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Trump Nvidia Deal Reshapes US’s China Strategy · Bloomberg Intelligence

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  Speaker 1: or watch us live on YouTube.
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  Speaker 2: Through President Trump has now opened the door to Nvidia
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  Speaker 2: selling some of its high end chips to China.
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  Speaker 3: Yeah, I'm not sure. I kind of can't follow the policies.
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  Speaker 3: Some days the door's open, some days it's closed.
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  Speaker 2: Yeah, and it could always move in the other that's
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  Speaker 2: the other risk.
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  Speaker 4: Right.
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  Speaker 2: Let's bring in Bloomberg Tech co host Caroline Hide to
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  Speaker 2: tell us a little bit more so on b Tech.
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  Speaker 2: I'm sure you're going to be talking all about this,
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  Speaker 2: but Caroline, what does it mean that Nvidia can now
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  Speaker 2: sell these h two hundred chips to China? Because that
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  Speaker 2: is not the most advanced chips.
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  Speaker 1: Is it.
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  Speaker 5: It's not.
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  Speaker 4: It's based on Grace Hopper architecture, which isn't the Blackwell
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  Speaker 4: that we're currently in. It isn't the Vera Rubin that
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  Speaker 4: we're looking towards. It's the pre V's iterations. It is
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  Speaker 4: ten x superior to the ah twenties that remember cast
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  Speaker 4: Your Mind Back had also been deemed okay to ship
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  Speaker 4: from the United States to China if a fifteen percent
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  Speaker 4: cut was given to the US government, but that was
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  Speaker 4: never signed into law. They were never able to execute
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  Speaker 4: on that. And most importantly, China doesn't want them. And
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  Speaker 4: I think this is the key the financial times of
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  Speaker 4: reporting that basically already China's looking at putting curves licenses,
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  Speaker 4: basically limiting the ability for certain companies to access the
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  Speaker 4: H two hundreds even if Invidia is allowed to ship them.
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  Speaker 4: And I think this is what everyone's got to currently digest.
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  Speaker 4: I'm hearing time and time again from some of the
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  Speaker 4: most powerful people in the technology space that we are
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  Speaker 4: underestimating how sophisticated China is at using the Invidia chips,
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  Speaker 4: the small amount they already have and some of those
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  Speaker 4: homegrown ones.
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  Speaker 3: Typically, how has this trade policy negotiated? Who typically says
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  Speaker 3: US tech company, you can sell this into China or
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  Speaker 3: to other markets, or you can't. Is because it just
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  Speaker 3: seems like it's now the whim of the present in
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  Speaker 3: his ex account or truth social account setting trade policies
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  Speaker 3: at how's it typically done well?
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  Speaker 4: Isn't it interesting that just last week Jensen Wang was
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  Speaker 4: meeting with a president, but was meeting with some of
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  Speaker 4: the leaders over in Congress. Most crucially, he was with
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  Speaker 4: the Senate Banking Committee, because it's the Banking Committee oddly
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  Speaker 4: that tends to be in charge of export restrictions, and
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  Speaker 4: so it was that group of leaders. But many are frustrated,
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  Speaker 4: and I was just at the Reagan Defense Forum National
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  Speaker 4: Defense Forum this weekend, and there is handwringing going on
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  Speaker 4: from Congress that they're being cut out of a lot
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  Speaker 4: of these discussions. Really they should have ownership of to
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  Speaker 4: how much trade should be allowed, But at the moment
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  Speaker 4: these are coming through executive orders. And we know that
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  Speaker 4: the President likes to cut a deal and Vidia, Jensen
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  Speaker 4: Wang likes to cut a deal. They have a very
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  Speaker 4: personal relationship. And most broadly, in Vidia and Jensen want
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  Speaker 4: access to China. They think there's something like a fifty
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  Speaker 4: billion dollar total addressable market they're being forced to have
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  Speaker 4: to put down. At the moment, he's has zero percent
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  Speaker 4: revenue coming from that country. But you've got this tussel
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  Speaker 4: at the top of the China Hawks, who were worried
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  Speaker 4: from anal security perspective, if you allow technology to go
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  Speaker 4: from the US into China.
