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Ferraris, Advil, and AI Chips 10 Companies to Watch Right Now · 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: Tim Craig d Global Chief Content Officer for Bloomberg Intelligence.
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  Speaker 2: He's been one of the leaders from day one for
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  Speaker 2: Bloomberg Intelligence, this little experiment in investment research that we've
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  Speaker 2: done here at Bloomberg. He's run businesses for us in
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  Speaker 2: Hong Kong, London, New York, so he's been all over
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  Speaker 2: based in London right now, but he's here in New York.
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  Speaker 2: So we've figured we get him in studio to talk
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  Speaker 2: about some of the research coming out of Bloomberg Intelligence. Tim,
• 0:46
  Speaker 2: I know you guys published time to time kind of Hey,
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  Speaker 2: here are ten companies we really think you should pay
• 0:52
  Speaker 2: attention to. We think we've got some insights into some
• 0:55
  Speaker 2: of these companies. Maybe we've IDENTI identified some catalysts that
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  Speaker 2: investors can keep it or that might move these stocks
• 1:01
  Speaker 2: one way or the other. What are you guys looking
• 1:03
  Speaker 2: at these days?
• 1:04
  Speaker 3: So just a little bit of context if that's okay.
• 1:08
  Speaker 3: So we have a broad set of what we call
• 1:10
  Speaker 3: focus ideas, and these are high conviction, bottom up, fundamentally
• 1:15
  Speaker 3: oriented calls on companies where we see something that the
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  Speaker 3: market doesn't seem to get and that they're catalyst ahead
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  Speaker 3: that can change the market mentality. There's about one hundred
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  Speaker 3: and twenty five hundred and thirty of these things globally
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  Speaker 3: across all sectors right now, and at the beginning of
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  Speaker 3: every quarter we'll zero in on ten where we think
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  Speaker 3: that there are catalysts ahead right now in the upcoming quarter.
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  Speaker 3: A lot of that will revolve around It could be
• 1:44
  Speaker 3: a new product announcement, it could be earnings results that
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  Speaker 3: really hit home on a given element. Yeah, that's that's
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  Speaker 3: the context I'm going to ask Matt.
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  Speaker 2: Matt Miller's wiring in and saying, hey, ask about Ferrari
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  Speaker 2: because that's one of the names on the list, and
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  Speaker 2: Michael Dean, our auto analysty covers all those cool European automakers.
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  Speaker 4: What's you to think about Ferrari here?
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  Speaker 3: Yeah, you know, it's interesting because for as got a
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  Speaker 3: couple of things going on right up front. They're important
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  Speaker 3: new cars coming, new models, the f eighty is their
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  Speaker 3: their next big supercar. You've got the loose Lucee which
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  Speaker 3: is their full electric that's coming out, and there's Those
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  Speaker 3: are two of twenty odd models that are coming through
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  Speaker 3: over the course in the next three years. But importantly
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  Speaker 3: these are now starting to wrap and we think that
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  Speaker 3: when you get in and see the next earnings reporting period,
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  Speaker 3: you will see the impact. It is interesting because it's
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  Speaker 3: a broader issue with the European autos where there was
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  Speaker 3: such high hopes about EV transit transition and China being
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  Speaker 3: a big market and both of those turn pair shape. Wow,
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  Speaker 3: and so last year was a was a big issue.
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  Speaker 3: Look at any of these guys, Ferrari, BMW et cetera.
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  Speaker 3: And we think Ferrari is looking to accelerate.
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  Speaker 2: Said here in the US, and folks, you can tell
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  Speaker 2: from Tim's accent he's he's from down south.
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  Speaker 4: But we've he's been all over the world.
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  Speaker 2: Here in US team, you've probably heard EV things kind
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  Speaker 2: of stalled out. I'm being generous there calling stalled out.
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  Speaker 2: How about the rest of world? Yeah, it's interesting.
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  Speaker 3: We just published our semi annual buyer survey that we
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  Speaker 3: do one in US, one in Europe, one in Asia
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  Speaker 3: and in Europe, it really does depend on the home market.
