Speaker 1: From Mahard where Innovation of Money and Power.
Speaker 2: Collie in Silicon Vallet NBN.
Speaker 3: This is Bloomberg Technology with Caroline Hyde and.
Speaker 4: Ed Ludlove.
Speaker 5: Live from New York and San Francisco.
Speaker 6: This is Bloomberg Technology coming up technology stocks.
Speaker 5: They jump on cooling inflation, but.
Speaker 6: City strategists still see a risk of a sell off.
Speaker 7: We discuss Elon Musk pictures himself as government spendings are
Speaker 7: in an hour's long Glitchy spaces on X with former
Speaker 7: President Trump.
Speaker 5: And Google's gadget game.
Speaker 6: We discuss the search Giant's the latest handsets and AI
Speaker 6: goals were first. That's checking on these markets and we
Speaker 6: are on the up, up and the up. And when
Speaker 6: it comes to the nasgag in the NASA one hundred
Speaker 6: hy Cooling Inflation Science PPI data today signifies that tomorrow
Speaker 6: we have all liyes on CPI and.
Speaker 5: We're managing to cush I know, up more than five
Speaker 5: point five percent. Let's call it. At the moment.
Speaker 6: Over the course of the last four training days, Ed,
Speaker 6: what are the key stocks that driver us higher?
Speaker 7: So these are three names that also just happen to
Speaker 7: be the biggest points drivers to the upside. On the
Speaker 7: Nasdaq one hundred, Tesla is higher. We will talk about
Speaker 7: the focus on evs between Musk and Trump in that space.
Speaker 7: Is also taking a look at Nvidia, on track for
Speaker 7: its biggest two day.
Speaker 4: Jump since late May.
Speaker 7: I don't think we can talk enough about this, even
Speaker 7: though earnings are still far away, almost twenty eight And
Speaker 7: then Starbucks, Okay, Starbucks is not necessarily a technology company.
Speaker 7: Laxman's out as CEO, the protele CEO has been brought in.
Speaker 7: Maybe there's a digital story there, but it is the
Speaker 7: biggest points gainer on the Nasdaq one hundred and frankly
Speaker 7: on social media, Starbucks is a lot of whatever one's
Speaker 7: talking about as well. And look at that gain twenty
Speaker 7: two percent on a new CEO.
Speaker 4: Interesting, got to.
Speaker 5: Talk about it.
Speaker 6: Meanwhile, though, let's just get back to our core of
Speaker 6: tech stocks. They are jumping, but there is still this
Speaker 6: warning from City Group that called our rye stocks could
Speaker 6: come back under significant pressure basically on any negative economic data.
Speaker 6: That says investor positioning remains extended on the butish side,
Speaker 6: despite of course, what has been the past.
Speaker 5: Month's set off for more on these markets.
Speaker 6: That's bringing Cally Cox's chief market strateses that whit holds
Speaker 6: wealth management. So it's interesting City is pointing out here,
Speaker 6: there's twenty two and a half billion dollar worth of
Speaker 6: long positions still out there tracking the futures on the
Speaker 6: NAS that one hundred. Why are we still seeing these
Speaker 6: long bets? Are they right to be long at the moment?
Speaker 8: So sure, I think we agree with City there. I mean,
Speaker 8: tech stocks have.
Speaker 9: Had a stellar year so far minus the last month,
Speaker 9: and you know, with so many economic conditions changing, with
Speaker 9: the expectation for interest rates changing, we think there could
Speaker 9: be more volatility there just because tech has been a
Speaker 9: victim of its own success.
Speaker 6: So to that end, to people reposition, how would you
Speaker 6: if you found yourself generally long some of the big
Speaker 6: mega while the Magnificent seven shall we still call them?
Speaker 5: How do you reposition that? Should you reposition that?
Speaker 9: So, look, we're a big believer in tech, it's hard
Speaker 9: not to be. But you know, we also believe in risk,
Speaker 9: in managing a portfolio that helps you get from point
Speaker 9: A to point.
Speaker 8: B iNeST way possible.
Speaker 9: So we've been talking to clients about rebalancing out of tech,
Speaker 9: you know, selling a little bit of those tech cheers
Speaker 9: that have done so well this year and looking at
Speaker 9: you know, potentially smaller stocks, mid cap stocks, and looking
Speaker 9: at those rate sensitive sectors outside of tech.
Speaker 4: Kelly, I don't apologize this.
Speaker 7: We were sharing shares of Nvidia earnings of August twenty eighth.
Speaker 7: How anxious a period of time will it be for
Speaker 7: financial markets until that earnings print?
Speaker 8: Well, I apologize about that.
Speaker 9: I think that's on a lot of investors' minds right now.
Speaker 9: I know that's something that we're watching just because Nvidia
Speaker 9: shows that it can just it can beat any kind
Speaker 9: of expectation you put out there over and over again.
Speaker 9: Is really the hot stock when it comes to fundamentals
Speaker 9: within the tech sector.
Speaker 8: The bar is a little bit higher.
Speaker 9: The bar in general has been higher for tech earnings
Speaker 9: this season. But the AI story is still quite real.
Speaker 9: I think my question is, you know, what kind of
Speaker 9: guidance are we going to get out of video? How
Speaker 9: are investors going to digest a sales and you know,
Speaker 9: earnings estament beat if bad guidance comes on the back end.
Speaker 9: You know, I think the AI story is just a
Speaker 9: little complicated right now.
Speaker 8: I think it's lost a little bit of its luster.
Speaker 7: I think I'm right in saying Kelly that you're probably
Speaker 7: in the camp of investors that look at the technology sector,
Speaker 7: particularly cyclical areas of it, maybe the chip space, and
Speaker 7: say growth cycles come and go.
Speaker 4: I get that, but what if the growth cycle goes
Speaker 4: within Video?
Speaker 7: You know, it's not like Jensen huang To, I don't know,
Speaker 7: give a modest outlook. I guess is the lesson we've
Speaker 7: learned so far because his company is performing, but there
Speaker 7: is a scenario where he says, actually things have slowed down.
