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BI Weekend: New Disney CEO, AMD, PayPal Earnings · Bloomberg Intelligence

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  Speaker 2: At first, we begin with some news at the media
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  Speaker 2: and entertainment giant Walt.
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  Speaker 3: Disney, and that's because Disney announced Josh Tomorrow will succeed
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  Speaker 3: Bob Iger as CEO.
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  Speaker 2: Tomorrow, a twenty eight year vetteran of Disney, was chosen
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  Speaker 2: from among several internal candidates to lead the company at
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  Speaker 2: a critical time as it transitions from traditional TV viewing
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  Speaker 2: to the streaming era.
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  Speaker 3: Iiger will stay on the board and serve as a
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  Speaker 3: senior advisor until he retires on December thirty. First, we
• 1:25
  Speaker 3: were joined by Geithrong and Aten Bloomberg, intelligence analyst on
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  Speaker 3: US Media.
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  Speaker 2: Well first asked Githa about this succession plan and how
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  Speaker 2: it might differ from previous plans.
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  Speaker 4: Yeah, I think it was a very different time. March
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  Speaker 4: twenty twenty, everything closes down, including you know, Disney parks
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  Speaker 4: because of the pandemic. So it was kind of unfortunate.
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  Speaker 4: The timing was all wrong, I would say for Bob Japek.
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  Speaker 4: And what happened then is, of course movies were shut down,
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  Speaker 4: a big part of Disney's business, movies as well as
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  Speaker 4: the parks again. But then what really kind of shot
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  Speaker 4: into prominence at that point was the streaming business. A
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  Speaker 4: business that Bob Chapik was not really very familiar with,
• 2:06
  Speaker 4: and while he did have some experience in content, obviously
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  Speaker 4: it was not enough, and we had a whole bunch
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  Speaker 4: of different missteps with the content part of the business,
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  Speaker 4: which kind of led to the whole you know mess
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  Speaker 4: that we saw, you know follow I think this time
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  Speaker 4: we're in a very very different position. I think at
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  Speaker 4: that point Disney was still kind of trying to figure
• 2:27
  Speaker 4: out what it really was. Was it a TV company,
• 2:29
  Speaker 4: was it a studio, was it a theme park company?
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  Speaker 4: Or was it really a streaming player? And I think
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  Speaker 4: now the pieces have kind of fallen in place. We
• 2:36
  Speaker 4: are on much more steady ground. I would say, you know,
• 2:39
  Speaker 4: they have their clear mandates, whether it isn't streaming, whether
• 2:42
  Speaker 4: it's in studio, you know, the clear What has really
• 2:45
  Speaker 4: emerged clearly right now, Scarlett, is that parks is the
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  Speaker 4: main core growth engine of the company, and I think
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  Speaker 4: that is reflected in this choice with Josh Tomorrow.
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  Speaker 1: So Keithan.
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  Speaker 2: Josh is a twenty eight year veteran of Disney running
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  Speaker 2: the parks, But of course the other big part of
• 3:01
  Speaker 2: the company is it's you know, entertainment business. Dana Walden,
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  Speaker 2: who runs the big part of that business, great reputation
• 3:10
  Speaker 2: in Hollywood. It's important to keep her at the Walt
• 3:14
  Speaker 2: Disney Company. Are they going to be able to do that?
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  Speaker 4: I absolutely think so. So, you know, they obviously this
• 3:21
  Speaker 4: was a very clever move by the board to kind
• 3:23
  Speaker 4: of create this new role for Dana Walden, make her
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  Speaker 4: the president and the chief creative officer. They've never had
• 3:30
  Speaker 4: this post before, but they specifically created this one for
• 3:33
  Speaker 4: Dana Walden, so that I think really kind of I
• 3:37
  Speaker 4: think dispels a lot of fears about what would happen
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  Speaker 4: from a creative perspective. You know, last time, this was
• 3:43
  Speaker 4: the same problem that you know, many investors raised when
• 3:46
  Speaker 4: Bob Chapek became CEO. So having her there in the
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  Speaker 4: creative role, I think definitely plays very well with Hollywood,
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  Speaker 4: with the creative community, and ensures that, you know, Disney
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  Speaker 4: will still have a top tier content coming to its
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  Speaker 4: streaming platforms for the foreseeable future.
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  Speaker 3: So Josh Tomorrow takes the job on March eighteenth, that's
• 4:06
  Speaker 3: when the succession is effective. And we talked about how
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  Speaker 3: yesterday Disney came out with a forecast that was fairly tepid,
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  Speaker 3: And one way of looking at that is it kind
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  Speaker 3: of you know, clears the deck. Lets him start off
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  Speaker 3: with the clean say and set expectations and kind of
• 4:20
  Speaker 3: manage it for investors a way that he sees fit.