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  Speaker 2: But on the flip side.
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  Speaker 4: In Jenson Wrong would say, they're just going to build
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  Speaker 4: it themselves, and we're forcing them to speed up that
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  Speaker 4: by limiting my technology. Let our stack own that of
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  Speaker 4: China's big large language model development.
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  Speaker 2: So you had mentioned that China didn't want to buy
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  Speaker 2: the H twenty chips. Does China want to buy the
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  Speaker 2: H two hundred chips?
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  Speaker 4: I think if you asked, what the reporting shows is
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  Speaker 4: that if you turn to an Ali.
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  Speaker 5: Barbar or a Tensen or a by Do, they are.
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  Speaker 4: Limited by the amount of GPUs they have access to.
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  Speaker 4: So I think more is more from their perspective. And yes,
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  Speaker 4: the H two hundreds build on the H twenties, but
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  Speaker 4: longer term, the government wants to focus on domestic supply here.
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  Speaker 4: That's why you're seeing camera con do so well, while
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  Speaker 4: you're seeing Huawei do well, while you're hearing Bido wants
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  Speaker 4: to spin off its chip manufacturer. While we just had
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  Speaker 4: that superb entrance to the market just of the Moore's
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  Speaker 4: technology company that has shot up more than four hundred percent,
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  Speaker 4: they do want to make it homegrown.
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  Speaker 5: Great store on a Bloomberg terurnal.
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  Speaker 3: Today, Apple shares have sorted thirty five percent since the
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  Speaker 3: end of the gym as the market scrutiny of AI development
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  Speaker 3: spending has made the company's lack of an AI strategy
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  Speaker 3: a strength.
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  Speaker 2: So do nothing and benefit.
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  Speaker 5: I don't know, but I mean Apple.
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  Speaker 3: We always say about Apple they don't have to be first,
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  Speaker 3: and tim that they are not first, but when they
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  Speaker 3: do come into the market, they do it really well.
• 4:18
  Speaker 3: It's a thought out approach and that people, you know,
• 4:22
  Speaker 3: the Apple bullsmen saying, don't worry, don't worry, don't worry.
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  Speaker 5: They're going to be fine.
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  Speaker 3: There's two billion Apple devices out there, they'll be fine.
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  Speaker 5: I don't know.
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  Speaker 4: Yeah, And meanwhile, goodbye to the guy who is in
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  Speaker 4: charge of AI policy over at Apple. Because of that
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  Speaker 4: botched Apple intelligence roll up, people have been frustrated that
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  Speaker 4: Apple seems to be a slow player to adoption, but
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  Speaker 4: longer term, most in the generative AI space thinking that
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  Speaker 4: we are going to be using this from a consumer perspective,
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  Speaker 4: from our edge devices. Therefore, computer is going to change
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  Speaker 4: in the way in which you know it. Your models
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  Speaker 4: are going to change in the way in which you
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  Speaker 4: know it, and eventually we will be doing running our
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  Speaker 4: Chatchpt or our Gemini or whatever model you like on
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  Speaker 4: your device. Eventually that means you'll need an Android or
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  Speaker 4: an Apple or maybe some future AI device that hasn't
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  Speaker 4: yet been created and is probably being developed in the
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  Speaker 4: minds of the great leaders right now. But we'll have
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  Speaker 4: to see how Apple continues to basically do the benefit
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  Speaker 4: of not having got a load of debt and not
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  Speaker 4: having spent an awful lot of money on the buildout,
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  Speaker 4: because at the moment the come I think investors are
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  Speaker 4: just still grappling with the sheer scale of capital expenditure
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  Speaker 4: that's going into this and wondering whether there's going to
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  Speaker 4: be a real upside. Can Apple get the upside without
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  Speaker 4: making the infrastructure investment.
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  Speaker 5: Stay with us more from Bloomberg Intelligence coming up after this.
