WEBVTT - Dan Ives Talks Micron Earnings

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. For many people and

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<v Speaker 1>particularly the gloom crew out there, this is the pinata

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<v Speaker 1>of the day.

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<v Speaker 2>Dani's joins US now quietly dressed with web Bush technologies

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<v Speaker 2>and security is starving.

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<v Speaker 1>I should say, so, what's the character of this pullback?

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<v Speaker 1>There's fourteen kinds of a pullback. Which kind is this?

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<v Speaker 2>Look?

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<v Speaker 3>I think this pullback is it's real.

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<v Speaker 2>Look.

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<v Speaker 3>I view it as it's all related to what's happened

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<v Speaker 3>in Korea right in terms of like the cosy what

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<v Speaker 3>we've seen there. It's just this white knuckle moment that's

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<v Speaker 3>going to be nothing more than breathering.

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<v Speaker 2>You go to China a lot.

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<v Speaker 1>The zeitgeist, without question is about China developing through deep

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<v Speaker 1>seek and others.

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<v Speaker 2>Ninety percent of the efficacy of AI for one tenth

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<v Speaker 2>the cost. Is it legit?

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<v Speaker 3>Warry No, because for the first time in thirty years,

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<v Speaker 3>the US is headed China when it comes to TAP

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<v Speaker 3>and the reality is it's not just from Nvidia to

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<v Speaker 3>what we see with the models with Anthropic, to the hyperscalours,

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<v Speaker 3>to the software comes like pound tier and others.

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<v Speaker 2>Look, could they do it cheaper? Yeah?

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<v Speaker 3>Are they winning on robotics. Are they winning when it

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<v Speaker 3>comes to energy because of nuclear But when it comes

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<v Speaker 3>to the AI race, I don't even think it's a

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<v Speaker 3>question in terms of right now where you know US

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<v Speaker 3>is versus China. And that's why I think some of

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<v Speaker 3>those fears, and we've seen like the deep seek moments

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<v Speaker 3>and some of the others, I think a lot of

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<v Speaker 3>that are more fictional sort of fears.

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<v Speaker 4>Microsoft stock US off twenty three percent year to date,

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<v Speaker 4>trades it twenty times earnings.

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<v Speaker 2>Talk to us about Microsoft here.

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<v Speaker 3>Look, it's I think it continues to be somewhere between

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<v Speaker 3>a head scratcher to just a table pound. Their opportunity

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<v Speaker 3>for in my view, very similar like when I think

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<v Speaker 3>about Alphabet a year ago in terms of you like

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<v Speaker 3>they were done. I was going to crush search. You know,

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<v Speaker 3>the DJ was going to break it up. Look, I

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<v Speaker 3>think with Microsoft and the issue is just tied to

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<v Speaker 3>open AI and right now, whether it's Oracle, Microsoft, I

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<v Speaker 3>think being tied to open ayes and negive relative to

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<v Speaker 3>anthropic being Golden that the case because I think anthropic

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<v Speaker 3>relative to the model claud Golden Child best model out there.

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<v Speaker 3>I think anyone tied to open AI right now that's

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<v Speaker 3>been that's been negaive for Microsoft. Two is look when

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<v Speaker 3>you look at as your growth, it's been strong, but

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<v Speaker 3>maybe not the overwhelming point where there's a view that

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<v Speaker 3>Amazon and Google started narrow the gap coepile it clearly

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<v Speaker 3>had stumbled out of the gate. So right now that

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<v Speaker 3>is a penalty box stock that I think is ultimately

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<v Speaker 3>five hundred and fifty dollars.

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<v Speaker 1>Does a penalty box stock have to have active management

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<v Speaker 1>helping the stock here?

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<v Speaker 2>Do they do a share buyback?

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<v Speaker 1>I got a dividend growth five year dividend growth of

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<v Speaker 1>ten point two percent.

