Speaker 1: From Mahard.
Speaker 2: We're Innovation, Money and Power Collie in Silicon Valley, NBN.
Speaker 3: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 4: Live from New York and San Francisco. This is Bloomberg
Speaker 4: Technology coming up. The race to reward the buy An
Speaker 4: administration is against the clock to complete chipsack deals with
Speaker 4: top companies before the Trump takes office.
Speaker 5: And come to Saudi Arabia, the country's one hundred billion
Speaker 5: dollar pitch to become an AI powerhouse hub.
Speaker 6: And draftking shares.
Speaker 4: They bounced back after earnings and a tough end of
Speaker 4: the year for the online sports spelling company. We speak
Speaker 4: with the CEO, but first let's check in on these markets.
Speaker 6: Because I'll give you a five day chart.
Speaker 4: Today we're just flat, slightly low on the Nazak one hundred,
Speaker 4: coming off of those record highs, but we power to
Speaker 4: new records on this particular benchmark. A florry of earnings
Speaker 4: is something we need to dissect. So two is a
Speaker 4: fed Rake cup that helps us push higher, but of
Speaker 4: course the election result. Also, we're up five point two percent,
Speaker 4: the best week since mid September.
Speaker 6: Then what are you watching on the.
Speaker 5: Micro So I think We're still in a stage where
Speaker 5: you look at single names and we're thinking about winners
Speaker 5: and losers. Post election day, Tesla continues to have momentum.
Speaker 5: It is trading at its highest level since early May
Speaker 5: of twenty twenty two, gone beyond a trillion dollars of
Speaker 5: market cap, whether it closes there or not.
Speaker 7: But there's the association.
Speaker 5: Trump with Musk, and then there's the analysis of whether
Speaker 5: Trump policy adjustments will impact negatively or positively that name. Elsewhere,
Speaker 5: there is a scramble in DC in across this country
Speaker 5: in the chip sector about what happens next. Intel is
Speaker 5: modestly higher in the session, but on the week over
Speaker 5: five days on track for its best week since June.
Speaker 5: Could it be a beneficiary of the Trump administration? What
Speaker 5: Bloomberg is reporting is that deals are done, negotiations settled
Speaker 5: for Chips Act funding, but in some cases is their
Speaker 5: renegotiation to try and actually get access to money through
Speaker 5: the Biden administration before Trump two point zero takes effect
Speaker 5: and President lank Trump takes office in January of next year.
Speaker 4: Care I know Pat Gelsinger spoke to you after the
Speaker 4: earnings with a frustration at how slow that money has
Speaker 4: been coming out of the door. Ed, let's discuss that
Speaker 4: all a little bit more from Bogs. Mackenzie Hawkins has
Speaker 4: a great piece out just talking us through how chip
Speaker 4: companies are basically racing, as is the Biden administration, to
Speaker 4: get access to that Chips Act funding.
Speaker 6: What is the latest.
Speaker 8: So earlier this year, the Biden administration announced a slate
Speaker 8: of multi billion dollar awards for some of the most
Speaker 8: important companies in the semi collect industry to build factories
Speaker 8: on American soil. The funding comes from the Chips Act,
Speaker 8: where she signed in twenty twenty two. It's a major
Speaker 8: bipartisan initiative to revitalize the American industry. Since those announcements,
Speaker 8: companies have been going through pretty onerous due diligence, and
Speaker 8: some of them still haven't reached final term sheets. So
Speaker 8: now the Biden administration and those couple of companies in
Speaker 8: particular Intel and Samsung and Micron are the big ones
Speaker 8: that we're watching, are trying to get those incentives locked
Speaker 8: down so they can get money out the door before
Speaker 8: there's a potential for renegotiation under a Trump admin.
Speaker 5: Intel Micron two of the names I showed a moment ago.
Speaker 5: Micron lower in the session. Sources are telling us that
Speaker 5: those names, the eyes are not dotted, the t's are
Speaker 5: not crossed. Which areas do they still have to negotiate McKenzie.
Speaker 8: It varies by company. In Intel's case, part of the
Speaker 8: hang up is over what's called a change of contract provision,
Speaker 8: which is a fancy way of saying what happens if
Speaker 8: Intel spins office manufacturing business or is acquired in part
Speaker 8: or in whole. Now, Dolsinger has said we're going to
Speaker 8: keep Intel together. Intel has said it's making good progress
Speaker 8: on the award negotiations. But you can imagine why that's
Speaker 8: a sensitive provision with a company that is going through
Speaker 8: some serious financial troubles.
Speaker 4: The key issue here is, as you said at the top,
Speaker 4: this is bipartisan in nature. So where might we see
Speaker 4: changes made. We have heard in recent days weeks key podcasts,
Speaker 4: Trump really rail against what he sees is well money
Speaker 4: out the door when he thinks Taris would just bring
Speaker 4: TSMC to build in the US, for example.
Speaker 8: The general consensus among industry lobbys and government officials in
Speaker 8: Washington is that the broad contours of this program will
Speaker 8: stay the same. It passes bipartisan support. It was Trump's
Speaker 8: first administration that recruited TSMC to Arizona in the first place.
Speaker 8: But Republicans are already taking aim at what they consider
Speaker 8: it to be social provisions of the Biden administration's implementation,
Speaker 8: things like requirements for childcare facilities, or expectations that companies
Speaker 8: will work with local labor unions or try to limit
Speaker 8: the environmental impact of their facilities.
Speaker 5: Bimberg's Mackenzie Hawkins, thank you for your reporting. Let's get
Speaker 5: the markets perspective, bringing Eric Friedman, chief investment officer a
Speaker 5: US Bank Asset Management. I think we start with semiconductors, right.
Speaker 5: I talked to the beginning of the show about still
Speaker 5: trying to discern the winners and losers in Trump two
Speaker 5: point zero through that lens. How are you viewing chips
Speaker 5: right now, Eric.