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  Speaker 3: Scandinavia still cares about EV's no surprise. Germany, give me,
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  Speaker 3: give me a petrol gasoline based engine. Generally speaking, there's
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  Speaker 3: more appetite for hybrids across Europe than what was full
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  Speaker 3: on plug in electric vehicles, and clearly over here it's
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  Speaker 3: all about gasoline. And you know, if you're going to
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  Speaker 3: do electric, you're going to do a hybrid. You're not
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  Speaker 3: going to do a You're not going to do a
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  Speaker 3: battery electric.
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  Speaker 2: Yeah, for my final offspring, he goes to school in
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  Speaker 2: California where gas is like six dollars a gallon.
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  Speaker 4: So we got him the hybrid and it's been perfect.
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  Speaker 4: Well I've got a battery electric.
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  Speaker 3: I love it.
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  Speaker 4: But hey, you live in London.
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  Speaker 2: In London, yeah, so talk to us just browall the
• 4:24
  Speaker 2: and kind of related topic just esg in general. Environmental sustainability, governance,
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  Speaker 2: all that kind of stuff hit a brick wall here
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  Speaker 2: in the US, but I understand that's not the case
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  Speaker 2: in Europe and smother parts.
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  Speaker 4: Yes and no.
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  Speaker 3: So there's a series of client events that I get
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  Speaker 3: involved with on an ongoing basis that go around Europe
• 4:44
  Speaker 3: along with my team, and speaking of Scandinavia, that's the
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  Speaker 3: heart and soul of ESG, who adopted it most aggressively.
• 4:54
  Speaker 3: They don't call it ESG anymore. Okay, they call it sustainable,
• 4:58
  Speaker 3: sustainable financiers sustainability. It's generally under that moniker and you
• 5:02
  Speaker 3: could say, oh, you know, we just changing names. But
• 5:06
  Speaker 3: it's about managing companies well. And part of this is
• 5:11
  Speaker 3: management governance, part of it at social issues, part of
• 5:15
  Speaker 3: it is environmental, and I think it seems to be
• 5:18
  Speaker 3: making a move towards actually don't call it ESG and
• 5:22
  Speaker 3: tick a box, which was kind of the thing before,
• 5:25
  Speaker 3: think about how this is a way that you can
• 5:27
  Speaker 3: actually manage a company better and that actually is good
• 5:30
  Speaker 3: for shareholder returns. We've done some pretty interesting work. There's
• 5:33
  Speaker 3: a report actually the team here, our BI team here
• 5:36
  Speaker 3: had put out about ESG two point zero, and that
• 5:39
  Speaker 3: is all about actually driving better companies.
• 5:44
  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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• 6:01
  Speaker 1: your podcasts. Or watch us live on YouTube.
• 6:04
  Speaker 2: One of the big winners in the tech space consistently,
• 6:08
  Speaker 2: there's been Micron Technology sucks up three percent today, it's
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  Speaker 2: up thirty two percent year to date, up four hundred
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  Speaker 2: and eighty five percent on the trailing twelve months, but
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  Speaker 2: it is down about twenty percent from a time.
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  Speaker 4: We're going to get the latest reporting.
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  Speaker 2: On this big, big tech stock four hundred twenty five
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  Speaker 2: billion dollars in market cap. We can do that today
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  Speaker 2: with you can leave Bloomberg Asia Stocks reporting Yukon.
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  Speaker 6: Thanks for joining me. You're based in Seoul, but you're
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  Speaker 6: here in New York today.
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  Speaker 4: That's right.
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  Speaker 2: Great to have you in our studio. Just say about
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  Speaker 2: Micron Technologies. It might not be a name that a
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  Speaker 2: lot of US investors know, but it's a huge tech
• 6:41
  Speaker 2: stock and it's having a big run here. What's the
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  Speaker 2: story here?