• 5:37
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 1: weekdays at ten am. He's Dene on Apple Coarclay, and
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  Speaker 1: wherever you get your podcasts, or watch us live on YouTube.
• 5:52
  Speaker 3: Our next guest one of the most highly respected media
• 5:55
  Speaker 3: analysts on Wall Street for a long time, and I
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  Speaker 3: think the value that I really find from her res
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  Speaker 3: or it's consistently over the years, is she's not afraid
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  Speaker 3: to be out of consensus here. And I think she's
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  Speaker 3: got a again, a non consensus call here that even
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  Speaker 3: if you don't agree with it, it makes you think. And
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  Speaker 3: that's the value of a good animals. Laura Martin joins
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  Speaker 3: his senior analysts that need them company, Laura, as it
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  Speaker 3: relates to Netflix, do you think they should even pursue
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  Speaker 3: this deal here?
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  Speaker 6: Yeah, So we published a note this morning say no
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  Speaker 6: that the big cultural Warner Brothers would create cultural problems
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  Speaker 6: at Netflix. Netflix has about fourteen thousand employees and Warner
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  Speaker 6: Brothers is about thirty five thousand, some of which they
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  Speaker 6: wouldn't be buying, but it would be about twice as
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  Speaker 6: many employees from let's call it the old world, the
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  Speaker 6: fifty year old studio who really is averse to make
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  Speaker 6: taking risks and they really do things the old fashioned
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  Speaker 6: way and siloed, competitive, internally fighting culture. And that isn't Netflix.
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  Speaker 6: Netflix is sort of single purpose disruptor. Everybody on the
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  Speaker 6: same page, move fast and break things, iterate if you
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  Speaker 6: get it wrong. And I just feel like the culture
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  Speaker 6: that Warner Brothers is an anchor would be an anchor
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  Speaker 6: to Netflix and a time when jenerative AI technology risks
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  Speaker 6: are collapsing timeframes into weeks with the changes. So we
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  Speaker 6: think the next disruption created by jeneritive AI requires really
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  Speaker 6: fast reaction times, which Netflix has the fastest in media,
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  Speaker 6: and it would really slow their reaction times if they
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  Speaker 6: suddenly brought on twice as many employees that were stuck
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  Speaker 6: in the fifty year old business model of the Hollywood studio.
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  Speaker 2: And you quantified the drag that this would have on Netflix,
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  Speaker 2: what does that look like?
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  Speaker 7: So?
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  Speaker 6: I mean, I think what we're saying is that the
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  Speaker 6: eighty three billion dollar purchase price that they would pay
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  Speaker 6: to buy Warner Brothers would add another that cash would
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  Speaker 6: be at risk of not returning its capital because would
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  Speaker 6: bring all these cultural problems and envelop the entire consolidated
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  Speaker 6: four hundred billion dollar entity.
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  Speaker 3: Lars, So, as it related to jen ai, is that
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  Speaker 3: a friend or a foe to Hollywood, to the media companies?
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  Speaker 6: Yeah? So to date, Paul, what isn't different about jen
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  Speaker 6: ai is it's being used as tools by humans, in
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  Speaker 6: which case it's not different than the web. It's not
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  Speaker 6: different than our smartphones our you know, our Apple phones
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  Speaker 6: are you know, flashlights and communication devices and map they
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  Speaker 6: replace Thomas Guides, so their utility.
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  Speaker 8: So so far.
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  Speaker 6: Jenai technology has been a tool or a utility for
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  Speaker 6: human beings. I think the vision of Sam Altman at
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  Speaker 6: open Ai, Elon Musk, Mark Zuckerberg over at Meta is
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  Speaker 6: to have and certainly of course of Navidia is to
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  Speaker 6: have to achieve what's called superintelligence, where machines trained machines,
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  Speaker 6: and case it replaces people at some level. It does better, thinking, faster,
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  Speaker 6: it's less emotional. So if that comes true and they're
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  Speaker 6: saying that's ten years out, that's superintelligence, it would actually
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  Speaker 6: replace humans. But in near term it's just like the
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  Speaker 6: other three technological disruptions you and I've seen where it
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  Speaker 6: makes our life better. It's a tool for humans to
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  Speaker 6: do faster, better, safer work.