Speaker 9: Yeah, we're still favorable on the ship space. I think
Speaker 9: the distinction that we're really trying to make is number
Speaker 9: one in terms of the beneficiarias of AI. That is
Speaker 9: certainly a story that lots of people talk about, because
Speaker 9: there is still some concern in terms of hardware and
Speaker 9: peripheral sales, just you know, with a weakening labor market,
Speaker 9: some softening not just in the US, but across the globe,
Speaker 9: what does the upgrade cycle look like? What will corporate
Speaker 9: capex specific to peripherals and hardware look like. We're seeing
Speaker 9: some stabilization aad but really not necessarily an uplift, So,
Speaker 9: you know, probably more the idea of will we see
Speaker 9: diffusion of AI chips beyond the hyperscalers? Again, hyperscalers have
Speaker 9: a ton of free cash flow, and that's what we've
Speaker 9: seen consistently throughout this earning season, and so the ability
Speaker 9: to almost self fund AI chip demand we think will continue.
Speaker 9: So I think there's all almost a business to business
Speaker 9: versus business to consumer angle. We're probably were in the
Speaker 9: business to business angle for chips. But then more specifically,
Speaker 9: will we see that diffusion out beyond again hyperscalers, Will
Speaker 9: AI chip growth again meet and demand? We still think
Speaker 9: there's a backlog there.
Speaker 10: That's why we're still bullish.
Speaker 5: Eric, how's the US Bank Asset Management team modeling for
Speaker 5: Trump tariff policy?
Speaker 9: Yeah, I think it's important to really discern probably by
Speaker 9: country and by region, and I think that almost a
Speaker 9: knee jerk reaction that we saw heading into election day
Speaker 9: and then the immediacy following the election, is that look,
Speaker 9: there would be this you know, almost broad tear iff
Speaker 9: policies set across not just China, which is a very
Speaker 9: common refrain from both parties heading into the election, but
Speaker 9: also you know Western Europe in particular, and if you
Speaker 9: look at the performance in particular of EFA again developed
Speaker 9: international stocks, you look at what's happened within the currency realm,
Speaker 9: there is still this this view that, look, tariffs are coming.
Speaker 9: I do think that our modeling work suggests that differentiation
Speaker 9: is probably an underappreciated point right now in the marketplace,
Speaker 9: so as we await again not just the specifics on
Speaker 9: what tariffs looks like, but also who's going to be
Speaker 9: in the cabinet that can have a material impact on
Speaker 9: just again maybe the glide path of what tariffs look like.
Speaker 9: Last thing I'd say is this, there's the possibility of
Speaker 9: more of a glide path approach, almost a in initial
Speaker 9: set and then perhaps an expansion depending on success as
Speaker 9: well as depending on how the other side reacts. The
Speaker 9: reaction function of those impacted by tariffs is one that
Speaker 9: we again have to also model in and something we're
Speaker 9: very focused on.
Speaker 4: To that point, has any of your feelings changed on
Speaker 4: big American companies with large exposure to China do get
Speaker 4: more nervous around that or actually does things stay the same?
Speaker 9: Yeah, caroly I think it is a bit more nervous.
Speaker 9: And when I say nervous, the range of outcomes that
Speaker 9: we're modeling has to expand, and I think that if
Speaker 9: you look at, for example, what's happening in the Chinese
Speaker 9: stock market review as completely anomalist, that is more of
Speaker 9: a policy driven China really trying to regain some of
Speaker 9: the spotlight with the challenges they have structurally within their
Speaker 9: economy and most of the issues that we're.
Speaker 7: Seeing within the supply chain.
Speaker 9: That's the part that we think is key, and there
Speaker 9: was a lot of rhetoric and obviously discussion about the
Speaker 9: supply chain and what requirements were going to be really imposed,
Speaker 9: if you will, pre election. Now that we have the
Speaker 9: election results largely behind us, the extent of the supply
Speaker 9: chain is probably our next area of focus. So I
Speaker 9: do think that in terms of our modeling work and
Speaker 9: if we're looking at the range of opportunities and considerations,
Speaker 9: it's widened, but again having more of a bias towards
Speaker 9: more on shoring and the potential of more inflation we
Speaker 9: think is now our base case, probably more so than
Speaker 9: it was two or three weeks ago.
Speaker 4: Talk to that inflation because we've had a raft of
Speaker 4: consumer facing tech companies come out with their earnings and
Speaker 4: they move on the day to day. Not individual names,
Speaker 4: but more broadly tech exposed.
Speaker 6: To the consumer.
Speaker 4: Are they going to have a better time of it
Speaker 4: or a harder time in twenty twenty five if inflationary
Speaker 4: pressures are there, Yeah, I.
Speaker 9: Think that on balance, you know, we're still optimistic about
Speaker 9: the consumer, especially amongst the middle income and upper income
Speaker 9: consumer in the US. We do think there is some
Speaker 9: level of stability in continental Europe. I'm not saying it's
Speaker 9: certainly a gangbuster a consumer electronics demand cycle, but that
Speaker 9: idea of the quote unquote case shape recovery, we think
Speaker 9: is intact one of the things that we've really looked at.
Speaker 9: In addition to again our role as a bank, we
Speaker 9: have a lot of purview into delinquencies, We have a
Speaker 9: lot of understanding what's happening within credit flows, and there
Speaker 9: is a very market difference between middle and upper income
Speaker 9: consumers and lower income consumers. And what I mean by
Speaker 9: that is, if if you look at at just the
Speaker 9: bar that the lower income consumers have had to overcome
Speaker 9: expenses on rents, expenses on credit cards. Those are going up,
Speaker 9: and so that marginal consumer who's maybe lower end, you know,
Speaker 9: consumer electronics demand is probably going to be challenged for
Speaker 9: some time. We still think that middle income and upper
Speaker 9: income consumers will spend, so we think that that that
Speaker 9: refresh cycle will exist.
Speaker 7: On balance.
Speaker 9: It's it's still okay, it's really not, you know, Carolin,
Speaker 9: I'd say gangbusters at this point.
Speaker 4: Right now, I Friedman of US Bank Asset Management really
Speaker 4: appreciate you coming on today. Meanwhile, coming up Saudi Arabia
Speaker 4: betting b on Ai for their potential one hundred billion
Speaker 4: dollar investment.
Speaker 6: That's next. This is a bluebot technology.
