WEBVTT - China's Tech, Tesla's Surge, and Bitcoin Stall 0:00:02.600 --> 0:00:14.160 Bloomberg Audio Studios, Podcasts, Radio Newshard. 0:00:10.520 --> 0:00:14.960 Where innovation, money and power. Collie in Silicon Valley, n Beyond. 0:00:15.280 --> 0:00:19.320 This is Bloomberg Technology with Caroline Hyde and Ed loved Love. 0:00:33.280 --> 0:00:35.600 We are live from New York. This is Bloomberg Technology. 0:00:35.600 --> 0:00:38.919 Coming up, Apple CEO Tim Cook visit China and undines 0:00:39.000 --> 0:00:40.000 its importance to. 0:00:39.960 --> 0:00:40.720 The tech company. 0:00:40.880 --> 0:00:43.760 Will discuss the future US China relations and supply chains. 0:00:44.159 --> 0:00:47.640 Plus we'll look at what's behind Tesla's post election stock surge. 0:00:47.320 --> 0:00:49.360 Is it fundamentals, is it hype? 0:00:49.840 --> 0:00:52.960 And Bitcoin's rally stools out after nearly reaching one hundred 0:00:53.000 --> 0:00:53.560 thousand dollars. 0:00:53.600 --> 0:00:57.640 We'll discussed on Kristen Smith from Blockchain Association, but first. 0:00:57.680 --> 0:00:59.800 Let's get a little bit more on today's market moves 0:01:00.000 --> 0:01:03.760 when you fold in the geopolitical contentions here, we're still 0:01:03.800 --> 0:01:05.920 on what happens between US and China, and we still 0:01:05.920 --> 0:01:08.160 tried to digest what's happened in terms of earnings from 0:01:08.280 --> 0:01:11.559 the Chinese tech johnts Isabelle Lee joins us now and Isabelle, 0:01:11.800 --> 0:01:14.280 you've really been going global for us, and I want 0:01:14.319 --> 0:01:16.920 to take a moment to say how awful Chinese earnings 0:01:16.920 --> 0:01:19.039 have been for the big tech companies, and we get 0:01:19.040 --> 0:01:21.679 a little bit of a reprieven training today, but we 0:01:21.680 --> 0:01:23.119 were entering a bear market at the end. 0:01:23.080 --> 0:01:23.720 Of last week. 0:01:24.080 --> 0:01:26.920 Definitely, it was definitely underwhelming for all of the Chinese 0:01:26.920 --> 0:01:28.920 tech companies, and it's not a surprise to allude to 0:01:28.920 --> 0:01:32.480 the geopolitical and economic uncertainties and whether or not these 0:01:32.520 --> 0:01:36.800 companies can win investors back large hinges on Beijing's stimulus 0:01:36.800 --> 0:01:39.600 splits and that has really since fizzled out. Just over 0:01:39.640 --> 0:01:41.720 the past week, we have the five biggest tech companies 0:01:41.959 --> 0:01:44.920 erase forty one billion dollars in market cap. The MSCAI 0:01:45.040 --> 0:01:48.120 China indexed slits its lowest in September, and call after call, 0:01:48.360 --> 0:01:50.920 a lot of these executives are really just saying how 0:01:51.000 --> 0:01:53.720 uneven the economy is and how underwhelming their business is, 0:01:53.920 --> 0:01:56.840 and how most offered cautious optimism. But they also ask 0:01:56.880 --> 0:01:59.960 investors for patients. We have PDD for example, they walk 0:02:00.080 --> 0:02:03.240 around discussing their disappointing earnings. Ten Cent that it promised 0:02:03.240 --> 0:02:05.920 new blockbusters, even Baidu, which is the front runner in 0:02:05.960 --> 0:02:08.919 the AI development, failed to wow. And adding to this 0:02:08.919 --> 0:02:11.200 is of course Donald Trump win and what that would 0:02:11.200 --> 0:02:13.600 mean for China. And lastly we have Morgan Stanley cutting 0:02:13.680 --> 0:02:16.920 Chinese equities too slight underweight and Golden sax lowing. It's 0:02:17.040 --> 0:02:22.120 MSCA Chinese gauge ratings, so it's really underscores how cautious 0:02:22.400 --> 0:02:25.560 and how shaky Chinese equities are on for. 0:02:25.639 --> 0:02:29.520 Now, it's really with the roundup of concerns with China. Meanwhile, 0:02:29.639 --> 0:02:32.760 I commit that economic concern or a number of top 0:02:32.800 --> 0:02:36.399 executives of global firms traveling to China participating in discussions 0:02:36.440 --> 0:02:39.400 with the country's premiere. Apple CEO, Tim Cook was one 0:02:39.440 --> 0:02:41.400 of the most notable names. Just to take a listen 0:02:41.440 --> 0:02:42.320 to what he's had to say. 0:02:43.280 --> 0:02:45.560 And I'm thrilled to be here and I'm so proud 0:02:45.600 --> 0:02:48.360 that Apple has an exhibit here with our partners. 