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  Speaker 2: So, Laura, you make the case that Netflix doesn't need
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  Speaker 2: to buy Warner Brothers Discovery. It would be adding an
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  Speaker 2: anchor and it would drag it down because it's this disruptor.
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  Speaker 2: What about paramount skuidance? Doesn't that argument also apply or
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  Speaker 2: does it not?
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  Speaker 6: It does, But the distinction I would make is Netflix
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  Speaker 6: is large enough to go it alone, and with generative
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  Speaker 6: AI collapsing timeframes, their culture is really well suited to
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  Speaker 6: the technological you know, the future of the next five years.
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  Speaker 6: Peace Guy is subscale. It probably can't survive without bulking up,
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  Speaker 6: and it doesn't really have time to build in a
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  Speaker 6: generative world because it's just too small and change is
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  Speaker 6: happening too fast, so it needs to bulk up and
• 10:10
  Speaker 6: buy in something. We think they could get it closed
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  Speaker 6: in six months because we think the senior Ellison is
• 10:17
  Speaker 6: good friends with Donald Trump and he would have it
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  Speaker 6: sale through regulatory so it would happen faster, there'd be
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  Speaker 6: less uncertainty, and it would allow peace Guy to survive.
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  Speaker 6: So I think they have to take the technological risk
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  Speaker 6: because they must have scale.
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  Speaker 2: Or they're going to die.
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  Speaker 6: So they might die because I'm right about the culture
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  Speaker 6: problem and the anchor problem, but they're going to die
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  Speaker 6: if they don't buy something anyway, so it gives them
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  Speaker 6: a better chance to survive. I think to buy Warner.
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  Speaker 3: And Laurie you follow on Netflix, since it's inception here.
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  Speaker 3: This is a company and a management team and a
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  Speaker 3: board that's been pretty adamant.
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  Speaker 5: They don't they'd rather build from within than buy.
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  Speaker 3: What do you think is changed here, because this is
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  Speaker 3: a huge turnaround for this company strategic wise.
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  Speaker 6: Yeah, Paul, you know, we really wanted to write a
• 11:01
  Speaker 6: note that says dogma is bad. I mean, they said
• 11:04
  Speaker 6: they'd never do advertising. They do advertising. They said we'll
• 11:07
  Speaker 6: never do live sports, and now they've broadcast NFL games
• 11:10
  Speaker 6: on Christmas Day. And then they said, well, we don't
• 11:13
  Speaker 6: like the Hollywood, we don't like the theatrical window, and
• 11:16
  Speaker 6: we don't want to release any films in the theatrical
• 11:19
  Speaker 6: window unless talent like directors force us because they want
• 11:22
  Speaker 6: Academy Award consideration, which is a turn which is a requirement.
• 11:27
  Speaker 6: To get an Academy Award, you have to have been
• 11:28
  Speaker 6: released in theaters. So that is really hurting them in
• 11:31
  Speaker 6: this In this those words are really hurting them with
• 11:35
  Speaker 6: the talent community. So when they say we will never
• 11:39
  Speaker 6: do something, please take that with a grain of salt
• 11:42
  Speaker 6: because they often reverse themselves completely one hundred and eighty degrees,
• 11:46
  Speaker 6: and it's really those words about the theatrical window are
• 11:49
  Speaker 6: really hurting their hurting the feedback loops with talent like
• 11:54
  Speaker 6: big talent like Jim Cameron and Scarce. Like all these
• 11:57
  Speaker 6: people that really are big talent, they all want a
• 11:59
  Speaker 6: theatre window and Netflix. They're scared to death that if
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  Speaker 6: Netflix bought Warners, the theatrical window over five years would
• 12:07
  Speaker 6: go to zero.