Speaker 5: It's time for talking tech and first stop. Sony lifts
Speaker 5: its sales out look. The Japanese tech a saw strong
Speaker 5: music sales and a surprise boost from its PlayStation unit
Speaker 5: due to sales of the video game Black Myth Wu Kong.
Speaker 5: Sony says it now expects a net revenue of eighty
Speaker 5: three point two billion dollars plus. By Doo is set
Speaker 5: to unveil a new pair of AI smart glasses. The
Speaker 5: likes of which rival Metas ray bands. According to sources,
Speaker 5: the Chinese search leader plans to introduce the device, said
Speaker 5: it's Bydo World event in Shanghai next week. Sales of
Speaker 5: the glasses could start as early as twenty twenty five
Speaker 5: and would likely cost less than Metas two hundred and
Speaker 5: ninety nine dollars price point, and Nvidia has named NASA
Speaker 5: veteran elean Na Choa as a director. The move bolsters
Speaker 5: and videos board to thirty members after the AI rally
Speaker 5: turned the company into a Silicon Valley titan. The Choa
Speaker 5: previously ran NASAs Johnson Space Center in Houston and was
Speaker 5: the first Latina astronaut in Spacekroen ed, let's.
Speaker 6: Talk to Saudi Arabia right now.
Speaker 4: It is set to make a big push into artificial intelligence,
Speaker 4: investing up to one hundred billion dollars in new projects.
Speaker 4: We're talking data centers, startups, other AI focused infrastructure.
Speaker 6: It's all according to sources from More.
Speaker 4: We welcome Bloomberg's Tom Jarles on now to talk about
Speaker 4: this was initially potentially an agreement. We've heard Alphabet Google
Speaker 4: helping fund AI focus in Saudi Arabia, but this is
Speaker 4: much much bigger in scale. Now.
Speaker 11: There's a lot of ambition behind this project, Caroline. What
Speaker 11: the Saudis are trying to do is make sure that
Speaker 11: they have a seat at the table part of the
Speaker 11: AI revolution.
Speaker 12: What can they do? They have a lot of.
Speaker 11: Money, they're not and they basically there's a lot of
Speaker 11: money and they want to invest in infrastructure. Something that
Speaker 11: we've been writing about and talking talking to you about
Speaker 11: for a long time is the need for all of
Speaker 11: the data centers, all of that computing power that's necessary
Speaker 11: to drive generitive artificial intelligence. The Saudis have plenty of
Speaker 11: resources to help invest in that. They are putting a
Speaker 11: lot of money and time and energy into this effort
Speaker 11: that they hope will essentially put Saudi Arabia on the
Speaker 11: map as a major force behind generative.
Speaker 7: AI code name Project Transcendence.
Speaker 5: According to our reporting, I think what we know from
Speaker 5: our reporting, tom Right, is that it's almost a quid
Speaker 5: pro quo that Saudi's ready to invest hand over money
Speaker 5: to startups, big name players, but in return they have
Speaker 5: to have a presence in country.
Speaker 11: That's right. One of the conditions is they want to
Speaker 11: see those operations have a strong to hold right there
Speaker 11: in the Kingdom. Something else that you need to bear
Speaker 11: in mind when you look and when you think about
Speaker 11: the role that the Middle East is going to play
Speaker 11: investing in global startups and investing in this Again, I
Speaker 11: keep referring to it as a revolution because it is
Speaker 11: transforming the way we do business, the way we live
Speaker 11: our lives.
Speaker 12: Something that's really important, something that we've seen come up
Speaker 12: time and time.
Speaker 11: Again, is the West, led by the United States, wants
Speaker 11: to ensure that the companies that have a really strong
Speaker 11: stake in AI, in these startups, in these global startups
Speaker 11: and these global businesses, is that they be allied with
Speaker 11: the West.
Speaker 12: Something that we've seen before is that when.
Speaker 11: When parts of the country, parts of the world excuse me,
Speaker 11: become too closely allied with state China, that starts to
Speaker 11: make people nervous. And so one of the things that
Speaker 11: you're going to see is if the IF US companies
Speaker 11: are going to take part in this, they're going to
Speaker 11: want to see the Middle East allying itself with the
Speaker 11: West and away from China.
Speaker 6: Interesting, So that's sort of the global context.
Speaker 4: When you get into the nitty gritty, it's going to
Speaker 4: be the PIF that's their sort of sovereign wealth fund
Speaker 4: aligning themselves and co investing with big international companies.
Speaker 6: It's going to have similar feel to it, right than
Speaker 6: al At. Can you just spell out how the funding
Speaker 6: might look.
Speaker 11: Well, well, we're still getting our arms around that. We
Speaker 11: know that they want to invest in startups, they want
Speaker 11: to invest in the infrastructure. These data centers cost a
Speaker 11: lot of money. All the servers, all the chips, all
Speaker 11: this computing power that's needed to generate to for generative
Speaker 11: artificial intelligence, the chips themselves, and the equipment needed to
Speaker 11: build the chips, and you see the potential for Saudi
Speaker 11: Arabia to become this major world center of global of
Speaker 11: the global infrastructure needed around artificial intelligence.
Speaker 12: We talk a lot about the role that Taiwan plays.
Speaker 11: We talk a lot about the US and the Chips
Speaker 11: Act and its desire to bring chip making capabilities in
Speaker 11: the US. This is Saudi Arabia saying we want to
Speaker 11: have a stake in this as well. We're going to
Speaker 11: incentivize you to come to build and invest right here
Speaker 11: in our backyard.
Speaker 5: Blomberg Technology Senior Executive Editor, Tom Giles, thank you, Happy Friday, boss,
Speaker 5: right shares of draftings Honestly bouncing all over the place,
Speaker 5: but currently up almost five percent after reporting third quarter results.
Speaker 7: Look at that stot Go five percent game.
Speaker 5: The Sports bending company cut his full year revenue forecast
Speaker 5: below analyst estimates reported are wider and then expected loss
Speaker 5: per share. Let's gets Drafting CEO Jason Robbins, There's this
Speaker 5: idea that the streets fixated on that there were customer
Speaker 5: friendly outcomes, particularly in the realm of NFL. Is that
Speaker 5: true to your mind? And what's a customer friendly outcome?
Speaker 7: Well?