0:02:48.800 --> 0:02:51.320 So how do you value your partners in China? 0:02:51.560 --> 0:02:54.960 Oh, I value them very highly. We could not do 0:02:55.040 --> 0:02:56.720 what we do without them. 0:02:56.960 --> 0:03:00.200 Dan Willman's with us joining us for more on will 0:03:00.360 --> 0:03:02.720 remind us why China is so integral to Apple. 0:03:03.400 --> 0:03:08.000 China is a huge, hugely important to Apple supply chain, 0:03:08.120 --> 0:03:11.200 and according to our reporting, it is Apple's second largest 0:03:11.200 --> 0:03:16.080 market behind the US, where it is currently struggling. According 0:03:16.160 --> 0:03:18.520 to many of our reports over this past year against 0:03:19.160 --> 0:03:23.800 domestic Chinese domestics smartphone makers. So on those two counts 0:03:23.800 --> 0:03:25.200 extremely important to Apple. 0:03:25.760 --> 0:03:28.200 Meanwhile, they've got to try and front run what other 0:03:28.280 --> 0:03:32.760 tariffs look like, what the future and under a Trump 0:03:32.760 --> 0:03:36.200 administration can look like. And actually, you've done great reporting 0:03:36.200 --> 0:03:39.720 across the entire team that they have interesting relations across Asia. 0:03:39.960 --> 0:03:42.880 More broadly somewhere they have to invest more to earn 0:03:42.880 --> 0:03:44.920 the right to sell their products in China, where they 0:03:44.960 --> 0:03:47.360 have to earn the right to continue to build so much. 0:03:47.320 --> 0:03:50.360 The absolutely in a real study of contrast, today, Bloomberg 0:03:50.400 --> 0:03:53.000 also had a report out that Indonesia is really pushing 0:03:53.040 --> 0:03:57.280 back on lifting its iPhone sixteen sales ban, really demanding 0:03:57.320 --> 0:04:01.200 more investment from Apple, saying, hey, you have invested so 0:04:01.320 --> 0:04:05.000 much in manufacturing in Vietnam, which is a smaller market 0:04:05.040 --> 0:04:08.720 for you in terms of iPhone sales, why not invest 0:04:08.800 --> 0:04:13.640 more in Indonesia, which is the largest Southeast Southeast Asian economy. 0:04:14.600 --> 0:04:17.520 So the two stories today stood as a real contrast 0:04:17.600 --> 0:04:23.200 for me, this push from Indonesian leaders versus just this 0:04:23.400 --> 0:04:26.640 report out of China that really highlighted how vulnerable Apple's 0:04:26.640 --> 0:04:28.000 business is in the region. 0:04:28.880 --> 0:04:33.120 Dana we love the context Dane woman for all things Apple. 0:04:33.360 --> 0:04:35.360 Let's talk about the other juggernaut that is in video. 0:04:35.440 --> 0:04:37.880 A big exposure to China too, of course in terms 0:04:37.920 --> 0:04:40.120 of selling into that market. The CEO, Jensen Wang, was 0:04:40.279 --> 0:04:42.400 just in Hong Kong over the weekend, where he received 0:04:42.400 --> 0:04:44.800 an honorary doctorate in engineering from the Hong Kong University 0:04:44.800 --> 0:04:47.520 of Science and Technology. He emphasized in Vidia's ties to 0:04:47.560 --> 0:04:50.000 the region and weighed in on the potential impact of 0:04:50.040 --> 0:04:51.240 the incoming US administration. 0:04:51.320 --> 0:04:51.919 Just take a listen. 0:04:52.720 --> 0:04:55.680 I don't know what's going to happen with the new administration, 0:04:55.760 --> 0:05:04.800 but whatever happens, we'll balance multaneously compliance with laws and policies, 0:05:05.960 --> 0:05:10.480 continue to advance our technology and support and serve customers 0:05:10.880 --> 0:05:11.560 all over the world. 