Speaker 9: Yeah, it's a great question, and I have to remind
Speaker 9: people too that in Video is just one player in
Speaker 9: the semiconductor sector. You know, obviously it's fundamentals have been
Speaker 9: incredibly good, but we still don't know who the winner
Speaker 9: when it comes to AI, when it comes to the
Speaker 9: AI story, and we could see other chip makers take
Speaker 9: some of that market share away from in Video. You know,
Speaker 9: I think if Jensen does come out and say that
Speaker 9: growth that isn't as great as we're seeing, or growth
Speaker 9: hasn't been as great as we've seen in the past,
Speaker 9: I think investors could get a little.
Speaker 8: Bit worried there, and that's a reason why you.
Speaker 9: Should maybe you know, rebalance some money out of tech.
Speaker 9: You know, the expectations for the tech sector are just
Speaker 9: so high right now that it's hard to see tech
Speaker 9: beating those for a while.
Speaker 6: Kenny, It's interesting that while we have one side of
Speaker 6: Citi's mouth saying, look, we're thinking we've got a big
Speaker 6: exposure to a downside risk if we do get some
Speaker 6: worrying economic data on the other side of their mouth
Speaker 6: speaking about City Group analysts of basically buying the dip
Speaker 6: in chip names in particular.
Speaker 5: They still like in video.
Speaker 6: They're thinking maybe some other key names could be abroadening
Speaker 6: out because look, when you look historically, other banks have
Speaker 6: shown that we've had four quarters of an up cycle
Speaker 6: for chips, but actually usually with us about ten quarters.
Speaker 6: How do you remain exposed without perhaps just keeping on
Speaker 6: betting on the same things. How do you take profit
Speaker 6: but still diversify within technology?
Speaker 9: You do it carefully, and look, before any conversation about rebalancing,
Speaker 9: you have to realize what your risk tolerance in time
Speaker 9: horizon is.
Speaker 8: If you're looking at a five.
Speaker 9: To ten year time horizon and you're really excited about AI,
Speaker 9: then hey, you know, any sell off that we see
Speaker 9: in the tech sector, especially here, could be an opportunity
Speaker 9: for you. You just have to, you know, potentially wait it
Speaker 9: out a little bit. In terms of rebalancing, we like
Speaker 9: slow and steady, you know, maybe selling a little bit
Speaker 9: here and there, revisiting your targets when it comes to
Speaker 9: single stocks that you're owning and sectors that you're owning,
Speaker 9: and just understanding that there's a market outside of tech,
Speaker 9: and you know, there are some exciting stories in other sectors.
Speaker 8: I know we're on a tech show right now, but
Speaker 8: you know.
Speaker 5: Tech is exciting about Patti nothing else.
Speaker 8: Nothing else matters.
Speaker 9: But over the next year or so, we could see
Speaker 9: some other socks tape leadership, and in fact we're already.
Speaker 4: Seeing that, you know here on Bloomberg Technology.
Speaker 7: Cali I like to ask about the FED if I may.
Speaker 7: After PPI this morning, what's the CALI call on what
Speaker 7: the FED does? Because, as we say on this show,
Speaker 7: higher rates discount the present values of future cash flows,
Speaker 7: and when you're technology investor, that's important.
Speaker 9: So the FED looks like it's going to have to
Speaker 9: cut in September. CPI data confirmed this this morning.
Speaker 8: Excuse me.
Speaker 9: PPI data confirmed this this morning. I mean, we saw
Speaker 9: quite a drop in services PPI or slowing down in
Speaker 9: services PPI, and that just boosts the story for inflation
Speaker 9: getting lower and lower and close to the Fed's target.
Speaker 9: And if the Fed does start cutting rates in September,
Speaker 9: we could see investors' behavior around tech stocks change.
Speaker 8: I'll be honest.
Speaker 9: Tech stocks are growth stocks, but I think that there
Speaker 9: are a lot of flavors in the tech industry and
Speaker 9: investors are looking at them quite differently. So if we
Speaker 9: see growth maintain but we see rates come down, I
Speaker 9: actually think that this rotate out of tech could continue
Speaker 9: this rotation in to rate sensitive sectors.
Speaker 8: But you have to remember, if we do hit a rough.
Speaker 9: Patch in the economy, some of the strongest stocks on
Speaker 9: the market are tech stocks, so investors could look at
Speaker 9: those as a recession trade of sorts.
Speaker 7: We got all the flavors of technology here on Bloomberg Technology.
Speaker 4: Take your pick.
Speaker 7: Kellie Cox, chief market strategist Atridhol's Wealth Management, Thank you
Speaker 7: very much. Coming up from the show, Elon Musk sat
Speaker 7: down with Donald Trump for a wide ranging interview, which
Speaker 7: he called more of a conversation last night. On a
Speaker 7: next basis, we'll discuss this is Bloomberg.
Speaker 10: I think it would be great to just have a
Speaker 10: government efficiency commission that takes a look at these things
Speaker 10: and just ensures that the taxpayer money, the taxpayers are
Speaker 10: harder money in a good way.
Speaker 4: And I'd be happy to.
Speaker 11: Help out on such a commission.
Speaker 4: I'd love it if it were formed for you.
Speaker 12: You're the greatest cutter.
Speaker 7: That was Elon Musk taking the opportunity to pitch himself
Speaker 7: for a role in a second Trump administration on last
Speaker 7: night's Eventful Spaces with the former President. Bloomberg's Max Chafkin
Speaker 7: of Elon Inc. Joins us now, and I mean, there's
Speaker 7: so much to recap for me. That was in the
Speaker 7: context of an election cycle, important like this idea that
Speaker 7: Musk would maybe have a role if Trump were re
Speaker 7: elected to the White House, and Musk also was at
Speaker 7: pains to kind of clarify his own politics. You tuned
Speaker 7: in for many hours as well.
Speaker 13: Let's start there, Yeah, I mean nearly three hours long.
Speaker 13: With the lengthy delay, there were a long bunch of
Speaker 13: technical difficulties that caused it to start laid. I mean,
Speaker 13: in terms of the sort of must Trump relationship, what
Speaker 13: I heard was Musk being extremely deferential to Trump in
Speaker 13: a way that is pretty unusual for him. He's obviously
Speaker 13: a combative guy. I mean, not only was he kind
Speaker 13: of asking for a job, but he was nodding along
Speaker 13: during lengthy sections where Trump was seeming to downplay climate change.