Speaker 13: Q three actually we said that we had neutral outcomes,
Speaker 13: so you know, we had exactly kind of as we expected,
Speaker 13: and we ended up having a beat in Q three,
Speaker 13: which is great. Q four aside from these outcomes, would
Speaker 13: have been on track for the same So you know, basically,
Speaker 13: what it means is that the favorites one a lot
Speaker 13: and the big name players scored touchdowns and had a
Speaker 13: lot of And sometimes that happens in sports. You know,
Speaker 13: the book sometimes wins, sometimes the customers win. And it's
Speaker 13: hard to know, right because we're only you know, halfway
Speaker 13: through the quarter yet, how it's all going to end.
Speaker 13: It could easily swing the other way, but at this
Speaker 13: point for the quarter, at least the five weeks that
Speaker 13: we're into it, the customers are winning, and you know,
Speaker 13: over the long term, that's great.
Speaker 7: We need our customers to win.
Speaker 13: Sometimes they want to win sometimes that's part of experiencing
Speaker 13: the product. So we're really excited though that the fundamentals
Speaker 13: are super strong. We saw three hundred BIPs year of
Speaker 13: year improvement in both promotionally and gross margin percentage. Cacs
Speaker 13: were down twenty percent in the quarter. Lots of really
Speaker 13: good things going on.
Speaker 5: It's well, there's lots of things, full stop going on.
Speaker 7: Let's get technology in a little bit.
Speaker 5: But in a week where you have a US election
Speaker 5: and it's getting towards the end of the year, the
Speaker 5: holidays are fast approaching, how does sports betting stand out?
Speaker 5: Like what is the consumer attitude towards placing a bet
Speaker 5: in a week like this one?
Speaker 13: Well, obviously a lot of distraction with the election going on,
Speaker 13: but you know, as you might imagine, people were even
Speaker 13: talking about speculating on one side or the other the
Speaker 13: election markets, and that was available in certain places too.
Speaker 13: So you know, I think it's very much part of
Speaker 13: the culture now that people want to be, you know,
Speaker 13: a participant by having an idea, a prediction, a viewpoint
Speaker 13: on what they think is going to happen. And I
Speaker 13: think betting is really just you know, part of that
Speaker 13: overall trend.
Speaker 4: Jason, I want to jump in on that polymarket call
Speaker 4: a lot of people's attention.
Speaker 6: Would you go there, would you expand in pass sports?
Speaker 13: Well, we would only do it if it were in
Speaker 13: a legal and regulated fashion. So you know, these types
Speaker 13: of markets on elections are regulated at the federal level.
Speaker 13: It's different than the way betting is regulated. You know,
Speaker 13: it's something that maybe we would you know, consider looking
Speaker 13: into before the next election. But I do think that
Speaker 13: it's only something that we would do in a legal,
Speaker 13: regulated environment, which is what differentiates us from some of
Speaker 13: those that are offering and now some are offering it
Speaker 13: legally now too, there is a legal framework for it
Speaker 13: as well, but not everybody is.
Speaker 4: Let's just talk about therefore that passage of legalization. Is
Speaker 4: that going to be easier under the next administration? I
Speaker 4: mean also just from the point of sports betting too,
Speaker 4: we see Missouri Common Line for example.
Speaker 13: Well, definitely for us, it's really you know, the states
Speaker 13: that are legalizing and so a lot of what we
Speaker 13: were watching were the various outcomes and state houses and governors'
Speaker 13: races around the nation. Obviously, you know there is some
Speaker 13: impact from you know, federal government impacts every industry in
Speaker 13: some way or another. But you know, taxes other ways,
Speaker 13: corporate taxes meaning but you know, in terms of legalization,
Speaker 13: our action is really at the state level. So as
Speaker 13: you knowed, Missouri's big win passed about initiative to legalize
Speaker 13: sports betting, and very excited about that. Missouri is the
Speaker 13: eighteenth largest state and the huge sports state. Really great
Speaker 13: sports fans in Missouri, so excited about that one.
Speaker 7: Hopefully that'll get.
Speaker 13: Up and running soon, and you know, hopefully we'll see
Speaker 13: even more action when the legislators come back in session.
Speaker 5: In Kew on Jason, we focus a lot on this
Speaker 5: program about how sport is access the technology right, a
Speaker 5: transition from linear television to OTT and I'm fascinated by
Speaker 5: how the betting markets either benefit or don't benefit from that.
Speaker 7: Right.
Speaker 5: The consumer has so many options about how to watch
Speaker 5: sport and pay for it. You know, it's astonishing. Actually
Speaker 5: what flies out of my bank account each month? Is
Speaker 5: that a tailwind or a headwind to you when you're
Speaker 5: thinking about bets being placed in parallel.
Speaker 13: Well, I think it's actually a tail in that it's
Speaker 13: part of the overall trend we're seeing, which is sports
Speaker 13: and interest in sports continues to grow, and betting is
Speaker 13: a part of that. They're very intertwined, so I think
Speaker 13: they feed off each other as more and more, you know,
Speaker 13: people can see more and more sports from around the world,
Speaker 13: not just their favorite sports or their favorite teams, but
Speaker 13: they can watch any team or they can watch any sport,
Speaker 13: and that access is there that's going to be a
Speaker 13: benefit to our business. But it's really part of the
Speaker 13: same overall mega trend, which is, you know, information is
Speaker 13: easier to come by for the consumer, and the consumer
Speaker 13: wants to be a more active participant because they have
Speaker 13: more information and have a viewpoint on things. And I
Speaker 13: think that's why you're seeing this mega trend around betting
Speaker 13: that you know, continues to grow the overall industry in
Speaker 13: the US and really internationally as well.
Speaker 4: Mega trend that you're going to continue to enhance products into.
Speaker 4: Jason Robbins, we appreciate your time DraftKings CEO on the
Speaker 4: back of the earnings, and we'll have more from Draftkins
Speaker 4: next week. Tune into Bloomberg Chief Future Officer conversation with
Speaker 4: a CFO coming up. Meanwhile, we've got plenty more to
Speaker 4: be dissecting when it comes to tech earning season as
Speaker 4: it continues, will bring you the latest out of pinterest
Speaker 4: out of Airbnb so much more. At the moment, pinterest
Speaker 4: ed off by more than fifteen percent. This is as look,
Speaker 4: the numbers look good from a revenue perspective for this quarter,
Speaker 4: but really it's the forecast and they increase in spending
Speaker 4: on AI that's got people's attention. I'll come back to
Speaker 4: Bloomberg Technology. I'm Caroline Hide in New York and I.
