WEBVTT - Tesla's Disappointing Deliveries and Apple's Quarterly Dip 0:00:01.440 --> 0:00:06.720 From Marhard where Innovation, Money and Power Collie in Silicon Valley, NBN. 0:00:07.080 --> 0:00:11.080 This is Bloomberg Technology with Caroline Hyde and Ed lud Love. 0:00:24.320 --> 0:00:26.640 I'm Caroline heind A Bloomberg's Weld headquarters in New York, 0:00:26.680 --> 0:00:28.840 and I'm d Ludlow side by side this week. 0:00:28.920 --> 0:00:31.040 This is Bloomberg Technology. 0:00:30.560 --> 0:00:34.920 Coming up full ev coverage ahead. Tesla drops after deliveries 0:00:35.120 --> 0:00:39.280 fell way short of expectations. Meanwhile, Rivian beats production estimates. 0:00:39.280 --> 0:00:39.879 We'll discuss. 0:00:39.960 --> 0:00:43.240 Plus we'll get the outlook for technology stocks after Apple 0:00:43.600 --> 0:00:46.519 posted one of its worst quarters relative to the S 0:00:46.560 --> 0:00:48.040 and P in over a decade. 0:00:48.240 --> 0:00:50.479 And we'll take the pulse of the IPO market. That's 0:00:50.520 --> 0:00:55.520 is Microsoft bat Rubrics IPO filing shows growing revenue, still losses. 0:00:55.920 --> 0:00:58.320 Details to come, but first that's checking on these public markets. 0:00:58.360 --> 0:00:59.880 And we're having the worst day in about a month 0:01:00.040 --> 0:01:02.280 the moment on the key benchmarks. We're seeing tech in 0:01:02.320 --> 0:01:04.680 particular under pressure, off by one and a half percent 0:01:04.720 --> 0:01:06.920 on the NASDAC. This as we see once again a 0:01:06.959 --> 0:01:09.319 fear of the fact that US economy is just too strong. 0:01:09.360 --> 0:01:10.920 The Federal Reserve is not going to be cutting rates 0:01:10.920 --> 0:01:13.960 at the market anticipated rate, and Therefore, we're likely to 0:01:13.959 --> 0:01:16.000 see just a pullback and some of these more frothier 0:01:16.080 --> 0:01:18.520 names Tenure Yield though also pushing higher on the back 0:01:18.560 --> 0:01:20.000 of the fact that we're going to see rates staying 0:01:20.080 --> 0:01:24.080 higher for longer potentially. And Bitcoin of course riscassett under 0:01:24.120 --> 0:01:25.640 pressure as we see the rest sell off we're of 0:01:25.680 --> 0:01:28.280 by more than five percent. Also we see the inflows 0:01:28.280 --> 0:01:31.520 perhaps style back from those crucial spot bitcoin ets. But ed, 0:01:31.720 --> 0:01:32.800 there is one stock that you. 0:01:32.840 --> 0:01:35.720 Are watching, yeah, and that is Tesla and Tesla deliveries 0:01:35.840 --> 0:01:39.959 missed expectations. In fact, that's an understatement. Tesla's deliveries three 0:01:40.080 --> 0:01:42.000 hundred and eighty eight thousand or so in the core 0:01:42.080 --> 0:01:47.080 to gone was the biggest miss against Bloomberg consensus on record. 0:01:47.480 --> 0:01:50.040 Where did we get this analysis wrong? The stock is 0:01:50.160 --> 0:01:52.840 down around five percent in the session in pre marketed 0:01:52.880 --> 0:01:56.120 fallen as much as seven percent. What are the factors 0:01:56.160 --> 0:01:58.200 that are happening here? I want to bring in Stephanie 0:01:58.200 --> 0:02:02.640 Bauder's Streaty, director of industry Insights at Coxa Automotive and 0:02:02.920 --> 0:02:08.000 Stephanie Tesla said this is supply side related. Three factors. 0:02:08.040 --> 0:02:11.280 They diverted shipments because of the situation in the red Sea. 0:02:11.600 --> 0:02:14.120 They pause production in Berlin because of what they call 0:02:14.160 --> 0:02:17.359 an arson attack, and they relaunched a refresh Model three 0:02:17.360 --> 0:02:21.280 in Fremont, which impacted the production rum ramp. Why has 0:02:21.320 --> 0:02:23.560 that impacted deliveries to this extent? 