Speaker 13: You know, Musk has has a lot to potentially gain here, beyond,
Speaker 13: of course, potential employment. Tesla and SpaceX both have a
Speaker 13: lot to gain by a friendly regulatory environment, both in
Speaker 13: terms of subsidies government contracts, as well as you know,
Speaker 13: potential regulation or lack thereof, of things like the potential ROBOTAXI.
Speaker 6: Let's just go into that awkwardness around climate change and
Speaker 6: the fact that he calls himself sort of well, you
Speaker 6: can be an environmentalist. You can still do good for
Speaker 6: the planet, but not have to sacrifice on ultimately a
Speaker 6: great car.
Speaker 5: It was kind of his pitch to a whole new audience.
Speaker 13: Well, you know, weirdly, that has been Musk's pitch for
Speaker 13: some time, almost from the very beginning. What was different
Speaker 13: was his willingness to kind of go along with the
Speaker 13: idea that climate change is not existential. You know, back
Speaker 13: during the early days of Tesla and even especially during
Speaker 13: the Obama years, Musk would emphasize that we're you know,
Speaker 13: the planner is running out of oil, that climate change
Speaker 13: is a really big problem. Trump during this space said
Speaker 13: We've got five hundred years as long before we run
Speaker 13: out of oil. You know, climate change is not that
Speaker 13: big a deal. We don't need all electric cars.
Speaker 11: You know.
Speaker 13: These are all things that at an earlier time would
Speaker 13: have really set Elon musk off, and he has, you know,
Speaker 13: navigated to a slightly different position, a position that is
Speaker 13: definitely much more accommodating of kind of right wing skepticism
Speaker 13: of man made climate change.
Speaker 7: Max electric vehicles would discuss. Actually, I want to bring
Speaker 7: some news this morning to an audience that in response
Speaker 7: to the spaces last night, the UAW, the United Auto
Speaker 7: Workers union, filed a labor complaint, a practice charge against
Speaker 7: both Trump and musk And I'm summarizing, but they basically
Speaker 7: said that during the course of that conversation, the two
Speaker 7: men illegally intimidated.
Speaker 4: Union workers.
Speaker 7: Actually must literally thirty seconds ago responded on x which
Speaker 7: we will show as soon as we got that in
Speaker 7: a second. To combine all that, please, it's difficult, but
Speaker 7: that news this morning of what was said about EV's
Speaker 7: and unionized work.
Speaker 13: Well we actually heard it in that clip you played
Speaker 13: that that bit about him being a great cutter that
Speaker 13: went on. Trump said, you know, your workers went on
Speaker 13: threatening to go on strike and you just let them go.
Speaker 13: The UAW has already cut an ad about that, And
Speaker 13: of course this could become politically difficult for Trump, who's
Speaker 13: who's trying to cater to working class voters in swing state,
Speaker 13: especially in the Midwest, where where unions definitely hold sway
Speaker 13: and where at times he's seemed to make up some ground.
Speaker 13: And of course it could be an issue for Elon
Speaker 13: Musk because the UAW is trying to unionize electric vehicle
Speaker 13: manufacturers and has signals tension to do so, although it
Speaker 13: doesn't seem like has made a ton of progress yet.
Speaker 6: So we know what we did here around EVS and
Speaker 6: around well, as you said, basically sort of a cozying
Speaker 6: up of mustera Trump.
Speaker 5: What we didn't hear was anything about Krypto.
Speaker 13: Did that sparzy Well, I mean, it's surprising in the
Speaker 13: sense that Elon Musk has kind of expressed affinity with
Speaker 13: the kind of crypto community. There's a lot of overlap
Speaker 13: between fans of Elon Musk and fans of bitcoin. But
Speaker 13: you know, Elon must never been totally a crypto guy.
Speaker 13: He's more somebody who seemed like he has a desire
Speaker 13: to kind of graft himself.
Speaker 4: Onto a popular movement.
Speaker 13: So in that sense, no, But what we did here was,
Speaker 13: you know, kind of a pitch for the boring company
Speaker 13: must tunneling venture, as well as Trump suggesting that he
Speaker 13: might be open to expanding the boring Company's operations, praising
Speaker 13: Musks tunnels in Vegas as well as Ed said this
Speaker 13: kind of more muted praise, kind of almost like backhanded
Speaker 13: compliment for Tesla's cars, Trump saying they're good, but not
Speaker 13: everyone needs an electric vehicle.
Speaker 6: Oh the nuances there all over Elon Inc. As always
Speaker 6: our mix Chaffkin, we thank you, look as we reference
Speaker 6: at the very beginning, though, there were some technical glitches
Speaker 6: during Musk's conversation with Trump last night on xpasis, Mask
Speaker 6: actually blamed the delay on a cyber attack, and he
Speaker 6: didn't provide any evidence, and then went on when the
Speaker 6: event started to sort of suggest that Trump's opponents are responsible.
Speaker 14: Gesticulously, we unfortunately had a massive, distributed anilo service attack
Speaker 14: against our servers. As this massive attack illustrates, there's a
Speaker 14: lot of opposition to people just hearing what President Trump
Speaker 14: has to say.
Speaker 6: It's been an expert Undidos Brian Palmer, CEO of Trellis, Brian,
Speaker 6: did this look feel seem like it was a cyber attack?
Speaker 15: It's possibly a distributed denial of service attack, which is
Speaker 15: a malicious attempt to disrupt the servers. That is one possibility.
Speaker 15: There's a lot of reasons why servers and a system
Speaker 15: could go down. I don't have any insight directly, but
Speaker 15: it is a possibility.
Speaker 7: A senior source at X last night told me that
Speaker 7: it was definitely add US attack, but The Verge reported,
Speaker 7: citing staffers un named staffers, that it was not ADDUS attack. Regardless,
Speaker 7: what did it tell you about the strength or fragility
Speaker 7: of X's security and its systems.
Speaker 15: Yeah, I wouldn't speculate on whether it was or it
Speaker 15: wasn't because I'm not involved in the investigation. What I
Speaker 15: can tell you is that around election time, fifty percent of.
