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AT&T Shares Tumble After Profit Forecast Disappoints Market · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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  Speaker 1: Listen on demand wherever you get your podcasts, or watch
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  Speaker 1: us live on YouTube.
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  Speaker 2: AT and T reported some numbers. There are some pretty
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  Speaker 2: big numbers and subscribers. I noted stock's kind of flat today,
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  Speaker 2: but it's up twenty percent year to date. Let's break
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  Speaker 2: it down with John Butler, Bloomberg Intelligence senior telecom analyst
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  Speaker 2: and the pride of Lafayette College. Out there. John, talk
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  Speaker 2: to us about AT and T. That's a competitive business
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  Speaker 2: there in What did they deliver?
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  Speaker 3: Boy, it is a tough business, Paul, and I'll tell
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  Speaker 3: you what. As quarters go for AT and T, I
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  Speaker 3: would say it was a relatively unremarkable quarter. And in
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  Speaker 3: telecom that's a very good thing. I mean, I seem
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  Speaker 3: to just say a quarter and in quarter app AT
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  Speaker 3: at T is the steady hand in the space here.
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  Speaker 4: I mean, they just.
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  Speaker 3: Have done a great job of setting a foundation for
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  Speaker 3: a very good business and just executing on that plan.
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  Speaker 3: They do a quarter in quarter out and two Q
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  Speaker 3: was no exception here.
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  Speaker 5: What are you expecting, Like, how are AT and T
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  Speaker 5: and specific metrics like hash floor and net ads really
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  Speaker 5: playing out compared to its competitors in this space. I
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  Speaker 5: feel like the network space is really very challenging because,
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  Speaker 5: as Paul and I talked about, it's so easy to move,
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  Speaker 5: especially these days when you can keep your cell phone number.
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  Speaker 3: Yeah, I mean, what you're talking about is switching activity.
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  Speaker 3: And if there was anything this quarter that sort of
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  Speaker 3: caught my eye, it was the churn number. And by
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  Speaker 3: the way, I wasn't alone. I mean, there were tons
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  Speaker 3: of questions on the call from analysts about churn and
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  Speaker 3: for our listeners, churn is a measure of, on a
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  Speaker 3: net basis, what percent of people left the brand during
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  Speaker 3: the core and AT and T. For AT and T
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  Speaker 3: it was point eighty seven percent. A year ago it
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  Speaker 3: was point seven percent. So we saw this seventeen basis
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  Speaker 3: point increase, which to me is not incredibly remarkable. It's
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  Speaker 3: not alarming per se, but it could be sort of
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  Speaker 3: a hint that the subscriber acquisition and retention costs are
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  Speaker 3: going to go up a little bit, and that could
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  Speaker 3: put a squeeze on the margin and as you said, Isabelle,
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  Speaker 3: there's just this very competitive market out there. The cable
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  Speaker 3: operators are really leaning into these low priced plans, and
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  Speaker 3: it's just making life that much tougher for AT and
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  Speaker 3: T Verizon and T Mobile. Again, though, I go back
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  Speaker 3: to the fact that AT and T just is a
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  Speaker 3: steady performer here. They have a great device promotion out there.
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  Speaker 3: They continue to rely on that to drive subscriber growth,
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  Speaker 3: and a continues to work for them.
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  Speaker 2: Hey, John, I know that the Verizon another stock that
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  Speaker 2: you cover. On their call, they used, I guess, the
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  Speaker 2: opportunity for President Trump's tax and spending bill to boost
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  Speaker 2: some of their full your guidance metrics. ATT did not
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  Speaker 2: do that, did they.
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  Speaker 3: No, they're actually this is interesting, Paul. They're taking all
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  Speaker 3: the savings and they're driving it back into upgrading the
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  Speaker 3: five G network, which they've been doing. It's nothing that
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  Speaker 3: they've been ignoring it by a long shot, but they
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  Speaker 3: are trailing Verizon and T Mobile just a bit in
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  Speaker 3: the deployment of what's called midband spectrum, which is very
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  Speaker 3: high capacity. So you know, the download speeds on your
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  Speaker 3: phone are dictated by how much spectrum is deployed in
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  Speaker 3: the network, and they're going to take those savings and
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  Speaker 3: just lean hard into deploying more spectrum on a nationwide
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  Speaker 3: basis to get network speeds and network coverage up.
