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Walmart Flags Higher Fuel Costs Eroding Retailer’s Earnings · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. You're listening to the
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  Speaker 2: Walmart coming out with its latest earnings report.
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  Speaker 3: Jen bartashis it's our senior analyst who covers retail staples
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  Speaker 3: and packaged food, and Jen, I'm really interested in the
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  Speaker 3: interplay between oil prices and Walmart's sales. In particular, we
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  Speaker 3: know that fuel costs are definitely squeezing Walmart's consumers, yet
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  Speaker 3: Walmart says that it has managed to absorb almost all
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  Speaker 3: of the fuel increase.
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  Speaker 4: Yeah, it's an interesting dynamic when you look at it.
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  Speaker 4: You know, Walmart has really done a good job of
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  Speaker 4: shifting their business mix, which really gives them a little
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  Speaker 4: bit more flexibility and how they can offset unexpected high
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  Speaker 4: costs like we're seeing right now with fuel. The consumer
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  Speaker 4: for Walmart is certainly anybody in the lower end of
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  Speaker 4: the consumer spectrum is under some pressure that does get
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  Speaker 4: amplified when gas prices are higher, and so we see that,
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  Speaker 4: but at the same time, what it does is it
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  Speaker 4: does reinforce value focused shopping, which is really Walmart's wheelhouse.
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  Speaker 4: And so the almost it's almost an odd situation where
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  Speaker 4: the more stress the consumer is, the more likely Walmart
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  Speaker 4: is to be able to serve those customers. Not that
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  Speaker 4: you want that to be a never ending cycle, but
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  Speaker 4: it is something that is that is out there. You know,
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  Speaker 4: Walmart is actually they do sell fuel as well, and
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  Speaker 4: so you know, obviously higher fuel prices does feed their
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  Speaker 4: top line to a degree, especially for Sam's Club. But
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  Speaker 4: it is a dynamic that we're going to have to
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  Speaker 4: watch closely over the next couple months.
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  Speaker 5: Talk to us about their e commerce business. Every quarter,
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  Speaker 5: I see this revenue growth from digital and I guess
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  Speaker 5: this core is a twenty one percent.
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  Speaker 6: It is extraordinary. How how are they doing that?
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  Speaker 4: Yeah, their e commerce business is really flourishing. And to
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  Speaker 4: your point, Paul, it's been multiple I mean, it's just
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  Speaker 4: on a string of double digit, high twenty percent, mid
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  Speaker 4: twenty percent growth every quarter. And really what's happening is
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  Speaker 4: you're seeing a big expansion of their marketplace. So you've
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  Speaker 4: got more sellers coming into the marketplace, more shoppers buying
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  Speaker 4: on the wall on the on the marketplace, and that's
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  Speaker 4: then feeding you know, ad revenue, it's feeding other types
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  Speaker 4: of revenue for the company, and so it's become this
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  Speaker 4: virtuous cycle where the more they're putting into it, the
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  Speaker 4: more people are responding, and the healthier that business becomes.
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  Speaker 7: You know.
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  Speaker 4: Walmart has has already said that their e commerce business
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  Speaker 4: is now profitable, which is really you know great, and
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  Speaker 4: it's also fuel to that to that growth where they
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  Speaker 4: can reinvest more easily because they are you know, finding
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  Speaker 4: it to be a profitable business now. And you can't
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  Speaker 4: discount things like Walmart Plus, which is their membership program.
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  Speaker 4: Their membership for income growth was astounding this quarter. They
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  Speaker 4: said they had a record number of new net ads
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  Speaker 4: for Walmart Plus this quarter, you know, and a lot
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  Speaker 4: of Walmart Plus benefits are centered around e commerce and
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  Speaker 4: so whether you're placing orders for delivery to your house,
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  Speaker 4: whether it's for ship to your home, all of that
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  Speaker 4: is contributing to that e commerce success.
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  Speaker 3: Yeah, their Walmart Plus has a partnership with American Express Platinum,
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  Speaker 3: and I think that has well. I signed up for
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  Speaker 3: the AMX Platinum card and I'm very well versed on
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  Speaker 3: all the different benefits, and this is one of the
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  Speaker 3: benefits to you know, steal market share away from Amazon.