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  Speaker 3: At what point does he own everything that happens to Disney.
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  Speaker 4: So actually a lot of the things that we're seeing
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  Speaker 4: right now with the parks has been under Josh Tomorrow's watch. Remember,
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  Speaker 4: once Bob Chapek was promoted to the CEO position, Josh
• 4:41
  Speaker 4: Tomorrow assumed the role of chief of the Parks, and
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  Speaker 4: so all of the different initiatives that we've seen, you know,
• 4:47
  Speaker 4: whether it's Lightning Lan and whether it's Genie, whether it's
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  Speaker 4: the sixty billion dollar expansion, a lot of that has
• 4:53
  Speaker 4: been you know, Josh Tomorrow's doing. So yeah, I mean,
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  Speaker 4: of course we're you know, I think the street is
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  Speaker 4: definitely going to give him a few quarters to kind
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  Speaker 4: of settle in. But he has pretty much been the architect,
• 5:04
  Speaker 4: along with Bob Ayeger I'm sure, and the rest of
• 5:06
  Speaker 4: you know, the management team in kind of instituting the
• 5:09
  Speaker 4: strategy and making the parks a prominent part of the
• 5:13
  Speaker 4: portfolio going forward. So very soon you know the shot
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  Speaker 4: answer Scarlett is very soon. I think he owns pretty
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  Speaker 4: much all of this right away.
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  Speaker 2: In fact, Keith, if I were Josh Tomorrow, day one
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  Speaker 2: of my tenures CEO, I would go and I would say, Hey,
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  Speaker 2: explain to me why we are not spinning out our
• 5:31
  Speaker 2: broadcasting cable networks. They are businesses that are in a
• 5:34
  Speaker 2: secular decline. They're dragging down our multiple Let's cut them loose.
• 5:38
  Speaker 2: Do you think that's even an option for the Walt
• 5:40
  Speaker 2: Disney Company.
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  Speaker 4: I think it is. I think everybody is considering that
• 5:44
  Speaker 4: right now. I mean we've just seen what you know,
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  Speaker 4: Warner Brothers Discovery has been able to achieve by kind
• 5:50
  Speaker 4: of separating out its studio and streaming from the TV
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  Speaker 4: network's business. So I definitely would not rule that out.
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  Speaker 4: I'm sure Disney will consider and Josh Tomorrow will consider
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  Speaker 4: all options once he becomes CEO.
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  Speaker 3: What happens to Jimmy Pataro over at ESPN, I mean,
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  Speaker 3: does that become part of the spinouts as Paul was
• 6:10
  Speaker 3: talking about it, because there's different parts of Disney's media
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  Speaker 3: business that are slowing down, that are no longer the
• 6:15
  Speaker 3: crown rules the way they once were. Whether you're talking
• 6:17
  Speaker 3: about the network television, or whether you're talking about ESPN,
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  Speaker 3: or whether you're talking about the movie business.
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  Speaker 4: Yeah, I think sports is still very core to Disney.
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  Speaker 4: I mean they are so if you just kind of
• 6:29
  Speaker 4: look at the US sports landscape, ESPN actually owns majority
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  Speaker 4: of the marquee US sports right almost about forty percent
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  Speaker 4: of all sports viewing happens on ESPN platforms, So obviously
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  Speaker 4: it's still very core to the company. As far as
• 6:43
  Speaker 4: Jimmy Pittaro is concerned. Scarlett, I mean, yes, he was
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  Speaker 4: one of the you know, candidates that they were considering
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  Speaker 4: to take on this job, but I think he himself
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  Speaker 4: had many times indicated that he was not really interested
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  Speaker 4: in the top spot. I think he kind of carries
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  Speaker 4: on business as usual with ESPN. You know, it's a
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  Speaker 4: little bit of a wait and watch what exactly happens
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  Speaker 4: with the strategy. It is really instrumental, I think, to
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  Speaker 4: their streaming business because you know, as they kind of
• 7:07
  Speaker 4: mentioned on their earnings call, you know a lot of
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  Speaker 4: people taking the bundle the ESPN streaming plus the Disney
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  Speaker 4: plus the Hulu. So it is a critical portion of that.
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  Speaker 4: So I'm not really sure how exactly a spinout would work.
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  Speaker 4: But of course, again, you know, we are in a
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  Speaker 4: very very different time and age, and everybody is thinking
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  Speaker 4: about all possible options when it comes to a media.
• 7:30
  Speaker 3: Our thanks to KEITHA. Rong Andathan, she is our US
• 7:32
  Speaker 3: media analyst.
• 7:33
  Speaker 2: We've moved to some news in the energy space.
• 7:35
  Speaker 3: And this week the German energy company Siemens Energy announced
• 7:38
  Speaker 3: it will invest a billion dollars in manufacturing capacity in
• 7:41
  Speaker 3: the US over the next two years as power demand surges.