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  Speaker 5: Is broadbandsila growth driver for AT and T or are
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  Speaker 5: there signs of a slowdown?
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  Speaker 4: You know, it's a great question.
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  Speaker 3: So the other I guess word on this report in
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  Speaker 3: my eyes was the fact that they just missed analyst
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  Speaker 3: expectations for fiber net additions, the net new subscriber additions
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  Speaker 3: that they had during the quarter in their fiber broadband business.
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  Speaker 3: Having said that, they continued to quarter and in quarter
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  Speaker 3: app deliver very stable results there. So I think the
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  Speaker 3: fiber broadband business is healthy. It's actually healthier in many
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  Speaker 3: ways than the mobility business, which is hyper competitive. But
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  Speaker 3: to me, AT and T out of all the big
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  Speaker 3: three is doing a great job just laying that foundation
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  Speaker 3: for future growth by continuing to roll out new coverage
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  Speaker 3: areas for fibers, I think they've done a great job.
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  Speaker 3: There is sort of the summary statement that i'd make.
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  Speaker 3: I'm broadband all right, John, thank you so much for
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  Speaker 3: joining us.
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  Speaker 2: Appreciate it as always John Butler, he's a senior telecom
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  Speaker 2: analyst for Bloomberg Intelligence.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 1: get your podcasts, or watch us live on YouTube.
• 5:28
  Speaker 2: Paul Sweeney live here with you in the Bloomberg Interactive
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  Speaker 2: Broker Studio. Streaming live on YouTube here, Ray Smack. In
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  Speaker 2: the middle of earning season, let's talk toys. That sounds
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  Speaker 2: kind of fun. Hasbro reported numbers. It looks solid to me.
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  Speaker 2: They beat, they raise their guidance, get the stocks down
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  Speaker 2: three percent. I just don't get this whole stock thing.
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  Speaker 2: Lindsay Dutch, she's the pro. She understands what's going on here.
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  Speaker 2: She's a consumer hardlines analyst at Bloomberg Intelligence. Lindsay talked
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  Speaker 2: to us about what we learned from Hasbro and the
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  Speaker 2: toy market.
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  Speaker 6: Yeah, hi, Paul, Hi aswell. Thanks for having me so yes, Paul,
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  Speaker 6: just as you said, you know, strong quarter a really
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  Speaker 6: a continuation from the first quarter, where all the strength
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  Speaker 6: is really coming from Magic the Gathering, Monopoly Go and
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  Speaker 6: Hasbro's digital gaming business. What we did not learn from
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  Speaker 6: the release is really about the consumer and what the
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  Speaker 6: outlook is for toys in the second half, and that's
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  Speaker 6: causing a lot of uncertainty. You know what that back
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  Speaker 6: half might look at look like I was.
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  Speaker 5: Going to ask how exposed is haspro to current consumers
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  Speaker 5: spending trends, Like, especially in the toys and entertainment area,
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  Speaker 5: do we see more middle income shoppers buying haspur or
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  Speaker 5: what kind of consumers are you seeing?
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  Speaker 6: Yeah, so the toy business typically grows with GDP. It
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  Speaker 6: has been you know, coming down a bit challenge over
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  Speaker 6: the past couple of years. After the peak during COVID
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  Speaker 6: when everyone was stuck at home buying a lot of toys.
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  Speaker 6: This year was supposed to be a turnaround year for
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  Speaker 6: toys and then early this year, you know, we got
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  Speaker 6: hit with the tariff news, which created a lot of
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  Speaker 6: uncertainty in the business. One is, you know, we don't
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  Speaker 6: know how the consumer is going to react to broader
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  Speaker 6: price increases, and we do expect increases on toys very specifically,
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  Speaker 6: so companies like Hasbro and Mattel, you know, some of
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  Speaker 6: the biggest toy makers in the globe, you know, are
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  Speaker 6: really faced with that challenge in second quarter. Normally retailers
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  Speaker 6: already start buying their holiday inventory. That didn't happen this year.