0:05:11.600 --> 0:05:13.280 Will continue to do that, and we'll be able to 0:05:13.320 --> 0:05:13.520 do that. 0:05:13.680 --> 0:05:14.080 Just fine. 0:05:15.839 --> 0:05:18.680 Let's keep this conversation going from an investor perspective. Scott Ladin, 0:05:18.720 --> 0:05:21.840 a CEI of Horizon Investments. Does it give you pause 0:05:22.120 --> 0:05:24.840 as you try to understand what on earth US China 0:05:24.880 --> 0:05:28.039 relations look like next year and how it impacts your 0:05:28.080 --> 0:05:29.039 investments in tech? 0:05:30.320 --> 0:05:31.599 Yeah, look, it has to. 0:05:31.800 --> 0:05:33.120 I mean you have to take account of what this 0:05:33.120 --> 0:05:35.919 administration says they're going to do to China, especially on 0:05:35.960 --> 0:05:39.240 the tech front, and and frankly, what China's retaliation might 0:05:39.279 --> 0:05:41.200 look like. You know, we think actually the US is 0:05:41.200 --> 0:05:42.760 probably a little bit of a stronger position than they 0:05:42.760 --> 0:05:44.960 were in twenty eighteen, the last time these two powers 0:05:45.200 --> 0:05:48.160 really confronted, because China is frankly in the throes of 0:05:48.160 --> 0:05:50.000 a balance yout recession right now, so they probably don't 0:05:50.040 --> 0:05:53.520 have quite as much maneuverability on the on the stimulus side. 0:05:53.880 --> 0:05:55.240 But at the end of the day, you know, like 0:05:55.279 --> 0:05:57.440 taking account of how these two are going to interact 0:05:57.680 --> 0:05:59.200 amongst each other, kind have a lot to do with 0:05:59.200 --> 0:06:00.080 where we put our money in. 0:06:00.680 --> 0:06:03.799 Okay, So would you ever, even at these pretty beaten 0:06:03.880 --> 0:06:07.520 up levels, be thinking about the Chinese technology giant still 0:06:07.560 --> 0:06:10.560 being an area to be a creative in the future. 0:06:11.360 --> 0:06:14.119 Look for once for me twice on the Chinese stimulus stuff, 0:06:14.200 --> 0:06:16.960 it's not you know, you can't you can't predict what 0:06:16.800 --> 0:06:19.320 the what the Chinese administration or the Chinese Communist Party 0:06:19.360 --> 0:06:21.440 is going to do with respect to fiscal stimulus, which 0:06:21.480 --> 0:06:24.200 is really what the doctor ordered for that economy. And 0:06:24.240 --> 0:06:26.880 without that fiscal stimulus, it's really tough to get out 0:06:26.880 --> 0:06:29.080 of these balance sheet recessions where demand is just lacking. 0:06:29.640 --> 0:06:32.120 And so you know, if we do get signs, not signs, 0:06:32.120 --> 0:06:35.320 we get announcements that the China is going to engage 0:06:35.360 --> 0:06:38.360 in large scale fiscal stimulus, then yes, you have to 0:06:38.360 --> 0:06:40.359 get on board the Chinese tech stocks because you know 0:06:40.360 --> 0:06:42.640 they because then the consumer can come back alive again 0:06:42.680 --> 0:06:45.200 in China and we can really get get going. But 0:06:45.240 --> 0:06:48.599 without that, it's you just you can't predict policy in China. 0:06:48.640 --> 0:06:49.960 So you know, we just have to take a wait 0:06:50.000 --> 0:06:50.640 and see approach. 0:06:51.120 --> 0:06:55.560 What about US names that have significant exposure to China 0:06:56.040 --> 0:06:59.360 and perhaps haven't managed to show that they've got such 0:06:59.400 --> 0:07:01.560 strong demand globally that it doesn't matter. 0:07:02.080 --> 0:07:04.159 You know, it's gonna hurt them, you know, any but 0:07:04.200 --> 0:07:06.120 this is not you know, there's not new news. I mean, 0:07:06.160 --> 0:07:09.200 everybody knows with the Trump win that China's is going 0:07:09.279 --> 0:07:11.480 to be sort of enemy list number one. And so 0:07:11.800 --> 0:07:14.120 you know that these these companies have been planning for 0:07:14.160 --> 0:07:16.800 a while the potentiality of a Trump win. 0:07:16.960 --> 0:07:18.200 They're going to have answers to it. 0:07:18.440 --> 0:07:20.320 But you know, just just because you know, this