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<v Speaker 2>Put some steroids on it. Is that what they have

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<v Speaker 2>to do well?

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<v Speaker 3>I think that I think that Nadella and the team

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<v Speaker 3>it's getting to a point here where they're gonna have

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<v Speaker 3>to do something.

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<v Speaker 2>Look twenty one multiple pup to your point.

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<v Speaker 3>But then it goes back to like if you look

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<v Speaker 3>at Apple, if I told you a year ago where

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<v Speaker 3>Apple would be today relative to maybe some of the

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<v Speaker 3>doomsday fears.

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<v Speaker 2>A lot of that was also like cook.

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<v Speaker 3>One of their mean pieces of successes that despite some

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<v Speaker 3>of the bumps, and you know, the sort of roller

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<v Speaker 3>course that they saw when it came to what they've

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<v Speaker 3>done on the capital side.

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<v Speaker 2>I agree to that.

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<v Speaker 1>Come on, they're not pissing away money and an AI

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<v Speaker 1>like everybody else does Microsoft have to adjust their timeline

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<v Speaker 1>of spending on all this XAI?

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<v Speaker 3>Why I think the market's telling Microsoft, show us the execution,

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<v Speaker 3>show us the growth, otherwise you're gonna have to get curtailed.

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<v Speaker 3>And the market's saying that not just to Microsoft, but

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<v Speaker 3>to Meta because for Meta, investors no longer want to

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<v Speaker 3>see doggate the home type quarters when you're spending cap

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<v Speaker 3>backs like that. For Google, they've succeeded massively, so when

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<v Speaker 3>they do equity raise and things like that, investors are

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<v Speaker 3>fine with it. And now look, they have obviously lost

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<v Speaker 3>engineers and others and with anthropic and that caused some

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<v Speaker 3>of the sell off. But I just think now you're

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<v Speaker 3>starting to see a separation in terms of you can

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<v Speaker 3>just own the names as a broader trade. They each

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<v Speaker 3>have their own sort of characteristics that are ultimately going

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<v Speaker 3>to drive their growth.

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<v Speaker 4>Dan, I don't think we've spoken to you since SpaceX

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<v Speaker 4>has been in the market. I'm not even sure what

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<v Speaker 4>bush you're covering that stock, But what's the conversations, what

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<v Speaker 4>are the conversations you've been having with clients about SpaceX here.

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<v Speaker 3>Look, I think it just like we'll see with anthropic

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<v Speaker 3>and open AI. You know, it's it's something where it's

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<v Speaker 3>been this juggernaut that one way or another, investors like

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<v Speaker 3>it or hate it. It's definitely a huge conversation. I

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<v Speaker 3>think the big thing is is that investors are more

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<v Speaker 3>looking at it as a pro for what would be

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<v Speaker 3>with an open AI or an anthropic or what it

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<v Speaker 3>says about the broader tech trade. And I think this

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<v Speaker 3>is one where it's almost been investors of viewing it

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<v Speaker 3>a little is a proxy and that states to what

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<v Speaker 3>I think is important in terms of broader attack. Look,

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<v Speaker 3>it's our view like in the AI revolution, whether it's

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<v Speaker 3>space chips, cybersecurity. So this is gonna spread. You could

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<v Speaker 3>talk about on the SpaceX side. I could even talk

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<v Speaker 3>about on the caterpillar side. So I think you're really

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<v Speaker 3>seeing right now this AI revolution spreading to second or

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<v Speaker 3>fourth riven and investors figure out how to own it.

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<v Speaker 1>Is Microsoft a software company, do you pull them together

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<v Speaker 1>with salesforce and the accenture?

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<v Speaker 2>And I don't do that. They're like, how do they

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<v Speaker 2>convey that to the public?

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<v Speaker 1>But other than the CEOs in wonderful interview on the

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<v Speaker 1>Wall Street Journal the other day.

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<v Speaker 3>Look, it's really you have to show it in Azure growth.