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  Speaker 6: Those retailers, Walmart, Target, took a pause. So normally by
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  Speaker 6: now we would sort of get a sense of holiday
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  Speaker 6: But because of that pullback, you know, Hasbro saw their
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  Speaker 6: consumer products segment see a sixteen percent decline in the
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  Speaker 6: second quarter revenue because of that hold on those orders.
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  Speaker 2: I would have thought they would have tried to front
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  Speaker 2: run the tariffs. Here, what's the company saying about when
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  Speaker 2: they expect some of these retailers to place their orders.
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  Speaker 6: So they expect the orders to be sort of made
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  Speaker 6: up in the third quarter. And the challenge with that is,
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  Speaker 6: you know, some of those hotter toys that do sell
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  Speaker 6: out maybe in the early holiday shopping season, there will
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  Speaker 6: be very little time to sort of replenish on that end.
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  Speaker 6: So Hasbro did continue their production, which you know they
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  Speaker 6: do still make about fifty percent of their toy products
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  Speaker 6: in China. They continued in May. You know, they took
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  Speaker 6: some of that inventory on their books in the second quarter.
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  Speaker 6: That's why we saw the inventory come up there. You know,
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  Speaker 6: they're hoping that the retailers, you know, place more of
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  Speaker 6: their orders in the third quarter, you know, ahead of holiday.
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  Speaker 6: You know, the risk is they just don't really know
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  Speaker 6: what those pre order will be and there will be
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  Speaker 6: limited time for additional orders like in that fourth quarter
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  Speaker 6: right before holiday.
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  Speaker 5: To your point. In April, the company warned the Times
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  Speaker 5: CLID impact profits by as much as sixty million two
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  Speaker 5: hundred and eighty million this year, and they did reduce
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  Speaker 5: their Chinese manufacturing output to less than forty percent, or
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  Speaker 5: at least plan to by twenty twenty six. If they
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  Speaker 5: do that, will they pass on the cost to consumers?
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  Speaker 5: And do you think consumers will bear the brunt of
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  Speaker 5: that burden.
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  Speaker 6: Yes, so Hasbro is using multiple mitigation strategies. You know,
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  Speaker 6: they have been very focused on cutting costs. You know,
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  Speaker 6: prior to tariffs, they sort of accelerated some cost cutting
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  Speaker 6: at the corporate level. They will be raising prices, I
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  Speaker 6: think selectively on toys. They are also just going to
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  Speaker 6: not sell certain toys in the US if it can't
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  Speaker 6: it doesn't make financial sense to do so if they
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  Speaker 6: can't raise the price and consumers would not buy it
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  Speaker 6: at that price.
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  Speaker 5: So they're sort of.
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  Speaker 6: Using a mixed strategy. They had predicted tariffs to cost
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  Speaker 6: sixty million to one eighty million on an annual basis.
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  Speaker 6: Three months ago, they sort of dropped that impact closer
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  Speaker 6: to the sixty million side. That's because of the lower
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  Speaker 6: rate on the Chinese imports. They are working to diversify
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  Speaker 6: the supply chain, but that will take time. The goal
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  Speaker 6: of less than forty percent that's really by twenty twenty seven.
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  Speaker 6: So in terms of this year, you know where their
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  Speaker 6: supply chain is. They're sort locked in with that at
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  Speaker 6: the moment, and they kind of have to work with
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  Speaker 6: the price increases and sort of balancing where do I
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  Speaker 6: increase price and not hurt the demand even more?
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  Speaker 2: All Right, Lindsay, thank you so much. We appreciate your analysis,
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  Speaker 2: Sir Lindsay Dutch. She's a consumer hardlines senior retail analyst
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  Speaker 2: for Bloomberg Intelligence space down there in our Princeton, New
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  Speaker 2: Jersey campus, talk just about Hasbro, the toymaker. Had some
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  Speaker 2: really good numbers and some good guidance, but there's still
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  Speaker 2: tariff concerns out there surrounding this industry as well as others.
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  Speaker 2: Stock trading off a little bit.