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  Speaker 7: Yeah, sure, so Microne is the biggest the maker of
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  Speaker 7: this memory device is called DRAM dynamic and random at
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  Speaker 7: this memory which is a crucial and facing a bottlenight
• 6:54
  Speaker 7: in this because there's a crucial device for artificial intelligence.
• 6:56
  Speaker 7: Transformation is the largest one to supply to in the
• 7:01
  Speaker 7: United States, but in the world it is the third
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  Speaker 7: largest after after two Korean bigger rivals, and one of
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  Speaker 7: that Korean rival is going to reviewing possible listing of
• 7:12
  Speaker 7: the ADRs in the United States. So yeah, so that's
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  Speaker 7: that's going to If that happens, that's going to end
• 7:19
  Speaker 7: the micro status as the only US listed supplier of
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  Speaker 7: this dynamic and random access memory, a crucial memory ship
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  Speaker 7: device for the artificial intelligence transformation.
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  Speaker 5: And for those investors looking to be opportunistic as Khinex
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  Speaker 5: trades at a lower valuation than Microna as well, So
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  Speaker 5: talk through what investors are saying about that.
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  Speaker 3: Yeah.
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  Speaker 7: Absolutely, Even though micron is smaller than the current rivals,
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  Speaker 7: it's been trading at a slight premium than those Korean
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  Speaker 7: rivals because it's the only one listed out of the
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  Speaker 7: three biggest memory makers in the world listed in the
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  Speaker 7: United States. So it's been enjoying that such slight premium
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  Speaker 7: over the Korean memory makers. However, if one of the
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  Speaker 7: rivals s k Henex lists ad RS in the United States,
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  Speaker 7: that premium may come to end because Eska Highnis could
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  Speaker 7: be could enjoy better access, easier access to US based
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  Speaker 7: retail investors, and it could also possibly gain access to
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  Speaker 7: the ETF that tracks US listed chip stocks. There's a
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  Speaker 7: huge flow there. Hatch funds can enjoy new long short
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  Speaker 7: opportunity to play if the ESKE HIGHNEZ joins the chip index,
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  Speaker 7: possibly that are traded in the United States. So all
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  Speaker 7: these could possibly end the premium that micro has been
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  Speaker 7: enjoying over is bigger Stou's Korean rivals.
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  Speaker 5: Okay, so the bigger South Korean rivals are es K Henex.
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  Speaker 5: There's also Samsung Electronics. Is that companies shares traded in
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  Speaker 5: the US at all, either as an ADR or as
• 8:47
  Speaker 5: an OTC.
• 8:48
  Speaker 7: So Samsung Electronics is not traded in the United States. Also,
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  Speaker 7: most US based funds, they probably gain access to the
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  Speaker 7: Samsung Electronics through the South Korea South Korea ETF, which
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  Speaker 7: has a big exposure to chip stocks such as Samsum.
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  Speaker 7: Samsung is the largest member in the South Korea's benchmark COSBY,
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  Speaker 7: so that's how they gain the indirect access to the
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  Speaker 7: companies like Samsung, which is actually reporting its preliminary earnings tomorrow.
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  Speaker 2: How do why are all the great chip memories stocks
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  Speaker 2: in Korea?
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  Speaker 6: What's the history?
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  Speaker 7: Oh yeah, that's actually interesting question. So there has been
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  Speaker 7: a long history of South Koreat for having the memoryship
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  Speaker 7: makers since the nine eighties and nineties. It first began
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  Speaker 7: as mimicking mimicking the technology that Japan chip makers had
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  Speaker 7: and then using the cheap labors and also massive capital
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  Speaker 7: investment that they could have. But it's been becoming the
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  Speaker 7: world's largest it's become the world's largest supplier of the
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  Speaker 7: memberships and s k.
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  Speaker 6: Heine's thinking about an ADR in US.
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  Speaker 2: That's the story.
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  Speaker 6: When will we know if they're going to do that?
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  Speaker 7: So they said in the SEC confidential filing that they
• 9:53
  Speaker 7: will do that within this year. So they and there's
• 9:55
  Speaker 7: seen local media reports of hiring the bankers for that.