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<v Speaker 3>You have to show it in numbers that investors start

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<v Speaker 3>to feel that Microsoft basically owned the enterprise is an

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<v Speaker 3>acceleration story from a growth perspective, acceleration from what will

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<v Speaker 3>ultimately be free cash flow. And I think right now

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<v Speaker 3>they are lumped with salesforce, they are lumped with service.

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<v Speaker 1>Exactly what's the target price again on Microsoft.

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<v Speaker 3>Five fifty because to me, look and I just when

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<v Speaker 3>I look at Microsoft, that continues to be the one

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<v Speaker 3>meta in the penalty box for a good reason. Microsoft,

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<v Speaker 3>I think, is way disconnected by what ultimately is from.

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<v Speaker 1>Yeah, exactly, that's like a bright, shiny green quote that

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<v Speaker 1>you can't even constant. The rod alexis the rods and

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<v Speaker 1>cones of my retina shot when he walks.

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<v Speaker 2>That's a Bill Cosby line.

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<v Speaker 4>I mean, the shirts Sportco combination today is particularly troublesome.

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<v Speaker 4>But I don't know how you even got I think that's.

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<v Speaker 3>A kind of it's kind of like it's kind of

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<v Speaker 3>like t K It's like Keen styles.

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<v Speaker 4>It could be it could be back, you know, back

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<v Speaker 4>in the day, back in the day.

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<v Speaker 2>Real quickly, elon, does you.

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<v Speaker 4>Roll up Tesla into SpaceX?

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<v Speaker 3>Well, we've said eighty percent chance that Tesla ultimately gets

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<v Speaker 3>bought by SpaceX because from Musk, it's about having all

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<v Speaker 3>the AI under one ecosystem, under one control. It's also

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<v Speaker 3>the and that continues to be our view as a

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<v Speaker 3>data play.

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<v Speaker 1>Then how do you respond to a really, really competent

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<v Speaker 1>people like Georgian Noble founder with Peter Lynch, a fidelity overseas,

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<v Speaker 1>it's harshly critical of just the core financial dynamics of Tesla.

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<v Speaker 1>How do you respond to somebody that esteemed.

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<v Speaker 3>What I'd respond is that there is pressure on Tesla

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<v Speaker 3>to show robotaxis autonomous growth.

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<v Speaker 2>Stop.

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<v Speaker 3>You know, it's like show the actual numbers over the

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<v Speaker 3>next set's.

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<v Speaker 2>Get to do that? Come on?

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<v Speaker 1>I ended up here with what's his ed? Who's our

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<v Speaker 1>tech guy? Love Blood low Bloodlow ended up with that Luvelo.

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<v Speaker 1>They're in three cities with like forty two robotaxis. Well,

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<v Speaker 1>it's a starter project.

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<v Speaker 3>But ultimately it's the view that over the next two

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<v Speaker 3>three four years, when it comes to autonomous and it

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<v Speaker 3>comes to robot that Tesla will really be the one

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<v Speaker 3>that kind of owns the market. Look market is basically

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<v Speaker 3>saying like if you look at things today, you justify

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<v Speaker 3>the valuation. No market saying, look around the corner. I'm

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<v Speaker 3>gonna say where this could go two three, four years

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<v Speaker 3>And to your point in terms of the skeptics, like

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<v Speaker 3>that will determine if the bears will be wrong, and

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<v Speaker 3>I believe they will be. But it comes down to

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<v Speaker 3>execution from Musk and Tesla.

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<v Speaker 2>I just had to take photographs of you know, it's

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<v Speaker 2>just something that.

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<v Speaker 3>I can personally this, you know, this in a bow tie.

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<v Speaker 2>Yeah, for him, it would work. Would it would work?

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<v Speaker 3>I think it would work perfect.

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<v Speaker 1>It was a pee wee res, pee wee herb, pee

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<v Speaker 1>wee herban, not pe wee res