• 10:33
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 10:36
  Speaker 1: weekdays at ten am Eastern on Apple cocklay and Android
• 10:39
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• 10:43
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 10:47
  Speaker 2: Right in the middle of earnings here today we saw Hilton,
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  Speaker 2: the hotel company, I reported numbers and they lowered expectations
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  Speaker 2: for net income and saying that demand for US hotel
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  Speaker 2: bookings declined in the second quarter. Let's get the break
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  Speaker 2: at that a little bit more detail, because boy, I
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  Speaker 2: get on a plane, it just seems like it's packed,
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  Speaker 2: and I assume those people are staying at hotels and everything.
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  Speaker 2: Let's check in with Jody Lori, senior credit analyst for
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  Speaker 2: Bloomberg Intelligence. She covers all the fun stuff, the gaming business,
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  Speaker 2: the hotel business, the casino, the cruise is all that
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  Speaker 2: good stuff. So she has a great view on the
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  Speaker 2: consumer and kind of what's happening out there in that
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  Speaker 2: part of the economy. Jody, what did you learn from
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  Speaker 2: Hilton here? What are they saying about their business?
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  Speaker 7: So, Paul, I mean, I think what's so interesting is
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  Speaker 7: they definitely tried to provide an upbeat, optimistic view. The
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  Speaker 7: amount of times that they talked about the thawing that
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  Speaker 7: after the freeze from tariffs was sort of interesting to hear,
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  Speaker 7: and I mean, I think it fits a little bit
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  Speaker 7: with the conversation that we've been having with clients is
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  Speaker 7: that what we've been seeing in our data is twenty
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  Speaker 7: twenty five summer should still be pretty strong, but I
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  Speaker 7: think as we get into the latter part of the
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  Speaker 7: year and then into next year, it's a little bit uncertain.
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  Speaker 7: And I think they were trying to that economic data
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  Speaker 7: is positive for them and will provide for additional sort
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  Speaker 7: of demand, but it's still a little bit you know,
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  Speaker 7: it's still a little bit hazy, at least for me,
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  Speaker 7: and I mean more than anything, you know, they're so
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  Speaker 7: focused on giving back to shareholders that and.
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  Speaker 2: There's a credit analyst that's not something you necessarily.
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  Speaker 7: Yeah, yeah, you know, Hilton's one of those companies that
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  Speaker 7: we say, if they wanted to be investment grade, they
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  Speaker 7: probably could work to it yesterday and would have been
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  Speaker 7: investment grade five years ago. But you know, from a
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  Speaker 7: margin standpoint, they're so much stronger than a lot of
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  Speaker 7: their peers. But from a leverage standpoint, they just they're
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  Speaker 7: happy being around three times three and a half times,
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  Speaker 7: and they've indicated that they want to be a little
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  Speaker 7: bit higher than where they currently are, So I mean,
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  Speaker 7: I think they're going to invest in organic growth and
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  Speaker 7: look at ways to sort of grow some of their
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  Speaker 7: newer brands like Spark, which they've been talking about. And
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  Speaker 7: the most interesting thing related to that is it seems
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  Speaker 7: like they're looking outside the US for growth opportunities. And
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  Speaker 7: maybe that's a function of the fact that while they
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  Speaker 7: think the US is still having decent momentum, perhaps they
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  Speaker 7: need to sort of look outside to sort of really
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  Speaker 7: see the growth.
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  Speaker 5: Where are they finding that growth elsewhere? And is that
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  Speaker 5: in relation to just the lower consumer confidence in the
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  Speaker 5: US and the decline of international travelers. So then they
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  Speaker 5: just decided maybe looking elsewhere US better. What was the
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  Speaker 5: rationale behind that?
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  Speaker 7: So they actually talked about on the first quarter, they
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  Speaker 7: talked about Canada and Mexico demand, and they said specifically
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  Speaker 7: that it's such a small percentage, just like one percent
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  Speaker 7: of their total revenues is Canada and Mexico, and inbound
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  Speaker 7: US is certainly a large portion, I think, larger than
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  Speaker 7: they sort of indicate. But I think they're also sort
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  Speaker 7: of saying, Okay, yeah, it's going to be an effect,
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  Speaker 7: but it's not that much effect. I think they are seeing.