Speaker 7: Med Ludlow in San Francisco.
Speaker 4: Pic check on these market said, because what a week
Speaker 4: when it comes to the macro policy, when it comes
Speaker 4: to Fed rate cuts, when it comes to earnings, when
Speaker 4: it comes to the election outcome. We are completely unchanged
Speaker 4: on the last one hundred to day, but it's not
Speaker 4: unchanged on the week.
Speaker 6: We're other more than five percent.
Speaker 4: Best week since September the thirteenth through really seen big
Speaker 4: tech on top after those particularly electoral results. Looking at
Speaker 4: Trump media back higher today, it sunk significantly more than
Speaker 4: twenty percent yesterday. Maybe rumors swirling around the market that
Speaker 4: the President elect Trump could well sell off some of
Speaker 4: his holding in DJT. Of course that's the owner of
Speaker 4: the parent company of his media outlook.
Speaker 6: But actually he says no.
Speaker 4: He folks back on that particular one, saying he's holding
Speaker 4: We're up nine and a half percent on the day,
Speaker 4: but really has been a tell on his electoral chances
Speaker 4: and then success. I'm looking at Pinterest, though off by
Speaker 4: fifteen percent. We're going to dig into these numbers in
Speaker 4: a moment. Ed this is a raft of earnings, and
Speaker 4: we're seeing Pinterest at look double digit revenue growth. We're
Speaker 4: seeing still living up to expectations when it comes to
Speaker 4: forty percent growth in adjusted earnings per share, and they
Speaker 4: build on their overall user base, but the forecast.
Speaker 6: Looks a little bit weak.
Speaker 4: We're worried about advertising trends when it comes to food
Speaker 4: and beverage in particular, and a spending on AI that
Speaker 4: might top half a billion dollars in the fourth quarter,
Speaker 4: and we're seeing the spending also being a warring for Airbnb.
Speaker 4: They're investing in product, but that means margins are going
Speaker 4: to be crimped. It to manage though to show pretty
Speaker 4: good numbers when it came to their fiscalur quarter and
Speaker 4: revenue increasing. Not so for paramount revenue. On the downside,
Speaker 4: for Paramount down by about five percent year over year,
Speaker 4: we're off by four and a half percent. Of course,
Speaker 4: a company in transition. We understand that the deal with
Speaker 4: Ellison will be tied up by the first half, maybe
Speaker 4: at least by the second half of twenty twenty five.
Speaker 4: Good TV results relatively speaking, good streaming, but film was
Speaker 4: a weakness.
Speaker 6: Let's time into it.
Speaker 5: Yeah, let's get some team coverage and bring in bloombergs,
Speaker 5: Ryan Blaceelica and Ryan. If you go under your bio
Speaker 5: on the Bloomberg terminal, literally every single technology company there
Speaker 5: is in Tickery listed. I don't envy you, But in
Speaker 5: this week, of all weeks, many names reported carry has
Speaker 5: been over some day. Is there a common theme between
Speaker 5: the technology sets to names that posted results.
Speaker 14: Hey, good morning, thanks for having me. You know, I
Speaker 14: would say that there's really been sort of a mixed bag.
Speaker 14: We've seen some companies come out with some very strong forecasts,
Speaker 14: some very strong growth, and we've seen some you know,
Speaker 14: real double digit gains and the waker results. But there's
Speaker 14: also been a number of companies where, you know, and
Speaker 14: you can point to any number of factors behind it.
Speaker 14: Maybe the outlook was a little bit weak. Maybe the
Speaker 14: stock just had rallied so much going into the report
Speaker 14: that it just like had to give some of that back.
Speaker 7: There's really been a mixed bag here.
Speaker 14: I'd say on balance, things have been you know, generally
Speaker 14: pretty positive. But it's certainly easy to you know, point
Speaker 14: to some stocks at you know, for whatever reason, just
Speaker 14: seems like they weren't able to continue with some of
Speaker 14: their recent advances.
Speaker 4: Can we just go in more on Pinterest because this
Speaker 4: is a big set off and in fact it is
Speaker 4: underperformed the entire year. Yes, it rallied last year, but
Speaker 4: why when it's actual PE ratios forward looking PEE ratios
Speaker 4: are much cheaper than rivals like Meta.
Speaker 6: What is there a concern here?
Speaker 14: Right? So you mentioned the week forecast. That's really sort
Speaker 14: of the key issue here. You know, there was a
Speaker 14: lot of optimism building about this company a couple of
Speaker 14: months ago, some analysts commentary, some upgrades, some new analysts
Speaker 14: coming in to say, you know, they're pretty positive on
Speaker 14: the company's growth potential. From here, this forecast does kind
Speaker 14: of you know, throw some cold water on that thesis.
Speaker 14: So we are seeing it pull back. This is one
Speaker 14: that's really been sort of struggling. It's hard for these
Speaker 14: smaller social media companies to compete with the metas of
Speaker 14: the world, to compete with the other major digital advertising companies,
Speaker 14: and this is just sort of another example of that.
Speaker 7: Ryan.
Speaker 5: The big one November twentieth market clothes in VideA is that.
Speaker 7: Everything it certainly feels that way.
Speaker 14: I mean, so far this earning season, we've gotten some
Speaker 14: pretty positive data points that would seem to augur well
Speaker 14: for Nvidia.
Speaker 7: Notably all the big cappex.
Speaker 14: Spending plans from your megacaps, all that points to you know,
Speaker 14: on going demand for AI chips, ongoing demand for you know,
Speaker 14: everything surrounding artificial intelligence. That's pretty positive, you know, for
Speaker 14: Nvidia's growth outlook from here. Of course, this is you know,
Speaker 14: one of the big gainers of the year. There's a
Speaker 14: lot of concerns about, you know, how much more can
Speaker 14: this company keep rising after it's done so well so
Speaker 14: far in twenty twenty four, especially following you know, last
Speaker 14: year's big advance. So I think there's a lot of
Speaker 14: you know, there's reason for optimism here. There's certainly a
Speaker 14: pretty strong sign so that the company's demand drivers are intact.