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  Speaker 2: The company said most of the funds will be spent
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  Speaker 2: on expanding existing sites in North Carolina, Florida, Texas, Alabama,
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  Speaker 2: and New York, as well as a new plant in Mississippi.
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  Speaker 3: We are joined by Siemens Energy CEO Christian bra.
• 7:55
  Speaker 2: We first asked Christian what the goal of the Semens
• 7:58
  Speaker 2: Energy investment is Trouthol.
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  Speaker 5: It's a goal to keep up with a fantastic growth
• 8:02
  Speaker 5: which we see currently in the electricity market. And you know, Guest,
• 8:05
  Speaker 5: Turbine's great making sure that the AI transformation can really
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  Speaker 5: be fueled with electricity as one of the hottest markets
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  Speaker 5: you can see globally at the moment, and we are
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  Speaker 5: obviously trying to keep up with our customers and we're
• 8:18
  Speaker 5: trying to bring all this equipment what is needed guest turbine,
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  Speaker 5: transformers and the likes. This means we are expending a
• 8:25
  Speaker 5: lot of our industrial footprint here. We are hiring people
• 8:28
  Speaker 5: adding factories to keep up with that, and this is
• 8:33
  Speaker 5: obviously one important step really to create also this energy
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  Speaker 5: dominance what the US is looking for.
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  Speaker 2: You recently met with President Trump. What was the takeaway
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  Speaker 2: from your meeting there? How related is that meeting to
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  Speaker 2: your announcement in the investments in the US.
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  Speaker 5: Well, there was a let's say reception and others right,
• 8:48
  Speaker 5: which was a big group meeting. So what for me
• 8:50
  Speaker 5: is important that the Trump administration is very approachable for
• 8:54
  Speaker 5: us and I have to say I'm very grateful for that.
• 8:57
  Speaker 5: At the moment, my key interactions is really with the
• 9:00
  Speaker 5: secretaries in terms of really understanding, hey, what needs to
• 9:02
  Speaker 5: be done, how do we need looking forward on the opportunities,
• 9:08
  Speaker 5: and this is taken up excellently at the moment. That
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  Speaker 5: is my main interaction also with the Trump administration.
• 9:16
  Speaker 2: Christian, how would you characterize the US energy grid here
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  Speaker 2: as you get set to increase your investment here?
• 9:24
  Speaker 5: Yeah, I mean, first of all, what you see the
• 9:26
  Speaker 5: US market on the grid side is influenced by two things.
• 9:28
  Speaker 5: The one thing is that you have a massive investment
• 9:31
  Speaker 5: with ongoing just for replacement refurbishment of existing facilities. This
• 9:35
  Speaker 5: is very much utility driven business, which is very active,
• 9:38
  Speaker 5: which sometimes gets overlooked seeing the data center discussion. And
• 9:41
  Speaker 5: at the same time, you obviously have an unprecedented growth
• 9:44
  Speaker 5: in electricity on the data center side, which does require
• 9:48
  Speaker 5: heavy investments into the grid side as well, and we
• 9:51
  Speaker 5: need to understand also how do we operate all the things.
• 9:54
  Speaker 5: I mean, everybody easily talks about gigawards of additional electricity.
• 9:58
  Speaker 5: There's not so many sites in the US which like
• 10:01
  Speaker 5: a one gigable type of consumption. This will require grid
• 10:04
  Speaker 5: stabilization and this is what we all try to contribute.
• 10:08
  Speaker 5: So what we're doing here is building factories for switch gear,
• 10:12
  Speaker 5: transformers components which supply to that industry, and obviously also
• 10:17
  Speaker 5: bringing up people who can help to do this overarching
• 10:21
  Speaker 5: design on the grid side. We believe that is let's say,
• 10:25
  Speaker 5: really a long run and we will see it for
• 10:27
  Speaker 5: a long time because electricity grate is an important backbone
• 10:31
  Speaker 5: of the critical infrastructure, and this is why. I feel
• 10:34
  Speaker 5: very comfortable with the investment we're doing, and I'm very
• 10:36
  Speaker 5: happy with the market here.
• 10:37
  Speaker 3: So I want to pick up on where you just
• 10:39
  Speaker 3: left off, bring in more people to design some of
• 10:43
  Speaker 3: the grid work there. Talk to us about jobs. How
• 10:46
  Speaker 3: many jobs will your initiatives create, What kinds of jobs
• 10:50
  Speaker 3: are they going to be, what level, what kind of
• 10:52
  Speaker 3: education is needed, how much training will there be in
• 10:55
  Speaker 3: order for you to find the right people.
• 10:57
  Speaker 1: For those jobs.