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  Speaker 7: And what we sort of heard on this most recent
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  Speaker 7: call is that there is an element of trickle down
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  Speaker 7: effect related to what's going on in the US, the
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  Speaker 7: prevalence of travelers coming into the US VERSUS historically because
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  Speaker 7: of the tariff and geopolitical environment, and so, you know,
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  Speaker 7: they mentioned Saudi Arabia, they mentioned India, they mentioned turkeya
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  Speaker 7: on the call, and I think they're looking at anywhere
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  Speaker 7: there's potential growth opportunities. I mean, Hilton's so large and
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  Speaker 7: global that it's not really surprising to me, but it
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  Speaker 7: is sort of interesting when you hear a company that's
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  Speaker 7: seventy five percent US dominant that they are sort of
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  Speaker 7: looking to expand elsewhere.
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  Speaker 2: Hey, Trinty, we're hearing from you know, a number of
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  Speaker 2: companies that depend upon travel that maybe international travel inbound
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  Speaker 2: to the US is less than than it maybe in
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  Speaker 2: past periods, maybe in part because of all this tariff discussion,
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  Speaker 2: people deciding not to spend their travel dollars in the US.
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  Speaker 2: What's Hilton say about that?
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  Speaker 7: So, Hilton didn't so much talk about it on this call,
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  Speaker 7: per se, but they danced around it a little bit,
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  Speaker 7: saying that they think that you know that with the
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  Speaker 7: tariff situation sort of it hasn't resolved itself by any measure,
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  Speaker 7: but with us getting over that shock of Liberation Day,
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  Speaker 7: that they're now seeing that demand is picking up. They're saying,
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  Speaker 7: you know, business conference travel, and so I mean, I
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  Speaker 7: think they're sort of dancing around it. But if we recall,
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  Speaker 7: I mean a lot of the companies in my space
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  Speaker 7: still having gone back to pre COVID levels when it
• 15:19
  Speaker 7: comes to inbound US. I mean, we like to talk
• 15:21
  Speaker 7: about United Parks, which is formerly SeaWorld, because they talk
• 15:25
  Speaker 7: about it in their Florida Parks that they still haven't
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  Speaker 7: seen the return of international travelers to pre COVID levels.
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  Speaker 7: And so you add on top of that the tariff
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  Speaker 7: effect in the geopolitical environment, you say, okay, if we
• 15:37
  Speaker 7: weren't back to pre COVID levels, and then you have
• 15:40
  Speaker 7: this component to it, I don't know if we'll get
• 15:42
  Speaker 7: back to pre COVID levels sometime soon.
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  Speaker 2: Jody, thanks so much. I always appreciate checking in with you.
• 15:48
  Speaker 2: Jody Lourie, she's a senior credit analyst for Bloomberg Intelligence,
• 15:51
  Speaker 2: talking to us a little bit about the Hilton numbers. Again,
• 15:53
  Speaker 2: the company took down a little bit of guidance and
• 15:55
  Speaker 2: maybe citing some of the uncertainty surrounding the tariffs they
• 15:59
  Speaker 2: cited as well as reduced. They also call that reduced
• 16:02
  Speaker 2: government travel. So maybe the whole doge thing people with
• 16:05
  Speaker 2: some of the government employees are maybe traveling aple I
• 16:07
  Speaker 2: hadn't thought about that.
• 16:08
  Speaker 5: Business are also reducing travel, Like I mean, I don't
• 16:11
  Speaker 5: want to single out Bloomberg, but everyone like you only
• 16:13
  Speaker 5: really travel when it's mandatory. If you can do zoom,
• 16:16
  Speaker 5: you should do zoom. So we see it really.
• 16:18
  Speaker 2: But off to account that not our salesforce. Our salesforces
• 16:21
  Speaker 2: out there all the time pressing the flesh with Bloomberg customers,
• 16:25
  Speaker 2: and that's a good thing. That's how it's done.