is 0:07:20.400 --> 0:07:23.080 you know, like I said earlier, this is not new news, well, let's. 0:07:23.040 --> 0:07:25.120 Think about what's not new news when it comes to 0:07:25.160 --> 0:07:27.920 a player like in video. Currently, in Video is one 0:07:28.120 --> 0:07:31.160 the worst points contributor to the NASDAC. Today we're falling 0:07:31.200 --> 0:07:33.680 significantly another three percent, which is a lot of market 0:07:33.720 --> 0:07:35.640 cap erosion for Is this as big as this? 0:07:36.880 --> 0:07:37.720 Is that more. 0:07:37.560 --> 0:07:40.560 About just profit taking? Is that about exposure China? Is 0:07:40.560 --> 0:07:44.600 it about exposure to too few clients like Microsoft, like 0:07:44.680 --> 0:07:46.440 Amazon and like Alphabet. 0:07:47.320 --> 0:07:49.800 Yeah, look, it's probably a little bit of all those things, Caroline. 0:07:49.880 --> 0:07:51.840 It's it's you know, when you when you have one 0:07:51.880 --> 0:07:54.000 of your largest clients, you know, a company like Amazon 0:07:54.040 --> 0:07:56.880 coming out and saying, look, we might start competing with you, 0:07:57.160 --> 0:07:59.360 we might get in this game. Even though they've they've 0:07:59.360 --> 0:08:00.520 been in the game for a while, but now they're 0:08:00.520 --> 0:08:02.920 really ramping up efforts. You know, this is obviously a 0:08:03.000 --> 0:08:05.360 very lucrative space. You know, margins of seventy five eighty 0:08:05.360 --> 0:08:07.480 percent on businesses like this, So you know, it makes 0:08:07.520 --> 0:08:09.560 a lot of sense for it for other large tech 0:08:09.600 --> 0:08:11.720 companies to come in, to come in and try to 0:08:11.800 --> 0:08:14.440 challenge in Video's place in the market. These things will 0:08:14.440 --> 0:08:17.160 take some time, but but you know, those things will 0:08:17.200 --> 0:08:18.840 have to weigh on the on the stock price at 0:08:18.880 --> 0:08:19.239 some point. 0:08:20.120 --> 0:08:22.480 So what do you do, Scott? Do you keep the 0:08:22.560 --> 0:08:25.840 exposure you have to? It feels a fool Zerran to 0:08:25.840 --> 0:08:27.480 have a bet. Again, it's big tech in some way. 0:08:28.040 --> 0:08:30.520 Oh but let me be clear, I'm not I'm not 0:08:30.680 --> 0:08:33.360 advocating it anyway to bet against they bet against big tech. 0:08:33.400 --> 0:08:34.840 I mean, you know, we are we are in the 0:08:34.880 --> 0:08:37.080 in the mid to late nineties sort of cycle. AI 0:08:37.360 --> 0:08:39.600 is him as my kids would say, you know that, 0:08:39.679 --> 0:08:41.000 you know so this this is this is definitely a 0:08:41.040 --> 0:08:43.120 training guy to get on, but the train like that 0:08:43.120 --> 0:08:45.040 they have to get on in a broadening sense. You know, 0:08:45.080 --> 0:08:46.720 this is not just in VideA anymore. This is not 0:08:46.760 --> 0:08:49.440 the twenty twenty three AI trade. Just so you know, 0:08:49.480 --> 0:08:52.240 the broadening out of this team into other users, like 0:08:52.360 --> 0:08:53.760 how are companies going to use. 0:08:54.000 --> 0:08:55.120 AI in the future, you know what? 0:08:55.160 --> 0:08:57.360 Other what other you know, suppliers are going to come online, 0:08:57.400 --> 0:08:59.960 like like possibly Amazon in the chip space. So you know, 0:09:00.040 --> 0:09:02.400 playing that broadening out theme inside of AI is rankly 0:09:02.400 --> 0:09:04.040 We're spending quite a lot of time trying to figure 0:09:04.040 --> 0:09:06.000 that out here at Horizon, and it's something that I 0:09:06.000 --> 0:09:07.440 think a lot of investors are going to have to, 0:09:07.480 --> 0:09:08.760 but it is you know, you know, you do not 0:09:08.800 --> 0:09:10.120 want to be short tech. You do not want to 0:09:10.120 --> 0:09:12.280 be short at these this AI theme this time. To 0:09:12.280 --> 0:09:14.160 get on board, you have to understand how to play 0:09:14.160 --> 0:09:16.320 it for twenty twenty five, not for twenty twenty three. 