Speaker 2: The world is going to have elections this year.
Speaker 15: What we do know is that distributed denial of service
Speaker 15: attacks are on the rise, and they are used to
Speaker 15: disrupt campaigns. They're used to disrupt elections, So it is plausible.
Speaker 2: Like I said, I don't have.
Speaker 15: Any details on the investigation or why this particular incident.
Speaker 2: Happened at x RAN.
Speaker 6: I'm sure with Trelix, your job is to ensure that
Speaker 6: fight such events, websites, live streams remain impenetrable.
Speaker 5: And I'm interested as to whether this can.
Speaker 6: Be a case because this isn't the first time that
Speaker 6: we've seen some really awkward, embarrassing delays to certain spaces,
Speaker 6: and I'm wondering what could have been done to prevent
Speaker 6: a denal of distribution service attack occurring in this particular way.
Speaker 15: Yeah, Look, these attacks are very serious. They happen at scale.
Speaker 15: They happen a lot of different ways. They can happen
Speaker 15: through volume by just sending so many packets and by
Speaker 15: using botnets and zombies. So these can be very powerful
Speaker 15: and many companies have suffered. We know just recently on
Speaker 15: July thirtieth, the Azure platform suffered at a distributed denial
Speaker 15: service attack and was down for about six hours.
Speaker 2: That impacted the Starbucks app and outlook and Minecraft some
Speaker 2: other things as well.
Speaker 15: So these attacks are pretty sophisticated, especially when they're being
Speaker 15: played out by adversaries very skilled.
Speaker 7: Brian the FBI said that it's investigating allegations made by
Speaker 7: the Trump campaign team about documents access from the campaign
Speaker 7: during attack in the last week or so. Have you
Speaker 7: followed that case study and what do you make of it?
Speaker 15: I followed it. I heard the reports. I think what
Speaker 15: we have to do is let the FBI do their work.
Speaker 15: They've got some great cyber professionals who are going to
Speaker 15: do an investigation.
Speaker 2: Again, we know that in election season, all elections.
Speaker 15: We saw it recently in France there was a distributed
Speaker 15: denial of service attack launched by Russian activists on the
Speaker 15: French government during their election. So this is something that's happening,
Speaker 15: the specific cyber attack that you talked about over the weekend.
Speaker 15: I'll be interested to see what the FBI uncovers in
Speaker 15: their investigation.
Speaker 6: I mean, Brian, we're also fresh in our mind of
Speaker 6: how a lot of our lives and flights got put
Speaker 6: on ice a few fridays ago because of a CrowdStrike issue.
Speaker 6: When that happened, Elon Musk went on to X and said, look,
Speaker 6: he's ditched crowd strike. And I'm interested that you actually
Speaker 6: said at the time, you told Bloomberg that you understand
Speaker 6: why and you'd welcome Tesla CEO as a customer.
Speaker 5: Have you been approached by your musk wanting you.
Speaker 15: I haven't talked to haven't talked to him at all,
Speaker 15: but obviously we're a leader in cybersecurity and if they
Speaker 15: need some help, my offer stance we can do.
Speaker 2: We'll do whatever we can to help. Bad X and Eli.
Speaker 4: Brian Palmer, CEO Trelix, thank you very much.
Speaker 5: Time now for talking tech.
Speaker 6: The first up, well Polish billionaire Afile Roska takes aim
Speaker 6: at deep fakes, holding Meta accountable for fake ads on
Speaker 6: its platform.
Speaker 5: These are the likenesses of famous people.
Speaker 16: Look.
Speaker 6: The founder and CEO of InPost won an injunction last
Speaker 6: week temporarily banning Meta from publishing fake ads using the
Speaker 6: likeness of him and his wife, who's a local TV
Speaker 6: celebrity opponent. Rodka is now waiting on a similar order
Speaker 6: in Europe from Land's Data Protection Commission plus Singapore's c Limited.
Speaker 5: It raises its outlook on e commerce strength.
Speaker 6: The company is actually saying they expect sales of goods
Speaker 6: to rise in the mid twenty percent range, exceeding.
Speaker 5: The high teens they saw in March.
Speaker 6: Second quarter Profit and sales also top anist estaments and
Speaker 6: investors that anxiously awaiting Alphabet's Google Pixel event is happening today.
Speaker 6: The tech giant is set to debut new hardware and software.
Speaker 6: Look traders are hoping that the introduction of a new
Speaker 6: AI features to the redesigned Pixel phones, we could help
Speaker 6: stop what has been a massive sell off.
Speaker 5: It's wiped off three hundred.
Speaker 6: And sixty billion dollars in market value of Google in
Speaker 6: just one month and more on it.
Speaker 7: Yeah, this is worth talking about and thinking about what
Speaker 7: we can expect from the Google Pixel event. Let's get
Speaker 7: to Bloomberg Intelligence and Lissena Rana. We have this pie
Speaker 7: chart and it tells the story of where the Pixel
Speaker 7: or handset sales sit within the biggest, bigger picture over
Speaker 7: the last four quarters. In Frank piannareg the ar they
Speaker 7: are a small percentage of revenue. So why is success
Speaker 7: with the Pixel important?
Speaker 17: I mean it really has to showcase the software. I
Speaker 17: mean the hardware doesn't really matter because remember most of
Speaker 17: the phones in the world are Android phones at the
Speaker 17: end of the day. So if Google can showcase what
Speaker 17: Gemini can do on their device, I mean, it really
Speaker 17: changes the narrative for high end Samsung phones over the
Speaker 17: long term. I mean, this is a this is something
Speaker 17: that an Apple has to deal with, you know, next month.
Speaker 6: What's interesting, of course, is the fact that that tie
Speaker 6: up between open Ai, CHATCHBT and Apple is somewhat delayed.
Speaker 5: And how much therefore integral how much.
Speaker 6: Of a boon to Google is it that they basically.
Speaker 5: Have their own underlying large language models.