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  Speaker 3: Do we have any sense of how well that effort
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  Speaker 3: is going Walmart Plus versus Amazon.
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  Speaker 4: We we you know, obviously Walmart does not disclose anything
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  Speaker 4: about Walmart Plus, but when we look at our when
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  Speaker 4: we do our analysis, you know, we see, you know,
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  Speaker 4: millions and millions of households have now joined Walmart Plus
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  Speaker 4: and the frequency of shop is really increasing. You know.
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  Speaker 4: For a long time, you know, Walmart had a hard
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  Speaker 4: time displacing Amazon because people's first inclination when they wanted
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  Speaker 4: to look for something was to go to Amazon dot Com.
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  Speaker 4: And that mentality is slowly shifting, and in part it's
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  Speaker 4: due to these these types of memberships like Walmart Plus.
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  Speaker 4: So you know, when we estimate the number of households,
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  Speaker 4: you know, it's continuing to grow. The revenue generated from
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  Speaker 4: that is just changing the entire profit mix for Walmart.
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  Speaker 4: And most importantly, this is what helps keep higher income
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  Speaker 4: households in particular sticky with Walmart as the economy starts
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  Speaker 4: to improve, because once you're in that ecosystem and you
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  Speaker 4: get used to the quick delivery and the ease of
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  Speaker 4: ordering online, you know, especially for things that you order
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  Speaker 4: with frequency, that makes you very sticky within Walmart, and
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  Speaker 4: that really bodes well for just their ability to keep
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  Speaker 4: those customers long term.
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  Speaker 2: 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. He's done on Apple, Cocklay and
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  Speaker 1: wherever you get your podcasts, or watch us live on YouTube.
• 5:20
  Speaker 3: You mentioned in Nvidia down and Video was the big
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  Speaker 3: earnings report that we were waiting for, Ye, Paul, And
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  Speaker 3: I think everyone's just gotten so used to this chip
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  Speaker 3: maker blowing out expectations and coming in with these great
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  Speaker 3: statements of demand, limitless demand, seemingly, and the market's reaction
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  Speaker 3: is like, Eh, whatever.
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  Speaker 5: Yeah, they've beaten rays and they've been so good for
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  Speaker 5: so long, surpassing expectations of the street. But it's if
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  Speaker 5: nothing else, that's a law of large numbers.
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  Speaker 6: Maybe a little bit of competition as well.
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  Speaker 4: All right.
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  Speaker 3: Angelo Zeno is our senior vice president and equity analysts
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  Speaker 3: at cfr A Research. He joins us now through zoom
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  Speaker 3: Angelo we're looking at in Vidia shares now lower by
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  Speaker 3: almost two percent.
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  Speaker 2: Is there anything objectionable in the set of results.
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  Speaker 7: No, I mean, you know, I thought it was overall
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  Speaker 7: fairly clean type of number.
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  Speaker 3: You know.
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  Speaker 7: Maybe the only thing that you know, maybe wasn't as
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  Speaker 7: clean was the fact that they did, you know, shift
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  Speaker 7: their business segments around a little bit. But I think
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  Speaker 7: that would was to be to expected. I mean, it
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  Speaker 7: was one of those situations where when you kind of
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  Speaker 7: looked at everything outside of data centers, it was just
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  Speaker 7: such a small part of their revenue. Whether we talk
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  Speaker 7: about you know, autos that are about one percent of sales
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  Speaker 7: that are kind of you know, whatever. Else, even gaming,
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  Speaker 7: which was once their largest business, was only you know,
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  Speaker 7: mid single digit percentage of their sales. So kind of
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  Speaker 7: changing the way they kind of segmented and broke their
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  Speaker 7: revenue down I think makes a lot of sense. But
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  Speaker 7: when you kind of look up overall from the results here,
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  Speaker 7: I mean, it was it was a solid beat and
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  Speaker 7: raised quarter, as Nvidia has done here over the last
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  Speaker 7: couple of quarters. You're getting a little bit of a
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  Speaker 7: selling news, which is, you know, typically what you've seen
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  Speaker 7: here from in Vidio stock, which is now a stock
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  Speaker 7: trating about eighteen times our expectations for twenty twenty seven.