0:09:16.600 --> 0:09:18.280 I know you don't want to share the secret source. 0:09:18.480 --> 0:09:19.240 But as you're. 0:09:19.040 --> 0:09:22.200 Doing that work, where have been the rich pickings so far? 0:09:22.440 --> 0:09:23.600 We've heard often. 0:09:23.480 --> 0:09:25.880 It's about the energy play, or it's about the applications 0:09:25.880 --> 0:09:27.920 within healthcare, But where have you found some of the 0:09:27.920 --> 0:09:30.200 outsized potential here? 0:09:31.120 --> 0:09:32.720 You're you're picking on a couple of them. Look at mean, 0:09:32.840 --> 0:09:34.120 you know, at some point you've got to get down 0:09:34.160 --> 0:09:35.959 to the users. So you know, if you know, if you. 0:09:35.960 --> 0:09:37.800 Think about how how the tech trade played out in 0:09:37.800 --> 0:09:39.760 the middle late nineties, you know, first there's the people 0:09:39.800 --> 0:09:42.120 that made the tech and made things possible. But really, 0:09:42.160 --> 0:09:44.040 you know, the main gains where to we had by 0:09:44.080 --> 0:09:46.320 people that use the technology, that use the internet, that 0:09:46.400 --> 0:09:48.920 use PCs in order to enhance productivity in their businesses. 0:09:49.200 --> 0:09:51.199 So you know that, you know, getting onto that, getting 0:09:51.200 --> 0:09:53.319 onto that type of play is we're spending quite a 0:09:53.320 --> 0:09:55.000 lot of time trying to figure out, like you know what. 0:09:55.080 --> 0:09:56.760 You know you mentioned healthcare, which. 0:09:56.559 --> 0:09:58.240 Biotech companies are going to figure this out in order 0:09:58.240 --> 0:10:00.240 to do advanced drug development? You know which which major 0:10:00.280 --> 0:10:02.520 farmers are going to figure this out for the same 0:10:02.520 --> 0:10:04.440 type type of reason. You know what kind of industrial 0:10:04.440 --> 0:10:07.480 companies are going to figure out logistics improvements based on 0:10:07.480 --> 0:10:10.400 some AI logical that they're building in their processes. And 0:10:10.440 --> 0:10:12.360 so those types of questions are the things we're trying 0:10:12.360 --> 0:10:13.800 to answer right now. You know, I do think we're 0:10:13.800 --> 0:10:15.280 second or thirty any of this stuff. It's probably a 0:10:15.320 --> 0:10:17.560 little early to get really on board with the users, 0:10:17.840 --> 0:10:18.240 but it is. 0:10:18.320 --> 0:10:20.160 You know, you have to start doing the work right now. 0:10:20.720 --> 0:10:23.240 Keep going on when you've done the work, and as 0:10:23.240 --> 0:10:25.880 you continue down at Scott Lander, his CIO of Horizon Investments, 0:10:25.960 --> 0:10:28.080 we really appreciate your time today. Meanwhile, coming up, we've 0:10:28.080 --> 0:10:29.520 got so much more on some of the stocks that 0:10:29.559 --> 0:10:32.720 have outperformed. Tesla for example, absolutely mean like stock Search, 0:10:33.559 --> 0:10:35.800 is it needing Wall Street feeling a bit wary at 0:10:35.800 --> 0:10:36.240 these levels. 0:10:36.280 --> 0:10:38.200 We'll bring you the details from the latest UBS. 0:10:38.200 --> 0:10:40.439 Note, as we're up another four percent over the last 0:10:40.480 --> 0:10:50.800 five days, let's just focus in in one of well 0:10:50.960 --> 0:10:52.760 key driver in the market, today is Tesla. 0:10:52.960 --> 0:10:54.880 We want to look at it over the last month. 0:10:54.960 --> 0:10:58.680 Shares as you see thirty one percent in the last 0:10:58.840 --> 0:11:02.960 month because well, of course, all surrounding the new administration 0:11:03.040 --> 0:11:05.400 that's likely to come in twenty twenty five. BBS analysts 0:11:05.440 --> 0:11:07.920 are cautioning that this post election surge is more to 0:11:07.960 --> 0:11:10.679 do with marketing xuberants and actual improvements in the fundamentals 0:11:10.679 --> 0:11:11.200 of the business. 