filings, JD was the firm's top holding after boosting 0:16:14.920 --> 0:16:17.520 its stake by eighty percent, with Ali Barba coming in second. 0:16:17.720 --> 0:16:19.800 Laberia has been making a return to the Chinese tech 0:16:19.840 --> 0:16:22.840 sector after exiting them at one point in twenty twenty three, 0:16:23.520 --> 0:16:26.840 and revenue for Baydo grew at actually its slowest pace 0:16:26.880 --> 0:16:29.200 in more than a year. Chinese internet search leader look 0:16:29.240 --> 0:16:33.080 At struggling to turn its investments into generative AI into actually. 0:16:32.880 --> 0:16:34.360 Real revenue real earnings. 0:16:34.480 --> 0:16:36.160 They came in at four point four billion for the 0:16:36.240 --> 0:16:39.240 three months ending in March. Meanwhile, JD dot Com reported 0:16:39.320 --> 0:16:42.000 well better than expected seven percent rise in revenue, this 0:16:42.120 --> 0:16:45.440 after the Beijing based retailer actually cut prices ramped up 0:16:45.480 --> 0:16:48.800 customer perks to counter us on that competition. JD dot 0:16:48.840 --> 0:16:51.160 COM's results are seen as one of the key bellweathers 0:16:51.200 --> 0:16:53.680 of Chinese consumption, which look a struggle to recover since 0:16:53.720 --> 0:16:55.120 the country lifted COVID curbs. 0:16:56.760 --> 0:16:58.920 Yeah, there's going to be a big global e commerce 0:16:59.000 --> 0:17:02.160 theme in today's show because Walmart's also out with its 0:17:02.240 --> 0:17:04.920 results this morning. It showed a twenty two percent jump 0:17:05.040 --> 0:17:08.119 year over year in its online business. This is e 0:17:08.320 --> 0:17:10.960 commerce growth, principally in the US. Let's get out to 0:17:11.000 --> 0:17:14.080 Bloomberg's Jay one Com who covers Walmart for US, and 0:17:14.560 --> 0:17:15.359 that's the story. 0:17:15.480 --> 0:17:16.560 But what's behind it? 0:17:16.840 --> 0:17:20.080 What's Walmart been doing with its digital presence? 0:17:21.480 --> 0:17:24.520 Yeah, so e commerce has been a really important business 0:17:24.720 --> 0:17:28.040 for Walmart. It's you know, definitely one of the factors 0:17:28.160 --> 0:17:31.520 of growth. And what they've been doing is, you know, 0:17:31.680 --> 0:17:36.639 really adding capabilities like delivering orders super early in the morning. 0:17:37.280 --> 0:17:41.639 They're also working to deliver their items faster so you know, 0:17:41.720 --> 0:17:46.000 the same day, you know, or in a couple of hours. 0:17:46.960 --> 0:17:48.600 They're also improving what. 0:17:49.080 --> 0:17:52.080 The company calls a perfect order, which refers to different 0:17:52.160 --> 0:17:57.480 metrics like you know, when orders arrive or how complete 0:17:57.520 --> 0:18:01.840 the orders are, and they've been working on improving all 0:18:01.880 --> 0:18:06.640 of those things while cutting down costs associated with delivery. 0:18:07.480 --> 0:18:09.320 The numbers are phenomenal. 0:18:09.640 --> 0:18:12.720 And when you're looking at what four billion items in 0:18:12.800 --> 0:18:16.200 the last twelve months delivered by in the same day 0:18:16.600 --> 0:18:21.359 or next day, that's comparable to Amazon. What's also comparable 0:18:21.440 --> 0:18:23.520 to Amazon is some of the teething problems that they 0:18:23.560 --> 0:18:25.680 have back in the day when they started having third 0:18:25.720 --> 0:18:28.119 party sellers. Look, I was just sat down in makeup 0:18:28.200 --> 0:18:30.360 and make a part of saying, look, have you seen 0:18:30.440 --> 0:18:33.040 that there's like some fake handbags being sold on Walmart? 0:18:33.119 --> 0:18:33.720 Now, I had an. 0:18:33.680 --> 0:18:37.320 Issue with my son's gift arriving during Christmas because it 0:18:37.400 --> 0:18:39.200 was from a third party vendor and that bender didn't 0:18:39.200 --> 0:18:41.000 seem to live up to the expectations. 0:18:41.320 --> 0:18:42.800 What's going on in terms of teething issues. 0:18:44.119 --> 0:18:47.359 So Marketplace has also been one of the factors of 0:18:47.680 --> 0:18:50.800 growth for Walmart, and it's been trying to you know, 0:18:50.920 --> 0:18:54.520 add sellers and increase the number of items that it 0:18:54.600 --> 0:18:58.240 sells on on Marketplace in the US and abroad. And 0:18:58.320 --> 0:19:01.359 a huge benefit of that business is the fact that 0:19:01.480 --> 0:19:04.280 you know, the company can really grow the range of 0:19:04.600 --> 0:19:08.840 items that it selves online and they you know, see 0:19:08.840 --> 0:19:12.280 a lot of opportunities with general merchandise in particular. So 0:19:13.080 --> 0:19:15.520 you know, this morning they talked about items like pets 0:19:15.720 --> 0:19:19.320 and beauty. They're you know, going up in sales by 0:19:19.440 --> 0:19:23.159