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  Speaker 7: And when investors really want to hear and see long term,
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  Speaker 7: I mean, what the answer to is the sustainability of
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  Speaker 7: this stuff, right, And Nvidia can be as optimistic as
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  Speaker 7: they want looking out through the end of the decade,
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  Speaker 7: but investors are going to continue to be somewhat cautious
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  Speaker 7: in that outlook.
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  Speaker 5: Talk to us about customers, Angelo, you know, they talked
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  Speaker 5: about maybe governments and other entities becoming big big customers.
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  Speaker 5: Talked to us about that in the development of that
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  Speaker 5: part of the business.
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  Speaker 7: Yeah, I mean so in kind of breaking down this revenue,
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  Speaker 7: essentially they within data centers, which is what ninety two
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  Speaker 7: percent of their revenue at this point in time, you're
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  Speaker 7: looking at about half of that or essentially exactly half
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  Speaker 7: of it coming from the hyper scalers. And we know
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  Speaker 7: what the hyperscalers are all doing. We're looking at near
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  Speaker 7: doubling in terms of hyperscaler CAPEC spend here this year.
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  Speaker 7: And it's one of those situations where you know, of
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  Speaker 7: course those growth rates are going to decelerate over time.
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  Speaker 7: So I think it was smart for Nvidia at this
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  Speaker 7: point in time to show now that breakdown in terms
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  Speaker 7: of what else is out there in terms of to
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  Speaker 7: your point, the sovereign AI opportunities, potentially what the neo
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  Speaker 7: clouds have to offer, which is also in that other
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  Speaker 7: half of the bucket there where you could potentially see
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  Speaker 7: let's call it stronger capex spend at least on a
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  Speaker 7: relative basis here longer term, because there's a bigger or
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  Speaker 7: a larger number of participants in that basket, right, So
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  Speaker 7: you've got the potential for that to be a bigger
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  Speaker 7: percentage of their total revenue here as we kind of
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  Speaker 7: look out two to three years from now. I think
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  Speaker 7: that's at least their expectation, and I think if you
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  Speaker 7: start seeing that, I think investors will reward that. So again,
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  Speaker 7: it's one of those situations stop creating about eighteen times
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  Speaker 7: in night Peer's earnings. But if we see kind of
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  Speaker 7: maybe a more favorable mix outside of Hyperscalerton, I think
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  Speaker 7: that could be a good thing, especially since when you
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  Speaker 7: think about who really plays and sells these AI based
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  Speaker 7: servers outside of the hyperscalers, it really is largely Intel.
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  Speaker 2: I'm sorry, Nvidia, gotcha Angela b be where we let
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  Speaker 2: you go.
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  Speaker 3: I got to ask about the return of cash, because
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  Speaker 3: the CFO says they plan to return fifty percent of
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  Speaker 3: their free cash fload. This year, they announced an eighty
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  Speaker 3: billion dollar stock buyback plan, boosted their quarterly dividend to
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  Speaker 3: twenty five cents a share. Does this attract a new
• 9:14
  Speaker 3: crowd of investors, a new group of investors or is
• 9:17
  Speaker 3: this largely built into expectations?
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  Speaker 7: I think it's a little bit built in, but I
• 9:22
  Speaker 7: think it's a good thing to say. I mean, we're
• 9:24
  Speaker 7: looking at them, probably they're probably going to return at
• 9:26
  Speaker 7: least one hundred billion, we think in back to shareholders
• 9:30
  Speaker 7: here over the next twelve months. And the only other
• 9:32
  Speaker 7: company that is anywhere near that is Apple at this
• 9:35
  Speaker 7: point in time, especially when you start looking at all
• 9:37
  Speaker 7: the hyperscalers out there, Essentially all of them have kind
• 9:40
  Speaker 7: of refrained at this point from buying back shares right
• 9:44
  Speaker 7: and increasing dividends significantly because of what they're devoting towards
• 9:48
  Speaker 7: the capex spent. So that's all that money now is
• 9:51
  Speaker 7: going into Nvidia. They can return that cash to shareholders,
• 9:54
  Speaker 7: and I think that is somewhat enticing to investors at
• 9:57
  Speaker 7: this point in time. So we like the move, and
• 9:59
  Speaker 7: we think, especially as growth rates start to disell right
• 10:01
  Speaker 7: here over the next two to three years, I think
• 10:03
  Speaker 7: that's going to probably become a bigger part of the
• 10:05
  Speaker 7: conversation for investors.
