Latest / Bloomberg Intelligence / Earnings Analysis: Meta, Microsoft, Alphabet & Amazon Deliver Earnings

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Earnings Analysis: Meta, Microsoft, Alphabet & Amazon Deliver Earnings · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
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  Speaker 2: This is a breaking news update from Bloomberg.
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  Speaker 3: Instant reaction and analysis from our three thousand journalists and
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  Speaker 3: analysts around the world.
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  Speaker 4: Carol Master along with Tim Steenway getting ready for a
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  Speaker 4: big drop. You gotta be ready because they're bax seven
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  Speaker 4: Edla Love of course, co host of Bloomberg Tech on
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  Speaker 4: Bloomberg Television. He's out there in our San Francisco bureau,
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  Speaker 4: also with us as our anaag Rana, Bloomberg Intelligence Senior
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  Speaker 4: technolology analyst. He's out there in Chicago, honoreg I want
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  Speaker 4: to kick it off with you go where you want.
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  Speaker 4: There's a lot coming at US. I want to start
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  Speaker 4: with Microsoft.
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  Speaker 5: Yeah, so Microsoft did beat a little bit on the
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  Speaker 5: Azure growth, so thirty eight percent goes to thirty nine,
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  Speaker 5: So minor inflection up. We're going to hear on the
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  Speaker 5: call whether they're going to use the they have used
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  Speaker 5: sheep us internally, and what kind of guidance that they give.
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  Speaker 5: So that's really Microsoft. But the two biggest shaka are
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  Speaker 5: actually Google Cloud growth and AWS growth. Both have accelerated
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  Speaker 5: quite a bit. That shows that their cloud strategy right
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  Speaker 5: now is doing slightly better than MICROSOFTS.
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  Speaker 3: And Love though, come on in here again. We've got
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  Speaker 3: a great Roundtiller Love the Bloomberg Tech co host. That
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  Speaker 3: was Honor Rna Bloomberg Intelligence senior analyst who we just
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  Speaker 3: heard from. In in a minute, we're going to bring
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  Speaker 3: in Ron Westfall Hyperframe Research, Infrastructure and Networking VP and
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  Speaker 3: practice leader ed what's on your radar?
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  Speaker 6: How hard it is to follow? Anna rag, I gave
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  Speaker 6: you a little time, little time? Yeah, look I go
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  Speaker 6: with it. Logical that AWS growth Amazon Web Services is
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  Speaker 6: the number one position in cloud computing. Twenty eight percent
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  Speaker 6: is the highest rate of growth for about fifteen quarters.
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  Speaker 6: That's that's the severity of the performance. So going into this,
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  Speaker 6: I'm trying to get a common thread between Alphabet, the
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  Speaker 6: parent of Google AWS, and Microsoft. We looked for the
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  Speaker 6: growth rates of cloud because the swing factor in the
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  Speaker 6: market has been cap to expect. Investors have been willing
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  Speaker 6: to look at the capital expenditures even if those numbers
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  Speaker 6: get bigger. But in return, they want to see outperformance
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  Speaker 6: in cloud computing growth driven by AI and also they
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  Speaker 6: want to see some kind of forward guidance boosted forward guidance,
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  Speaker 6: and so in these statements we have the numbers on
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  Speaker 6: growth of cloud. We don't have a capital expenditures figure
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  Speaker 6: for AWS that's any different from prior guidance. Meta does
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  Speaker 6: have a new capital expenditures figure, and I would just
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  Speaker 6: suggest we go to that next.
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  Speaker 3: Well, that's exactly where I want to go. One hundred
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  Speaker 3: and twenty five to one hundred and forty five billion
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  Speaker 3: dollars increase from a prior range of one hundred and
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  Speaker 3: fifteen to one hundred and thirty five billion dollars. As
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  Speaker 3: a result, we're seeing shares of Meta platforms carrilled down
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  Speaker 3: by six point three percent.
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  Speaker 4: Yeah. Kurt Wagner, a tech reporter on the Metal Live blog.
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  Speaker 4: From the release, we anticipate twenty twenty six capex, including
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  Speaker 4: those principal payments on finance leases, to be in the
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  Speaker 4: range of that one twenty five to one forty five billion,
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  Speaker 4: So increase from that range, just to reiterate, So that's
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  Speaker 4: a problem in.
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  Speaker 6: Well, let's just do the calculation right, So we know
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  Speaker 6: that capex is going up, what is the outlook for growth?