• 12:08
  Speaker 5: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
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• 12:26
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 12:29
  Speaker 2: All right, let's move on here and talk a little
• 12:31
  Speaker 2: bit about Home Depot. Home Depot, of course did come
• 12:34
  Speaker 2: out with earnings a while ago, but they are giving
• 12:37
  Speaker 2: a bigger long term outlook here for its business. It's
• 12:41
  Speaker 2: an investor day kind of outlook. And for that we
• 12:43
  Speaker 2: have Matthew Griffin, He's a Bloomberg Stocks reporter, to just
• 12:46
  Speaker 2: talk us through some of the issues at Home Depot's face.
• 12:49
  Speaker 2: Because at the last earning support, Home Depot made clear
• 12:52
  Speaker 2: that the expected rebound in demand that it was looking
• 12:55
  Speaker 2: for had not yet materialized. Is the tone changing here
• 12:58
  Speaker 2: from Home Depot?
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  Speaker 8: Well, Scarlett I would say the tone really hasn't changed
• 13:04
  Speaker 8: in a meaningful way. Everyone's trying to make sense of
• 13:08
  Speaker 8: the economic moment that we're in. I mean, you were
• 13:11
  Speaker 8: just talking about economic data that we got this morning
• 13:13
  Speaker 8: that had some puts and takes in it when you
• 13:16
  Speaker 8: look at job openings versus layoffs, and I would say that,
• 13:19
  Speaker 8: like pretty much any economically sensitive company right now, Home
• 13:25
  Speaker 8: Depot is facing some puts in takes as well. So
• 13:28
  Speaker 8: they gave an outlook for comparable sales next year. They
• 13:32
  Speaker 8: are preliminary views. They'll be flat to up two percent.
• 13:37
  Speaker 8: That's lower than what Wall Street was looking for. But
• 13:40
  Speaker 8: then they also gave this market recovery scenario where there's
• 13:45
  Speaker 8: a bit more of a rebound in the US housing market,
• 13:47
  Speaker 8: more demand for home improvement, and in that scenario, comparable
• 13:51
  Speaker 8: sales would beat estimates at up four percent to five percent.
• 13:56
  Speaker 8: You know, you zoom out and you've got a picture
• 13:58
  Speaker 8: where mortgage rates have come down, but consumers are still
• 14:01
  Speaker 8: under pressure. Housing prices are still high, and so are
• 14:04
  Speaker 8: rates you know historically, and so you've got the consumer
• 14:11
  Speaker 8: trying to muddle through, companies trying to make sense of it,
• 14:13
  Speaker 8: and investors trying to make sense of it. You've got
• 14:15
  Speaker 8: the stock down a little bit pre market and now
• 14:17
  Speaker 8: just about flat on.
• 14:18
  Speaker 3: The day, four hundred and seventy thousand employees at home Depot.
• 14:22
  Speaker 3: That is amazing, But I don't think I could gave
• 14:24
  Speaker 3: a job there because I really don't know a hammer
• 14:26
  Speaker 3: from a screwdrive.
• 14:26
  Speaker 2: Okay, so back up a little bit, because Paul's goal
• 14:29
  Speaker 2: is to become a greeter at Walmart down the road. Like,
• 14:31
  Speaker 2: that's what he that's his dream job.
• 14:32
  Speaker 5: That's the final career.
• 14:35
  Speaker 2: Path, final destination.
• 14:37
  Speaker 3: So what are they saying about just the consumer behavior
• 14:40
  Speaker 3: these days?
• 14:41
  Speaker 5: I mean, interest rates are still high.
• 14:43
  Speaker 3: Are people still working on their homes, you know, the professional.
• 14:48
  Speaker 5: Versus the private?
• 14:50
  Speaker 3: What's going on with their core customer?
• 14:52
  Speaker 8: Yes, So we can actually look back to a few
• 14:56
  Speaker 8: weeks ago when they reported earnings and actually cut their
• 15:00
  Speaker 8: profit outlook for this year. What we saw in was
• 15:05
  Speaker 8: a continuation of trends at the company, which is you
• 15:09
  Speaker 8: have flagging demand for some of the bigger ticket home remodels. Again,
• 15:14
  Speaker 8: because there's pressure on consumers, people are not taking on
• 15:18
  Speaker 8: big projects, projects that require financing. At the same time,
• 15:21
  Speaker 8: they are shifting maybe into projects like gardening, smaller projects.