• 10:08
  Speaker 6: Stay with us. More from Bloomberg Intelligence coming up after this.
• 10:15
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us Live
• 10:18
  Speaker 1: weekdays at ten am easterne on Apple Cocklay and Android
• 10:22
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• 10:25
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 10:29
  Speaker 3: All right, Deer reported earnings as well. It's a real
• 10:31
  Speaker 3: grab bag towards the end of earning season. You've got retailers,
• 10:34
  Speaker 3: You've got farm machinery makers, and video. Yeah, I know,
• 10:38
  Speaker 3: and video is just kind of out of sync with
• 10:40
  Speaker 3: the rest of the mag seven names. But Deer shares
• 10:42
  Speaker 3: are slumping down about eight percent right now. Let's bring
• 10:45
  Speaker 3: in christ Ciolino. He is our senior US machinery analyst
• 10:48
  Speaker 3: to recap what we learned here from the tractor maker
• 10:52
  Speaker 3: and I guess it comes down to the farm economy
• 10:54
  Speaker 3: is struggling, and so therefore we're seeing that reflected in
• 10:57
  Speaker 3: Deer's results.
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  Speaker 6: I mean, that's part of it.
• 11:01
  Speaker 8: The headline coming out of the quarter was that they
• 11:03
  Speaker 8: had a big beat, but really, if you unpack that,
• 11:06
  Speaker 8: a lot of that was driven by this AIPA tariff
• 11:09
  Speaker 8: refund that they got. If you kind of peel back
• 11:12
  Speaker 8: the onion here, their construction business actually continues to perform
• 11:16
  Speaker 8: quite well, really good top line and margin performance there,
• 11:20
  Speaker 8: and the orders continue to progress nicely and small agen
• 11:25
  Speaker 8: turf was good as well. But the weakness on the
• 11:27
  Speaker 8: largeag side continues to be a problem for them, and
• 11:31
  Speaker 8: really it doesn't really kind of show any signs of
• 11:33
  Speaker 8: abating as we look through the balance of this year.
• 11:36
  Speaker 8: You have the higher input costs, weak farm fundamentals, so
• 11:40
  Speaker 8: still a very challenging setup as we look here in
• 11:43
  Speaker 8: the near term.
• 11:44
  Speaker 5: Chris, just by my recognition, dere's the first company that
• 11:47
  Speaker 5: I can think of that calls out this tariff rebate.
• 11:51
  Speaker 5: Can you explain, So what's the company disclosing about this?
• 11:54
  Speaker 5: How long did it take to get this rebate? Was
• 11:57
  Speaker 5: it everything they were looking for? What are they doing
• 11:59
  Speaker 5: with this rebate? Yeah?
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  Speaker 8: So, interestingly enough, I think they're the second or third
• 12:04
  Speaker 8: company at least in my universe that has actually called
• 12:07
  Speaker 8: out this this refund claim. It was roughly two hundred
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  Speaker 8: seventy two million dollars here in the quarter, so we
• 12:15
  Speaker 8: think it contributed you know, roughly seventy five cents in
• 12:19
  Speaker 8: the quarter. If you look at their gross tariff impact
• 12:23
  Speaker 8: for the year, so they were anticipating about one point
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  Speaker 8: two billion dollar impact for fiscal twenty twenty six. That
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  Speaker 8: gross number really hasn't changed once you take away some
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  Speaker 8: of the AIPA and you add back some of the
• 12:35
  Speaker 8: Section one twenty two's and some of the other incremental
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  Speaker 8: tariff costs. Net that hasn't changed. Now you have this refund,
• 12:43
  Speaker 8: So when you look on a net basis, it's somewhere
• 12:46
  Speaker 8: going to shake out in the nine hundred million dollar range.
