WEBVTT - Apple's Chips and the Tech Rally Fizzles Out 0:00:12.720 --> 0:00:15.640 I'm Caroline Hinder, Bloomberg's world headquarters and neal that I 0:00:15.720 --> 0:00:18.480 made Lovelow, also in New York City. This is Bloomberg 0:00:18.520 --> 0:00:22.120 Technology Special Day coming up. Apple racing too ready in 0:00:22.160 --> 0:00:26.280 house chips by and it has big implications for its suppliers. 0:00:26.480 --> 0:00:29.520 Shares of brock On dropped on the Bloomberg scoop will 0:00:29.520 --> 0:00:32.200 discuss in a moment, and a big tech rally loses 0:00:32.240 --> 0:00:35.440 steam as FED officials signal interest rates going beyond five 0:00:35.440 --> 0:00:38.559 pc and earnings come into focus as well as CPI. 0:00:38.920 --> 0:00:43.240 Just around the corner this Thursday, semiconductors outperform and Chinese 0:00:43.240 --> 0:00:46.440 stocks law back after Science of Government is winding down 0:00:46.440 --> 0:00:49.960 its tech crackdown on data protection, on online gaming and 0:00:50.200 --> 0:00:53.159 investments in foreign entities. We want to dig into that 0:00:53.200 --> 0:00:55.400 scoop because it did move markets, So please to say 0:00:55.440 --> 0:00:58.080 to talk about the replacements of chips and go really 0:00:58.080 --> 0:01:01.240 for its homegrown components and the implications on its supplies 0:01:01.240 --> 0:01:03.040 as well. Mark Gum and he was there with the 0:01:03.080 --> 0:01:05.600 story it did move fake time. Next, just talk about 0:01:05.600 --> 0:01:07.480 what's new here? Is it the pace at which they're 0:01:07.480 --> 0:01:10.839 doing it? So we've known for some time that Apple 0:01:10.880 --> 0:01:14.120 would be moving away from qual Calm for its cellular modems. 0:01:14.200 --> 0:01:16.600 Right now, the cellular modem, the qual Calm chip is 0:01:16.600 --> 0:01:18.760 what allows the phone to connect to data network, so 0:01:18.800 --> 0:01:21.639 you can make phone calls, connect the internet, download apps, email, 0:01:21.840 --> 0:01:23.600 basically do whatever you need to do when you're away 0:01:23.600 --> 0:01:25.960 from WiFi. So we've known that, we also now know 0:01:26.160 --> 0:01:28.160 to your point the timing of that that's going to 0:01:28.280 --> 0:01:30.880 be end of twenty four or early. It's going to 0:01:31.000 --> 0:01:33.679 start in one iPhone model. Take about three to four 0:01:33.760 --> 0:01:36.280 years for that transition to actually occur. Now, the main 0:01:36.360 --> 0:01:38.760 new piece of information is, in addition to working on 0:01:38.800 --> 0:01:42.200 its own cellular modem, Apple's working for the first time 0:01:42.280 --> 0:01:45.600 on its own WiFi chip. So that's the Broadcom component 0:01:45.680 --> 0:01:48.640 that allows the iPhone and it's other devices to connect 0:01:48.640 --> 0:01:51.080 to WiFi. And this is actually a combined chip, so 0:01:51.120 --> 0:01:53.120 it also lets the phone connect to Bluetooth as well. 0:01:53.440 --> 0:01:56.200 So it's the component not only for cellular from Qualcom 0:01:56.280 --> 0:01:58.520 that they're working on, but the component that also allows 0:01:58.520 --> 0:02:00.880 you to connect to wireless and bluetoo. So they really 0:02:00.880 --> 0:02:03.880 want to own the entire wireless stack inside of its products. 0:02:04.520 --> 0:02:07.200 How that for is the relationship between the two companies. 0:02:07.240 --> 0:02:11.920 What are executives saying about bracing of a future relationship. Yes, 0:02:12.000 --> 0:02:15.360 so the Apple Qualcom relationship has been, you know, dundling 0:02:15.400 --> 0:02:17.799 down for some time. Qualcom has publicly said the last 0:02:17.840 --> 0:02:20.640 few years that it expects for Apple to design them 0:02:20.680 --> 0:02:23.160 out of its products. Remember there was this major lawsuit 0:02:23.520 --> 0:02:26.880 over patents and royalties. Apple settled that because it really 0:02:26.919 --> 0:02:29.720 needed a five G phone with the iPhone twelve and twenty, 0:02:29.960 --> 0:02:31.840 and there was no way to come to market with 0:02:31.880 --> 0:02:34.800 the five G device unless they