• 9:59
  Speaker 4: 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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  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 10:20
  Speaker 4: Let's get back to technology.
• 10:21
  Speaker 2: I'm looking at the Nasdaq here up about a quarter
• 10:23
  Speaker 2: of one percent here today.
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  Speaker 4: A lot to talk about here.
• 10:27
  Speaker 2: I'm going to go to Anna rog Rana, Senior Tech
• 10:29
  Speaker 2: an all step Bloomberg intelligence, Honra, Let's start with Apple here.
• 10:34
  Speaker 2: What are expectations, if any, for Apple AI Siri. I mean,
• 10:40
  Speaker 2: it's been a wait and see kind of approach, which
• 10:42
  Speaker 2: historically has worked for Apple, but I guess the concern
• 10:46
  Speaker 2: is building that may be either waiting too long here
• 10:48
  Speaker 2: to really try to create an AI portfolio or tailwind.
• 10:54
  Speaker 8: So, Paul, I'll go back in November of last year
• 10:56
  Speaker 8: when Malcolm and reported that Apple maybe you Google's Gemini
• 11:01
  Speaker 8: technology for at CER, and you know, one of our
• 11:04
  Speaker 8: calls at that point was that if this happens, when
• 11:06
  Speaker 8: you look at Apple's low capex model, people are going
• 11:10
  Speaker 8: to appreciate it in twenty twenty six as everybody else
• 11:13
  Speaker 8: is going to spend hundreds of billions of dollars. You
• 11:16
  Speaker 8: can go back and see the valuation of Apple in
• 11:18
  Speaker 8: the last three months or so. I mean, it's really
• 11:22
  Speaker 8: divergent when it when you compare it to Apple versus Microsoft,
• 11:26
  Speaker 8: or Apple versus any of the other you know, large
• 11:29
  Speaker 8: tech company. And that's because they're only spending what twelve
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  Speaker 8: to fifteen billion dollars in capex, which is not that
• 11:35
  Speaker 8: much more than what they did four years ago. But
• 11:38
  Speaker 8: look at Microsoft, it's going to go up to one
• 11:39
  Speaker 8: hundred and sixty billion in CAPEX. So from a Capex
• 11:42
  Speaker 8: point of view, the Apple story is working. What we
• 11:45
  Speaker 8: are most excited about is going into June when their
• 11:48
  Speaker 8: next developer conference comes in and market has done a
• 11:51
  Speaker 8: great job of telling all of us that the upgrade
• 11:54
  Speaker 8: version of City comes out with the help of Google's
• 11:57
  Speaker 8: Gemini models, and if they are able to pull that off,
• 12:00
  Speaker 8: that's another change in the narrative of Apple being an
• 12:03
  Speaker 8: AI laggard to somebody who's actually, you know, found a
• 12:06
  Speaker 8: way to capitalize on it.
• 12:08
  Speaker 5: But does Apple just need to do what kind of
• 12:11
  Speaker 5: catch up with everyone else, or does it need to
• 12:13
  Speaker 5: really wow consumers and iPhone users with what series capable
• 12:17
  Speaker 5: of because it's fallen it feels like it's fallen pretty
• 12:20
  Speaker 5: far behind in this AI race.
• 12:23
  Speaker 8: Yeah, that's a fair point. But at the same time,
• 12:25
  Speaker 8: they're not in the selling of the model business. They
• 12:27
  Speaker 8: want to make sure that the most important distribution that
• 12:30
  Speaker 8: they have, which is iOS, is as good as Android
• 12:34
  Speaker 8: so that they don't lose market share to Samsung. And
• 12:36
  Speaker 8: right now, all they have to do is honestly catch
• 12:39
  Speaker 8: up and just give similar features to what is available
• 12:42
  Speaker 8: on Android. In this particular case, I think the one
• 12:45
  Speaker 8: news that really got our attention was if you have
• 12:48
  Speaker 8: then ext version of CIT, you can go and call
• 12:50
  Speaker 8: on any of the AI models out there. So you
• 12:53
  Speaker 8: can go and call on you know, whether it's Chat,
• 12:55
  Speaker 8: GPT or Gemini or anybody else that you have downloaded,
• 13:00
  Speaker 8: which means you will get the best of everything. But
• 13:03
  Speaker 8: your point of interaction is still Apple's iOS system. You're
• 13:07
  Speaker 8: not leaving that and going somewhere else.