• 12:50
  Speaker 8: This is relatively new for the machinery guys. I would
• 12:54
  Speaker 8: anticipate we may hear similar from other companies next quarter,
• 12:59
  Speaker 8: but deer being you know, a little bit of off
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  Speaker 8: cycle of their fiscal quarter, I would anticipate we'll begin
• 13:04
  Speaker 8: to hear more of these moving forward.
• 13:06
  Speaker 3: Okay, well, I mean either way, it's going to take
• 13:08
  Speaker 3: a while for this to all get resolved.
• 13:10
  Speaker 2: What we've seen with other.
• 13:12
  Speaker 3: Heavy machinery makers, including Caterpillar, is that the boom and
• 13:15
  Speaker 3: AI has benefited them as well.
• 13:19
  Speaker 2: Does Deer fit into that categories too.
• 13:22
  Speaker 8: It's a stretch, right, so it does help on the
• 13:25
  Speaker 8: construction business, particularly during the early phases of any construction,
• 13:30
  Speaker 8: whether it's excavation, anything with moving dirt. Deer has a
• 13:35
  Speaker 8: strong and really growing position in construction equipment. And I
• 13:38
  Speaker 8: think that's one of the big takeaways from this quarter
• 13:41
  Speaker 8: is that construction results were very strong, the orders again
• 13:45
  Speaker 8: very strong. There seems to be increasing visibility in terms
• 13:49
  Speaker 8: of projects as we move into next year, so I
• 13:53
  Speaker 8: think that has helped support the weakness that we're seeing
• 13:56
  Speaker 8: on the AX side. They've introduced a whole new excavator lineup,
• 13:59
  Speaker 8: a lot of new technology and innovations coming through on
• 14:03
  Speaker 8: the construction side. So if we look at machinery earnings
• 14:06
  Speaker 8: overall this season, i'd say construction continues to be one
• 14:09
  Speaker 8: of the biggest bright spots.
• 14:11
  Speaker 6: How's the US farmer doing out there.
• 14:13
  Speaker 8: Chris, You know, it's tough. Continues to be tough. I
• 14:18
  Speaker 8: sound like a little bit of a broken record with
• 14:20
  Speaker 8: this seems to be a recurring theme here over the
• 14:22
  Speaker 8: past two years. Listen. I do think that twenty twenty
• 14:27
  Speaker 8: six will still mark the trough of the cycle. And
• 14:30
  Speaker 8: I do think that's important. The debate really now becomes
• 14:32
  Speaker 8: around what the trajectory of recovery looks like. Our sense
• 14:36
  Speaker 8: is that it's going to be a much more measured
• 14:38
  Speaker 8: recovery as we look into twenty seven, and really, you know,
• 14:42
  Speaker 8: a lot kind of hinges on what happens here in
• 14:44
  Speaker 8: the Middle East. How soon do maybe some of these
• 14:47
  Speaker 8: fertilizer and input costs begin to come down. Yes, we've
• 14:50
  Speaker 8: seen a little bit of a pickup and crop prices,
• 14:52
  Speaker 8: so that helps to a degree, but we need clarity
• 14:56
  Speaker 8: in terms of some of the input costs again, particularly
• 14:59
  Speaker 8: on the first side, as well as what's going to
• 15:02
  Speaker 8: happen in terms of export markets and some of these
• 15:04
  Speaker 8: trade relationships and to see how those materialize. So we
• 15:10
  Speaker 8: have a much more cautious view in terms of a
• 15:12
  Speaker 8: sickle cold recovery as we look into twenty seven.
• 15:15
  Speaker 6: Stay with us more from Bloomberg Intelligence coming up after this.
• 15:22
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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• 15:37
  Speaker 5: Man It is good to be an equity capital markets
• 15:40
  Speaker 5: reporter these days. Lots going on at there. Scarlet Ful
• 15:43
  Speaker 5: and Paul Soony live here in our Bloomberg Inactor Broker studio,
• 15:45
  Speaker 5: streaming live on YouTube as well.
• 15:47
  Speaker 6: Anthony Hughes is that equity market's.