used Qualcom, so they 0:02:34.800 --> 0:02:36.680 needed to come to I believe it was a six 0:02:36.800 --> 0:02:40.400 year licensing agreement and a four or five year supply 0:02:40.480 --> 0:02:43.679 agreement at that time for the Qualcom modems inside of 0:02:43.720 --> 0:02:47.320 the iPhones. Now for Broadcom. Broadcom and Apple signed a 0:02:47.360 --> 0:02:50.280 fifteen billion dollar deal a couple of years ago that 0:02:50.320 --> 0:02:53.120 expires at the end of this year, right, And so 0:02:53.200 --> 0:02:56.080 that is also an indicator that there had been some 0:02:56.200 --> 0:02:59.239 trials and tribulations between the two companies. And now we 0:02:59.320 --> 0:03:01.240 know that it's pretty clear that Apple is also playing 0:03:01.280 --> 0:03:04.280 design broadcome out. But you look at any major supplier 0:03:04.320 --> 0:03:06.920 of components inside of Apple's devices, you can bet that 0:03:06.960 --> 0:03:09.480 Apple wants to work on its own in house custom solution, 0:03:09.960 --> 0:03:12.080 Mark Kara and I had to completely rip up the 0:03:12.080 --> 0:03:15.799 script for the show today because you have broken one 0:03:15.880 --> 0:03:19.200 story after another. Your other scoop this Monday was that 0:03:19.240 --> 0:03:22.960 Phil Peter sterns sorry, who was the Services VP, is 0:03:23.040 --> 0:03:26.440 leaving the company, leaving Apple according to sources. Why is 0:03:26.480 --> 0:03:30.600 that significant? This is hugely significant. So Peter Stern was 0:03:30.600 --> 0:03:33.960 a very quick riser at Apple. He's the brain, the 0:03:34.040 --> 0:03:37.040 driving force behind Apple subscription business. As part of its 0:03:37.160 --> 0:03:40.600 services business, he led the business side of Apple TV Plus, 0:03:40.920 --> 0:03:45.040 Apple Arcade, Apple News Plus, Apple Fitness Plus, as well 0:03:45.080 --> 0:03:47.800 as the marketing side of all of the the Apple services. 0:03:48.120 --> 0:03:51.840 He spearheaded bundles bundles for content within Apple TV plus 0:03:51.880 --> 0:03:54.920 the Channels service in the TVP but also the Apple 0:03:54.920 --> 0:03:57.360 One bundles. So he was really the brains behind this 0:03:57.440 --> 0:03:59.440 push in services that has made it one of the 0:03:59.440 --> 0:04:04.040 most components of the company's overall business. Now he's leaving. 0:04:04.040 --> 0:04:05.840 What that's gonna do is going to raise the profile 0:04:05.880 --> 0:04:08.560 of Oliver Schuster. He's the head of Apple Music. Now 0:04:08.560 --> 0:04:10.800 he's going to be taking on much of the responsibilities 0:04:10.840 --> 0:04:13.520 of Stern, and you can really probably Shoe and Schuster 0:04:13.560 --> 0:04:16.680 at this point as the eventual successor to Eddie q who, 0:04:16.760 --> 0:04:19.560 as we know, is the person behind all of Apple 0:04:19.640 --> 0:04:24.160 services and has been a top executive, a very senior lieutenant, 0:04:24.400 --> 0:04:26.960 a top three to five person at Apple under Steve 0:04:27.040 --> 0:04:30.320 Jobs and now under Tim cook Mark. I've just got 0:04:30.360 --> 0:04:33.080 back from Cslas Vegas, and you and I've written about 0:04:33.120 --> 0:04:35.920 this together in the past. Apple is never there, not 0:04:36.000 --> 0:04:38.440 normally in recent years at least, but there was a 0:04:38.440 --> 0:04:41.000 big discussion around a r v R and I notice 0:04:41.160 --> 0:04:45.200 your newsletter power on over the weekend looking at three. 0:04:45.640 --> 0:04:47.719 This will be a big year for Apple in the 0:04:47.760 --> 0:04:50.920 realm of a r VR, win't it. So Apple's next 0:04:50.920 --> 0:04:53.440 big thing is a mixed reality headset. It's gonna cost 0:04:53.440 --> 0:04:55.760 about three thousand dollars. They've been working on this for 0:04:55.800 --> 0:04:59.039 about seven years. They're going to introduce it sometime this 0:04:59.160 --> 0:05:02.240 spring March April time frame, talk more about it at 0:05:02.240 --> 0:05:05.600 their developer conference in June, and then released two consumers 0:05:05.600 --> 0:05:07.400 in the fall. So this is a big year for 0:05:07.440 --> 