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  Speaker 2: Revenue in the current period?
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  Speaker 6: Second quarter will be fifty eight billion to sixty one
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  Speaker 6: billion dollars. Consensus was fifty nine point six billion. That
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  Speaker 6: is right in line. And we went into this knowing
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  Speaker 6: based on a summary of the cell side and of
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  Speaker 6: the buy side that if the CAPEX numbers get higher,
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  Speaker 6: they want to see growth also going up. In terms
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  Speaker 6: of guidance going forward, and you know this second quarter
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  Speaker 6: guide on Meta sales, it's very in line with expectation.
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  Speaker 3: I want to bring in Ron Westfall, Hyperframe Research, Infrastructure
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  Speaker 3: and Networking VP and practice leader. I want to stay
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  Speaker 3: on what Ed was talking about Ron, and that's Meta
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  Speaker 3: Meta's CAPEX estimate. We're also seeing some headlines. Headwinds in
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  Speaker 3: the EU and US could significantly impact results. The company
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  Speaker 3: sees scrutiny on youth related issues as well. Shares of
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  Speaker 3: Meta platforms right now down about five and a half percent,
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  Speaker 3: but it does seem like more important is CAPEX number
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  Speaker 3: hen and twenty five hundred and forty five billion increase
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  Speaker 3: from that prior range of one hundred and fifteen two
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  Speaker 3: one hundred and thirty five billion dollars. What are your thoughts?
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  Speaker 7: Sure, I like to start with looking at the bigger picture.
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  Speaker 7: I would see Meta as certainly benefiting overall despite the
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  Speaker 7: recent dip from the overall market expectations that is the
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  Speaker 7: total addressable market for Meta alongside the other of the
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  Speaker 7: major four that are coming out this week, is a
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  Speaker 7: total addressable market of up to eleven trillion dollars, and
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  Speaker 7: so I think that's going to definitely enable Meta as
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  Speaker 7: well as the other players to continue with the upswing
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  Speaker 7: and capex. And yes, that's causing concern, but I think
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  Speaker 7: what we're looking at is when you look at the
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  Speaker 7: group burnings, they're projected to grow twenty percent year over year,
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  Speaker 7: and that is outpacing the overall S and P five
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  Speaker 7: hundred fourteen point five percent growth expectation. And so as
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  Speaker 7: a result, I'm anticipating that Meta will definitely be looking
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  Speaker 7: pretty solid over the course of the year and further out,
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  Speaker 7: because not only is it upping its CAPEX expenditures, however,
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  Speaker 7: it's also I think benefiting from trading at a relatively
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  Speaker 7: conservative forward pe ratio of the lower to mid twenties,
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  Speaker 7: as you know that fluctuates on a daily basis, and
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  Speaker 7: they're definitely benefiting from the fact that they're monetizing AI
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  Speaker 7: more rapidly than some of the other Max seven thanks
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  Speaker 7: to their social platforms, certainly including Facebook as well as
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  Speaker 7: Instagram and so I think that's something that will definitely
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  Speaker 7: be something to definitely look at as we find out
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  Speaker 7: what Meta is really going to do for the rest
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  Speaker 7: of the year.
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  Speaker 4: All right, folks, I want to go over to Amazon.
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  Speaker 4: A couple of things also popping up, fifty nine point
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  Speaker 4: three billion year year rise and purchase of property and equipment.
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  Speaker 4: They say the increase in purchases reflect investment in AI.
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  Speaker 4: They also say, ed fred free cash flow fil to
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  Speaker 4: one point two billion for trailing twelve months. Come on
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  Speaker 4: back in lot though.
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  Speaker 6: Yeah, so this is exactly what I've got on my screen.
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  Speaker 6: So the story financially for each company is slightly different.
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  Speaker 6: If we focus on Amazon, it's spending so much on
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  Speaker 6: AI infrastructure that trailing twelvemonth three cash flow basically falls
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  Speaker 6: from twenty six billion dollars to one point two billion dollars.
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  Speaker 6: Operating cash flow rises. Amazon's are complicated business, right, you know,
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  Speaker 6: AWS largely accounts for most of operating income, but increasingly,
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  Speaker 6: like ADS is important on the e commerce side. And
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  Speaker 6: I'm hoping that that Ana Rag will kind of talk
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  Speaker 6: a little bit about that this is kind of a
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  Speaker 6: classics building cycle signal though, and to this point, and
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  Speaker 6: you know, maybe one of the other guys and weigh
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  Speaker 6: in on this. I'm just but a journalist, but you know,
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  Speaker 6: the market has been really sanguine about negative free cash
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  Speaker 6: flow or the prospect of it. You know that it's
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  Speaker 6: not something that everyone's like freaked out over. Basically, that's
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  Speaker 6: a very simple way of putting it.