• 16:29
  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 Applecarclay and Android Auto
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• 16:39
  Speaker 1: get your podcasts, or watch us live on YouTube.
• 16:43
  Speaker 2: Switch gears to Technology Here we check in with Anaagrana,
• 16:46
  Speaker 2: Senior Tech Out also Bloomberg Intelligence, Honra. A lot of
• 16:49
  Speaker 2: news is going to be coming our way from your
• 16:51
  Speaker 2: tech space starting tonight after the clothes, we'll have Google Tesla,
• 16:56
  Speaker 2: then all the other tech names will be coming out
• 16:58
  Speaker 2: as well. I want to start with mike Soft. Can
• 17:01
  Speaker 2: you give us a summary or update of what's happening
• 17:03
  Speaker 2: with this software cyber breach here doesn't seem to be
• 17:07
  Speaker 2: impacting the stock that much. What's Microsoft saying? If anything?
• 17:13
  Speaker 8: I think the news is out and frankly, you know,
• 17:15
  Speaker 8: apart from the one big breach last year where crowds
• 17:19
  Speaker 8: tried really got hurt, these breaches typically don't have that
• 17:22
  Speaker 8: big un an impact on the stock, frankly because you know,
• 17:25
  Speaker 8: it's a small portion of the one particular application, and
• 17:29
  Speaker 8: you know, I think the news story is far bigger
• 17:32
  Speaker 8: than what it has an impact on the stock. In fact,
• 17:34
  Speaker 8: if anything, people will be more inclined to buy Microsoft
• 17:37
  Speaker 8: security products to protect themselves down the road. They would
• 17:40
  Speaker 8: be more inclined to move more workloads to the cloud
• 17:42
  Speaker 8: to make sure that the you know, the online version
• 17:45
  Speaker 8: of the software was not impacted. So if you know,
• 17:47
  Speaker 8: it just sells by itself, some of the security products,
• 17:51
  Speaker 8: and these beaches obviously not a good headline for the company,
• 17:54
  Speaker 8: but you know, these things do happen quite a bit.
• 17:57
  Speaker 5: How is the cloud business looking like these days, I
• 17:59
  Speaker 5: feel like it's one of the main drivers that growth
• 18:01
  Speaker 5: through many companies, from Amazon to Microsoft. As we're talking
• 18:04
  Speaker 5: about to most of the big tech giants. Is it
• 18:06
  Speaker 5: competition becoming more fierce than is there a leader emerging
• 18:09
  Speaker 5: in this space?
• 18:11
  Speaker 8: See, the leader was always Aws, But frankly speaking, over
• 18:14
  Speaker 8: the last two years, Microsoft has really narrowed the gap
• 18:17
  Speaker 8: because of its open Ai relationship.
• 18:19
  Speaker 4: They're the only company who's really.
• 18:21
  Speaker 8: Seeing the biggest benefit of you know, all the searchers
• 18:24
  Speaker 8: we're doing in chag GPT because open Ai runs primarily
• 18:28
  Speaker 8: on Microsoft's cloud network. So when they report next week,
• 18:31
  Speaker 8: we are expecting a big number coming out of that
• 18:34
  Speaker 8: AI contribution. So Microsoft, I think, is the bigger beneficiary
• 18:38
  Speaker 8: right now amongst all the big, bigger vendors.
• 18:41
  Speaker 2: So you know, it's interesting is it worth investors ranking
• 18:45
  Speaker 2: kind of who are the big cloud players, who are
• 18:47
  Speaker 2: the big AI players? Is it worth it? Or is
• 18:49
  Speaker 2: it better just to say, you know, AI is going
• 18:52
  Speaker 2: to kind of be all over the tech stack, and
• 18:55
  Speaker 2: I just got to be long tech. How do you
• 18:56
  Speaker 2: think about really getting quality exposed to that theme?
• 19:02
  Speaker 8: Yeah, when you look at cloud, I think all of
• 19:04
  Speaker 8: the top four vendors will flourish and flourish well. When
• 19:07
  Speaker 8: that would be Aws, Microsoft, Google, and then Oracle after that,
• 19:12
  Speaker 8: so all four will make a lot of money.