0:05:09.279 Apple in terms of a R and v R. And 0:05:09.320 --> 0:05:11.880 I'm sure you've had suppliers who are working with Apple 0:05:11.920 --> 0:05:16.120 and components without product discussing their plans at CS. The 0:05:16.160 --> 0:05:20.720 price point I mean where we expected three thousand. It's 0:05:20.720 --> 0:05:24.080 an earth shattering price point. It's going to be uh, 0:05:24.279 --> 0:05:25.880 let me do the quick math here. It's going to 0:05:25.920 --> 0:05:29.479 be about eight to ten times more expensive than the 0:05:29.480 --> 0:05:32.520 competing product from Meta, but it's also probably going to 0:05:32.560 --> 0:05:35.080 be eight to ten times better than their competing products. 0:05:35.080 --> 0:05:38.200 So I think it's really up to what consumers want 0:05:38.240 --> 0:05:40.400 to do with that, all right, bloombergs Mark gam And 0:05:40.440 --> 0:05:42.920 breaks stories every hour of the day, does the math 0:05:43.000 --> 0:05:45.160 live for us on the show. Thank you. I mean, 0:05:45.279 --> 0:05:47.720 you know, a r VR has been top of mind 0:05:47.760 --> 0:05:49.159 for you and I for a few days now. I 0:05:49.279 --> 0:05:53.120 was at CS where obviously you know that the latest 0:05:53.120 --> 0:05:55.520 consumer gadget that is the next generation that people are 0:05:55.520 --> 0:05:58.200 looking to. You've had your own bit of fun during 0:05:58.240 --> 0:05:59.760 the day on Monday, haven't you? In the realm of 0:05:59.800 --> 0:06:02.080 day r V I have, and I arrived on my 0:06:02.120 --> 0:06:04.400 city bike, So apologies for any like crow that you 0:06:04.440 --> 0:06:06.840 might be able to see in this current footage, because 0:06:06.880 --> 0:06:09.000 I did have it on in my cycling outfit. But 0:06:09.080 --> 0:06:11.520 I got to play with the Quest Pro, which I'm 0:06:11.560 --> 0:06:13.040 not sure if you like you've laid hands on the 0:06:13.120 --> 0:06:16.240 Quest too from metas now I happen to have a 0:06:16.320 --> 0:06:19.040 quest to my home, but I hadn't played with a 0:06:19.120 --> 0:06:21.600 pro check out my leggames. I'm sorry, but I was 0:06:21.640 --> 0:06:24.440 looking at all these latest tribex are was my favorite. 0:06:24.440 --> 0:06:26.039 You just saw me standing up using that. Basically I 0:06:26.080 --> 0:06:31.280 was a DJ this morning. And again it's all it's 0:06:31.400 --> 0:06:34.160 you're immersed within this idea of your being taught how 0:06:34.200 --> 0:06:36.360 to DJ, how to like build up the sounds, how 0:06:36.400 --> 0:06:38.680 to move them. Then I was doing here as I 0:06:38.720 --> 0:06:42.560 sat down, more of the focus on Horizon workspace. So 0:06:42.600 --> 0:06:45.120 this is really where perhaps Metal wants to get you 0:06:45.120 --> 0:06:47.799 excited how the future of work rooms, how the future 0:06:47.800 --> 0:06:50.680 of us interacting at work might differ. And I have 0:06:50.760 --> 0:06:52.799 to say I was impressed. And I just think before 0:06:52.839 --> 0:06:55.480 anyone's critical of things like n f t S, things 0:06:55.520 --> 0:06:59.120 like Peloton, things like the metaverse and VR, you've got 0:06:59.120 --> 0:07:00.719 to play with these things before you can have any 0:07:00.720 --> 0:07:02.920 sort of viewpoint here. And I actually really like the 0:07:02.920 --> 0:07:04.960 fact that I could be sat with just a small 0:07:05.000 --> 0:07:09.640 computer and actually through the wonder of the R and 0:07:09.720 --> 0:07:12.240 a R I could have like surround screens. I could 0:07:12.240 --> 0:07:14.640 be having this beautiful view while I worked. It's basically like, 0:07:14.720 --> 0:07:16.240 if you're going to stay in an airbnb and have 0:07:16.280 --> 0:07:17.560 a small office, you could go and do it to 0:07:17.640 --> 0:07:20.120 a really wonderful degree. I think for me, you know 0:07:20.160 --> 0:07:22.000 that when it comes down to the technology, it comes 0:07:22.000 --> 0:07:24.600 down to that price point, you know, three thou dollars 0:07:24.600 --> 0:07:27.400 for the Apple first generation of a r VR headset, 0:07:27.440 --> 0:07:29.960 and Mark mentioned