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  Speaker 4: Ron come on back in Ron westfall of hyperframe. How
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  Speaker 4: do you see it in terms of what Amazon's up to.
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  Speaker 4: I like that idea and this concept of you've got
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  Speaker 4: to spend to build for future revenue, But how do
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  Speaker 4: you see it?
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  Speaker 7: I think AWS is definitely benefiting Amazon's overall prospects, and
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  Speaker 7: I think that's underlined by the fact that the AWSAI
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  Speaker 7: revenue run rate has already gone past fifteen billion dollars,
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  Speaker 7: and that's linking to the fact that as growth is
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  Speaker 7: projected to accelerate toward twenty five point six percent following
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  Speaker 7: its landmark one hundred billion dollar infrastructure deal with Anthropic.
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  Speaker 7: So clearly that's something that I think will create not
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  Speaker 7: only positive perception, but I think it's giving you know,
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  Speaker 7: the hard numbers that AWS needs to continue with these
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  Speaker 7: cap asks expansions. Also, I think it's important to note
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  Speaker 7: that AWS capacity is selling out immediately, and so that's
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  Speaker 7: supported by a massive two hundred and forty four billion
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  Speaker 7: dollar contracted backlog, as well as high margin revenue from
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  Speaker 7: its trainium and graviton chips, and these I think are
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  Speaker 7: offset of concerns around the large margin pressure from the
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  Speaker 7: two hundred billion dollar billion planned and capital expenditures for
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  Speaker 7: the year. And so you take this together, I think
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  Speaker 7: net positive is what Amazon is going to bring to
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  Speaker 7: the table. It's definitely, I think something that applies to
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  Speaker 7: all the hyperscalers, and Amazon I think is definitely positioned
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  Speaker 7: to improve on its performance. As a result, we've got.
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  Speaker 4: To go to Alphabet, which is up three and a
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  Speaker 4: half percent here in the aftermarket.
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  Speaker 3: Yeah. The company reported quarterly revenue and profited beat projections.
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  Speaker 3: It was fueled by strong growth in its cloud computing unit.
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  Speaker 3: Its signaled that the Internet Giant's unprecedented investments in AI
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  Speaker 3: infrastructure are beginning to pay off. The company said that
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  Speaker 3: first quarter revenue excluding those partner payouts, was ninety four
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  Speaker 3: point seven billion dollars. That compares to the ninety one
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  Speaker 3: point six billion dollars expected on average by analysts. That's
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  Speaker 3: according to data compiled by Bloomberg.
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  Speaker 4: All right, still with us is Ed Lulow, a Bloomberg
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  Speaker 4: Tech co host Bloomberg TV, and our Agrana Bloomberg Intelligence
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  Speaker 4: Senior technology analyst, Ed. As we continue to go through
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  Speaker 4: these numbers and results, where do you want to go?
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  Speaker 1: Yeah?
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  Speaker 2: I think you guys have done a masterful job.
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  Speaker 6: You know, the the cloud growth rate, if we put
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  Speaker 6: medatus to one side for a minute, is really interesting
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  Speaker 6: because all things are relative. So you know, Ana rag
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  Speaker 6: pointed out if you if you focus on Google cloud
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  Speaker 6: sixty three percent growth. You know, AI is for them
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  Speaker 6: also boosting search, right, and they had this kind of
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  Speaker 6: dual benefit, which is really interesting. They reported a metric
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  Speaker 6: that we've kind of not skipped over, but there's so
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  Speaker 6: much news it gets buried, which is that Gemini for Enterprise,
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  Speaker 6: in other words, their AI tool that businesses pay for
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  Speaker 6: saw its active user base grow forty percent quarter on quarter.
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  Speaker 2: So there was a big jump in that. And the
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  Speaker 2: reason I flagged.
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  Speaker 6: That as important is that that's the standard to which
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  Speaker 6: we hold open ai right and andthropic. You know, but
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  Speaker 6: the markets of earlier this week were spooked by the
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  Speaker 6: Wall Street Journal report of Open AI missing its own
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  Speaker 6: internal metrics. One of them was the active user base
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  Speaker 6: of chat GPT, which isn't universally an enterprise product, it's consumer.