• 10:58
  Speaker 5: Yeah, I mean, we had today an organization with around
• 11:01
  Speaker 5: twelve thousand people in the US right and we're going
• 11:03
  Speaker 5: to add another fifteen hundred on top of that. And
• 11:06
  Speaker 5: this will be accompanied by a lot of education and
• 11:09
  Speaker 5: training programs. So a lot of this will be blue
• 11:11
  Speaker 5: color working jobs, also on the factories, making sure that
• 11:14
  Speaker 5: we can produce and also that we have people going
• 11:17
  Speaker 5: out in the fields and fixing things. So this will
• 11:20
  Speaker 5: go through training academies which we build up in parallel
• 11:23
  Speaker 5: in this. You know, we have one big new facility
• 11:26
  Speaker 5: coming up in Jackson, Mississippi, which will obviously also will
• 11:32
  Speaker 5: be with one training center. We have a big site
• 11:35
  Speaker 5: in Charlotte which we also will increase on that at
• 11:38
  Speaker 5: the same time building up factories is also then coming
• 11:42
  Speaker 5: with some engineering work on the white color side, so.
• 11:45
  Speaker 6: It will be both.
• 11:46
  Speaker 5: But the big thing, and this is why we went
• 11:48
  Speaker 5: out is really hey, this is I would call it
• 11:51
  Speaker 5: a blue color wave. Now in terms of really getting
• 11:53
  Speaker 5: educated workers. That is my biggest constraint at the moment,
• 11:56
  Speaker 5: also on the market, and it goes down to the
• 11:58
  Speaker 5: construction workers, people in the factories. And we should never
• 12:01
  Speaker 5: ever underestimate the need to finally get something done and
• 12:06
  Speaker 5: that will require more people, more skilled labor, and we
• 12:11
  Speaker 5: will definitely contribute to that and to help to build
• 12:13
  Speaker 5: up that workforce.
• 12:14
  Speaker 3: Our thanks to Semen's Energy CEO Christian Buruh, coming up
• 12:17
  Speaker 3: a look at why obesity data from drug maker Pfizer
• 12:20
  Speaker 3: underwhelmed investors.
• 12:21
  Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
• 12:24
  Speaker 2: depth research and data on two thousand companies and one
• 12:27
  Speaker 2: hundred and thirty industries.
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• 12:31
  Speaker 3: I'm Scarlet Foo and.
• 12:32
  Speaker 2: I'm Paul Sweeney, and this is Bloomberg.
• 12:38
  Speaker 1: This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney
• 12:43
  Speaker 1: on Bloomberg Radio.
• 12:45
  Speaker 2: We move to some news in the biotech sector.
• 12:47
  Speaker 3: This week, shares a Pfizer fell after the drug maker
• 12:50
  Speaker 3: revealed limited data from one of its new obesity treatments.
• 12:53
  Speaker 2: It showed people lost up to twelve point three percent
• 12:55
  Speaker 2: of their body weight compared to those on a placebo
• 12:57
  Speaker 2: at twenty eight weeks.
• 12:58
  Speaker 3: And of course this comes after Eyer battled to buy
• 13:01
  Speaker 3: weight loss startup met Sarah late last year. With no
• 13:03
  Speaker 3: new drug approvals expected this year, and the limited data
• 13:06
  Speaker 3: released means the prospects for Metsara's farthest long drug do
• 13:10
  Speaker 3: remain unclear.
• 13:11
  Speaker 2: For more on this and the latest in the biotech sector,
• 13:13
  Speaker 2: we heard from Sam Fazeli, Bloomer Intelligence, director of Research
• 13:16
  Speaker 2: for Global Industries and senior pharmaceuticals analysts.
• 13:19
  Speaker 3: We began by asking Sam about how investors were impacted
• 13:22
  Speaker 3: by this limited obesity data.
• 13:24
  Speaker 7: Yeah, yeah, so look, they paid ten point one billion
• 13:26
  Speaker 7: dollars for this, and if it all to do with that,
• 13:29
  Speaker 7: there is it people being reminded again that the next
• 13:31
  Speaker 7: three four years there's a major headwind from generated drugs
• 13:36
  Speaker 7: coming for there some of the products on the market
• 13:39
  Speaker 7: eye brands, ex standy, et cetera. So that's partly the issue.
• 13:44
  Speaker 7: And you know in order to deal with that, you
• 13:47
  Speaker 7: need assets and drugs that are going to try and
• 13:49
  Speaker 7: hopefully fill the gap. And maybe this is the problem
• 13:52
  Speaker 7: with the data. The thing is, we've looked at the data.
• 13:55
  Speaker 7: As you know, we have very deep obesity analysis. We've
• 13:57
  Speaker 7: looked at the data and it's not terrible. But as
• 14:01
  Speaker 7: I said the other day when Rash reported, there's some numbers,
• 14:05
  Speaker 7: I think folks are getting over this percentage here, percentage there.