0:02:25.080 --> 0:02:27.359 Yeah, good afftering you, thank you so much. Yeah, Tesla's 0:02:27.360 --> 0:02:30.639 definitely the news today. We had forecasted that we're going 0:02:30.639 --> 0:02:33.760 to see decline in Q one for Tesla, And if 0:02:33.800 --> 0:02:35.840 you look at just as you mentioned, you know, they 0:02:35.880 --> 0:02:38.799 have the two models, the why you know and the 0:02:38.919 --> 0:02:41.320 US that are really like carrying them forward, but they 0:02:41.320 --> 0:02:43.600 don't have any new product recently, and hopefully with the 0:02:43.680 --> 0:02:45.880 Roadster two coming in twenty twenty six, that's going to 0:02:45.880 --> 0:02:48.800 help them. But if you look like any automotive, new 0:02:48.800 --> 0:02:51.520 product really drives sales, and so I think for Tesla 0:02:51.880 --> 0:02:54.280 they're in that in between waves. If they've mentioned on 0:02:54.360 --> 0:02:56.600 their last call of where they had, you know, high 0:02:56.680 --> 0:02:59.400 volume products and now they're waiting to launch this new 0:02:59.440 --> 0:03:01.560 one that's going to be more affordable, which the industry 0:03:01.639 --> 0:03:03.520 really needs. So I think Tesla has a lot of 0:03:03.520 --> 0:03:05.520 word ahead of it, and I think when they have 0:03:05.600 --> 0:03:07.440 their earnings car, I think it's going to be important 0:03:07.440 --> 0:03:09.360 for them to really lay out what that plan is 0:03:09.360 --> 0:03:10.280 to execute on that. 0:03:10.800 --> 0:03:13.480 Stephanie Love, how you're going there on the demand side 0:03:13.480 --> 0:03:16.080 of the equation, I know you focus predominantly on the 0:03:16.160 --> 0:03:18.760 United States, and interesting we talk a lot about well 0:03:18.840 --> 0:03:22.240 some of the competition coming from Chinese makers BID in particular, 0:03:22.280 --> 0:03:25.000 and you see also show me, for example, launching a 0:03:25.040 --> 0:03:27.680 new EV where on the first day of sales online 0:03:27.680 --> 0:03:30.640 it looks as though bookings a northern ninety thousand. When 0:03:30.680 --> 0:03:33.240 you're looking at the US demand side, how much is 0:03:33.280 --> 0:03:35.800 the competition an issue for it or is it really 0:03:36.000 --> 0:03:37.920 the supply side a lack of a new product that's 0:03:37.920 --> 0:03:38.600 the driver here. 0:03:39.200 --> 0:03:41.080 I think it's the competition. You know, if you look 0:03:41.080 --> 0:03:42.720 at last year, it was a record year one point 0:03:42.720 --> 0:03:46.200 two pure battery electric vehicles. This year this quarter, we're 0:03:46.240 --> 0:03:49.560 expecting fifteen percent year of year. But with that, you know, 0:03:49.640 --> 0:03:52.119 Tesla as you saw is you know, we are expecting 0:03:52.200 --> 0:03:55.480 like a three point two percent year over year growth. Meanwhile, 0:03:55.480 --> 0:03:58.040 there's some other brands are going to see significant increase 0:03:58.240 --> 0:04:00.240 Q one. The results are going to come in the 0:04:00.280 --> 0:04:03.200 next week or so, will happen or even report. But 0:04:03.360 --> 0:04:06.000 some of the other products that are going to become popular. 0:04:06.000 --> 0:04:09.120 I think are really creating more competition for Tesla, and 0:04:09.240 --> 0:04:11.640 I think that's going to continue. You know, Tesla's finally 0:04:11.640 --> 0:04:14.040 having to compete with these other brands are offering different 0:04:14.080 --> 0:04:17.560 styling product range that are competing with the Tesla models. 0:04:17.560 --> 0:04:19.560 So I think definitely that's going to be a driving 0:04:19.640 --> 0:04:21.200 factor for Tesla going forward. 0:04:21.480 --> 0:04:23.320 Caroline, I'm just going to recap the numbers because I 0:04:23.400 --> 0:04:26.200 slightly misspoke at the top. So Tesla's first quarter deliveries 0:04:26.240 --> 0:04:29.479 were three hundred eighty six thousand, eight hundred and ten. 0:04:29.600 --> 0:04:32.080 The estimate was for four hundred and forty nine thousand. 