it that the quest to at least 0:07:30.000 --> 0:07:32.600 is is many factors cheaper than that. But as you said, 0:07:32.640 --> 0:07:35.320 I have experienced it, you know, down in in East 0:07:35.320 --> 0:07:38.800 Palo Alto, and that I actually felt, I did feel 0:07:38.840 --> 0:07:41.680 a bit disoriented. But for me, what was amazing was 0:07:41.680 --> 0:07:44.520 the workout. You know, I'm you know, I'm a Peloton user, 0:07:44.560 --> 0:07:47.200 I'm a Jim goer, but the lightsaber game for one 0:07:47.200 --> 0:07:51.240 of a better expression. Really interesting workout, sweating. We'll dig 0:07:51.320 --> 0:07:55.160 up that footage for another time. Great, great stuff. I mean, 0:07:55.160 --> 0:07:56.720 we want to get out there. That's the whole point. 0:07:56.720 --> 0:07:58.320 So if you're watching this and you're working in the 0:07:58.320 --> 0:08:00.400 realms of a r v R, give us a call. Yeah, 0:08:01.000 --> 0:08:02.880 we want to play with these things. Coming up What 0:08:03.040 --> 0:08:05.400 to watch in tech this year? Of course, two FED 0:08:05.400 --> 0:08:08.640 officials sirring some cold water and traders this Monday, after 0:08:08.680 --> 0:08:12.040 signaling the interest rates could top five we'll discuss all 0:08:12.080 --> 0:08:14.560 of that and more with Emily Bower sock Hill of 0:08:14.640 --> 0:08:28.240 Bowerstock Capital Partners. Next, this is Bloomberg. We started off 0:08:28.240 --> 0:08:31.600 this show by telling you pretty volatile day and training overall, 0:08:31.640 --> 0:08:34.559 particularly when you're looking and actually tech stocks managing to 0:08:34.720 --> 0:08:37.760 whether this sell off, whether some of the concerns about 0:08:37.840 --> 0:08:40.400 whether the Federal Reserve is still very intent on hiking 0:08:40.480 --> 0:08:43.400 rates above five and managed to be galvanized by the 0:08:43.400 --> 0:08:45.880 reopening story from China. But what about the rest of 0:08:46.559 --> 0:08:49.280 three Let's dig into it with Emily bowerstock Hill seeo 0:08:49.400 --> 0:08:52.880 founding partner of Bowerstock Capital Partners, fifty million dollars in 0:08:52.920 --> 0:08:55.360 assets under management. Emily, great to have some time with you, 0:08:55.400 --> 0:08:58.160 and let's go broad to start this whole conversation off. 0:08:58.320 --> 0:09:00.640 When you look at the days tradeing and you try 0:09:00.679 --> 0:09:04.559 and perspective out what look like you Are you bullish? 0:09:04.679 --> 0:09:07.000 Are you are you barish? When you get in terms 0:09:07.040 --> 0:09:11.400 of your sense, Well, I would classify myself as bearish, 0:09:11.960 --> 0:09:14.600 But you know, I think that's the consensus out there 0:09:14.679 --> 0:09:18.640 right now. So I don't think there's anything terribly uh, 0:09:18.679 --> 0:09:21.680 you know, revolutionary about saying that. I think, particularly in 0:09:21.679 --> 0:09:24.480 the tech sector, you know, we are at the end 0:09:24.600 --> 0:09:28.280 of you know, we've essentially had a bubble burst that 0:09:28.360 --> 0:09:31.720 had been building for two or three years. And I 0:09:31.760 --> 0:09:34.439 started in this business back in the early two thousand's, 0:09:34.480 --> 0:09:37.880 and so I have a very vivid memory of, you know, 0:09:37.960 --> 0:09:41.280 what happened in those years after the you know, the 0:09:41.280 --> 0:09:45.080 first tech bubble burst. So I would be surprised. You know, 0:09:45.120 --> 0:09:47.040 I think that there's some really good names in the 0:09:47.040 --> 0:09:50.520 tech sector, but I would be very surprised to see, 0:09:51.040 --> 0:09:54.360 you know, a quick, happy rebound. You've got to be 0:09:54.559 --> 0:09:57.880 very selected within the sector. And I mean everyone that 0:09:57.920 --> 0:10:01.240 you talk to sort of keeps referencing the interest rate environment. 