• 14:09
  Speaker 7: You can only dis the point going for what you
• 14:11
  Speaker 7: can't mean unless you give out somebody who are thirty
• 14:14
  Speaker 7: forty weights, which of course nobody wants. So this is
• 14:17
  Speaker 7: getting to a point where now it comes to the nuance,
• 14:20
  Speaker 7: and unfortunately we don't have a lot of the nuance
• 14:22
  Speaker 7: that we need to know about this data set tolerability.
• 14:26
  Speaker 7: And it is good because it's a once monthly injection
• 14:29
  Speaker 7: after the first few weeks, so it's well set up.
• 14:32
  Speaker 7: But the market obviously doesn't like it because they're not
• 14:34
  Speaker 7: getting enough information about how good actually it is. Sam.
• 14:38
  Speaker 2: It seems like if you want to be an investor
• 14:40
  Speaker 2: in big cap farmer, you really have to be a
• 14:42
  Speaker 2: stock picker. I've got stocks like Pfizer and Bristol on
• 14:45
  Speaker 2: a trailing twelve month basis that are down. But I've
• 14:48
  Speaker 2: got stocks like Johnson and Johnson and Eli Lilly and
• 14:51
  Speaker 2: abby V. They're are big. And is that just because
• 14:54
  Speaker 2: they've got the right portfolio of drugs and the others don't.
• 14:59
  Speaker 7: Entirely entirely about that is what you don't want is
• 15:03
  Speaker 7: looking into the abyss of generic drugs coming for your
• 15:06
  Speaker 7: big earners with no obvious pipeline. Versus, let's take a
• 15:10
  Speaker 7: Johnson and Johnson in this case, and they have a
• 15:14
  Speaker 7: phenomenal set of drugs for the multiple my looma space
• 15:18
  Speaker 7: or a whole you know, other oncology spaces. This is
• 15:22
  Speaker 7: a powerhouse. And of course they've also still got the
• 15:25
  Speaker 7: other divisions medical devices growing quite nicely so and no
• 15:30
  Speaker 7: massive I mean, there's one that's coming up, a big
• 15:33
  Speaker 7: hole that's coming in terms of generics, but they've still
• 15:37
  Speaker 7: got these things that are growing at phenomenal speed. And
• 15:39
  Speaker 7: one of their drugs, Dartlects, is very close to twenty
• 15:43
  Speaker 7: billion dollars and that's just one indication in multiple myloma.
• 15:47
  Speaker 7: So they've done everything right in that case, and that's
• 15:49
  Speaker 7: what the market likes.
• 15:51
  Speaker 3: So in other words, Sam, this is something that can
• 15:53
  Speaker 3: be managed. The fact that Pfizer hasn't managed this well
• 15:57
  Speaker 3: raises a lot of questions here because I mean, it's
• 16:00
  Speaker 3: not like just one day they woke up and oh,
• 16:02
  Speaker 3: you know, there's suddenly a lot of competition for some
• 16:05
  Speaker 3: of their best selling drugs, or people are no longer
• 16:07
  Speaker 3: paying up for COVID treatments COVID vaccines. In terms of management,
• 16:12
  Speaker 3: do investigate a question whether adviser has a right management
• 16:16
  Speaker 3: in place.
• 16:18
  Speaker 7: Yeah, I mean, look, this is a tough game, right
• 16:22
  Speaker 7: not the game, of course, this is a very tough
• 16:24
  Speaker 7: set of issues to deal with. Creating pipeline takes a
• 16:29
  Speaker 7: lot of effort. Let's take Eli Lilly. For years, nobody
• 16:33
  Speaker 7: was paying too much attention to their potential margin expansion
• 16:36
  Speaker 7: that was coming, and they were arguing for it, et cetera.
• 16:39
  Speaker 7: Maybe they were lucky they hit on these obesity drugs.
• 16:42
  Speaker 7: Look at Ask for Zeneca. It took quite a lot
• 16:44
  Speaker 7: of pain for Pascal Soio you should write that ship
• 16:48
  Speaker 7: when he took it. So management's part of it. Then
• 16:51
  Speaker 7: you need to be lucky. You cannot have just one
• 16:54
  Speaker 7: or the other. And pipeline. You know, we'll see what
• 16:57
  Speaker 7: Fizer shows us over time, they have assets early development
• 17:01
  Speaker 7: that we need to start seeing the fruit our.
• 17:03
  Speaker 2: Thanks to Sam Fizzelli, Bloomberg Intelligence, Director of Research for
• 17:06
  Speaker 2: Global Industries and senior pharmaceuticals.
• 17:08
  Speaker 3: Analyst, we moved to some news in the tech space.