0:04:33.400 --> 0:04:35.760 As Caroline knows, Stephanie, I was one of the people 0:04:35.800 --> 0:04:38.640 that leased a model. Why in the penultimate day of 0:04:38.680 --> 0:04:43.280 the quarter. I did so because the incentives on offer, 0:04:43.320 --> 0:04:46.280 both those from the federal tax credit and those that 0:04:46.360 --> 0:04:49.039 Tesla did of its own accord, were just too good 0:04:49.080 --> 0:04:52.679 to pass up. Then on April the first Tesla raised 0:04:52.720 --> 0:04:55.320 prices again and they said they were going to do that. 0:04:55.960 --> 0:04:57.919 And what it's got me thinking about now that we 0:04:58.000 --> 0:05:02.280 have the first quarter number print, is there a market anymore, 0:05:02.360 --> 0:05:05.880 particularly in this country, for a forty thousand dollars to 0:05:05.920 --> 0:05:09.240 fifty thousand dollars EV. It seems like that's gone and 0:05:09.279 --> 0:05:11.920 everyone is waiting for the twenty five thousand dollars EV 0:05:12.240 --> 0:05:13.920 to finally materialize. 0:05:14.880 --> 0:05:17.960 Yeah, you hit on it. If you think about EV adoption, 0:05:18.200 --> 0:05:21.440 like our research consistently shows that price is one of 0:05:21.480 --> 0:05:24.280 the major barriers, along with infrastructure. And at the end 0:05:24.320 --> 0:05:27.640 of February, the average EV was fifty two thousand. If 0:05:27.640 --> 0:05:30.560 you look back two years ago, the price premium and 0:05:30.640 --> 0:05:33.960 EV was about seventeen thousand, So in February that gap 0:05:34.040 --> 0:05:37.440 narrative about fifty five hundred. But still it's expensive, right, 0:05:37.480 --> 0:05:40.440 And so I think portability is key to adoption, and 0:05:40.480 --> 0:05:42.000 I think we're going to need some more of those 0:05:42.400 --> 0:05:45.120 vehicles that are that different price point. And I think 0:05:45.160 --> 0:05:47.880 as we start to see more used evs enter the market, 0:05:47.920 --> 0:05:50.239 that might be able to compate some of that price 0:05:50.279 --> 0:05:51.320 point barriers. 0:05:51.600 --> 0:05:54.839 Rivian is another interesting one. They beat expectations on both 0:05:54.839 --> 0:05:57.800 production and deliveries, though they'd kind of set the bar low, 0:05:57.839 --> 0:06:00.400 which is being kind for the quarter. What you make 0:06:00.400 --> 0:06:03.159 of a name like Rivian where they offer the big, 0:06:03.200 --> 0:06:06.840 BOXYEV that Americans love. They like light truck category, they 0:06:06.920 --> 0:06:09.760 like big cars, but they seem still like a niche player. 0:06:10.800 --> 0:06:13.360 Well, you know, any of these new entry entrants into 0:06:13.440 --> 0:06:17.120 the EV market, you know, they'struggling with you know, cash, 0:06:17.200 --> 0:06:20.120 trying to build up their brand. They don't have any 0:06:20.160 --> 0:06:23.800 ice vehicle revenue to support that. But with Rivian, I 0:06:23.800 --> 0:06:26.120 think the unveiling of the R two created a lot 0:06:26.160 --> 0:06:28.280 of energy for that brand, and I think it's going 0:06:28.320 --> 0:06:30.000 to be key if they're able to execute on that. 0:06:30.080 --> 0:06:31.760 But that R two is going to be critical in 0:06:31.839 --> 0:06:35.360 terms of giving them entry into this high volume segment 0:06:35.480 --> 0:06:38.880 and more affordable volumes and hopefully being able to turn 0:06:38.920 --> 0:06:41.520 a profit over long term. So I think Rivian's on 0:06:41.600 --> 0:06:44.080 a good path and I think definitely that R two 0:06:44.080 --> 0:06:47.360 and veiling helped ignite some of that excitement about the brand. 0:06:47.880 --> 0:06:52.080 Stephanie, we talk about the incentives offered from a federal 0:06:52.080 --> 0:06:54.760 perspective at the moment, is the biggest competition to an 0:06:54.760 --> 0:06:57.840 EV A hybrid, just because we're still so worried about 0:06:57.880 --> 0:06:58.839 infrastruct great question. 0:06:59.760 --> 0:07:02.320 Yeah, I think we're going to continue to see gas 0:07:02.400 --> 0:07:05.719 hybrids increase in sale because if you think about a 0:07:05.720 --> 0:07:08.760 gas hybrid, there's nothing different. Like you said, it's the 0:07:08.839 --> 0:07:11.240 same experience as driving an ice vehicle, you don't have 0:07:11.280 --> 0:07:14.840 to worry about charging infrastructure any of that. So I 0:07:14.840 --> 0:07:16.440 think we're going to see that because it's a good 0:07:16.440 --> 0:07:20.480 gateway as we try to navigate to full electrification. Hybrid's 0:07:20.520 --> 0:07:22.760 definitely a good option, and we'll probably start to see 0:07:22.800 --> 0:07:25.240 more plug in hybrids as well since that's a good 0:07:25.600 --> 0:07:27.000 gateway as well. 0:07:27.120 --> 0:07:29.640 Stephanie, is policy support working in this country. 