Speaker 17: See, at the end of the day, people are not
Speaker 17: buying phones so quickly or moving around because of one
Speaker 17: large language model or the other. But this is really
Speaker 17: a fight between the two biggest large language made sets
Speaker 17: out there. Once Open Ai the other one is you know,
Speaker 17: Google's Gemini. And at the end of the day, Google
Speaker 17: has to showcase that they are actually better, not even
Speaker 17: closer to open AI, and these kinds of events are
Speaker 17: a chance for them to showcase that, at least when
Speaker 17: it comes to on device inferencing.
Speaker 4: Let's focus on that.
Speaker 7: Bloom Meg Intelligence has done deep analysis into generative AI.
Speaker 7: What is the future of using generative AI tools or
Speaker 7: smaller models on device ANARAG it really.
Speaker 17: Makes it what I would call is the hyper customization
Speaker 17: of smartphones, where you know your smartphone behavior is going
Speaker 17: to be very different than mine. You can do a
Speaker 17: lot of things that an assistant can help you with,
Speaker 17: do you know, from anything from booking airline tickets to maps,
Speaker 17: all those things, but you require something that's on the device,
Speaker 17: and both of these companies are really championing that they
Speaker 17: will be the first ones to achieve it.
Speaker 2: Now Apple's going to launch a new phone.
Speaker 17: They really have a long poo.
Speaker 7: Catch up Bloomberg Xana rab Brana of Bloomberg Intelligence, thank
Speaker 7: you so much. Welcome back to Bloomberg Technology. Ed Ludlow
Speaker 7: in San Francisco.
Speaker 5: And I'm Caroline Hide in New York.
Speaker 6: Quick check on these markets because we are up into
Speaker 6: the right when it comes to the Nasdaq. In fact,
Speaker 6: about a four straight days of gains. That's the longest
Speaker 6: winning streak since July the tenth, more than a month
Speaker 6: of the Nasdaq. So we're managing to see once again
Speaker 6: a bit of a risk on attitude to the market
Speaker 6: after last week's absolute turmoil. But bond market's really getting
Speaker 6: a bid as well, yields crushing.
Speaker 5: Down on the front end.
Speaker 6: Two year yields as we see off by about six
Speaker 6: basis points. Why is that the PPI print basically inflationary
Speaker 6: data is.
Speaker 5: Coming in and giving us the.
Speaker 6: Comfort that inflation is being tamed. What does that mean
Speaker 6: for CPI print tomorrow? What does it mean for the
Speaker 6: economic market re reactions? That we're seeing bitcoin currying up
Speaker 6: more than a percent because the dollar is down, Move
Speaker 6: onto the individual movers for a moment, because.
Speaker 5: That's the macro.
Speaker 6: On the micro side of things, we are looking at
Speaker 6: in video just on the higher side more than five percent.
Speaker 6: Of course, all the eyes on that's earnings. But really
Speaker 6: we're seeing and by the dip moment in some of
Speaker 6: these chip makers, we're also seeing it spread out to
Speaker 6: the likes of broad Com up more than three percent.
Speaker 5: We're seeing some.
Speaker 6: Thirty NEFT filings come out, some hedge funds and buying
Speaker 6: into this particular name. And I'm looking at Tesla because
Speaker 6: we are still more than four percent, even though you
Speaker 6: singled out what ultimately is some fighting talk coming from
Speaker 6: the overall association that focuses in on United Workers for
Speaker 6: Automobiles saying that we don't like what was said between
Speaker 6: Trump and Musk yesterday on that spaces ed. But we
Speaker 6: are seeing at the moment Tesla getting a bid. Maybe
Speaker 6: Republicans are going to be buying eves more.
Speaker 5: Let's listen in.
Speaker 7: Yeah, I think there's a lot of discuss in the
Speaker 7: markets in the short term and the long term. Let's
Speaker 7: get into it with Gil Simon, chief investment officer the
Speaker 7: two billion dollar hedge funds Soma Equity Partners, which makes
Speaker 7: concentrated long and short bets on tech, media and telecom companies.
Speaker 7: The funds up about four percent this year through June.
Speaker 7: I'm also joined by Bloomberg's Hemma Palmer, who covers this
Speaker 7: space very closely. Good morning to you, Welcome to the
Speaker 7: San Francisco studio. I want to start with AI broadly
Speaker 7: because it's what everyone's talking about. But you have this
Speaker 7: like thesis that in terms of earning t revisions or
Speaker 7: something tangible, that all the investments worth it that shows
Speaker 7: up in hardware names. I don't see too many hardware
Speaker 7: names that you're holding. Explain that to me.
Speaker 3: Yeah.
Speaker 1: So our focus has really been historically on software and
Speaker 1: internet companies. That's primarily where kind of our source of
Speaker 1: differentiation have been, just in terms of our own research
Speaker 1: and experience. We've owned some hardware over time, but one
Speaker 1: of the things that we've found difficult is just with
Speaker 1: the predictability of this early AI investment wave, and so
Speaker 1: we're looking for really durable beneficiaries of AI, and so
Speaker 1: we think we've found many in both the infrastructure and
Speaker 1: application layers. And so while it's been unfortunate to miss,
Speaker 1: like saying Nvidia, we think it's very difficult to predict
Speaker 1: just how their fundamentals play out over the next couple
Speaker 1: of years. And so, you know, we're happy with our
Speaker 1: strategy and focusing on what we know best.
Speaker 18: And Gil, you know one company that you invested in
Speaker 18: that your long is Rivian. Now, this is a stock
Speaker 18: that's been under pressure, down forty two percent so far
Speaker 18: this year. You think over two years of stock and
Speaker 18: had fifty dollars a share is currently trading around thirteen.
Speaker 18: Explain to us your blishness on this company and how
Speaker 18: much of it is writing on this deal with Voldwagen.