0:10:01.280 --> 0:10:03.959 That is why we saw the claps and evaluation two. 0:10:04.040 --> 0:10:06.400 But is that the story for you? Now? Do we 0:10:06.480 --> 0:10:10.800 think enough of the prices, the overall valuations have thinned 0:10:10.800 --> 0:10:13.679 out enough that it's less about that, it's more about 0:10:14.280 --> 0:10:19.679 individual stories and individual stocks. As you say, yes, I 0:10:19.720 --> 0:10:22.560 think the interest rate increases for the most part have 0:10:22.679 --> 0:10:26.200 been priced in. I think the problem here is that 0:10:26.240 --> 0:10:29.000 you look at a company like Amazon or Facebook or 0:10:29.080 --> 0:10:34.479 Shopify or Salesforce. You know, they really during the pandemic, 0:10:34.640 --> 0:10:40.319 they spent with abandoned and they they they increase their workforce. 0:10:40.800 --> 0:10:45.560 They spent very heavily on technology, and now reality is 0:10:45.640 --> 0:10:48.880 hitting and capital is much more expensive, and this is 0:10:48.880 --> 0:10:51.599 why we're seeing the layoffs and we're seeing the slowdown 0:10:51.600 --> 0:10:55.000 and spend and so I while I think the worst 0:10:55.080 --> 0:10:57.240 is behind us, and there's certainly large parts of the 0:10:57.280 --> 0:11:01.920 tech sector Apple, for example, Microsoft that are probably fairly valued, 0:11:02.360 --> 0:11:04.400 I don't think we're going to see the kind of 0:11:04.520 --> 0:11:07.840 growth rates that we saw over the last ten years 0:11:07.880 --> 0:11:10.880 over the next term. So I think it's you know, 0:11:11.120 --> 0:11:14.280 these are these are premium companies, right, I mean, I'm 0:11:14.280 --> 0:11:17.400 not suggesting that anyone goes sell their Apple or their Microsoft. 0:11:17.480 --> 0:11:20.320 In fact, it's probably a good a good time to 0:11:20.440 --> 0:11:25.600 gradually accumulate it. But don't expect the next five years 0:11:25.640 --> 0:11:28.240 to be like the last five. Emily, Caroline and I 0:11:28.240 --> 0:11:29.959 would love to get in some of the single names 0:11:30.000 --> 0:11:33.560 and specific subsectors in a moment. But there's this idea 0:11:33.600 --> 0:11:35.480 that actually, in the coming weeks, when we get fourth 0:11:35.559 --> 0:11:38.800 quarter earnings, irrespective of the trajectory for rates or the 0:11:38.920 --> 0:11:42.080 terminal rate, we're kind of bracing for this earnings recession. Right, 0:11:42.120 --> 0:11:44.560 I was looking on the Bloomberg terminal. I think that 0:11:44.640 --> 0:11:47.959 the consensus is for earnings on the NAZTAC one D 0:11:48.120 --> 0:11:50.360 to drop two percent or two point two percent. This 0:11:50.440 --> 0:11:54.079 year is an earnings recession, and earnings recession opposed to 0:11:54.120 --> 0:11:57.800 an economics procession the biggest rick risk to tech right now. 0:12:00.400 --> 0:12:03.240 I am expecting an earnings recession. I think the interest 0:12:03.360 --> 0:12:06.120 rates have increased so quickly. You know, the Fed raise 0:12:06.240 --> 0:12:10.560 seven times in two and it takes time for that 0:12:11.120 --> 0:12:14.480 to trickle through two earnings. And so I think we're 0:12:14.480 --> 0:12:17.960 going to have some earning disappointments. And you know, I 0:12:17.960 --> 0:12:20.280 think we're gonna we're gonna see that certainly through this 0:12:20.320 --> 0:12:24.520 fourth quarter reporting season. So I you know, I share 0:12:24.600 --> 0:12:27.120 the consensus view. The only thing that's alarming to me 0:12:27.200 --> 0:12:29.880 is typically when there is this much of a consensus, 0:12:29.920 --> 0:12:33.840 it's wrong. So it does give me some pause. Right, 0:12:34.120 --> 0:12:36.520 let's get to some of your top picks for three. 0:12:36.559 --> 0:12:39.280 I know that you yourself hold some of these stocks, 0:12:39.280 --> 0:12:41.200 indeed they're in your funds as well. But the names 0:12:41.200 --> 0:12:43.840 that jump out and me are not just the chip makers, 0:12:43.840 --> 0:12:46.440 but the chip equipment makers. We're showing on our screen. 