0:07:30.800 --> 0:07:33.840 I definitely think it is. If you think about the incentives, 0:07:34.080 --> 0:07:37.040 I think that seventy five hundred dollars, as we know, 0:07:37.280 --> 0:07:40.680 with the changes in the regulation, some of them become uneligible. 0:07:40.720 --> 0:07:43.600 But I think that definitely has helped with adoption. And 0:07:43.640 --> 0:07:45.720 I think one of the things that change with the 0:07:45.760 --> 0:07:48.240 point of purchase. Now that you get that seventy five 0:07:48.320 --> 0:07:50.760 hundred a point of purchase, I think that is also attractive. 0:07:51.280 --> 0:07:53.680 But I will say that I think the incentives are 0:07:53.800 --> 0:07:57.240 very confusing and consumers some consumers aren't aware of them 0:07:57.320 --> 0:08:00.400 and confusing what is eligible what isn't. So I think 0:08:00.400 --> 0:08:04.040 there needs to be more education around just EV's in general, 0:08:04.080 --> 0:08:08.080 around the incentives, the value of an EV, what's it 0:08:08.160 --> 0:08:10.920 like to drive an EV? That total cost of operation 0:08:11.040 --> 0:08:12.480 is going to be important as well, So I think 0:08:12.520 --> 0:08:15.160 we have a lot of work ahead. In January, one 0:08:15.200 --> 0:08:18.080 of our key messages was for EV it's going to 0:08:18.080 --> 0:08:19.800 be the year and more so, We're going to see 0:08:19.840 --> 0:08:22.040 more sales, but we're going to see more bumps. We're 0:08:22.040 --> 0:08:25.720 going to see more incentives or price cuts. But also 0:08:25.760 --> 0:08:27.440 I think we're going to see the industry build more 0:08:27.480 --> 0:08:30.000 sales muscle and really selling these evs to that next 0:08:30.000 --> 0:08:30.800 wave of adoption. 0:08:31.280 --> 0:08:35.120 More transparency, please, Stephanie valdezstri we thank you so much 0:08:35.160 --> 0:08:38.560 of Cox Automotive. Mean, while coming up, Erka KLA's going 0:08:38.600 --> 0:08:41.360 to be joining us PA Jim Jennison Technology FUM portfolio manager. 0:08:41.480 --> 0:08:43.000 We've got a deep dive on what's happening in the 0:08:43.000 --> 0:08:45.480 broader markets today with a big chip sell off, and 0:08:45.520 --> 0:08:47.240 she's got a keen eye on some of those names. 0:08:47.360 --> 0:08:48.679 Ed, what are you watching, Well, let's go back to 0:08:48.720 --> 0:08:52.280 Shaomi for a second. You mentioned it. By close of 0:08:52.360 --> 0:08:56.480 play Friday, having unveiled this new EV a surprise entrance 0:08:56.480 --> 0:08:59.120 to the EV market, they had eighty nine thousand orders 0:08:59.200 --> 0:09:02.079 ninety thousan I'm sure bigger. Now see the reaction when 0:09:02.120 --> 0:09:05.880 Asia markets opened after the holiday weekend, Really curiously there's 0:09:05.920 --> 0:09:08.840 a lot of evidence that in the Chinese market, consumers 0:09:08.840 --> 0:09:12.720 were putting down the refundable deposit and then canceling just 0:09:12.800 --> 0:09:16.320 for the prestige of saying I ordered a Gaomi and 0:09:16.360 --> 0:09:19.600 then didn't follow through with it. Interesting if it actually 0:09:19.640 --> 0:09:37.360 haven't materializes. This is bluebog technology. We took another bite 0:09:37.440 --> 0:09:40.000 out of the Apple in the first quarter. Shares are 0:09:40.000 --> 0:09:42.640 coming off the worst quarterly performance relative to the S 0:09:42.679 --> 0:09:45.640 and P five hundred index in over a decade, with 0:09:45.720 --> 0:09:48.160 the company raising more than three hundred billion dollars of 0:09:48.200 --> 0:09:51.760 market value in twenty twenty four. The twelve percent dropped 0:09:51.760 --> 0:09:54.240 since the start of the year's paying off for short sellers, 0:09:54.280 --> 0:09:58.400 giving them an incentive to unwind their bets. Now it 0:09:58.480 --> 0:10:01.800 could be the time to buy. That's according to technical 