• 15:49
  Speaker 5: Capital reporter for Bloomberg News, joining us here in studio, Anthony.
• 15:54
  Speaker 5: The SpaceX I S one was filed yesterday or dropped,
• 15:58
  Speaker 5: as the kids would say. Tom Keen had the notable
• 16:02
  Speaker 5: very Keen observation. There's a lot of pictures, a lot
• 16:04
  Speaker 5: of photographs in this perspectives you don't typically see that.
• 16:08
  Speaker 5: Did you take note of that?
• 16:10
  Speaker 9: Yeah, there was definitely a few interesting pictures. I think
• 16:12
  Speaker 9: the first four or five pages were rockets flying into
• 16:16
  Speaker 9: the air, which is quite an evocative, Yeah picture, evocative
• 16:19
  Speaker 9: thing for an IPO and perhaps people who don't you know,
• 16:23
  Speaker 9: not you don't want to read the whole document, we'll
• 16:25
  Speaker 9: just have a look at those pictures and get excited.
• 16:27
  Speaker 9: So that's one possibility. But there's also a rendering I
• 16:30
  Speaker 9: think of life on Mars, which I thought was quite
• 16:32
  Speaker 9: interesting as well.
• 16:33
  Speaker 5: Yeah, yep, So there's a lot there, and then you
• 16:35
  Speaker 5: get to the nitty gritty. I noticed, first of all,
• 16:38
  Speaker 5: risk factors section are solid thirty eight pages, so I
• 16:43
  Speaker 5: mean that takes you. I mean I used to pop
• 16:45
  Speaker 5: out perspectus as that were thirty eight pages, and now
• 16:47
  Speaker 5: you got the risk factors here.
• 16:48
  Speaker 6: What was your takeaway from this filing here?
• 16:51
  Speaker 9: Well, I think that there's already been so much written
• 16:55
  Speaker 9: about this in a lot of height, but you actually
• 16:57
  Speaker 9: read some of the statements in about how much of
• 17:03
  Speaker 9: you know, how much of the you know, how many
• 17:06
  Speaker 9: projects that SpaceX has that could provide the growth for
• 17:10
  Speaker 9: the future. I mean, it's quite phenomenal, and you know,
• 17:13
  Speaker 9: people obviously really have to believe in those two get
• 17:16
  Speaker 9: excited about this story. But you know, there's one section
• 17:19
  Speaker 9: there which is just about the growth strategies of the company,
• 17:21
  Speaker 9: and it lists out what they're doing in the space
• 17:24
  Speaker 9: launch business, which is about growing the payload capacity of
• 17:27
  Speaker 9: the rockets, and they're having they've got the rocket launch
• 17:29
  Speaker 9: today of Starship. There's in the starlink business, which is
• 17:33
  Speaker 9: which is the one that's doing the best in many ways.
• 17:36
  Speaker 9: They're they're looking to build out a mobile mobile phone
• 17:39
  Speaker 9: network there and then, but the really interesting one is
• 17:42
  Speaker 9: on the AAI side, they're obviously looking to substantially expand
• 17:49
  Speaker 9: the amount of compute there and obviously put data centers
• 17:51
  Speaker 9: in space, but and then some of those projects in space,
• 17:54
  Speaker 9: the really long term stuff is quite amazing around, you know,
• 17:58
  Speaker 9: putting a civil as I mentionedalization on Mars, but also
• 18:02
  Speaker 9: building a lunar economy and asteroid mining was one.
• 18:06
  Speaker 3: I think.
• 18:06
  Speaker 9: They also talked about space tourism and what they call
• 18:09
  Speaker 9: point to point to terrestrial flights as well, which is
• 18:13
  Speaker 9: like basically a spaceship replacing an airline and getting you
• 18:17
  Speaker 9: across the world much quicker, which is kind of an
• 18:18
  Speaker 9: interesting is an interesting concept. But you know, I think
• 18:21
  Speaker 9: to your point about the risk, space has always had
• 18:25
  Speaker 9: a huge amount of risks, So you know, people might
• 18:28
  Speaker 9: with so much hype around this IPO, people might forget
• 18:30
  Speaker 9: that space is very risky endeavor.