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  Speaker 6: But I find that to be really interesting, and you know,
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  Speaker 6: it shows tangible growth on the other side of people
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  Speaker 6: actually using this. This the Gemini tool in the real world,
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  Speaker 6: you know, right, which.
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  Speaker 4: We all keep talking about. We need to see, right
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  Speaker 4: to kind of justify the spend. All right, We're going
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  Speaker 4: to continue with Ed Ludlow and of course Ron Westfall
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  Speaker 4: in just a moment. As we mentioned, Alphabet is now
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  Speaker 4: up about five point eight percent here in the aftermarket.
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  Speaker 4: We're looking at Amazon down about two point four percent,
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  Speaker 4: Meta a decline of five point three percent, and then
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  Speaker 4: we've also got Microsoft out with its results and we're
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  Speaker 4: seeing this one. It's been under pressure in the aftermarket
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  Speaker 4: right now, Tim about one point eight percent.
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  Speaker 3: Hey, we were talking about meta platforms. We have spoken
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  Speaker 3: quite a bit about Amazon, Qualcom and more. I want
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  Speaker 3: to bring Alphabet to our attention, six point six percent higher.
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  Speaker 3: In the after hours, the company reported quarterly revenue and
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  Speaker 3: profit that beat projections. It was fueled by strong growth
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  Speaker 3: in its cloud computing unit. That cloud computing unit reported
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  Speaker 3: sales of twenty billion dollars with a quote meaningful acceleration
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  Speaker 3: in growth driven by demand for its AI software and infrastructure.
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  Speaker 3: I want to bring it back in Ed Ludlow, Bloomberg
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  Speaker 3: Tech co host and Ron Westfall hyper frame research, infrastructure
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  Speaker 3: networking VP and a practice leader. Ron, I want to
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  Speaker 3: start with you in alphabet because we are seeing share
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  Speaker 3: surge in the after hours. The company reported earnings per
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  Speaker 3: share of five dollars and eleven cents, compared with Wall
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  Speaker 3: Street's two dollars and sixty two per share estimate. The
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  Speaker 3: cloud growth to certainly top of mind. We should remind
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  Speaker 3: everybody that you know, it competes against AWS and Microsoft's Azure.
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  Speaker 3: This report, though, what sticks out to you?
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  Speaker 7: Yeah, I think it's pointing to that Google is making
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  Speaker 7: more in roads in terms of capturing you know, mind
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  Speaker 7: share amongst the hyper scale competition. And I think what
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  Speaker 7: we saw is that when you look at Google Cloud
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  Speaker 7: specifically and reporting over twenty billion revenue, well that basically
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  Speaker 7: beat out the analyst estimates, and that is I think
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  Speaker 7: a remarkable sixty three percent you overhear growth rate, and
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  Speaker 7: so that by itself is congratulatory. And when you look
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  Speaker 7: further down, it's like, okay, why are the cloud margins
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  Speaker 7: expanding to nearly thirty percent, up from just twenty percent
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  Speaker 7: six months ago. I think what is resonating is that
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  Speaker 7: the company is making the right moves. Certainly, it's acquisition
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  Speaker 7: of wiz, which closed just last month and has already
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  Speaker 7: become integrated. It's making Google Cloud a more attractive choice
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  Speaker 7: for enterprises that are requiring sovereign and highly secure AI environments.