Speaker 14: But you know, is that going to be enough given
Speaker 14: how much it's moved up, given some of these you know,
Speaker 14: sort of mixed signals from other companies. You know, that's
Speaker 14: that's really the uh, you know, the three trillion dollar question.
Speaker 4: How much it's moved up is almost two hundred percent.
Speaker 4: Yes today, Randalstelica, we thank you so much. Let's get
Speaker 4: more markets perspective for you now, bring in Fiona Sincoto,
Speaker 4: who's senior analyst for City Index Financial Markets.
Speaker 6: Boy, what a week.
Speaker 4: Let's just focus in on, like really the people that
Speaker 4: pick up the phone to post Wednesday and throughout the week.
Speaker 4: Is it one of optimism around big tech and its
Speaker 4: continuation of massive market cap increases.
Speaker 2: Yes, I mean the bottom line is yes, you know,
Speaker 2: and I think that optimism was reflected in what we
Speaker 2: saw happen in the stock market and what we've seen
Speaker 2: happen in the stock market since Trump was declared victory
Speaker 2: of Trump one. So yes, you know, it seems big
Speaker 2: tech seems to be a big favorite.
Speaker 10: Once again. We're just sort of coming into the elections
Speaker 10: and before.
Speaker 2: The elections, there was this sense that sort of big
Speaker 2: tech was a little bit sort of.
Speaker 10: You know, out of favor.
Speaker 2: And we had seen the Nasdaq under performing, the S
Speaker 2: and P five hundred and the Dow Jones, which we're
Speaker 2: trading at record highs.
Speaker 10: But we've seen that really turn around.
Speaker 2: You know, Nasdaq's now trading at record highs as well.
Speaker 10: We've seen a phenomenal.
Speaker 2: Rally in tech dog and I think there is a
Speaker 2: lot of optimism that this can continue. I mean, we've
Speaker 2: seen you know, stocks such as Google, Tesla, We've i mean,
Speaker 2: Apple's underperforming a little bit compared to the rest, but
Speaker 2: there's a lot of optimism surrounding it. And basically this
Speaker 2: is on the back of expectations of a more favorable
Speaker 2: regulatory environment.
Speaker 10: I mean, we've got other factors that are playing in.
Speaker 2: You've got the optimism surrounding end of year seasonality, which
Speaker 2: tends to work in favor as well. Federal reserves still
Speaker 2: cutting interest rates, albeit more gradually expected.
Speaker 10: So you know, there is a positive outlook.
Speaker 2: There are some risks ahead, but that doesn't seem to
Speaker 2: be the focus right now.
Speaker 4: Look, there are fundamental risks ahead on your side of
Speaker 4: the Atlantic where the bo is cutting but also talking
Speaker 4: about inflationary pressures going forward. You've got the similar echoes
Speaker 4: here in the US. I just want to dig into
Speaker 4: Europe a little bit more though, because what was the
Speaker 4: reaction when people are wanting to get invest in European
Speaker 4: tech but it was a big week for the German
Speaker 4: government as well for you, or is it all about
Speaker 4: us still over European over international flavor?
Speaker 10: That does feel like the way that it is right now.
Speaker 2: I mean, they does feel like there is a lot
Speaker 2: of uncertainty still in Europe. There seems to be concerns regarding,
Speaker 2: as you said, the political situation in Germany, fragile growth,
Speaker 2: just broadly speaking, the outlook doesn't feel the same. And
Speaker 2: then on top of that, now with Trump sort of
Speaker 2: taking the helm in the US, they're also concerns what
Speaker 2: that might mean as far as tariff's to concerns. So,
Speaker 2: you know, geographically speaking, the US is.
Speaker 10: Now, without a doubt the preferred.
Speaker 2: Geographical location for investing, particularly in big tech.
Speaker 10: I think you can get.
Speaker 2: Some feed across into Europe, which is going to be beneficial,
Speaker 2: But I think we're going to see the big positives
Speaker 2: play out more in the US compared to other areas.
Speaker 5: You know, is there a single name that clients, investors
Speaker 5: have been most focused on this week?
Speaker 7: People phoning you about.
Speaker 10: Tesla? What one? Yeah, because we've obviously we've had sort
Speaker 10: of Trump and and Aneno.
Speaker 2: Muss cozying up recently, and that doesn't seem to be
Speaker 2: ending any time soon. So, you know, Tesla has absolutely
Speaker 2: outperformed and I think there are expectations that it will
Speaker 2: continue to do so. Now it's a bit interesting the
Speaker 2: Tesla's story because obviously there is the expectation that actually
Speaker 2: Trump may reduce benefits for the evy industry within the US,
Speaker 2: But you know, Tesla's already such a big, well established
Speaker 2: company that actually that means it's going to benefit from
Speaker 2: that disadvantages to its competitors. So that's just one of
Speaker 2: the reasons that we think that, yeah, that Tesla's going
Speaker 2: to be well. It has been very much on the
Speaker 2: on the phones. It's been mentioned, our clients are looking
Speaker 2: at it. It's seen volumes go through the roof, and
Speaker 2: the share price after after having a dodgy starts the
Speaker 2: year is looking much better.
Speaker 5: Is it even possible to model into an equity a
Speaker 5: relationship between the world's richest man and President elect Donald Trump.
Speaker 3: The good question, And I mean it's not something that
Speaker 3: we would typically do or have had too much experience
Speaker 3: doing previously, so, but I think it is.
Speaker 2: Definitely something that needs to be taken into account when
Speaker 2: we're looking at tests evaluations going towards twenty twenty five.
Speaker 2: And I think that as we've seen, you know, it
Speaker 2: has been reflected in the optimism in the share price.
Speaker 5: Yeah, I just reflect on Gary Cohne and Steve Manouchin
Speaker 5: and somewhat analogous, but maybe they're not Furnising Kota, Senior
Speaker 5: analyst of City Index Financial Markets. Happy Friday, and thank
Speaker 5: you very much. Coming up on the show, it's been
Speaker 5: a stellar week for the crypto community as Donald Trump's
Speaker 5: victory paves the way for deregulation and potentially more innovation
Speaker 5: in blockchain.