• 13:09
  Speaker 2: What else will you be looking for this June Get
• 13:12
  Speaker 2: Together product launch.
• 13:15
  Speaker 8: I think this is the most significant upgrade of adding
• 13:18
  Speaker 8: more AI capabilities. I think that's the number one. The
• 13:21
  Speaker 8: second one is can we get into a point that
• 13:24
  Speaker 8: they can give us a hint whether this conversational AI
• 13:28
  Speaker 8: going into the phone and talking can take other actions. So,
• 13:31
  Speaker 8: for example, will it be able to do some work
• 13:33
  Speaker 8: on Apple card play down the road, because once you
• 13:36
  Speaker 8: start using that, I think that's the next phase of
• 13:39
  Speaker 8: big development for all of us, where AI agents can
• 13:42
  Speaker 8: go out and do shopping for you or do other things.
• 13:45
  Speaker 8: But the point of intersection is still the iOS or
• 13:49
  Speaker 8: your interaction with your phone.
• 13:52
  Speaker 5: And very quickly before we let you go on rog
• 13:54
  Speaker 5: oracle naming a new CFO. What will you be watching
• 13:57
  Speaker 5: for listening for from her?
• 13:59
  Speaker 8: I think the number one thing that for us is
• 14:02
  Speaker 8: they've found somebody from the power in the electric industry,
• 14:05
  Speaker 8: which is probably the biggest barklerneck that we have in
• 14:08
  Speaker 8: building data centers right now. So it's very clear to
• 14:11
  Speaker 8: us where article's future is as far as the management
• 14:14
  Speaker 8: is concerned. You know, they are looking to deploy more
• 14:17
  Speaker 8: in that area. The biggest question for me is where
• 14:20
  Speaker 8: are their next acquisitions going to be. Are they going
• 14:22
  Speaker 8: to be more on the industrial side, or are they
• 14:24
  Speaker 8: going to stick to software?
• 14:26
  Speaker 4: Say with us more from Bloomberg Intelligence coming up after this.
• 14:33
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 14:37
  Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto
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• 14:43
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• 14:47
  Speaker 5: All right, let's not bring in Catherine Shaglinsey right now.
• 14:50
  Speaker 5: She is our US finance team leader on Jamie Diamond's
• 14:53
  Speaker 5: annual shareholder letter, And this is something that Jamie Diamond's
• 14:57
  Speaker 5: been doing for years. He's kind of the spokesman, the
• 14:59
  Speaker 5: ambassador for the industry at large. And it used to
• 15:01
  Speaker 5: focus on things like the Fortraits balance sheet of JP Morgan,
• 15:05
  Speaker 5: but in recent years it's become kind of much bigger
• 15:08
  Speaker 5: and broad ranging and talking about policy in the US's
• 15:12
  Speaker 5: place in the world. What's the big takeaway from his
• 15:14
  Speaker 5: latest letter.
• 15:15
  Speaker 9: Yeah, well, I think you could see that in this letter. Well,
• 15:17
  Speaker 9: he definitely talked about JP Morgan and the risks facing
• 15:20
  Speaker 9: the bank and how the bank was weathering big changes
• 15:22
  Speaker 9: like AI and all that stuff. He really spent like
• 15:26
  Speaker 9: the biggest portion on critical issues facing America, and he
• 15:29
  Speaker 9: really dug into these geopolitical issues, including he mentioned that
• 15:33
  Speaker 9: Iran war. He also mentioned the war in Ukraine. But
• 15:36
  Speaker 9: he also talked a lot about what the Bank and
• 15:38
  Speaker 9: what other citizens need to be doing to like bolster
• 15:41
  Speaker 9: the US make sure we don't fall behind.