0:10:01.840 --> 0:10:05.800 analysts who argue Apple's flirting with levels where bottom feeding 0:10:05.960 --> 0:10:09.240 could come soon. Apple looking cheap to some of the 0:10:09.280 --> 0:10:12.560 ever megacap tech names on a relative term. The key 0:10:12.559 --> 0:10:15.120 support level to watch for one hundred and sixty five 0:10:15.440 --> 0:10:18.320 dollars a share. Will that be enough to entice you 0:10:18.440 --> 0:10:20.120 dip buyers? If you're one of them, hit me up 0:10:20.120 --> 0:10:22.920 on X, LinkedIn, Instagram, wherever social media you know where 0:10:22.960 --> 0:10:24.160 to find me, Caroline. 0:10:24.480 --> 0:10:26.959 Meanwhile, let's just go a little bit broader than Apple 0:10:27.000 --> 0:10:29.560 and see what's been helping me the charge on the 0:10:29.600 --> 0:10:32.160 border benchmarks, and what's pulling away a little bit. P 0:10:32.320 --> 0:10:35.240 Jim Jennison, Technology Fun Portfolio Manager Erica Klaas with us. 0:10:35.240 --> 0:10:36.960 We're so pleased to welcome you back to the show. 0:10:37.000 --> 0:10:40.440 And while Apple's been having a few tough times, as 0:10:40.480 --> 0:10:42.640 has Tesla, let's just focus on where it still dines 0:10:42.640 --> 0:10:45.559 out and super microcomputer up more than two and forty 0:10:45.600 --> 0:10:48.480 eight percent, Video is still up seventy nine percent. You're 0:10:48.520 --> 0:10:51.520 a holder of chip names. People are questioned how far 0:10:51.559 --> 0:10:53.400 they've run? Do they still have further to go? 0:10:54.320 --> 0:10:56.560 You know, at Jennison, we always take a longer term view, 0:10:56.679 --> 0:11:00.000 and our view remains very constructive. When we look out 0:11:00.080 --> 0:11:03.320 over three five years, we still see extraordinary opportunities for 0:11:03.400 --> 0:11:07.000 penetration of AI and that is really broadening out in 0:11:07.040 --> 0:11:10.760 its applicability in industries. So we still are very constructive. 0:11:11.120 --> 0:11:13.600 When you say broadening out, does that mean you take 0:11:13.960 --> 0:11:16.480 money off the table from the winners that we've seen 0:11:16.600 --> 0:11:19.000 the in videos that I mentioned and put it into 0:11:19.160 --> 0:11:21.280 industry groups that now benefit from AI. Or do you 0:11:21.320 --> 0:11:24.680 have to do both, our viewers, you have to do both. 0:11:24.760 --> 0:11:28.920 There are the core experts in compute, led of course 0:11:28.920 --> 0:11:31.240 by Nvidia, which I believe is a core holding to 0:11:31.360 --> 0:11:33.960 own for a long, long period of time, and also 0:11:34.000 --> 0:11:38.360 advanced micro devices. But the very existence of parallel computer 0:11:38.440 --> 0:11:43.160 or accelerated compute is creating opportunities throughout various industries, whether 0:11:43.200 --> 0:11:46.200 it be energy, whether it be for other semiconductor companies, 0:11:46.240 --> 0:11:48.480 whether it be for healthcare. So we're really looking at 0:11:48.559 --> 0:11:52.680 a broad base of opportunities for these companies to address. 0:11:52.800 --> 0:11:55.439 It's been really interesting in the show for probably almost 0:11:55.520 --> 0:12:00.360 two years speaking with investors who are basically ripping off 0:12:00.360 --> 0:12:02.760 the paneling of a server design and learning what's going 0:12:02.800 --> 0:12:05.840 into it. Now a name like Micron is starting to 0:12:05.840 --> 0:12:09.120 get credit at GtC, we can get into GCC and 0:12:09.160 --> 0:12:12.080 all the fantastical things that Jensen said, But he was 0:12:12.080 --> 0:12:14.240 slapping Michael Dell on the back and saying, Oh, if 0:12:14.280 --> 0:12:16.959 you need a server, this is the guy. Is that 0:12:17.000 --> 0:12:20.480 you'll kind of approach how the compute gets built in 0:12:20.520 --> 0:12:23.600 its entirety and then work out the component providers and 0:12:23.640 --> 0:12:24.400 invest in those. 