0:12:46.760 --> 0:12:50.200 LAMB Research t SMC. Is there is there a broad 0:12:50.280 --> 0:12:54.720 rule of thumb you're applying here to those names. Yes, 0:12:54.800 --> 0:12:58.800 I think actually Lamb Research and Teradyne have very very 0:12:58.840 --> 0:13:01.559 similar competitive dynam m X think of them as being, 0:13:01.840 --> 0:13:04.800 you know, the equipment services of tech the white slumberge 0:13:05.040 --> 0:13:09.240 is the oil services of the energy sector. And so 0:13:09.400 --> 0:13:11.840 they are going to be a little bit more resilient 0:13:12.280 --> 0:13:16.080 in this very cyclical business. They're a little bit less 0:13:16.080 --> 0:13:18.920 affected by decisions like the one that Apple just made. 0:13:19.640 --> 0:13:23.920 They're they've got very they've got high barriers to entry 0:13:24.040 --> 0:13:26.760 because the amount of capital that has to go and 0:13:26.800 --> 0:13:30.200 build to building some of this equipment is very substantial. 0:13:30.720 --> 0:13:33.760 So I think and they all they're both very well 0:13:33.880 --> 0:13:40.160 managed companies with strong cash flow, with strong balance sheets 0:13:40.160 --> 0:13:43.240 that are that are very disciplined, and they've had to 0:13:43.280 --> 0:13:46.800 be in an industry like this, so it's their their 0:13:46.840 --> 0:13:50.959 companies to own collected dividend and you know, wait for 0:13:51.000 --> 0:13:54.920 some of this these semiico doctor issues to work their 0:13:54.960 --> 0:13:57.200 way through. You know, it was a terrible year last 0:13:57.240 --> 0:14:02.040 year down over all for the sector. So there's definitely 0:14:02.280 --> 0:14:06.239 value there if you're selective, and a lot of geopolitical 0:14:06.320 --> 0:14:08.440 risk will wrapped up in that, whether it's China US 0:14:08.480 --> 0:14:11.440 as well. I mean we've talked sort of through therefore, 0:14:11.640 --> 0:14:15.040 areas that you're kind of being cautious but still holding 0:14:15.080 --> 0:14:18.319 onto the Microsoft's, the apples, then talking about the areas 0:14:18.320 --> 0:14:21.040 that you're looking to actually like buy into. But I mean, 0:14:21.040 --> 0:14:23.360 why should you just be getting out of avoiding at 0:14:23.360 --> 0:14:27.960 all costs. This is a little bit risky, as say, 0:14:28.000 --> 0:14:30.160 but I think some of these I p o s 0:14:30.360 --> 0:14:32.200 we call them broken I p o s. I'm sure 0:14:32.240 --> 0:14:34.840 there are many people who use that term. But there 0:14:34.880 --> 0:14:39.120 were a lot of technology companies that I p oed 0:14:39.280 --> 0:14:46.480 in that I think have a long road to recovery. 0:14:46.520 --> 0:14:48.440 It doesn't mean that they're not good companies. And I 0:14:48.440 --> 0:14:51.720 would put in their palant here, a sauna, a firm, 0:14:52.360 --> 0:14:55.240 big commerce. You know, some of these companies that now 0:14:55.320 --> 0:14:58.680 are going to be stretched by how expect and so 0:14:58.760 --> 0:15:04.040 the capital is. So I would probably avoid those companies. 0:15:04.600 --> 0:15:06.640 Now I would wait. I think there's going to be 0:15:06.680 --> 0:15:10.440 a better entry point down the road. It's interesting. Emily 0:15:10.480 --> 0:15:14.520 barwasot Hill, CEO and founding partner of Bostock Capital Partners. 0:15:14.560 --> 0:15:15.960 Thank you, you know, I'm just looking at my Bloombell 0:15:16.000 --> 0:15:19.520 Caroline Palanteer, you know, not the best here in two 0:15:20.080 --> 0:15:22.480 the v makers that were the worst performers literally on 0:15:22.480 --> 0:15:33.200 then as that one she's saying, still not the time, alright, 0:15:33.360 --> 0:15:35.640 time now for your top tech calls. Starting with Jefferies 0:15:35.720 --> 0:15:38.600 placing Uber at a bias, the firm sees some upside 0:15:38.640 --> 0:15:42.440 from improving sentiment on the ride hailing company's profitability. Meanwhile, 0:15:42.520 --> 0:15:45.960 Jeffreys dropped Piers door Dash to an underperform rating and 0:15:46.040 --> 0:15:49.160 Lift at a hold. Next up, Oracle upgraded to overweight 0:15:49.200 --> 0:15:53.480 from neutral at Piper Sandler is It's cloud transformation takes hold. 0:15:53.480 --> 0:15:56.760 Piper also notes that fiscal might be a water said 0:15:56.840 --> 0:15:59.960 year for the software company, with growth in operate operating 0:16:00.080 --> 0:16:03.160 profits and earnings to share accelerating to more than ten percent. 