• 15:43
  Speaker 8: You know.
• 15:44
  Speaker 9: He ragged on Europe, which has been sort of a
• 15:46
  Speaker 9: favorite talking point of his, to say that they need
• 15:48
  Speaker 9: to be doing more. And I think you've seen that
• 15:50
  Speaker 9: a lot in how JP Morgan. They've been announcing all
• 15:53
  Speaker 9: these initiatives, so like the Security and Resiliency Initiative, they
• 15:56
  Speaker 9: haven't the American Dream Initiative. It's all these ventures that
• 16:00
  Speaker 9: they have now to focus quite a bit on certain
• 16:03
  Speaker 9: aspects of the US economy, and I think that's Jamie
• 16:06
  Speaker 9: really leaning into this sort of elder statesman role he
• 16:08
  Speaker 9: has in the industry.
• 16:10
  Speaker 6: Any hint as to succession thoughts.
• 16:13
  Speaker 9: No hint is succession, And he was definitely like still
• 16:16
  Speaker 9: classic Jamie's sort of you know, cheering on the bank
• 16:18
  Speaker 9: and looking for the long term.
• 16:20
  Speaker 2: So but he did say that many companies will only
• 16:23
  Speaker 2: thrive if their countries thrive. Now, is that behind the
• 16:26
  Speaker 2: plan to deploy more than one trillion dollars to ensure
• 16:31
  Speaker 2: US remains strong.
• 16:32
  Speaker 6: I mean they're putting their money where their mouth is.
• 16:34
  Speaker 9: Yeah, they're putting their money where their mouth. There's more
• 16:37
  Speaker 9: than one trillion over a decade, you know, and I
• 16:39
  Speaker 9: think it is financing a lot of these industries that
• 16:41
  Speaker 9: will be key to the military and to other sort
• 16:44
  Speaker 9: of like he brought up critical minerals, all these different businesses,
• 16:48
  Speaker 9: and he's brought in help from the outside. Todd Combs
• 16:51
  Speaker 9: from Berkshire is helping to lead that venture, part of
• 16:54
  Speaker 9: that venture, and so yeah, I think it is a
• 16:57
  Speaker 9: little bit of him sort of leaning into sort of
• 16:59
  Speaker 9: how does the bank relate to sort of geopolitics and
• 17:02
  Speaker 9: it's obviously quite a tumultuous time now for around the globe,
• 17:05
  Speaker 9: so I think he was really trying to speak to investors'
• 17:09
  Speaker 9: concerns about them.
• 17:10
  Speaker 5: And of course he also spoke to investor concerns about
• 17:12
  Speaker 5: private credit. This is something he has warned about in
• 17:14
  Speaker 5: the past, right, calling them cockroaches. If you see one,
• 17:18
  Speaker 5: there's more to come. What has he said about private
• 17:20
  Speaker 5: risk this time around?
• 17:21
  Speaker 9: So in some ways I think it was tempered, right,
• 17:23
  Speaker 9: Like he mentioned private credit, he doesn't believe it will
• 17:26
  Speaker 9: likely be a systemic risk, So I think that was
• 17:29
  Speaker 9: in you know, relation to other parts of the market
• 17:31
  Speaker 9: and the size of how private credit relates to that.
• 17:34
  Speaker 9: But he did notice that, like you know, especially now,
• 17:37
  Speaker 9: we're seeing all these funds faced redemption requests that are
• 17:40
  Speaker 9: quite high, and he said, you know, that's likely to
• 17:42
  Speaker 9: continue because this industry doesn't have a great transparency and
• 17:45
  Speaker 9: not not you know, easily marketing stuff. So I think
• 17:49
  Speaker 9: it does create among investors sort of this concern of like,
• 17:52
  Speaker 9: you know, do you want to be the last out
• 17:54
  Speaker 9: if stuff does go wrong? And if Mark's our off base.
• 17:57
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