0:12:25.040 --> 0:12:28.640 So this is such a great question because on one hand, 0:12:29.120 --> 0:12:32.080 the very essence of compute, how compute is done has 0:12:32.200 --> 0:12:35.280 changed the demand for memory. As you talk about the 0:12:35.280 --> 0:12:40.320 demand to be the demand created for distributing power, generating power, 0:12:40.360 --> 0:12:43.680 dealing with power thermal envelopes for example, are all changing 0:12:43.720 --> 0:12:47.880 and that's creating extraordinary opportunities on the infrastructure side of 0:12:47.880 --> 0:12:51.240 the business that we're very interested in. On the other side, 0:12:51.400 --> 0:12:56.000 the actual advent of accelerated compute has applicability to everyone 0:12:56.200 --> 0:13:01.520 from smart cities to healthcare apptions. We're looking at things 0:13:01.559 --> 0:13:06.280 like drug discovery, medical imaging sequencing as being enabled by 0:13:06.320 --> 0:13:08.400 the event of accelerated compute. 0:13:08.640 --> 0:13:10.400 Here we are and we led you to it. But 0:13:10.440 --> 0:13:14.080 we're talking about markets and the tailwind that is AI that' 0:13:14.120 --> 0:13:16.600 stop of mind. We're not talking about rates, we're not 0:13:16.640 --> 0:13:20.080 talking about concerns of global economic strength, We're not talking 0:13:20.080 --> 0:13:21.880 about geopolitical headwinds. 0:13:22.320 --> 0:13:27.040 Why I think the interesting thing to think about is 0:13:27.080 --> 0:13:31.079 that this technology is disruptive to literally every single industry. 0:13:31.520 --> 0:13:34.599 So while there are always going to be cyclical concerns, 0:13:34.960 --> 0:13:38.200 whether it be one specific geographic region is slowing down, 0:13:38.360 --> 0:13:42.160 or perhaps pressure of inflation or interest rates, at the 0:13:42.280 --> 0:13:44.880 end of the day, what we're seeing right now is 0:13:45.160 --> 0:13:49.920 literally every single industry being disrupted by the advent of AI, 0:13:50.559 --> 0:13:54.760 and so I think that that discussion happens not in 0:13:54.800 --> 0:13:58.400 a vacuum, but it probably drowns out to a certain 0:13:58.440 --> 0:14:02.200 extent some of the more macro concerns I want to talk. 0:14:02.320 --> 0:14:05.160 We just mentioned that we're not talking about geopolitical tensions. 0:14:05.200 --> 0:14:08.160 I want to weave in the ongoing geopolitics that is 0:14:08.240 --> 0:14:10.000 China and US because it does affect a lot of 0:14:10.040 --> 0:14:11.880 the chip names that you hold. We're actually just getting 0:14:11.880 --> 0:14:15.000 breaking news that Hi Jinping, leader of China, and indeed 0:14:15.360 --> 0:14:19.120 Biden and President Biden have whole held phone talks. Shinoa, 0:14:19.200 --> 0:14:21.720 which is a local news organization over in China, has 0:14:21.760 --> 0:14:24.760 been reporting this. No real details on the phone talks, 0:14:24.760 --> 0:14:28.640 and one indeed was discussed, but China's official news agency 0:14:28.680 --> 0:14:32.840 reporting that President she has spoken with President Biden of late. 0:14:33.400 --> 0:14:35.880 Now we know within that context is the fact that 0:14:36.040 --> 0:14:39.160 US has been limiting sales of US chips to China 0:14:39.280 --> 0:14:42.640 worried about the application of such technology in China. Has 0:14:42.640 --> 0:14:46.200 that worried or in any way changed your opinion on 0:14:46.240 --> 0:14:48.240 how much to go into these some names that are 0:14:48.240 --> 0:14:49.960 exposed to China and video being one of them. 0:14:50.560 --> 0:14:54.760 So from a semiconductor equipment perspective, those US companies that 0:14:54.840 --> 0:14:58.280 sell equipment to make chips, they've also been banned from 0:14:58.320 --> 0:15:02.280 selling their most advanced equipment into China. I think that 0:15:02.600 --> 0:15:04.400 the end of the day, what that does is it 0:15:04.440 --> 0:15:09.160 forces semiconductor companies to look for locations outside of Taiwan, 0:15:09.200 --> 0:15:11.680 outside of China to build. And what we've seen is 0:15:11.720 --> 0:15:15.200 an unprecedented amount of government support around the world to 0:15:15.280 --> 0:15:19.360 build more semiconductor plants. That's a great tailwind for semiconductor 0:15:19.360 --> 0:15:22.640 