Speaker 1: Bloomberg Audio Studios, podcasts, radio news. For many people and
Speaker 1: particularly the gloom crew out there, this is the pinata
Speaker 1: of the day.
Speaker 2: Dani's joins US now quietly dressed with web Bush technologies
Speaker 2: and security is starving.
Speaker 1: I should say, so, what's the character of this pullback?
Speaker 1: There's fourteen kinds of a pullback. Which kind is this?
Speaker 2: Look?
Speaker 3: I think this pullback is it's real.
Speaker 2: Look.
Speaker 3: I view it as it's all related to what's happened
Speaker 3: in Korea right in terms of like the cosy what
Speaker 3: we've seen there. It's just this white knuckle moment that's
Speaker 3: going to be nothing more than breathering.
Speaker 2: You go to China a lot.
Speaker 1: The zeitgeist, without question is about China developing through deep
Speaker 1: seek and others.
Speaker 2: Ninety percent of the efficacy of AI for one tenth
Speaker 2: the cost. Is it legit?
Speaker 3: Warry No, because for the first time in thirty years,
Speaker 3: the US is headed China when it comes to TAP
Speaker 3: and the reality is it's not just from Nvidia to
Speaker 3: what we see with the models with Anthropic, to the hyperscalours,
Speaker 3: to the software comes like pound tier and others.
Speaker 2: Look, could they do it cheaper? Yeah?
Speaker 3: Are they winning on robotics. Are they winning when it
Speaker 3: comes to energy because of nuclear But when it comes
Speaker 3: to the AI race, I don't even think it's a
Speaker 3: question in terms of right now where you know US
Speaker 3: is versus China. And that's why I think some of
Speaker 3: those fears, and we've seen like the deep seek moments
Speaker 3: and some of the others, I think a lot of
Speaker 3: that are more fictional sort of fears.
Speaker 4: Microsoft stock US off twenty three percent year to date,
Speaker 4: trades it twenty times earnings.
Speaker 2: Talk to us about Microsoft here.
Speaker 3: Look, it's I think it continues to be somewhere between
Speaker 3: a head scratcher to just a table pound. Their opportunity
Speaker 3: for in my view, very similar like when I think
Speaker 3: about Alphabet a year ago in terms of you like
Speaker 3: they were done. I was going to crush search. You know,
Speaker 3: the DJ was going to break it up. Look, I
Speaker 3: think with Microsoft and the issue is just tied to
Speaker 3: open AI and right now, whether it's Oracle, Microsoft, I
Speaker 3: think being tied to open ayes and negive relative to
Speaker 3: anthropic being Golden that the case because I think anthropic
Speaker 3: relative to the model claud Golden Child best model out there.
Speaker 3: I think anyone tied to open AI right now that's
Speaker 3: been that's been negaive for Microsoft. Two is look when
Speaker 3: you look at as your growth, it's been strong, but
Speaker 3: maybe not the overwhelming point where there's a view that
Speaker 3: Amazon and Google started narrow the gap coepile it clearly
Speaker 3: had stumbled out of the gate. So right now that
Speaker 3: is a penalty box stock that I think is ultimately
Speaker 3: five hundred and fifty dollars.
Speaker 1: Does a penalty box stock have to have active management
Speaker 1: helping the stock here?
Speaker 2: Do they do a share buyback?
Speaker 1: I got a dividend growth five year dividend growth of
Speaker 1: ten point two percent.
Speaker 2: Put some steroids on it. Is that what they have
Speaker 2: to do well?
Speaker 3: I think that I think that Nadella and the team
Speaker 3: it's getting to a point here where they're gonna have
Speaker 3: to do something.
Speaker 2: Look twenty one multiple pup to your point.
Speaker 3: But then it goes back to like if you look
Speaker 3: at Apple, if I told you a year ago where
Speaker 3: Apple would be today relative to maybe some of the
Speaker 3: doomsday fears.
Speaker 2: A lot of that was also like cook.
Speaker 3: One of their mean pieces of successes that despite some
Speaker 3: of the bumps, and you know, the sort of roller
Speaker 3: course that they saw when it came to what they've
Speaker 3: done on the capital side.
Speaker 2: I agree to that.
Speaker 1: Come on, they're not pissing away money and an AI
Speaker 1: like everybody else does Microsoft have to adjust their timeline
Speaker 1: of spending on all this XAI?
Speaker 3: Why I think the market's telling Microsoft, show us the execution,
Speaker 3: show us the growth, otherwise you're gonna have to get curtailed.
Speaker 3: And the market's saying that not just to Microsoft, but
Speaker 3: to Meta because for Meta, investors no longer want to
Speaker 3: see doggate the home type quarters when you're spending cap
Speaker 3: backs like that. For Google, they've succeeded massively, so when
Speaker 3: they do equity raise and things like that, investors are
Speaker 3: fine with it. And now look, they have obviously lost
Speaker 3: engineers and others and with anthropic and that caused some
Speaker 3: of the sell off. But I just think now you're
Speaker 3: starting to see a separation in terms of you can
Speaker 3: just own the names as a broader trade. They each
Speaker 3: have their own sort of characteristics that are ultimately going
Speaker 3: to drive their growth.