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  Speaker 7: And that is certainly a hot topic in our conversations,
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  Speaker 7: and that is sovereign AI is something that will underpin
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  Speaker 7: confidence and the ability of enterprises to adopt the hyper
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  Speaker 7: scale AI services and so forth. And certainly that comes
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  Speaker 7: to inferencing, and that is, you know, ensuring that their propriety,
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  Speaker 7: proprietary data never falls into the wrong hands, that you know,
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  Speaker 7: it's not going to be something that will be exposed
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  Speaker 7: out in the public cloud at part of it. And
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  Speaker 7: I think what's also important is that what we saw
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  Speaker 7: at Google Cloud Next just you know, last week, is
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  Speaker 7: that when it comes to uh, you know, the TPU silicon,
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  Speaker 7: Google is coming up with innovative ways to augment the
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  Speaker 7: NVIDIA capable at least they have in house certainly they
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  Speaker 7: use their TPUs to train their own models in house,
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  Speaker 7: that includes a Gemini for example. But I think they're
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  Speaker 7: smart about how they're now diversifying their AI chip sets
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  Speaker 7: to stand out. That is, now they have TPU what
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  Speaker 7: they're calling t eight that is that is a specific
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  Speaker 7: for training only, but now they also have the TPU
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  Speaker 7: eight I, which is for inferencing. And so what we're
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  Speaker 7: seeing is a fundamental shift more toward inferencing. That is,
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  Speaker 7: you know, the AI capabilities being used in play, that is,
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  Speaker 7: the ability to use handsets and other capabilities that take
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  Speaker 7: what has already been trained and actually apply to real
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  Speaker 7: world scenarios. And so as a result, I think this
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  Speaker 7: is why Alphabet is definitely making inroads with winning more
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  Speaker 7: cloud business. And if you look at Alphabet overall, I
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  Speaker 7: think also it's import to note that when it comes
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  Speaker 7: to diversifying revenue streams that their way MO unit is
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  Speaker 7: definitely making it would say waves. So that is that's
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  Speaker 7: already scaling up to one million rides and so that
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  Speaker 7: I think is something that will definitely continue the revenue
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  Speaker 7: generating capabilities moving forward.
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  Speaker 4: Well, we're definitely seeing it. Jine in the aftermarket now
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  Speaker 4: up about six point two percent here. I mean listen,
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  Speaker 4: to be fair, Alphabet's definitely been hustling when it comes
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  Speaker 4: to AI. Amazon right now though down about one point
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  Speaker 4: nine percent. We want to get a little bit more
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  Speaker 4: on Amazon. And with that, Matt Day, Bloomberg News Technology
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  Speaker 4: reporter follows the company joining us right now. Matt, walk
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  Speaker 4: us through what you think is important for our audience.
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  Speaker 1: You can go back to what Jeff Bezos said was important,
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  Speaker 1: his favorite metric, free cash flow. If you look at
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  Speaker 1: Amazon the last twelve months, it's not zero, but it's
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  Speaker 1: pretty close to zero, and it's a whole lot closer
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  Speaker 1: than it was last year. So the reason for that, obviously,
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  Speaker 1: it's AI spending. It's data centers, a whole lot of
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  Speaker 1: property and equipment that there's spend money on these days.
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  Speaker 1: The cloud revenue is good, it's going up. It beat expectations.
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  Speaker 1: But just a reminder for Amazon investors, they're spending a
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  Speaker 1: whole lot to get a seat at this table.
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  Speaker 3: Is the spending paying off?
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  Speaker 1: It looks like it if you if you roll things
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  Speaker 1: back a few months ago, folks were really concerned about
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  Speaker 1: Amazon's position in cloud, and we're just talked about Google, Microsoft,
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  Speaker 1: was also really hot, and they kind of looked like
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  Speaker 1: they might be sort of the third place cloud of
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  Speaker 1: the AI era. To boil it down. Since then, they've
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  Speaker 1: done these big mechad deals with open Ai, with Anthropic,
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  Speaker 1: and it looks like some of that is starting to
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  Speaker 1: filter into their at their cloud results, they've accelerated the
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  Speaker 1: last couple of quarters.
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  Speaker 4: Anything you're scratching your head over here, Matt a little.
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  Speaker 1: The market reaction, honestly, is they beat on so many
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  Speaker 1: things that if it feels like a lot of these
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  Speaker 1: big tech names been going between Capex freak out to
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  Speaker 1: you know, OAI is the future and in quarter quarter,
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  Speaker 1: it's kind of hard to tell what folks are stinking
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  Speaker 1: their teeth into.
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  Speaker 3: Is the yeah, oh, go ahead, Carol, No, go ahead.
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  Speaker 3: The investing that Amazon has done in open Ai and Anthropic,
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  Speaker 3: it's committed that they'll h to spend more than one
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  Speaker 3: hundred billion dollars on AWS services in the coming years
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  Speaker 3: between those two. How do investors look at that, because
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  Speaker 3: it's do they look at it as venture like the
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  Speaker 3: company's making a bet, like a venture capitalist bet, or
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  Speaker 3: does it look like the companies trying, you know, guaranteeing
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  Speaker 3: business by making these investments in exchange for AWS usage.