0:16:03.200 --> 0:16:06.240 And finally, Tesla auto stock investors had a pretty rough 0:16:06.320 --> 0:16:09.840 year in two is. The industry suffered through supply change, 0:16:09.840 --> 0:16:13.760 disruptions and inventory and balances, and Tesla not spared. Therefore, 0:16:13.840 --> 0:16:16.520 Bank of America cutting its price target for the ev 0:16:16.640 --> 0:16:19.280 maker from two seven five to add and thirty five 0:16:19.320 --> 0:16:23.320 dollars and reiterating a neutral rating. Carrec interesting though Tesla 0:16:23.360 --> 0:16:25.680 managed to be rallying on the day. We want to 0:16:25.720 --> 0:16:28.360 dig into Tesla price cuts and not just on this 0:16:28.440 --> 0:16:30.760 price target. Let's talk about the price cut ramification on 0:16:30.800 --> 0:16:32.880 the actual car, particularly in China, because we know that, 0:16:32.920 --> 0:16:35.640 of course they have been cutting their prices over there, 0:16:35.720 --> 0:16:39.400 but showrooms therefore have been overwhelmed, not with potential buyer 0:16:39.480 --> 0:16:43.840 zed but protesters, people going and saying, look, you've taken 0:16:43.880 --> 0:16:46.400 down the price. What about me? What about the amount 0:16:46.480 --> 0:16:49.240 that I've just paid for my recently purchased electric vehicle? 0:16:49.320 --> 0:16:51.960 And I think all of these cut prices, I mean, 0:16:52.000 --> 0:16:54.160 what was it fourteen percent we cut last week, the 0:16:54.240 --> 0:16:57.000 second time in four months. Not only are they way 0:16:57.120 --> 0:16:58.880 cheaper to go and buyer from China than they are 0:16:58.880 --> 0:17:00.760 in the US, but you would be pretty annoyed if 0:17:00.800 --> 0:17:03.280 you just purchased one at a higher price point. Yes, 0:17:03.440 --> 0:17:06.760 second cut in China, since third cut since October or 0:17:06.800 --> 0:17:09.919 second recently, and you know, I think the executives have 0:17:10.000 --> 0:17:12.240 taken to Twitter to say these are the lowest they've 0:17:12.240 --> 0:17:15.760 ever been. And what's fascinating is the discount to US 0:17:15.800 --> 0:17:20.560 sale prices, So they're basically saying we missed the boat, Yeah, 0:17:20.800 --> 0:17:23.480 we want in. Doesn't work like that, I mean on 0:17:23.520 --> 0:17:25.720 a much smaller scale. I remember when I bought my 0:17:25.800 --> 0:17:28.440 full price Peloton many people are actually buying them, like 0:17:28.520 --> 0:17:30.000 higher than full price. I mean, if we all went 0:17:30.040 --> 0:17:31.600 back to the depths of COVID and thought about the 0:17:31.600 --> 0:17:34.040 supply chain headaches, we were all spending above and beyond 0:17:34.040 --> 0:17:36.560 on many crystals. We didn't know that was going to happen. 0:17:36.600 --> 0:17:38.320 So we now look how much cheaper that they are. 0:17:38.359 --> 0:17:40.000 But I'm not running down to Palaton and saying I 0:17:40.040 --> 0:17:41.720 want on my money back. But I can understand the 0:17:42.359 --> 0:17:45.520 frustration when they seem seemingly happen overnight, right and now 0:17:45.600 --> 0:17:48.120 Peloton follows up with more insensitives to kind of move 0:17:48.160 --> 0:17:50.800 that inventory of cheaper bikes and also trying to sell 0:17:50.840 --> 0:17:53.040 the more expensive hardware as well. I think on the 0:17:53.040 --> 0:17:55.520 e V side, what's interesting is there are many more 0:17:55.520 --> 0:17:57.600 players in China than there are here in US, and 0:17:57.600 --> 0:17:59.919 there are other well there's just other names. B y D, 0:18:00.000 --> 0:18:02.600 for example, raise prices and had a record quarter of deliveries. 