• 15:27
  Speaker 8: So it's not that people don't want to do anything.
• 15:29
  Speaker 8: It's that people are maybe the doing the home remodeling
• 15:32
  Speaker 8: equivalent of trading down here, which is a trend that
• 15:36
  Speaker 8: we've seen in other corners of the economy. For example,
• 15:39
  Speaker 8: Walmart's business holding up. You know, if you want that
• 15:42
  Speaker 8: greater job, it might be open for you because consumers
• 15:47
  Speaker 8: are trading down. That's good for Walmart's business, it's good
• 15:49
  Speaker 8: for a segment of Home depots business, but not enough
• 15:53
  Speaker 8: to support the overall outlook so far. And if you
• 15:56
  Speaker 8: look at these slides from their analyst today, they see
• 16:02
  Speaker 8: pressures continuing, including high home prices, and that's weighing on
• 16:06
  Speaker 8: consumers here.
• 16:07
  Speaker 2: Yeah, the affordability crisis strikes again. So, Matthew, I'm looking
• 16:11
  Speaker 2: at Loads shares, which are of course a competitor to
• 16:14
  Speaker 2: Home Depot down at the moment as Home Depot's basically unchanged.
• 16:18
  Speaker 2: Do we presume that these same headwinds that are dogging
• 16:21
  Speaker 2: Home Depot are the same that kind of our clouding
• 16:24
  Speaker 2: the outlook for our LOWS or does Loads have a
• 16:26
  Speaker 2: different approach?
• 16:28
  Speaker 8: Interestingly, you know, they both serve similar corners of the
• 16:33
  Speaker 8: market home improvement. So far, it does seem like LOWS
• 16:37
  Speaker 8: has fared a little bit better this year, at least
• 16:40
  Speaker 8: with how investors have viewed the way they've been managing
• 16:42
  Speaker 8: through their shares currently down about two percent on the year,
• 16:46
  Speaker 8: compared to down ten percent for Home Depot. If you
• 16:50
  Speaker 8: look at that reaction today, it's possible investors are thinking
• 16:53
  Speaker 8: there could be some of the same headwinds in their future.
• 16:59
  Speaker 8: But again, it do us seem like they've gotten a
• 17:01
  Speaker 8: little bit more of a pass so far.
• 17:03
  Speaker 3: I about tariffs here, What's what are the companies saying
• 17:05
  Speaker 3: about tariffs and their ability to deal with them?
• 17:08
  Speaker 8: So so far, the companies in their commentary have really
• 17:12
  Speaker 8: focused on the state of the consumer rather than directly
• 17:19
  Speaker 8: talking or at least talking constantly about tariffs. I would
• 17:22
  Speaker 8: say though, that Home Depot did call out high building
• 17:27
  Speaker 8: material costs as a reason that consumers are deferring home
• 17:32
  Speaker 8: improvement projects, So you know, you do think about tariffs
• 17:36
  Speaker 8: on lumber things like that. That doesn't help that side
• 17:39
  Speaker 8: of the equation.
• 17:40
  Speaker 5: Stay with us. More from Bloomberg Intelligence coming up after this.
• 17:48
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 17:51
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• 17:58
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• 18:02
  Speaker 2: We want to talk about Campbell's. The company came out
• 18:04
  Speaker 2: with its fiscal first quarter earnings. Both the top line
• 18:06
  Speaker 2: and the bottom line beat analy assessments, but the direction
• 18:09
  Speaker 2: of travel for revenue profit is still lower. Let's bring
• 18:13
  Speaker 2: in Diana Rosera, pennacious Bloomberg Intelligence consumer staples analysts on
• 18:17
  Speaker 2: the latest on Campbell's and of course the package foods
• 18:20
  Speaker 2: industry overall. So Campbell's has two businesses, the snacks business
• 18:25
  Speaker 2: and the meals and beverages portfolio. How are the two
• 18:27
  Speaker 2: businesses doing, Diana, Well, they are just.