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  Speaker 1: I mean, some of it is is clearly buying business
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  Speaker 1: a little bit right, making sure that you've got entitlement
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  Speaker 1: relationship with open AI that they want to spend. But
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  Speaker 1: I think there are some long term questions. You know,
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  Speaker 1: Oracle has seen versions of this. Microsoft have seen this
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  Speaker 1: where you know, investors start to discount. Okay, Sam Maltman
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  Speaker 1: has pledged to spend you know, one trillion dollars plus
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  Speaker 1: all over the place. How much of that is going
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  Speaker 1: to materialize? Right? So now Amazon's in a position where they've
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  Speaker 1: definitely got a slice of that alongside anthropic spending. So
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  Speaker 1: the question is, you know, when does that materialize, Where
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  Speaker 1: do you start to put that up on the calendar,
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  Speaker 1: and how much of a sure thing does that become.
• 18:03
  Speaker 3: I want to bring back Ron Westfall, Hyperframe Research, Infrastructure Networking,
• 18:06
  Speaker 3: a VPN practice leader. He has been with us for
• 18:09
  Speaker 3: about an hour as the slew of earnings came in
• 18:11
  Speaker 3: at thanks to ED, we know at seventy one seconds
• 18:14
  Speaker 3: for all of these companies to report, we're still you know,
• 18:17
  Speaker 3: breaking our making our way through all of these I
• 18:20
  Speaker 3: weigh in on Amazon, what we've heard from Matt what
• 18:23
  Speaker 3: we've heard from Ed as well, because this is a
• 18:27
  Speaker 3: company where you know, certainly AWS is the star, but
• 18:30
  Speaker 3: it also and that's what moves the needle, but it
• 18:33
  Speaker 3: also gives us a good idea of what Americans are
• 18:37
  Speaker 3: paying and how American consumer spending is holding up, even
• 18:41
  Speaker 3: though that's not really what moves the stock.
• 18:46
  Speaker 7: It's amazing. I think when you're looking at Okay, what
• 18:50
  Speaker 7: is Amazon doing? That is you know, continuing these organizations
• 18:56
  Speaker 7: as well as consumers to you know, use their certainly
• 19:01
  Speaker 7: their services. And I think when he snapshot for example AWS,
• 19:08
  Speaker 7: that is, you know, the enterprises are using Amazon bedrock,
• 19:12
  Speaker 7: and that is underlined by their trainingum to Inferentia chipsets.
• 19:18
  Speaker 7: And if you look at that, that chipset business alone
• 19:22
  Speaker 7: is reached twenty billion dollars in annualize revenue run rate.
• 19:27
  Speaker 7: And so I think this is pointing to that Amazon
• 19:29
  Speaker 7: is making the right bets across its entire portfolio. It's
• 19:33
  Speaker 7: not just about Okay, how can we improve you know,
• 19:37
  Speaker 7: the Amazon experience, but also how can AWS meet business
• 19:42
  Speaker 7: needs on across the board basis. And I think, yeah,
• 19:45
  Speaker 7: when it comes to fundamentals, when we're looking at Amazon,
• 19:48
  Speaker 7: Amazon advertising. He's on track to exceed seventy billion dollars
• 19:53
  Speaker 7: in revenue just this year. And that is, you know,
• 19:56
  Speaker 7: tied to the fact that there's so much high intent
• 19:58
  Speaker 7: purchase data information that they're able to leverage that it's
• 20:02
  Speaker 7: improving their capability. So that is again underlying why AI
• 20:08
  Speaker 7: is making a difference in terms of their business model.
• 20:11
  Speaker 7: And I think it's also reflected in what we talked
• 20:13
  Speaker 7: about in.
• 20:13
  Speaker 2: Terms of the metas.
• 20:15
  Speaker 7: Hey, guys, something I think will improve.
• 20:18
  Speaker 4: No, this is all good stuff, really good stuff. We
• 20:21
  Speaker 4: could go on and on. Hey, we've got about two
• 20:23
  Speaker 4: minutes before we have to wrap up this segment. I'm
• 20:25
  Speaker 4: just curious for each of you, what do you think
• 20:28
  Speaker 4: was kind of the most important headline or narrative from
• 20:32
  Speaker 4: this drop of for results. And Matt, let me start
• 20:36
  Speaker 4: with you. I know Amazon's your jams, so maybe go
• 20:39
  Speaker 4: there or go anywhere there's a good spot.