0:18:02.640 --> 0:18:05.359 So I mean, but what's the price point deferential for 0:18:05.400 --> 0:18:07.479 a b y D versus a text that are they 0:18:07.600 --> 0:18:10.600 much more luxurious price point at Tesla not not the 0:18:10.680 --> 0:18:13.879 huge premium that a Mercedes for example, But there's just 0:18:13.960 --> 0:18:15.960 more choice for the consumer right here in the US, 0:18:16.640 --> 0:18:27.400 the price range is much more well said. Welcome back 0:18:27.400 --> 0:18:30.240 to Blomo Technology. I'm Caroline Hide in New York alongside 0:18:30.640 --> 0:18:34.160 in the flash mister ed Ludlow want a joy. Meanwhile, 0:18:34.359 --> 0:18:36.080 all we've gotta do is talk global. While we're both 0:18:36.080 --> 0:18:37.760 sat here in New York. We want to talk about 0:18:37.760 --> 0:18:40.840 the page potentially being turned in China for the text 0:18:40.840 --> 0:18:43.399 docks is it now? The hand sang Tech indext jumped 0:18:43.640 --> 0:18:45.760 after a top Central Bag official actually said that they 0:18:45.800 --> 0:18:48.840 clamped down on the internet sector. That's drawing to a close. 0:18:49.080 --> 0:18:51.840 Ali Baba led the rally, which comes, of course after 0:18:51.880 --> 0:18:54.720 a major squeeze on Chinese tech markets more broadly for 0:18:54.720 --> 0:18:56.800 the past two years no less, and the drop seems 0:18:56.800 --> 0:19:00.200 to have stepped from regulatory scrutiny on data production, on 0:19:00.200 --> 0:19:03.679 online gaming, and a government pushed to untangled investments in 0:19:03.720 --> 0:19:06.320 certain firms. But meanwhile, let's just think of the poster 0:19:06.480 --> 0:19:10.439 child of Chinese entrepreneurship, one billionaire Jack Mar. He's actually 0:19:10.440 --> 0:19:13.480 giving up a controlling rights of ant group that's the 0:19:13.480 --> 0:19:16.119 fintech part of his empire. Really, it's a sign that 0:19:16.160 --> 0:19:19.680 Mar is retreating yet further from his online empire following 0:19:19.880 --> 0:19:23.200 China's tech crackdowns, and he has mostly disappeared from public 0:19:23.240 --> 0:19:26.240 views since giving a speech that, of course rather criticized 0:19:26.280 --> 0:19:30.600 Chinese regulators. Just think that huge scuttling of the ANT 0:19:30.680 --> 0:19:33.879 listing still having repercussions. It still feels like such a 0:19:33.920 --> 0:19:37.199 catalyst for US listed tech shares this Monday. That and 0:19:37.240 --> 0:19:41.040 the fact that ants appointed individuals with their own voting rights, 0:19:41.080 --> 0:19:45.400 basically taking it out of Jack Mar's hands. Meanwhile, Beijing 0:19:45.640 --> 0:19:49.040 is spending big money as the US aggressively pushes for 0:19:49.080 --> 0:19:53.320 more semiconductor manufacturing market share. That includes the passage of 0:19:53.440 --> 0:19:56.760 the Chips Act, which brought more investment to US made 0:19:56.840 --> 0:19:59.240 chips or future US made chips, as well as this 0:19:59.320 --> 0:20:03.159 embargo on China chip exports from the US. Bloomberg's in 0:20:03.320 --> 0:20:06.560 King covers all things chipped for US. You've made a mind. 0:20:06.560 --> 0:20:09.600 Back in the San Francisco Bureau, we talked a lot 0:20:09.840 --> 0:20:15.560 about US policy to restrict China's access to chip making 0:20:15.560 --> 0:20:19.639 equipment and and and the latest generation of chip technology. 0:20:19.680 --> 0:20:23.360 My question to you is what has China's response been. 0:20:23.480 --> 0:20:27.720 What has China's policy been to advance their own semiconductor industry. 0:20:28.600 --> 0:20:30.320 You know, it's a very good question. I mean The 0:20:30.320 --> 0:20:32.280 way to think about this is to think about what 0:20:32.400 --> 0:20:35.320 South Korea did, think about what Taiwan did, and it 0:20:35.359 --> 0:20:39.320 took them basically thirty years to get to the position 0:20:39.320 --> 0:20:41.879 wherein where some Song is the world's largest chipmaker t 0:20:42.080 --> 0:20:45.440 SMC is arguably the world's most advantage chipmaker. China has 0:20:45.480 --> 0:20:50.679 been following that path. Unfortunately, the US are not supporting 0:20:50.800 --> 0:20:54.879 China in the way that they supported Taiwan and South Korea, 0:20:55.160 --> 0:20:57.480 and therefore China has got to this point where they've 0:20:57.520 --> 0:21:00.160 spent billions and really haven't got to the point where 0:21:00.200 --> 0:21:03.679 they can do things like withstand these restrictions that the 0:21:03.680 --> 0:21:06.800 Americans are putting upon them, and really, you know, there 0:21:06.800 --> 0:21:08.920