equipment for years and years to come. Later, on top 0:15:22.680 --> 0:15:25.720 of that that these semiconductor chips themselves are becoming more 0:15:25.800 --> 0:15:30.320 semiconductor equipment intensive. This is a long time tailwind for 0:15:30.880 --> 0:15:34.360 the industry going forward. On the semiconductor side, as you say, 0:15:35.120 --> 0:15:37.640 what we're finding is that where there's a will, there's 0:15:37.680 --> 0:15:41.000 a way people want to have the compute. So it 0:15:41.080 --> 0:15:44.280 may take place in different geographic regions, but the ultimate 0:15:44.320 --> 0:15:47.600 necessity is there and driving the demand for Nvidia beyond 0:15:48.040 --> 0:15:50.000 even what we had thought three months ago. 0:15:50.640 --> 0:15:53.320 Caroline and I have no problem talking about semi conductors 0:15:53.360 --> 0:15:55.440 all day long, but there are other things out there. 0:15:55.440 --> 0:15:57.160 I mean, we're going to talk about the rubric IPO 0:15:57.800 --> 0:16:01.560 later in the program, how do you feel about software cybersecurity. 0:16:01.600 --> 0:16:03.520 You know, there must be more opportunity out there in 0:16:03.560 --> 0:16:07.160 the world than beyond a GPU or a combination of 0:16:07.200 --> 0:16:08.880 CPU and GPE. 0:16:08.760 --> 0:16:12.160 You know, right now, I think that there's extraordinary opportunity 0:16:12.240 --> 0:16:16.360 for apps to be developed to take advantage of this compute. 0:16:16.760 --> 0:16:21.480 And so basically what we're seeing is a scramble an 0:16:21.560 --> 0:16:24.440 incredible innovation on the software side to be able to 0:16:24.560 --> 0:16:27.720 analyze big data, being able to sort through huge amounts 0:16:27.720 --> 0:16:29.920 of data and then make sense of it so that 0:16:29.960 --> 0:16:34.880 companies can understand consumer patterns, the progression of certain of 0:16:35.120 --> 0:16:39.400 certain diseases, even modeling out how drugs may behave as 0:16:39.400 --> 0:16:44.560 they're developing them. So the software is very, very critical 0:16:44.680 --> 0:16:50.720 in this process. Not to mention the cybersecurity is an 0:16:50.880 --> 0:16:53.840 absolutely essential part of this too, because this is at 0:16:53.840 --> 0:16:57.920 the core the companies. Whatever company is best assets, that 0:16:58.040 --> 0:17:02.720 intellectual property must be protected, and that's why cybersecurity is 0:17:02.760 --> 0:17:06.119 also seeing such a strong backdrop of demand. 0:17:06.280 --> 0:17:09.680 Tech the data at all costs. PGM Jennison Technology Fund 0:17:09.880 --> 0:17:12.239 Portfolio Manager, Erica Cloud. It's great to have you back 0:17:12.240 --> 0:17:13.280 on the program. Thank you. 0:17:20.560 --> 0:17:23.480 Time now for talking tech first up email musks starlink 0:17:23.800 --> 0:17:26.400 well it claims that it's rolled out of high speed 0:17:26.480 --> 0:17:29.639 internet in Italy, is being obstructed by Telecometalia, is the 0:17:29.640 --> 0:17:32.960 country's largest phone carry over There, it's possible repercussions for 0:17:33.040 --> 0:17:37.240 its services across Southern Europe and North Africa. Meanwhile, while 0:17:37.280 --> 0:17:40.240 the US is asking South Korea to adopt restrictions on 0:17:40.280 --> 0:17:43.760 semiconductor technology exports to China similar to those that Washington 0:17:43.800 --> 0:17:46.040 has already implemented. It's another sign, of course, that the 0:17:46.080 --> 0:17:49.600 Biden administration is stepping up its efforts to thwart Beijing's 0:17:49.720 --> 0:17:53.640 chip ambitions. Meanwhile, Japan it's approved as much as three 0:17:53.680 --> 0:17:58.119 point nine billion dollars in subsidies to chip venture Rapidness. 0:17:58.160 --> 0:18:01.280 It's committing more money to it's ambition to catch up 0:18:01.280 --> 0:18:05.200 in semiconductive manufacturing and the economy. Mister quin Salto said 0:18:05.280 --> 0:18:08.200 that the additional funding will help rapidus by chip making 0:18:08.200 --> 0:18:11.920 equipment and also develop advanced back end chip making processes. 