Speaker 7: We'll discuss neat Oh, look a bitcoin.
Speaker 5: This has been bog technology. This is bitcoin, and it's
Speaker 5: trading at its highest level ever, just below seventy six
Speaker 5: thousand US dollars. Be token, it's worth saying again out loud,
Speaker 5: highest level ever.
Speaker 7: That's all bitcoin caroc.
Speaker 4: It is ed and there's a reason for it because
Speaker 4: many feel that the next administration, and in d Congress,
Speaker 4: we particularly crypto friendly Delta Blockchain Fund general partner KeVita Guptra,
Speaker 4: is with us, will it be What action do you
Speaker 4: need to see first and foremost to make the new
Speaker 4: record highs vindicated?
Speaker 15: Hey, go line just the President elect and then of
Speaker 15: course you have Elon Musk standing next to him, and
Speaker 15: then you have all the BAC which has really donated
Speaker 15: this time. This election has been one of the biggest
Speaker 15: pack money going into a political motive and we literally
Speaker 15: saw such a positive return out of it. Everything is up.
Speaker 15: You have seen bitcoin all time high. Most of the
Speaker 15: currencies are twenty to forty percent up, but look at
Speaker 15: even dodgecoin. It has literally jumped up twenty one percent.
Speaker 12: There.
Speaker 6: Look at some of your investments.
Speaker 4: You were like first checks into some significant DeFi projects.
Speaker 4: One protocol, for example, Polygon, has had an epic time
Speaker 4: because it, along with unisworp, was kind of singled out
Speaker 4: by the SEC is potentially not living up to what
Speaker 4: is or isn't a security. How important is a change
Speaker 4: at the top of the SEC and clarity around regulation
Speaker 4: going forward for projects and protocols such as.
Speaker 15: This that is one of the main reason for a
Speaker 15: big boom, Caroline, because we are seeing the whole DeFi ecosystem,
Speaker 15: certainly uniswap RVE and all the DeFi protocols suddenly bumping
Speaker 15: up their prices up to twenty to thirty five percent
Speaker 15: jump because I think now everyone is expecting a change
Speaker 15: in attitude with SEC with the new administration on the
Speaker 15: him via President Trump has actually said in one of
Speaker 15: his rallies that he's going to change the current SEC
Speaker 15: commissioner and going to have much more pro friendly, pro
Speaker 15: friendly agenda.
Speaker 10: So everyone is expecting.
Speaker 15: Much more clarity on regulations and the feeling but I
Speaker 15: kept on feeling within the crypto ecosystem is that it
Speaker 15: is going to be Crypto for America and America for
Speaker 15: Crypto after a very very long time.
Speaker 7: Cove to prior to the election.
Speaker 5: Many hello, by the way, I was having some fun
Speaker 5: with a bitcoin chart, but there are some serious things.
Speaker 5: Like prior to the election, a lot of people came
Speaker 5: in this program and said, well, look at the inflows
Speaker 5: the ETF products, how significant that is. The harvening and
Speaker 5: then sort of the vibe shift. Things were more positive
Speaker 5: around the underlying technology. Well before we knew the outcome
Speaker 5: of this election. I wonder how important those factors still
Speaker 5: are whatever happens with this Trump presidency.
Speaker 15: Absolutely, just the day of the election, ED look at
Speaker 15: the amount one point two eight billion dollars in flow
Speaker 15: for bitcoin ETF, seventy eight million dollar in flow in
Speaker 15: twenty four hours in eat in eat ETF. Now people
Speaker 15: are expecting solana ETF near ETF. But at the same time,
Speaker 15: a lot of IPOs companies which have been sitting quite
Speaker 15: like encourage circle chain chain analysis, bunch of them, so
Speaker 15: they are basically have been sitting Falcon ex just been
Speaker 15: sitting and wading. And we had that conversation with you
Speaker 15: like three months before the election, like are we going
Speaker 15: to see a big IPO boom? Are we going to
Speaker 15: see a lot of legal construct Are we going to
Speaker 15: see a lot of ETFs coming in? And I feel
Speaker 15: like over next six months it's just gold for the
Speaker 15: crypto industry.
Speaker 5: Will Trump open the door to modernization of the financial system.
Speaker 15: I think the most important thing which we have been
Speaker 15: asking for over eight years is the clarity on regulations. Everybody,
Speaker 15: every crypt founder across the world wants to work with
Speaker 15: the government and sec in any regulatory body to have clarity,
Speaker 15: and I feel like the biggest pathway which America can
Speaker 15: set trend is to have that legal clarity and to
Speaker 15: create a safe environment for retail customers and for technology
Speaker 15: builders to work together. So I think that's going to
Speaker 15: be the biggest reason for all these movement of prices
Speaker 15: to be.
Speaker 6: Up Delta blockchains. Cavita Gupta, really great to have your
Speaker 6: take today. Thank you.
Speaker 5: Some TikTok staff and creators are hoping President elects Trump
Speaker 5: may become the social media app savior as it faces
Speaker 5: a potential ban come January. Bloombergs Alexandra Lavine joins US
Speaker 5: now and there are many questions. I mean, President elect
Speaker 5: Trump has hinted that he opposes an outright ban, but
Speaker 5: there's a legislative action underway.
Speaker 7: What have you written about?
Speaker 16: Well, I think that really since Biden had signed this
Speaker 16: law earlier this year that would effectively ban TikTok in
Speaker 16: the new year, unless it's China based parent company by
Speaker 16: Dan sells it. The big question is the big question
Speaker 16: has been is this actually going to happen? And I
Speaker 16: think the feeling was really if Harris is elected that
Speaker 16: she would sort of finish the job that Biden had started.
Speaker 6: Now that Trump.
Speaker 16: You know, now that Trump has been elected, he was
Speaker 16: originally the president who tried to ban TikTok. Back in
Speaker 16: twenty twenty, on the campaign trail, he did a stunning
Speaker 16: one to eighty saying that now he doesn't believe in
Speaker 16: a ban. And so I think the reason why there
Speaker 16: is now even more uncertainty than there was prior is
Speaker 16: because his rhet his rhetoric has completely changed, leaving folks
Speaker 16: inside the company wondering whether he will in fact follow
Speaker 16: through on what he has said.