• 18:33
  Speaker 5: I like they start off strong in this perspective summary.
• 18:36
  Speaker 5: Our mission is to build the systems and technology is
• 18:40
  Speaker 5: necessary to make life multiplanetary, to understand the true nature
• 18:44
  Speaker 5: of the universe, and to extend the late of consciousness
• 18:48
  Speaker 5: to the stars.
• 18:49
  Speaker 6: That's a solid sentence. Only to find a person who
• 18:51
  Speaker 6: wrote that one. Yes, yes, that's not an investment banker
• 18:54
  Speaker 6: right now, one, I don't think.
• 18:55
  Speaker 8: Yeah.
• 18:56
  Speaker 9: I think a few people were commenting that some of
• 18:57
  Speaker 9: the prospectives might have been written by AI, even I'm
• 19:00
  Speaker 9: not sure whether AI is that creative, but yeah, I
• 19:03
  Speaker 9: mean there's also a section of the prospectus which talks
• 19:05
  Speaker 9: about the TAM or the total addressable market, and they
• 19:07
  Speaker 9: say it's the largest in human history, and interestingly that
• 19:12
  Speaker 9: I think it's a twenty seven to twenty eight trillion
• 19:13
  Speaker 9: dollar TAM, and interestingly the largest easily a large large
• 19:18
  Speaker 9: proportion of that is actually AI. So, you know, I
• 19:20
  Speaker 9: think a lot of people's initial reaction maybe once they've
• 19:22
  Speaker 9: read a bit more of the fine print about this company,
• 19:24
  Speaker 9: are we really investing in more of an AI story
• 19:26
  Speaker 9: here than a Space story? And the answer is, well,
• 19:29
  Speaker 9: it may be that as we're looking to really scale
• 19:31
  Speaker 9: up the revenue and sort of justify this two trillion
• 19:33
  Speaker 9: dollar valuation, which at the moment looks pretty far fetched,
• 19:38
  Speaker 9: maybe there is a lot of revenue coming through AI
• 19:41
  Speaker 9: in the next few years. Particularly they've got this deal
• 19:43
  Speaker 9: with Anthropic and that is going to add a bit
• 19:45
  Speaker 9: to revenue, So maybe you can see the revenue scale
• 19:48
  Speaker 9: up a bit. Still, still you want to see it
• 19:49
  Speaker 9: scale up a lot to justify this valuation.
• 19:52
  Speaker 6: That's what I say.
• 19:52
  Speaker 5: All right, So, do we know anything about any type
• 19:55
  Speaker 5: of roadshow that the company and its advisors will go on.
• 19:58
  Speaker 9: Yeah, so I mean, like in the IPO, there'll be
• 20:00
  Speaker 9: a road show, and at the moment we think it's
• 20:03
  Speaker 9: going to start on June four, so fifteen days.
• 20:07
  Speaker 6: From the filing, and then.
• 20:09
  Speaker 9: We could see the IPO potentially price on June eleven,
• 20:15
  Speaker 9: is the current speculation. Then you'd have on that Friday,
• 20:17
  Speaker 9: which is the twelfth, you'd see the stop start trading.
• 20:19
  Speaker 9: But obviously in the next few weeks we would actually
• 20:23
  Speaker 9: see evaluation in the price range, which would be give
• 20:25
  Speaker 9: us a much better idea of like whether this is
• 20:28
  Speaker 9: going to be a good investment or not. But obviously
• 20:30
  Speaker 9: a bunch of hype and a lot of people are
• 20:31
  Speaker 9: interested in them.
• 20:32
  Speaker 5: Presumably they'll be a video publicly available with kind of
• 20:36
  Speaker 5: the road show presentation.
• 20:37
  Speaker 6: Yeah.
• 20:37
  Speaker 9: So typically there's a retail road show that's publicly available,
• 20:40
  Speaker 9: and then there's an institutional roadshow as well, which is
• 20:43
  Speaker 9: more you know, may include brought it brought more information,
• 20:48
  Speaker 9: but the retail road show would be something would be
• 20:51
  Speaker 9: publicly available.
• 20:53
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