0:11:11.440 --> 0:11:13.080 Who knows Cretridel. 0:11:12.600 --> 0:11:16.680 Has more And we've been trying to understand crucially whether 0:11:16.720 --> 0:11:21.960 this relationship personal one really between Elon Musk and Trump 0:11:21.960 --> 0:11:25.199 and the future administration will bear dividends for the business 0:11:25.200 --> 0:11:27.800 of Tesla, And you've been trying to measure it up, 0:11:27.840 --> 0:11:28.480 so has UBS. 0:11:30.200 --> 0:11:30.440 Yeah. 0:11:30.800 --> 0:11:34.160 I think UBS's report is very interesting today because they 0:11:34.640 --> 0:11:37.080 will sort of grant this idea that narrative wise, it 0:11:37.120 --> 0:11:38.520 makes a lot of sense that you would see a 0:11:38.559 --> 0:11:41.360 run up in the stock given how close Elon Musk 0:11:41.400 --> 0:11:45.200 has placed himself to Donald Trump. But they really sort 0:11:45.200 --> 0:11:48.080 of pick apart some of the reasons you know, commonly 0:11:48.120 --> 0:11:50.680 cited for this run up in the last few weeks. 0:11:51.480 --> 0:11:54.440 You know, you take a look at taking away ev 0:11:54.600 --> 0:11:58.480 tax credits in the US, for example, maybe Tesla is 0:11:58.520 --> 0:12:01.320 able to handle that better than some of its competitors 0:12:01.320 --> 0:12:03.960 that aren't making money on EV's but it's still not 0:12:04.200 --> 0:12:07.600 a positive for EV demand as a whole, and so 0:12:08.320 --> 0:12:11.080 UBS is a bit bearish on that front. And when 0:12:11.080 --> 0:12:14.880 you look at autonomous vehicle policy as well, you don't 0:12:14.880 --> 0:12:18.720 have an actual robotaxi at Tesla, whereas you know, Weimo 0:12:18.960 --> 0:12:22.839 is out with a robotaxi now, and you know that 0:12:22.920 --> 0:12:25.720 was that company was just valued at about forty five billions. 0:12:25.760 --> 0:12:27.920 So does it really make sense to put, you know, 0:12:28.080 --> 0:12:31.439 potentially one hundreds of billions of dollars on a Tesla 0:12:31.920 --> 0:12:36.200 autonomous vehicle valuation given its it's sort of closest comp 0:12:36.280 --> 0:12:38.000 Weimo is valued it much less than that. 0:12:38.559 --> 0:12:39.400 The problem is. 0:12:40.240 --> 0:12:42.880 The price target for the next twelve months on average 0:12:43.080 --> 0:12:46.120 from the analyst that rate it is well below where 0:12:46.120 --> 0:12:49.040 we're currently trading two and forty four, whereas the last 0:12:49.080 --> 0:12:52.160 price is currently three hundred and fifty four. We've seen 0:12:52.600 --> 0:12:55.400 relative strength indexes of Tesla just show that we are 0:12:55.679 --> 0:12:59.439 over bought territory, and yet we don't seem to be 0:12:59.480 --> 0:13:00.839 able to actually against the stock. 0:13:02.600 --> 0:13:02.840 Yeah. 0:13:03.080 --> 0:13:06.559 I think that's another point that UBS makes interestingly today. 0:13:06.640 --> 0:13:08.800 Is just that we've seen this before. We've seen that 0:13:08.880 --> 0:13:11.280 this is sort of an ultimate momentum stock that when 0:13:11.320 --> 0:13:12.840 it rises, it really rises. 0:13:12.880 --> 0:13:14.320 When it falls, it really falls. 0:13:15.080 --> 0:13:17.440 And I guess that's sort of befitting of Musk, right, 0:13:17.520 --> 0:13:20.320 he doesn't do anything halfway. But you really see in 0:13:20.400 --> 0:13:26.000 terms of you know, equities that are are commonly you know, 0:13:26.040 --> 0:13:28.920 traded with with options that you know really sort of 0:13:29.200 --> 0:13:31.800 lead to these outsized moves. I think Tesla is you know, 0:13:31.880 --> 0:13:35.080 sort of exhibit A in terms of stocks that you know, 0:13:35.160 --> 0:13:38.280 because of the options activity, you tend to see you know, 0:13:39.080 --> 0:13:42.280 sustained and really dramatic moves in the stock one where 0:13:42.600 --> 0:13:45.080 or the other when you have a a sort of 0:13:45.480 --> 0:13:49.400 reason for the stock to you know, narrative wise, you