Speaker 4: Dan, I don't think we've spoken to you since SpaceX
Speaker 4: has been in the market. I'm not even sure what
Speaker 4: bush you're covering that stock, But what's the conversations, what
Speaker 4: are the conversations you've been having with clients about SpaceX here.
Speaker 3: Look, I think it just like we'll see with anthropic
Speaker 3: and open AI. You know, it's it's something where it's
Speaker 3: been this juggernaut that one way or another, investors like
Speaker 3: it or hate it. It's definitely a huge conversation. I
Speaker 3: think the big thing is is that investors are more
Speaker 3: looking at it as a pro for what would be
Speaker 3: with an open AI or an anthropic or what it
Speaker 3: says about the broader tech trade. And I think this
Speaker 3: is one where it's almost been investors of viewing it
Speaker 3: a little is a proxy and that states to what
Speaker 3: I think is important in terms of broader attack. Look,
Speaker 3: it's our view like in the AI revolution, whether it's
Speaker 3: space chips, cybersecurity. So this is gonna spread. You could
Speaker 3: talk about on the SpaceX side. I could even talk
Speaker 3: about on the caterpillar side. So I think you're really
Speaker 3: seeing right now this AI revolution spreading to second or
Speaker 3: fourth riven and investors figure out how to own it.
Speaker 1: Is Microsoft a software company, do you pull them together
Speaker 1: with salesforce and the accenture?
Speaker 2: And I don't do that. They're like, how do they
Speaker 2: convey that to the public?
Speaker 1: But other than the CEOs in wonderful interview on the
Speaker 1: Wall Street Journal the other day.
Speaker 3: Look, it's really you have to show it in Azure growth.
Speaker 3: You have to show it in numbers that investors start
Speaker 3: to feel that Microsoft basically owned the enterprise is an
Speaker 3: acceleration story from a growth perspective, acceleration from what will
Speaker 3: ultimately be free cash flow. And I think right now
Speaker 3: they are lumped with salesforce, they are lumped with service.
Speaker 1: Exactly what's the target price again on Microsoft.
Speaker 3: Five fifty because to me, look and I just when
Speaker 3: I look at Microsoft, that continues to be the one
Speaker 3: meta in the penalty box for a good reason. Microsoft,
Speaker 3: I think, is way disconnected by what ultimately is from.
Speaker 1: Yeah, exactly, that's like a bright, shiny green quote that
Speaker 1: you can't even constant. The rod alexis the rods and
Speaker 1: cones of my retina shot when he walks.
Speaker 2: That's a Bill Cosby line.
Speaker 4: I mean, the shirts Sportco combination today is particularly troublesome.
Speaker 4: But I don't know how you even got I think that's.
Speaker 3: A kind of it's kind of like it's kind of
Speaker 3: like t K It's like Keen styles.
Speaker 4: It could be it could be back, you know, back
Speaker 4: in the day, back in the day.
Speaker 2: Real quickly, elon, does you.
Speaker 4: Roll up Tesla into SpaceX?
Speaker 3: Well, we've said eighty percent chance that Tesla ultimately gets
Speaker 3: bought by SpaceX because from Musk, it's about having all
Speaker 3: the AI under one ecosystem, under one control. It's also
Speaker 3: the and that continues to be our view as a
Speaker 3: data play.
Speaker 1: Then how do you respond to a really, really competent
Speaker 1: people like Georgian Noble founder with Peter Lynch, a fidelity overseas,
Speaker 1: it's harshly critical of just the core financial dynamics of Tesla.
Speaker 1: How do you respond to somebody that esteemed.
Speaker 3: What I'd respond is that there is pressure on Tesla
Speaker 3: to show robotaxis autonomous growth.
Speaker 2: Stop.
Speaker 3: You know, it's like show the actual numbers over the
Speaker 3: next set's.
Speaker 2: Get to do that? Come on?
Speaker 1: I ended up here with what's his ed? Who's our
Speaker 1: tech guy? Love Blood low Bloodlow ended up with that Luvelo.
Speaker 1: They're in three cities with like forty two robotaxis. Well,
Speaker 1: it's a starter project.
Speaker 3: But ultimately it's the view that over the next two
Speaker 3: three four years, when it comes to autonomous and it
Speaker 3: comes to robot that Tesla will really be the one
Speaker 3: that kind of owns the market. Look market is basically
Speaker 3: saying like if you look at things today, you justify
Speaker 3: the valuation. No market saying, look around the corner. I'm
Speaker 3: gonna say where this could go two three, four years
Speaker 3: And to your point in terms of the skeptics, like
Speaker 3: that will determine if the bears will be wrong, and
Speaker 3: I believe they will be. But it comes down to
Speaker 3: execution from Musk and Tesla.
Speaker 2: I just had to take photographs of you know, it's
Speaker 2: just something that.
Speaker 3: I can personally this, you know, this in a bow tie.
Speaker 2: Yeah, for him, it would work. Would it would work?
Speaker 3: I think it would work perfect.
Speaker 1: It was a pee wee res, pee wee herb, pee
Speaker 1: wee herban, not pe wee res