• 17:11
  Speaker 3: This week. Advanced micro Devices suffered its worst stock declined
• 17:13
  Speaker 3: in almost nine years after its sales forecast underwhelmed investors.
• 17:17
  Speaker 3: It's a sign that AMD is not making the AI
• 17:20
  Speaker 3: inroads that Wall Street had anticipated.
• 17:22
  Speaker 2: Separately, the semiconductor manufacturers Texas Instruments reach an agreement to
• 17:26
  Speaker 2: buy the US chip firm Silicon Laboratories for about seven
• 17:29
  Speaker 2: point five billion dollars.
• 17:30
  Speaker 3: This deepens TIS exposure to several long standing markets for chips,
• 17:34
  Speaker 3: including the home appliance, power, industrial, and medical device sectors.
• 17:38
  Speaker 2: For more on all of this, guest host John Tucker
• 17:39
  Speaker 2: and I were joined by Ku John Sobandi, Bloomberg Intelligence
• 17:42
  Speaker 2: senior semiconductor analysts.
• 17:43
  Speaker 3: We began by asking Konjohn of investors overreacted or if
• 17:47
  Speaker 3: there is actually something fundamentally wrong with AMD's latest report.
• 17:50
  Speaker 8: There was nothing fundamentally wrong in this report. There were
• 17:54
  Speaker 8: a lot of good things to take away, but it
• 17:56
  Speaker 8: comes down to you know when you become an ar darling.
• 17:59
  Speaker 8: You set up really really high expectations, and when you
• 18:02
  Speaker 8: take out the China revenue, which was not included in
• 18:06
  Speaker 8: the guidance and the expectations, the beat came out pretty modest,
• 18:10
  Speaker 8: which I guess people didn't like, and then was not
• 18:13
  Speaker 8: at power against the really high expectations that you have
• 18:15
  Speaker 8: now every quarter from these companies.
• 18:18
  Speaker 6: Like they used to ask in the old Westerns, you know,
• 18:21
  Speaker 6: is there room enough for the two of us in
• 18:23
  Speaker 6: this town? Is there room enough for them? And in
• 18:26
  Speaker 6: Nvidia there is right now.
• 18:27
  Speaker 8: I mean, look, all the tide is lifting all boats.
• 18:30
  Speaker 8: There's so much demand for accelerator chips that there's room
• 18:34
  Speaker 8: for a MD as a GPU provider. There's even room
• 18:37
  Speaker 8: for other folks like Broadcomming mar Well as an AS provider.
• 18:40
  Speaker 8: So there's a plenty of demand right now.
• 18:43
  Speaker 2: Do we like management least as Sue? I think is
• 18:46
  Speaker 2: just when I just see your interviews, it seems super
• 18:48
  Speaker 2: on top of it.
• 18:49
  Speaker 8: Yeah, I mean, like I said, fundamentally, nothing changed their
• 18:53
  Speaker 8: their CPU story continues to become stronger. Nobody's paying attention
• 18:57
  Speaker 8: to do it right now because all the focus is
• 18:59
  Speaker 8: on GPU and competing with n media. But people are
• 19:01
  Speaker 8: forgetting inherently. I when you look at two years back,
• 19:04
  Speaker 8: this was really a CPU company. Their GPU story line
• 19:07
  Speaker 8: remains intact. We didn't expect any fireworks coming into this earnings.
• 19:11
  Speaker 8: We don't expect it until really four q F twenty
• 19:15
  Speaker 8: twenty six, so the market is aware of this. We
• 19:18
  Speaker 8: really have to wait until the four q twenty twenty six.
• 19:21
  Speaker 8: This is when they will be really put to tests
• 19:23
  Speaker 8: if they can really execute their first server level solution
• 19:27
  Speaker 8: or not. So there's nothing changed that we saw should
• 19:30
  Speaker 8: really concern us.
• 19:32
  Speaker 6: How important is China in all this? I thought the
• 19:35
  Speaker 6: export restrictions were lifted. I mean, what's what's taking so long?
• 19:38
  Speaker 8: Well, so the expert restrictions are different for each chip,
• 19:42
  Speaker 8: so that the Mi three to eight which they were
• 19:44
  Speaker 8: able to ship, had already licenses approved prior, so that's
• 19:50
  Speaker 8: a different chip. The newer chips that now is in
• 19:53
  Speaker 8: the news when it comes to in media is that
• 19:55
  Speaker 8: H two hundreds and equivalent. It will be the MI
• 19:58
  Speaker 8: three twenty five for those have not been granted yet.
• 20:02
  Speaker 8: Even though the White House has said that yes, these
• 20:04
  Speaker 8: companies can start shipping these products, yet the formal licenses
• 20:08
  Speaker 8: have not been granted.