• 20:43
  Speaker 1: I mean, it's that Amazon's got a seat at the table,
• 20:46
  Speaker 1: right They've got all the big models are on a
• 20:49
  Speaker 1: WS and so now you know, there was a first
• 20:50
  Speaker 1: leg of this AI competition was you know, who's going
• 20:53
  Speaker 1: to add the exclusive tie up? This one looks like
• 20:55
  Speaker 1: you can get most just about anything anywhere. So who's
• 20:57
  Speaker 1: got the better mouse trapping cloud? Looking forward to seeing
• 20:59
  Speaker 1: how that transplarers?
• 21:00
  Speaker 3: All right, Ron, your turn, come on in here. Just
• 21:02
  Speaker 3: the most important bit of info you got from any
• 21:04
  Speaker 3: of these companies that reported after the bell.
• 21:07
  Speaker 4: And you can't say, ah, yeah, I think they both.
• 21:11
  Speaker 7: No, they're demonstrating the runways there that this capex is
• 21:14
  Speaker 7: all justified, and I think we're seeing that it's having
• 21:16
  Speaker 7: an impact already. We're seeing that the companies that have
• 21:19
  Speaker 7: integrated AI to their operations are seeing cash flow margin
• 21:23
  Speaker 7: expansion it roughly twice the global average. So yes, it
• 21:27
  Speaker 7: is now making a difference. The ROI is there and
• 21:29
  Speaker 7: we're seeing the results.
• 21:31
  Speaker 4: All right, good stuff, Ron, Thank you so much. Ed,
• 21:33
  Speaker 4: come on in, same thing for you. I know you
• 21:35
  Speaker 4: kind of love all these It's hard to have a
• 21:37
  Speaker 4: favorite child here. But I'm just curious, as you look
• 21:39
  Speaker 4: at these headlines and you're thinking about your show tomorrow,
• 21:42
  Speaker 4: is there a narrative a headline that really just sticks
• 21:45
  Speaker 4: with you?
• 21:46
  Speaker 2: Yeah, I think you know.
• 21:47
  Speaker 6: Across all four and it includes Meadow, which is a
• 21:49
  Speaker 6: slightly different company. AI demand is running ahead of their
• 21:53
  Speaker 6: ability to supply. That's not a new sentence or idea.
• 21:57
  Speaker 6: People have been saying that for a little while, and
• 21:59
  Speaker 6: so across four it's interesting to see those that they
• 22:02
  Speaker 6: believe and those that they don't. This isn't profound selling
• 22:06
  Speaker 6: in Meta's case or in Amazon's case. It's not severe
• 22:09
  Speaker 6: buying in alphabets are either or you know. So I
• 22:14
  Speaker 6: think the idea is proof points, you know, like tangible
• 22:17
  Speaker 6: new pieces of data. Google gave many of them, and
• 22:20
  Speaker 6: investors have kind of cheered that. But it's about AI
• 22:23
  Speaker 6: in the real world, and that might sound abstract, but
• 22:25
  Speaker 6: that's what the market's been asking for.
• 22:26
  Speaker 3: Okay, well, speaking of AI and the real world, just
• 22:29
  Speaker 3: push us ahead to tomorrow afternoon when we hear from Apple,
• 22:33
  Speaker 3: Tim Cook, John Turnus. What's thirty seconds on what you
• 22:37
  Speaker 3: expect from Apple.
• 22:38
  Speaker 6: This is the first earnings and earnings call since Tim
• 22:41
  Speaker 6: Cook announced he's stepped down September one, and John Turnus
• 22:45
  Speaker 6: becomes CEO September first, and I think whatever Apple says
• 22:48
  Speaker 6: about handsets or software that it will just be about
• 22:52
  Speaker 6: those two people.
• 22:52
  Speaker 4: All right, unbelievable sixty minutes on here on Bloomberg Business Weekday, guys,
• 22:57
  Speaker 4: Thank you so much, so appreciate our own ed Ludlow,
• 23:00
  Speaker 4: co host of Bloomberg Tech. Catch him on TV eleven
• 23:03
  Speaker 4: am to twelve noon Monday through Friday, Wall Street Time,
• 23:07
  Speaker 4: Ron Westfall, thank you so much for all that time
• 23:09
  Speaker 4: Hyperframe Research, Infrastructure, Networking VP and practice leader out there
• 23:13
  Speaker 4: in the Twin Cities, and of course out in Seattle
• 23:16
  Speaker 4: watching Amazon, our own Matt Day, Bloomberg News technology reporter.
• 23:19
  Speaker 2: Incredible stuff.