• 19:14
  Speaker 4: Then you want to dissect each one of them.
• 19:16
  Speaker 8: Within this group, Microsoft is the one that's seeing the
• 19:19
  Speaker 8: current direct benefit.
• 19:21
  Speaker 4: And that's because of open Ai. The other two, whether.
• 19:24
  Speaker 8: It's Amazon or Google, will start to see more and
• 19:28
  Speaker 8: more revenue flow in because of the applications people are
• 19:31
  Speaker 8: building on their cloud platform. And then lastly on the
• 19:33
  Speaker 8: Oracle side, they are benefiting in another part of cloud,
• 19:37
  Speaker 8: which is more on the infrastructure side where they're getting
• 19:39
  Speaker 8: a lot of money or you know, future funding from
• 19:42
  Speaker 8: open Ai to create their data centers to help train
• 19:45
  Speaker 8: the bottle. So each one is slightly different, but I
• 19:47
  Speaker 8: would say as as you mentioned, the total basket you
• 19:50
  Speaker 8: know should do well over time.
• 19:52
  Speaker 5: You cover tech and next week is a big week
• 19:54
  Speaker 5: for those companies and beyond tech. Be am author expected
• 19:58
  Speaker 5: to deliver nearly fifteen percent of profit growth and robust
• 20:01
  Speaker 5: demand for AI and that's compared to the virtually no
• 20:04
  Speaker 5: growth for the rest of the four hundred and nine
• 20:06
  Speaker 5: or three stocks. Are you watching anything any specific company
• 20:08
  Speaker 5: you're excited about and you mentioned you're looking at cloud,
• 20:11
  Speaker 5: but is there anything else that is factoring in your outlook?
• 20:15
  Speaker 4: So there can be two elements of it.
• 20:17
  Speaker 8: One is the cloud, the AI side of spending, and
• 20:19
  Speaker 8: the non AI side of spending. What we saw from
• 20:22
  Speaker 8: SAP yesterday and Inphasis this morning, and then you know,
• 20:26
  Speaker 8: taught at a couple of weeks ago, so that the
• 20:29
  Speaker 8: non AI tech spending is under pressure. People are not
• 20:32
  Speaker 8: spending as much because they are not sure how the
• 20:36
  Speaker 8: tariff related uncertainty is is playing out, so they're seeing
• 20:39
  Speaker 8: a delay in closing, closing of deals.
• 20:42
  Speaker 4: And everything around it.
• 20:43
  Speaker 8: But on the AI side, we anticipate strong results from Microsoft,
• 20:48
  Speaker 8: for example. So that's there the two dichotomy over there
• 20:51
  Speaker 8: between the two vendors. The third thing that we are
• 20:54
  Speaker 8: watching is actually what happens on the margin side of
• 20:56
  Speaker 8: things because a lot of these companies are investing very
• 20:59
  Speaker 8: heavily in AI. Because of that, the margins are going
• 21:02
  Speaker 8: to get squeezed. And for that, what we think is
• 21:04
  Speaker 8: going to happen is they're going to take reduction in force,
• 21:08
  Speaker 8: either through not hiding at the same pace that they
• 21:10
  Speaker 8: have been or basically laying off a portion of their
• 21:13
  Speaker 8: workforce in order to counter some of that pressure. So
• 21:16
  Speaker 8: those are the three theams that we are most interested
• 21:18
  Speaker 8: in right now.
• 21:19
  Speaker 2: An Agrana absolutely, thank you, appreciate on Agrana Tech Analysts
• 21:23
  Speaker 2: Bloomberg Intelligence Agrana Mandeep Sing. Those are our two senior
• 21:27
  Speaker 2: tech analysts. They manage our global technology research effort for
• 21:31
  Speaker 2: Bloomberg Intelligence. We have close to I think twenty analysts
• 21:34
  Speaker 2: covering technology on a global basis, a lot based in Asia,
• 21:37
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• 21:40
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• 21:41
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• 21:45
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• 21:49
  Speaker 2: and we do on a global basis, I think the
• 21:51
  Speaker 2: best tech research on the street with the best data.
• 21:54
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