• 20:09
  Speaker 2: Ku John some m and A in your space. Texas
• 20:12
  Speaker 2: Instruments has reached an agreement to buy Silicon Laboratories for
• 20:16
  Speaker 2: about seven point five billion dollars. Here what's going on
• 20:20
  Speaker 2: here with ti.
• 20:21
  Speaker 8: Yeah, so just to give some context, this is sort
• 20:24
  Speaker 8: of this size of the deal they have not done
• 20:26
  Speaker 8: in the past. The last time they did a deal
• 20:28
  Speaker 8: like this was buying National for about six seven billion
• 20:31
  Speaker 8: dollars in twenty eleven. So this is not their typical nature,
• 20:35
  Speaker 8: so a bit of a surprise. Strategically, it fits well.
• 20:39
  Speaker 8: Their industrial segment, which is their largest segment and that's
• 20:42
  Speaker 8: where they want to be focused, has a missing piece
• 20:44
  Speaker 8: when it comes to wireless connectivity in IoT, so Silicon
• 20:48
  Speaker 8: Lab gives them that portfolio. Financially, however, it's a lot
• 20:51
  Speaker 8: more important. They have retreated that this has not change
• 20:54
  Speaker 8: their pre cash foot trajectory, this has not changed their
• 20:57
  Speaker 8: dividend path, and this does not increase The most important
• 21:00
  Speaker 8: thing is the capech so all those things we really like.
• 21:04
  Speaker 8: If they're able to execute to that yet the cost synergies,
• 21:06
  Speaker 8: then this will be a really good deal for them. Also,
• 21:09
  Speaker 8: remember TIA has been on a spending spree for the
• 21:11
  Speaker 8: last three to five years building up a lot of capacity.
• 21:14
  Speaker 8: So this will help bring more loading to the internal factories,
• 21:18
  Speaker 8: bring more manufacturing internal to own TI, and help with utilization.
• 21:24
  Speaker 2: Our thanks to Kunjan Sabani, Bloomberg Intelligence Senior Semiconductor analyst.
• 21:28
  Speaker 3: We moved out to some news from fintech company PayPal.
• 21:30
  Speaker 2: This week, PayPal reported quarterly profit and revenue that missed
• 21:33
  Speaker 2: analyst expectations. The company also said HP CEO Enrique Lauris
• 21:38
  Speaker 2: will take the top job from Alex Chris, whose turnaround
• 21:41
  Speaker 2: plan failed to meet targets.
• 21:43
  Speaker 3: Jamie Miller, who is the payments firm's chief financial and
• 21:45
  Speaker 3: operating officer, will serve as interim CEO until Lauris takes
• 21:49
  Speaker 3: over on March. First. Shares a PayPal tumbled as much
• 21:52
  Speaker 3: as nineteen percent after the news. It was the biggest
• 21:54
  Speaker 3: drop in more than four years.
• 21:56
  Speaker 2: More on this I was joined by Dick sha gera
• 21:58
  Speaker 2: Bloomberg Intelligence Global Fintech and payments analyst. I first answer
• 22:01
  Speaker 2: her to break down the latest news at PayPal.
• 22:03
  Speaker 9: Like two big headlines hit at once missed four Q
• 22:07
  Speaker 9: expectations and then announced a CEO change. So on the
• 22:11
  Speaker 9: print side, adjusted EPs was about a four percent miss
• 22:15
  Speaker 9: and the revenue came in one percent lower, and I
• 22:18
  Speaker 9: should highlight this is like their first miss in two years.
• 22:22
  Speaker 9: But I think the bigger issue is forward looking branded checkout,
• 22:26
  Speaker 9: which is the main core high margin business for PayPal,
• 22:30
  Speaker 9: that has slowed to one percent in the fourth quarter.
• 22:33
  Speaker 9: And PayPal is also flagging in earnings decline for twenty
• 22:36
  Speaker 9: twenty six. So those were the key forward looking problem areas,
• 22:40
  Speaker 9: and the CEO change definitely was a surprise. I mean,
• 22:43
  Speaker 9: the guidance division was driven by their investments in some
• 22:49
  Speaker 9: of the merchant business that they're doing, But I think
• 22:51
  Speaker 9: the market reaction goes beyond that. I think it goes
• 22:56
  Speaker 9: more around some of the serious gaps that appear to
• 23:00
  Speaker 9: have been discovered, especially with Apple pay and all the
• 23:04
  Speaker 9: product advancements that the competition has come through. And I think, yeah,
• 23:09
  Speaker 9: lots to unpack that today.
• 23:11
  Speaker 2: So just give us a sense of the competitive landscape
• 23:14
  Speaker 2: of the businesses that paypals and the financial technology and
• 23:17
  Speaker 2: kind of where do they fit in what are they
• 23:19
  Speaker 2: maybe not doing right here?