Speaker 4: And then there's the closeness with Musk, who has X
Speaker 4: so whether he sees TikTok his arrival, even though perhaps
Speaker 4: he's a bit more pro China than others, can you
Speaker 4: just give us the very next step?
Speaker 6: What do we look for in the legal action? At least?
Speaker 16: So there are a bunch of things that Trump could
Speaker 16: try to do once he takes office to try to
Speaker 16: reverse what has been done or try to stall it.
Speaker 16: And I think though a lot of the things that
Speaker 16: he could do would be really difficult, they'd be uphill challenges,
Speaker 16: they'd be politically sort of unpopular amongst folks in his
Speaker 16: own party. Who were really key to getting this law
Speaker 16: to force a divestiture or to be on the platform
Speaker 16: getting it across the finish line in the first place.
Speaker 16: He could come up with another plan that satisfies both
Speaker 16: the company and the US government on national security. He
Speaker 16: could look for an American buyer, and he's got people
Speaker 16: who are certainly interested, who are political and political allies
Speaker 16: of his worlds, yes, exactly. And he could also try
Speaker 16: to get Congress to repeal or amend the law that
Speaker 16: they had passed. I think, though, the most likely thing,
Speaker 16: and the path of least resistance would be to let
Speaker 16: this legal process that you've talked about play out on
Speaker 16: its own. So we're expecting a decision in December that
Speaker 16: where the courts in DC will rule whether the law
Speaker 16: that President Biden has signed should be overturned or whether
Speaker 16: it should be upheld. And then it's likely that legal
Speaker 16: proceeding following that that TikTok may well fight. We'll just
Speaker 16: drag on well past the January deadline for when the
Speaker 16: band would have gone into effect. So I think the
Speaker 16: easiest thing for Trump would really be to sit back
Speaker 16: watch the legal process play out, and that way the
Speaker 16: legal process takes care of it without him having to
Speaker 16: be super proactive, and he then does not have to
Speaker 16: do a complete about face on his twenty twenty crusade
Speaker 16: against TikTok when he initially tried to ban it, and
Speaker 16: he would avoid then being seen as sort of softening
Speaker 16: this tough on China stance. It's been super central to
Speaker 16: his entire agenda.
Speaker 4: Alexandra Levine, all things TikTok, We appreciate it. Meanwhile, like
Speaker 4: traditional media executives maybe Sad's Love, for example, ever at
Speaker 4: Water Brothers Discovery or Perry suk over a Next Star,
Speaker 4: see a possibility for more mergers and indeed deregulation as
Speaker 4: Donald Trump returns to the presidency. Neowberg's Kelsey Griffiths joins
Speaker 4: us for more. So M and A gonna suddenly launch
Speaker 4: through when it comes to at least the more local
Speaker 4: news and TV side of the equation.
Speaker 1: Well, if the broadcast executives have their way, that's exactly right.
Speaker 12: You know.
Speaker 1: I think we've heard on Earning's calls over the last
Speaker 1: couple of days that these executives are really looking for
Speaker 1: a Trump administration that is more friendly to deal making
Speaker 1: of all kinds, whether that is in the broadcast space,
Speaker 1: whether that's in the content space, whether that is permitting
Speaker 1: some mergers that you know, maybe wouldn't have even been
Speaker 1: pitched under the Biden administration. So I think it has
Speaker 1: a lot of folks like really watching this space, Chelsey.
Speaker 5: Let's think about a name like Nexstar, how its business
Speaker 5: is set up, but it's got some history with government agencies.
Speaker 5: What kind of happens to them under Trump? Two point zero?
Speaker 6: That's right.
Speaker 1: So Nextstar is the largest owner of local broadcast stations
Speaker 1: in the country, and they've previously tried to buy up
Speaker 1: more stations. They actually got in trouble with the FCC
Speaker 1: and had to pay a one point two million dollar
Speaker 1: fine earlier this year because as part of a merger agreement,
Speaker 1: they were supposed to divest some stations and they actually
Speaker 1: effectively maintained control of a station in New York that
Speaker 1: was at least what the FCC found and ended up
Speaker 1: hitting them with that fine. So Nexstar has been looking
Speaker 1: around for a while for other ways to expand sort
Speaker 1: of their broadcast empire, and they're hoping that under the
Speaker 1: Trump administration, the Federal Communications Commission could actually get rid
Speaker 1: of some of the broadcast ownership restrictions that have held
Speaker 1: them back in the past, So some rule changes could help.
Speaker 6: What about people who need the FCC or within it,
Speaker 6: That's right.
Speaker 1: So we're looking at an incoming Republican administration across the
Speaker 1: government obviously, but that means big changes at the FCC.
Speaker 1: My sources are telling me that we are very likely
Speaker 1: to see the senior Republican at the FCC, Brendan Carr,
Speaker 1: be nominated as FCC chair and Car could, you know,
Speaker 1: really makes some big changes for broadcast executives in doing
Speaker 1: some irregulatory action that would benefit the broadcasters. He would
Speaker 1: also have some pretty big effects on the rest of
Speaker 1: the media landscape.
Speaker 10: You know.
Speaker 1: Carr has aligned himself with Elon Musk. He has talked
Speaker 1: a lot about TikTok and rolling back its presence here
Speaker 1: in the US over national security concerns. So it could
Speaker 1: be a very different FCC under Car. So we're going
Speaker 1: to be watching that too.
Speaker 5: Bloombo's Kelsey Griffiths, great reporting and happy Friday, Thank you
Speaker 5: very much.
Speaker 6: What a week? What a day? Or another edition of
Speaker 6: Bloombo Tchnology.
Speaker 5: Yet, Yeah recap if there's any day to recaps today,
Speaker 5: go on the podcast.
Speaker 7: You know where the podcast is. Thank you to the
Speaker 7: team in New York.
Speaker 5: City, a historic week around the world, and the team
Speaker 5: here in SF.
Speaker 7: This is Bloombo Technology.