Speaker 1: Yeah, so great question. So I've noticed a lot of
Speaker 1: the conversation this morning has been about Elon and EVS
Speaker 1: and Tesla specifically. I think the market has really started
Speaker 1: to look at Tesla as kind of the only real
Speaker 1: winner in EVS in this country. There are some big
Speaker 1: Chinese companies like BYD that are successful as well, but
Speaker 1: we've really kind of tainted any other secondary players and
Speaker 1: evs into like this. Uh you know, dust been of unlikely,
Speaker 1: you know, kind of unviable companies. And we think Rivian
Speaker 1: is emerging into its promise as being the number two
Speaker 1: EV player after Tesla in the West. And so this
Speaker 1: deal that they just announced with Volkswagen about six weeks ago,
Speaker 1: we think is a massive validation of their position. Volkswagen
Speaker 1: is investing in aggregate of about five billion dollars that
Speaker 1: will flow to Rivian. Ravian's only a fifteen billion dollar
Speaker 1: market cap today. Compare that with Tesla at seven or
Speaker 1: almost eight hundred billion dollars, and you know, ed just
Speaker 1: being here in San Francisco, we see a lot of
Speaker 1: Rivians out on the streets. It's very reminiscent of when
Speaker 1: Tesla started to get traction with the model S. Rivian's
Speaker 1: roadmap is very much following in Tesla's footsteps, going from
Speaker 1: selling one hundred thousand dollars kind of you know, high
Speaker 1: priced cars to a mass market. And the R two
Speaker 1: and R three models which Rivian announced are going to
Speaker 1: come in twenty twenty six.
Speaker 7: I'm just gonna jump in here so as you know,
Speaker 7: our covered rub being ready closely for a few years.
Speaker 4: The VW deal was big.
Speaker 7: You know, I've written that AUJ scare has been to speak,
Speaker 7: unreliable boyfriends. You know, the Mercedes deal didn't last long.
Speaker 7: Ford never materialized, But it indicates that Rivin can't do
Speaker 7: it on its own.
Speaker 4: Is that fair? So I actually think.
Speaker 1: It's slightly different. I think the view that we have
Speaker 1: is that the legacy car industry is really struggling with
Speaker 1: a transition to modernizing their vehicle production. And so there
Speaker 1: are a couple of aspects of that. One is, the
Speaker 1: legacy car companies are really good at a couple of things.
Speaker 1: They're good at outsourcing, and they're good at marketing. They're
Speaker 1: not good at vertical integration, and they're not good at software.
Speaker 1: And so if you look at even Ford's last earnings call,
Speaker 1: one of the things that their CEO called out is
Speaker 1: that Tesla and Rivian, those are the two companies that
Speaker 1: he called out, are really the only two companies that
Speaker 1: have developed a kind of new technology infrastructure that really
Speaker 1: modernizes the experience for customers. One of the important things
Speaker 1: now as a customer is and I have both you know,
Speaker 1: I've had a Tesla for a long time. You expect
Speaker 1: to get over the air updates to your car to
Speaker 1: be able to access your car through your mobile phone.
Speaker 1: And those over the updates are not just to the
Speaker 1: user interface. There to the suspension system, the braking system,
Speaker 1: which requires a lot more integration. So we think the
Speaker 1: Volkswagen deal is a is like a real turning point
Speaker 1: for the industry in that Volkswagen, which owns Audi, Porsche, Volkswagen, Lamborghini,
Speaker 1: they want to infuse all of those platforms with Rivian technology.
Speaker 1: And so it opens up this new paradigm in the
Speaker 1: automotive industry where you see that the legacy oms might
Speaker 1: need Rivian as a supplier of technology and software, which
Speaker 1: is a new angle to this story.
Speaker 18: And given you know the developments that we've seen, has
Speaker 18: still been a pretty volatile stock. How do you hedge
Speaker 18: against that volatility in your portfolio.
Speaker 1: Yeah, so we've used the volatility to our advantage. So
Speaker 1: the company, if you remember it came public in twenty
Speaker 1: twenty one. It was one of the biggest IPOs in history.
Speaker 1: I think came out of one hundred billion dollar valuation
Speaker 1: because people perceived that it could be the next several
Speaker 1: years later, that promise the roadmap is starting to come
Speaker 1: into view. Obviously that was very early for people to
Speaker 1: think that far out, but we've used that downside volatility
Speaker 1: to our advantage. So we've just purchased the stock in
Speaker 1: the last six months at around these levels, and so
Speaker 1: we're very happy taking a position in Rivian using the
Speaker 1: downside price action to our advantage to be long term
Speaker 1: investors to see what this company can become.
Speaker 6: Gil's interesting one of your other key holdings is also
Speaker 6: well impacted by Tesla in many ways, and that's Uber.
Speaker 6: That was the ROBOTAXI read across. I'm really interested in
Speaker 6: your ethus and focus on Ober and why you're so committed.
Speaker 5: To the name.
Speaker 1: Yeah, so it's a great question. This year, in spite
Speaker 1: of Uber putting up tremendous fundamentals, one of the big
Speaker 1: overhangs on the stock has been Elon's commentary and plans
Speaker 1: around robotaxis. So this has been a big debate in
Speaker 1: the stock market, and we actually think we're very convicted
Speaker 1: in fact that av's autonomous vehicles actually will go through
Speaker 1: Uber's platform, not around Uber's platform, meaning that today the
Speaker 1: biggest player in avs is actually Weimo, and Weimo is
Speaker 1: partnering with Uber and Phoenix, and we are anticipating potentially
Speaker 1: expansion of that agreement because if you think about Weimo
Speaker 1: going direct to consumers on its own through its own app,
Speaker 1: it doesn't have nearly the exposure or distribution that they
Speaker 1: get through Uber, and so to better utilize their fixed
Speaker 1: capacity of cars, they are partnering with Uber to generate
Speaker 1: better utilization. We think that that is a very important
Speaker 1: understanding to really understand how av companies, companies that have
Speaker 1: autonomous functionality will leverage Uber's distribution to achieve better economics.
Speaker 1: Now with robotaxis, one of the big knocks that we
Speaker 1: have is, again as a Tesla owner, the dream that
Speaker 1: I can push a button and let my car drive
Speaker 1: around and generate revenue for me so great, and we
Speaker 1: love Elon's long term visions, but we also think that
Speaker 1: it's a bit naive and that the number of customers
Speaker 1: that are likely to push that button and let their
Speaker 1: cars drive around with strangers in the backseat. There are
Speaker 1: just a lot of real world kind of considerations that
Speaker 1: we think make it still very far from happening.
Speaker 6: And the real world driver is of course artificial intelligence
Speaker 6: as well. Gil I go back to that as a
Speaker 6: as a driving force of what names you get in
Speaker 6: and get out of, because where are we undervaluing the
Speaker 6: impact of artificial intelligence in certain applications and names.