know, 0:13:49.440 --> 0:13:51.280 go in one direction or the next. 0:13:52.120 --> 0:13:55.000 We'll see whether the meme trading can continue. We're currently 0:13:55.360 --> 0:13:57.960 up on the day at least. Created Al always great 0:13:57.960 --> 0:13:58.600 to check in with you. 0:13:58.679 --> 0:13:59.480 Meanwhile, let's take. 0:13:59.360 --> 0:14:01.880 A look at Rocket Lab shares absolutely surging as well 0:14:01.920 --> 0:14:05.000 after the satellite company said it successfully launched IS fifty 0:14:05.000 --> 0:14:09.600 sixth electron missile LUMEGS. Bruce Einhorn joins US. Now we're 0:14:09.679 --> 0:14:12.480 up three percent there's other narratives around the business today 0:14:12.480 --> 0:14:14.959 in terms of the chip sacked, but focus on this launch. 0:14:15.280 --> 0:14:18.160 We had one out of New Zealand very swiftly after 0:14:18.200 --> 0:14:19.680 one out of the United States. 0:14:20.160 --> 0:14:22.920 Yes, so there are two launches. The launch in the 0:14:23.000 --> 0:14:27.000 United States is for a customer that the rocket Lab 0:14:27.040 --> 0:14:30.840 has not yet disclosed. In the past, rocket Lab has 0:14:30.960 --> 0:14:36.120 done launches from Virginia for US government customers. The launch 0:14:36.200 --> 0:14:40.360 in New Zealand was for French startup. This was part 0:14:40.400 --> 0:14:43.360 of a multiple launch contract that rocket Lab. 0:14:43.240 --> 0:14:43.800 Has with them. 0:14:44.040 --> 0:14:47.680 So altogether this makes fourteen launches that rocket Lab has 0:14:47.680 --> 0:14:50.720 had this year, which beats their record which was ten 0:14:50.880 --> 0:14:51.440 last year. 0:14:52.160 --> 0:14:53.520 Let's put this in context. 0:14:54.840 --> 0:14:58.280 Impressive for rocket Lab, but remember that SpaceX has had 0:14:58.320 --> 0:14:59.760 more than one hundred launches this year. 0:15:00.320 --> 0:15:02.800 They are very much still and also run at the moment, 0:15:02.920 --> 0:15:07.760 but they're clearly garnering some momentum here. What's interesting is 0:15:07.800 --> 0:15:10.280 they're also getting money from the US government when it 0:15:10.320 --> 0:15:13.680 comes to chips. Where else in the manufacturing area are 0:15:13.720 --> 0:15:16.000 they and why are they getting such money from the 0:15:16.000 --> 0:15:16.800 Commerce Department. 0:15:17.760 --> 0:15:23.400 So this is the final signing of a contract from 0:15:23.440 --> 0:15:26.600 the Department of Commerce related to the Chips Act. Twenty 0:15:26.600 --> 0:15:29.760 three point nine million dollars. The company had announced a 0:15:29.760 --> 0:15:32.320 preliminary deal for this before, so this is not a surprise. 0:15:32.560 --> 0:15:33.760 People knew this was coming. 0:15:35.040 --> 0:15:38.680 Rocket Lab has a subsidiary in New Mexico that makes 0:15:39.480 --> 0:15:42.480 solar cells. It's one of the only companies I believe 0:15:42.480 --> 0:15:45.200 they are only two in the United States that make 0:15:45.280 --> 0:15:50.040 these components. And so rocket Lab has now gotten funding 0:15:50.120 --> 0:15:54.720 from Commerce Department to promote that to build more of those. 0:15:55.040 --> 0:15:58.760 So just giving another lift to this stock. Interesting what 0:15:58.800 --> 0:16:03.400 you were talking about with craigirl about optimism about post election. 0:16:04.680 --> 0:16:09.080 Rocket Lab is one company among several space companies also 0:16:09.160 --> 0:16:16.040 benefiting from this bullishness after Trump's reelection that the new 0:16:16.040 --> 0:16:18.840 administration will have policies that will be favorable to the sector. 0:16:19.320 --> 0:16:24.120 Almost twelve billion dollars market capitalization not quite up to 0:16:24.160 --> 0:16:26.440 the two hundred and fifty billion dollar market evaluation we 0:16:26.520 --> 0:16:29.760 understand for the privately held SpaceX At the moment, Bruce 0:16:29.760 --> 0:16:32.840 Einhorn will need to get the context. 