0:18:12.080 --> 0:18:12.119 Ed. 0:18:12.240 --> 0:18:14.240 What if you got what a name? Catching up in 0:18:14.280 --> 0:18:17.320 chips and it's called Rapidness. Let's turn to the IPO 0:18:17.440 --> 0:18:20.960 market with Rubric, the cloud and data security startup backed 0:18:20.960 --> 0:18:24.320 by Microsoft, filing for an IPO, with size and price 0:18:24.320 --> 0:18:26.960 of the company's plan share sale to be disclosed in 0:18:27.000 --> 0:18:29.840 a later filing. But the person that broke the story 0:18:29.880 --> 0:18:32.679 first time around, Bloomber's Katie Roof, joins us. Now, I 0:18:32.680 --> 0:18:35.960 think this is an IPO in the technology space based 0:18:36.000 --> 0:18:39.160 in Palo Alto, well known back by Microsoft. We care 0:18:39.200 --> 0:18:41.600 about it to us, the banks tell us the size 0:18:41.640 --> 0:18:42.560 and scope of this one. 0:18:43.800 --> 0:18:46.199 Sure, yeah, no, we've been We've been looking into this 0:18:46.240 --> 0:18:48.280 one for a while. They were supposed to go public 0:18:48.440 --> 0:18:51.280 last fall and then they delayed it. And I broke 0:18:51.359 --> 0:18:53.360 last week that the filing was coming any day now 0:18:53.640 --> 0:18:56.720 and it came. So yeah, this is one that's backed 0:18:56.720 --> 0:19:00.800 by light Speed in Greylock. They have both were the 0:19:00.840 --> 0:19:03.800 top shareholders and the filing, as you mentioned, they're also 0:19:03.880 --> 0:19:05.200 backed by Microsoft. 0:19:05.840 --> 0:19:07.439 There's a lot of interest in this one. 0:19:07.520 --> 0:19:11.320 It's only the second enterprise software company to go public 0:19:11.960 --> 0:19:16.760 since twenty twenty one. We had Klavo last fall and 0:19:16.840 --> 0:19:19.919 now we have Rubric. This one is of course very different. 0:19:20.080 --> 0:19:23.600 This is data security, but they have you know, large 0:19:23.680 --> 0:19:26.919 enterprise clients. They have clients like Goldman Sachs, and then 0:19:26.960 --> 0:19:30.159 they also have you know, public sector clients like the 0:19:30.200 --> 0:19:33.760 State of Utah, they have a pretty wide list of clients, 0:19:34.119 --> 0:19:36.080 and you know, they're going to be testing the market 0:19:36.119 --> 0:19:37.560 to see how things are. 0:19:38.400 --> 0:19:40.560 And the market has to digest the fact that it's 0:19:40.560 --> 0:19:41.359 still lost. 0:19:41.080 --> 0:19:44.439 Making right, it is losing money. 0:19:44.760 --> 0:19:49.200 But as Jason Lempkin, a top software enterprise software venture 0:19:49.240 --> 0:19:54.240 capitalists pointed out on Twitter, it's ARR is growing significantly 0:19:54.280 --> 0:19:57.920 the annual recurring revenue. This is a metric that enterprise 0:19:57.960 --> 0:20:01.040 software investors care a lot about because it suggests that 0:20:01.040 --> 0:20:05.879 that the customers are, you know, renewing their contracts and 0:20:05.920 --> 0:20:08.919 that they're going to continue to get more customers, that 0:20:08.960 --> 0:20:10.400 they have a high retention rate. 0:20:10.880 --> 0:20:13.240 So you know, depending on what you look at. 0:20:13.280 --> 0:20:15.439 You know, if you care about profitability, no, Rubric is 0:20:15.480 --> 0:20:19.080 not profitable and their revenue overall revenue is actually growing 0:20:19.119 --> 0:20:23.840 pretty slowly, but you know ARR is up significantly. 0:20:24.960 --> 0:20:26.960 Well okay too, We thank you for some of the 0:20:27.040 --> 0:20:38.320 devil in the detail that got released last night. Welcome 0:20:38.320 --> 0:20:39.400 back to me in my Technology. 0:20:39.400 --> 0:20:41.359 I'm Caroline High and I'm ed Lovelow. This week in 0:20:41.359 --> 0:20:44.320 New York City, the story of the markets, at least 0:20:44.359 --> 0:20:47.040 in this session is strong economic data around the world, 0:20:47.640 --> 0:20:50.399 pushing us to believe that central banks all around the 0:20:50.400 --> 0:20:53.399 world will keep rates elevated for longer. That's kind of 0:20:53.400 --> 0:20:56.760 the story. You see Bitcoin participating in this risk off 0:20:56.800 --> 0:21:00.600