Speaker 1: Yeah, So you know, we own many companies, so you know,
Speaker 1: Ed pointed out that we don't do a lot of hardware,
Speaker 1: but we own a lot of companies that we expect
Speaker 1: to benefit significantly from AI. You know, obviously in the
Speaker 1: automotive space, AI really talk about autonomous driving, and that's
Speaker 1: why it's important for us to have a view on
Speaker 1: Uber and whether AI is a benefit or a hindrance
Speaker 1: over it to But there are a lot of names
Speaker 1: that we own in the infrastructure space, you know, really
Speaker 1: in cloud infrastructure like Amazon and Microsoft, names that are
Speaker 1: known to everybody, but also Data Dog in the software space,
Speaker 1: which is a little bit of a tie on to
Speaker 1: companies that are investing in their cloud infrastructure. We also
Speaker 1: own a company that you wouldn't really think of as
Speaker 1: an AI beneficiary, which is Roadblocks, which I saw Bloomberg
Speaker 1: Intelligence actually put out a piece this morning talking about
Speaker 1: how Roadblocks is embracing AI to help their developers build
Speaker 1: games and experience on the platform. So there are a
Speaker 1: lot of companies that are in the market, both enterprise
Speaker 1: and consumer facing. We just want to make sure that
Speaker 1: we're with management teams and companies that are on the
Speaker 1: front foot that are looking to embrace AI in all
Speaker 1: the different potential ways that they can.
Speaker 6: Gail Joy to have you on come back seeing we
Speaker 6: have thanks so much, Gil Simon, chief investment Officer at
Speaker 6: Soumaer Equity Partners, and we've got to thank our own
Speaker 6: Hemma Palmer.
Speaker 5: For helping bring that interview to bear I.
Speaker 6: Meanwhile, coming up, we're going to be joined by well
Speaker 6: key focus of VC right now Isabelle Freedham is going
Speaker 6: to be joining us founder managing partner.
Speaker 5: Over at the Capital how to take on the IPO market.
Speaker 5: This is bringing back technology.
Speaker 19: The IPO market is open and if you look how
Speaker 19: the companies that have gone public Rubric and some Instacart
Speaker 19: and some of these other ones have traded, they've actually
Speaker 19: done remarkably well. But yet you wouldn't know that based
Speaker 19: on the volume which is like almost dried up to
Speaker 19: next to nil.
Speaker 7: That was Lead Edge Capital managing partner Mitchell Green on
Speaker 7: the show yesterday, saying the IPO market is back or open,
Speaker 7: but not everyone agrees. Let's bring in Isabelle Friedheim for more.
Speaker 7: She's founder a managing partner of Athena Capital, which is
Speaker 7: currently raising a five hundred million dollar fund focusing on
Speaker 7: private companies preparing to go public or considering another exit
Speaker 7: like M and A. So make sure, says the IPO
Speaker 7: market is open. Do you think the IPO market's open?
Speaker 11: I do think we are starting to see a recovery.
Speaker 16: The IPO volume in the US is up in twenty
Speaker 16: twenty four Q one Q two up about twelve percent.
Speaker 16: Proceeds are up as well, which is encouraging, and we're
Speaker 16: starting to see larger deals such as Reddin, Stripe on
Speaker 16: File in Nvidia, and those are This is an indication
Speaker 16: that investors are starting to indicate interest in companies going
Speaker 16: public and deploying capital into tech companies in particular.
Speaker 11: But they're nonetheless prudence and that's.
Speaker 16: Why we're only seeing at this point still larger sized
Speaker 16: companies because they have a better chance of success. And
Speaker 16: I think we're going to continue to see that for
Speaker 16: the remainder of the year, with likely a higher velocity
Speaker 16: of deals in twenty twenty five after the elections.
Speaker 7: So election is an interesting point. Something that Mitchell reflected
Speaker 7: on yesterday is it's very difficult to be a private
Speaker 7: company planning to go public from a regulatory standpoint. You
Speaker 7: know the paperwork involved. Frankly, what do you make at that,
Speaker 7: particularly with your focus on taking companies that are currently
Speaker 7: private but thinking about jumping to the equity markets.
Speaker 11: It is very difficult.
Speaker 16: Unfortunately, we are in a regulatory environment in which it
Speaker 16: is hard and expensive for companies to go public. In fact,
Speaker 16: we've seeing over the last thirty years or so about
Speaker 16: ninety percent decrease in the volume and the number of
Speaker 16: publicly traded companies, and unfortunately Chairman Gensler has enacted almost
Speaker 16: forty rules recently, and it is making it harder.
Speaker 11: It is making the US.
Speaker 16: Less competitive, and it has repercussions that are both geopolitical
Speaker 16: and repercussions on our standard of living.
Speaker 6: I'm interested than what to be done because you've got
Speaker 6: such a wealth of experience when it comes to periv
Speaker 6: equity IPOs, but also SPACs, and many would say that
Speaker 6: the whole problem with SPACs was that there weren't enough
Speaker 6: investor protections in place. How do you make it less onerous,
Speaker 6: less expensive, but still necessarily protective, particularly retail investors.
Speaker 5: For companies to go public.
Speaker 16: What spas were there were a symptom of retail investors
Speaker 16: demanding access to tech returns. For the last two decades,
Speaker 16: tech returns have been hoarded by the venture capital industry.
Speaker 16: So the Amazons and the facebooks and the Googles of
Speaker 16: the world, those returns took place for the most parts
Speaker 16: privately before the companies went public, and that's the case
Speaker 16: for many tech companies, and retail investors wanted access to
Speaker 16: those investments, and they are difficult to risky to make
Speaker 16: in the venture capital acid class.
Speaker 11: And therefore facts were just a symptom of that.
Speaker 16: But beyond that, there needs to be easier access for
Speaker 16: capital formation for tech companies that are innovative that improve
Speaker 16: our standard of living, because the venture capital that we
Speaker 16: provide is the lifeblood for innovation, and we in the
Speaker 16: venture capital industry.
Speaker 11: Exists for the exits.