• 18:30
  Speaker 7: Put some takes on both of them. You know, for
• 18:33
  Speaker 7: meals and beverages, there's some headwinds on ready to serve soup,
• 18:38
  Speaker 7: whereas broth and condensed soup, which is usually used in cooking,
• 18:42
  Speaker 7: is improving. You know, you have V eight, which is
• 18:46
  Speaker 7: not really it's a brand that is not really doing
• 18:48
  Speaker 7: that well so.
• 18:51
  Speaker 5: Well to me. To me, that's like my healthy eating
• 18:54
  Speaker 5: for the day. Drink a little one in the morning.
• 18:56
  Speaker 2: When you're on the plane, You'll get a VA and
• 18:58
  Speaker 2: you're like, I'm.
• 18:58
  Speaker 5: Good, I'm good, I'm good. That's WoT. No need to
• 19:01
  Speaker 5: go to the gym on exactly.
• 19:02
  Speaker 7: So, but it's still facing some headwinds for snacks. It's
• 19:08
  Speaker 7: it's kind of I found out odd because there seems
• 19:11
  Speaker 7: to be a bifurcation of the consumer trends here. You
• 19:15
  Speaker 7: have salty snacks being you know, challenged by people trying
• 19:20
  Speaker 7: to eat healthier, reducing their sodium, but then you have
• 19:24
  Speaker 7: cookies outperforming. So I guess it's the salad with the fries.
• 19:28
  Speaker 2: All right, which I love.
• 19:30
  Speaker 5: By the way, Yes, yeah, absolutely.
• 19:32
  Speaker 3: Campbell Wills agreed to take a forty nine percent stake
• 19:35
  Speaker 3: in Lot Regina. What is law Regina? What's Campbell's trying
• 19:38
  Speaker 3: to do here?
• 19:38
  Speaker 7: Yeah, so that is the supplier for REOs, which they
• 19:42
  Speaker 7: bought it a year or so ago, and that it
• 19:46
  Speaker 7: makes it kind of like have a little bit more
• 19:49
  Speaker 7: control on the supply side. There has been some headwinds
• 19:53
  Speaker 7: on this brand because tomatoes are being exported or imported
• 19:57
  Speaker 7: to the United States, so they have to face some tariffs.
• 20:01
  Speaker 7: So you know, with this they're trying to not only
• 20:04
  Speaker 7: offset tyres, but have a little bit more on the
• 20:07
  Speaker 7: supply chain, have a little bit more control on that.
• 20:09
  Speaker 5: Here's my Rao story.
• 20:10
  Speaker 3: I mean it's for people to arn't in New York City.
• 20:13
  Speaker 3: It's a very famous restaurant in New York. It's very
• 20:15
  Speaker 3: difficult to get a table there, to get a reservation.
• 20:18
  Speaker 3: On my thirty years of Wall Street, I've asked people
• 20:21
  Speaker 3: to take me. Who I know go there to take me.
• 20:23
  Speaker 3: I haven't gone once. Really, Yeah, I mean it is impossible.
• 20:26
  Speaker 3: Like I never asked people to take me out on
• 20:28
  Speaker 3: their great golf course. I just wait for the invite
• 20:30
  Speaker 3: to come.
• 20:30
  Speaker 5: But for REOs, I've actively tried to get.
• 20:33
  Speaker 2: And haven't gotten. Anyone who has to invite into Rao's,
• 20:37
  Speaker 2: let possibly know. You know, I did actually get to
• 20:40
  Speaker 2: eat there. We ordered take out during the pandemic when
• 20:42
  Speaker 2: they take out. Yeah, so that was my one time
• 20:44
  Speaker 2: I got to.
• 20:44
  Speaker 5: Eat Rare very good.