0:16:39.000 --> 0:16:40.280 The French government. 0:16:40.000 --> 0:16:42.640 Suffering to buy the advanced computing assets. 0:16:42.240 --> 0:16:44.560 From ATOS for as much as six hundred and fifty. 0:16:44.400 --> 0:16:47.920 Three million dollars after an earlier offer from the state expired. 0:16:48.120 --> 0:16:50.480 Now the offer includes the company's AI business as well 0:16:50.520 --> 0:16:53.920 as its supercomputers and Merg's Benoir Badillo is here with 0:16:54.040 --> 0:16:57.800 more And what is better about this dale or is 0:16:57.800 --> 0:17:00.120 it just different because this is all about trying to 0:17:00.120 --> 0:17:02.560 bail out what is a company that's under a lot 0:17:02.560 --> 0:17:04.040 of duress from a debt perspective. 0:17:06.240 --> 0:17:06.600 Exactly. 0:17:06.720 --> 0:17:10.800 Yeah, it's important for Athos at this stage to divest 0:17:10.880 --> 0:17:14.520 it has these activities. The creditors who are taking over 0:17:14.600 --> 0:17:18.960 the company will win liquidity out of it. And most importantly, 0:17:19.000 --> 0:17:22.440 the French state has wanted to ensure that these strategic 0:17:22.520 --> 0:17:26.959 assets remain within French control and are sort of safe. 0:17:27.560 --> 0:17:32.320 These are important assets because the supercomputers we're talking about 0:17:32.840 --> 0:17:39.200 are used to do the dissimulations of nuclear activities for example, 0:17:39.280 --> 0:17:42.120 that are very key to friends and the French government. 0:17:42.800 --> 0:17:45.080 So this deal is sort of narrower. 0:17:45.200 --> 0:17:49.960 It's just on the supercomputers part of Athos, which called 0:17:50.119 --> 0:17:54.560 build Essay, and this leaves on the sides other assets 0:17:54.880 --> 0:17:58.960 that are in cyber security or what's called mission critical systems. 0:17:59.040 --> 0:18:02.080 So these are said are going to be sort of 0:18:02.240 --> 0:18:05.879 up for auctions and other French companies again are going 0:18:05.960 --> 0:18:08.960 to make bids for these activities. 0:18:08.600 --> 0:18:09.960 So that's the kicker here. 0:18:10.440 --> 0:18:12.920 These all want to remain in local hands in some way. 0:18:13.000 --> 0:18:14.800 Some deals have worked world. 0:18:14.600 --> 0:18:17.040 Grade unit we sold to a French engineering company, but 0:18:17.480 --> 0:18:20.800 others have unraveled, like the one with Talas. Is it 0:18:20.920 --> 0:18:22.920 just trying to find the right price point here. 0:18:24.920 --> 0:18:27.399 Yes, there's a bit of that. The creditors want a 0:18:27.440 --> 0:18:31.480 good price point for it. That the French defense companies 0:18:31.720 --> 0:18:34.439 bidding for these assets will certainly want to have a 0:18:34.480 --> 0:18:38.320 good price as well. We know that Talis, an important 0:18:38.359 --> 0:18:42.040 French defense company, is interested by what's called mission critical 0:18:42.119 --> 0:18:45.320 assets here. They said in the past they could be interested, 0:18:45.359 --> 0:18:48.399 they have not made a bid yet. It was probably 0:18:48.400 --> 0:18:52.240 complicated for these companies to do a deal with the 0:18:52.280 --> 0:18:54.960 French states. So now the state has done the deal 0:18:55.000 --> 0:18:58.199 in the supercomputers, and other deals could be done. But 0:18:58.520 --> 0:19:00.960 you're right, what's at stake here is really used as 0:19:01.000 --> 0:19:06.600 strategic assets and the sovereignty of French technology that's critical 0:19:06.760 --> 0:19:10.280 for the civilian industry and also for a lot of 0:19:10.400 --> 0:19:14.280 military use. So while this company has been unraveling, it's 0:19:14.280 --> 0:19:18.840 really the stake of these really sovereign assets that's at 0:19:18.840 --> 0:19:19.440 steak now. 0:19:20.000 --> 0:19:24.040 Meanwhile, it's bonds trading at sense on the Euro. Significant 0:19:24.040 --> 0:19:26.959