Speaker 16: We fund companies because we know there's an exit on
Speaker 16: the other end, and if companies stay private for too long,
Speaker 16: we jeopardize the volume of the venture capital acid class.
Speaker 6: So what therefore, should we brace ourselves for post November.
Speaker 5: Is it all AI names.
Speaker 16: It's larger size companies in the short term, and it's
Speaker 16: going to be more innovative companies probably in the next
Speaker 16: cup of years. We're still seeing a recovery. We don't
Speaker 16: know when exactly, but it will happen. That there's a
Speaker 16: big backlog of companies that want to go public, investors
Speaker 16: that want to deploy capital into those tech companies that
Speaker 16: are going to find solutions to climate problems, to drug developments,
Speaker 16: to payments to many of the technologies that we use
Speaker 16: that again improve our standard of living.
Speaker 11: So we will see that happen.
Speaker 16: Whether it's six months, a year, two years, doesn't really matter,
Speaker 16: but it will it will happen.
Speaker 6: Well, we'll see as and when that IVO window really
Speaker 6: does fly open as well. Freedha, I'm great to have
Speaker 6: some perspective, particularly on the sec founder and managing partner
Speaker 6: of Athena Capital, thank you.
Speaker 7: I'm looking at the crypto markets, Bitcoin in particular trading
Speaker 7: just below sort of sixty thousand US dollars per token
Speaker 7: because it was expected to but did not come up
Speaker 7: in that spaces between Musk and Donald Trump. But Donald
Speaker 7: Trump has been talking about crypto a lot recently. At
Speaker 7: the Bitcoin twenty twenty four conference a couple of weeks ago,
Speaker 7: he even promised to create a national bitcoin stockpile with
Speaker 7: the cryptocurrency being held by the US government as part
Speaker 7: of his platform.
Speaker 4: Have I listened to this?
Speaker 12: If I am elected, it will be the policy of
Speaker 12: my administration United States of America to keep one hundred
Speaker 12: percent of all the bitcoin the US government currently halls
Speaker 12: or acquires. Into the future, we'll keep one hundred percent.
Speaker 2: I hope you do well. Please.
Speaker 7: BA July twenty seventh statement alarmed a few former prosecutors,
Speaker 7: and that includes Amanda Wick, now principal with Insight Consulting,
Speaker 7: who served as a federal prosecutor for the USDOJ for
Speaker 7: nearly a decade, and you specialized in money laundering and cryptocurrency.
Speaker 7: Why did that Trump position alarm you?
Speaker 3: Unfortunately, it's one of the many things that he says
Speaker 3: that's either wrong, illegal, or not possible. And when he
Speaker 3: says he's going to keep one hundred percent, I don't
Speaker 3: know that he realized that some of that money is
Speaker 3: from the victims of scams, hacks, ransomware. It has to
Speaker 3: go back legally, and it's been stockpiled largely because it
Speaker 3: couldn't go back due to some contracting issues. I think
Speaker 3: the concerning part is that Trump has a tendency to
Speaker 3: say what people want to hear, and not necessarily what's
Speaker 3: even remotely feasible or legal.
Speaker 6: Of course, it's called is for a stockpile, LEUS holds
Speaker 6: what about twelve million dollars worth of crypto at the moment,
Speaker 6: variously Bitcoin eighth, as well as Tether's stable coin. How
Speaker 6: just go through the motions of how the US government
Speaker 6: decides as and when it should sell its crypto holdings
Speaker 6: to repay those who are the victims of scams or
Speaker 6: have had runsoms for example.
Speaker 20: Well, there's a process, and it's called the asset forfeiture process,
Speaker 20: and it's been established for years. The issue was that
Speaker 20: for several years, the process by which those funds would
Speaker 20: be liquidated or sold was held up due to a
Speaker 20: contracting issue that the US Marshals was having. And only recently,
Speaker 20: on July first, I believe, was it announced that the
Speaker 20: contract had gone to coinbase, And so this perception that
Speaker 20: the government was purposely keeping the funds was actually a
Speaker 20: contracting glitch, likely in the sense that they were stalling
Speaker 20: it was stalling.
Speaker 8: In terms of their ability to liquidate it.
Speaker 3: But normally that process would be they would be sold
Speaker 3: and the funds would be returned to victims as part
Speaker 3: of the normal process of either a civil or criminal case.
Speaker 6: Yeah.
Speaker 4: Man, I just want to level with our audience.
Speaker 7: We're talking about this because we thought it would come
Speaker 7: up last night between Musk and Trump and and it
Speaker 7: just did not.
Speaker 4: Sec and Gensler.
Speaker 7: You know, that's the other side of this that you
Speaker 7: talked about firing chair Againstler.
Speaker 4: You know, the.
Speaker 7: Mechanics of that working and then trying to get a
Speaker 7: bitcoin reserve. I'm just trying to understand process why it
Speaker 7: would work.
Speaker 8: Yeah.
Speaker 3: Professor Tanya Evans did a phenomenal article on this and
Speaker 3: Fortune Lead where she talked about the actual impossibility of
Speaker 3: firing him on day one. And I think, look, there
Speaker 3: were people actually placing bets on whether Trump would say
Speaker 3: bitcoin or crypto last night, and I think it's a
Speaker 3: disturbing trend that he tends to take money from people
Speaker 3: who are willing to give it to him. And the
Speaker 3: crypto community has been battered for four years by the
Speaker 3: Biden administration and they are only too happy to head
Speaker 3: towards somebody who's giving them positive indicators. I think the
Speaker 3: Harris campaign has been slower.
Speaker 8: To give positive indicators.
Speaker 3: There is a group Crypto for Harris that is working
Speaker 3: on that and is gauging on that. But there have
Speaker 3: been positive indicators from the Harris campaign privately, just not
Speaker 3: as publicly as Trump. But I think the crypto community
Speaker 3: has to decide do you want somebody who's saying what
Speaker 3: you want to hear but it's not possible, or do
Speaker 3: you want somebody who's taking their time and deliberating what
Speaker 3: the policy should be because it actually.
Speaker 2: Has a chance.
Speaker 6: Manda Wick Insite Consulting Principle, a former federal prosecutor. We
Speaker 6: thank you does it for Blombag Technology