• 20:45
  Speaker 2: But Diana, I want to ask you about, of course,
• 20:47
  Speaker 2: the controversy that surrounded Campbell's. Just last month, there was
• 20:52
  Speaker 2: an executive he was a vice president of the IT
• 20:54
  Speaker 2: department who talked about how the company's products are being
• 20:58
  Speaker 2: made for poor people and you know, had some disparaging
• 21:01
  Speaker 2: remarks about some of the employees, the Indian employees. Is
• 21:06
  Speaker 2: that something that's going to cast a pall over Campbell's
• 21:09
  Speaker 2: I mean, do you see any long term effects from that?
• 21:11
  Speaker 7: Well, usually they did not address that during the call,
• 21:15
  Speaker 7: but I think it's it might be a short term
• 21:18
  Speaker 7: headwind if there's any boycott happening. I don't I'm not
• 21:23
  Speaker 7: necessary I don't necessarily think that there's going to be one.
• 21:26
  Speaker 7: It's just one executive, and the company went ahead and
• 21:30
  Speaker 7: kind of tried to put on record that they're not
• 21:32
  Speaker 7: necessarily agreeing with what he said. So it's you know it,
• 21:37
  Speaker 7: I don't necessarily see that as a significant headwind for
• 21:40
  Speaker 7: the company.
• 21:41
  Speaker 3: Package good companies, I kind of think of them kind
• 21:44
  Speaker 3: of a GDP top line growth story at best. What's
• 21:48
  Speaker 3: the twenty twenty six out lot for your companies? Are
• 21:50
  Speaker 3: what are investors looking for?
• 21:52
  Speaker 7: So for twenty six, they're hoping that there's some light
• 21:56
  Speaker 7: at the end of the tunnel in terms of volume growth. Again,
• 22:00
  Speaker 7: it might be a second half of the year story
• 22:03
  Speaker 7: because comps get a lot easier going forward, but you know,
• 22:09
  Speaker 7: profitability seems to be a little bit more difficult because
• 22:11
  Speaker 7: they have tariffs, they have to contend costs steal are
• 22:15
  Speaker 7: a little bit higher. Specific specifically on the employee side,
• 22:18
  Speaker 7: and there's also marketing that they have to do because
• 22:22
  Speaker 7: they want to spur growth, and pricing is not necessarily
• 22:26
  Speaker 7: the you know, the only lever that they have.
• 22:30
  Speaker 2: To But you know, I think about Campbell's and other
• 22:32
  Speaker 2: packaged foods companies and how much competition they must face
• 22:34
  Speaker 2: from private label products. I go to the supermarket, I'm
• 22:38
  Speaker 2: going to get the check and brought that's cheapest, and
• 22:40
  Speaker 2: it's usually the ones sold by the supermarket and not
• 22:42
  Speaker 2: Campbell's or anyone else's. So that's I mean. And for
• 22:46
  Speaker 2: private label, you don't need to do any marketing exactly.
• 22:49
  Speaker 2: So what is there how do they counter that? Well,
• 22:52
  Speaker 2: more marketing.
• 22:53
  Speaker 7: They're trying to work with the with the retailers to
• 22:57
  Speaker 7: position themselves in the best part of the shell to
• 23:00
  Speaker 7: be able to move their product. Yeah, well, obviously retailers
• 23:04
  Speaker 7: have to contend with increasing their private label penetration. At
• 23:09
  Speaker 7: the same time have a good relationship with this national brand,
• 23:12
  Speaker 7: so they're not necessarily want them to go against you know,
• 23:17
  Speaker 7: this product. So they're trying to there's some negotiations happening
• 23:21
  Speaker 7: and usually you know, when I speak to retailers, because
• 23:23
  Speaker 7: I do cover Canadian retailers. They mentioned that they try
• 23:27
  Speaker 7: to expand their private label into white spaces not necessarily
• 23:30
  Speaker 7: served by national brands, So you're while your minds might
• 23:35
  Speaker 7: see some you know, condensed soup private label, it's not
• 23:39
  Speaker 7: as as intricate or better quality than probably Campbell's.
• 23:44
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