• 23:21
  Speaker 9: So PayPal has two parts of the ecosystem. It works
• 23:26
  Speaker 9: with the merchants where you see the PayPal button when
• 23:28
  Speaker 9: you check out and it works with the consumers through
• 23:30
  Speaker 9: its app, the PayPal app and the Venmo app. What
• 23:35
  Speaker 9: is very interesting is that management kept highlighting execution, discipline
• 23:40
  Speaker 9: and prioritization, but honestly, like that is the main game.
• 23:44
  Speaker 9: PayPal's biggest value ad is the two sided network. They
• 23:48
  Speaker 9: could not have afforded to either drop the merchant or
• 23:52
  Speaker 9: forget about the consumer. So it's been like it's a
• 23:55
  Speaker 9: very competitive landscape. You have Stripe, Aden, Apple pay You
• 24:00
  Speaker 9: would have noticed recently they revised their partnership from they
• 24:05
  Speaker 9: moved from Goldmans to JP Morgan. So everyone is charging
• 24:09
  Speaker 9: FIRS step and PayPal needs to show up on that.
• 24:12
  Speaker 9: And I thought they were getting there, but I think
• 24:14
  Speaker 9: this new CEO to change definitely puts a multi year
• 24:18
  Speaker 9: transformation back in the play now.
• 24:20
  Speaker 2: So what do you think is the is the next
• 24:23
  Speaker 2: step for this company here? I mean a can of
• 24:27
  Speaker 2: kind of remain competitive in this business going forward. Does
• 24:30
  Speaker 2: it need to think about a new structure or a
• 24:33
  Speaker 2: new strategy. What do you think needs to happen here?
• 24:36
  Speaker 9: Yeah, that's the million dollar question, Paul. I think so
• 24:38
  Speaker 9: there are two things. One is I think investors need
• 24:41
  Speaker 9: really need clarity now on how PayPal reaccelerates its core
• 24:44
  Speaker 9: checkout business. Is it conversion, is it pricing merchant value proposition,
• 24:49
  Speaker 9: because that's still the core engine. But I think secondly
• 24:53
  Speaker 9: is whether the new leadership really signals a broader strategic shakeup,
• 24:57
  Speaker 9: like do they streamline initiatives, are they going to step
• 25:00
  Speaker 9: cost discipline or capital return or if it doesn't work out,
• 25:03
  Speaker 9: maybe they'd consider like big assets like Venmo. You know, strategically,
• 25:08
  Speaker 9: the performance doesn't inflect from that.
• 25:10
  Speaker 3: Our thanks to Dick Shagaratt Bloomberg Intelligence, Global Fintech and
• 25:13
  Speaker 3: Payments analyst, coming up a look at why the food
• 25:16
  Speaker 3: and beverage company PepsiCo is cutting prices by up to
• 25:18
  Speaker 3: fifteen percent for some key brands.
• 25:20
  Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
• 25:23
  Speaker 2: depth research and data on two thousand companies and one
• 25:25
  Speaker 2: hundred and thirty industries.
• 25:26
  Speaker 3: You can access Bloomberg Intelligence through Bigo on the terminal.
• 25:29
  Speaker 3: I'm Scarlett Foe.
• 25:30
  Speaker 2: And I'm Paul Sweeney, and this is Bloomberg.
• 25:40
  Speaker 1: This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney
• 25:45
  Speaker 1: on Bloomberg Radio.
• 25:47
  Speaker 2: We move next to some news in the food and
• 25:48
  Speaker 2: beverage space.
• 25:49
  Speaker 3: This week, PepsiCo announced it is cutting prices by up
• 25:52
  Speaker 3: to fifteen percent for key brands, including Lays anden Doritos.
• 25:55
  Speaker 3: It's a bid to lift sales by offering more affordable products.
• 25:58
  Speaker 2: Pepsco has struggled to grow itales of North American in
• 26:00
  Speaker 2: recent years. The company, like many of its peers in
• 26:02
  Speaker 2: the food space, raised prices during the pandemic and its
• 26:05
  Speaker 2: aftermath to offset high inflation.
• 26:07
  Speaker 3: So we brought in Ken Shape, Bloomberg Intelligence Senior consumer
• 26:10
  Speaker 3: products analyst.
• 26:11
  Speaker 2: We first asked Ken for his take on Pepsi's earnings.
• 26:14
  Speaker 10: I think the broad takeaway for investors is that PepsiCo
• 26:17
  Speaker 10: is committed to bringing better focus to this company. You know,
• 26:21
  Speaker 10: I've covered this company a long time and it's it's
• 26:24
  Speaker 10: primary competitors Coca Cola, here, doctor Pepper, you can say Primo,
• 26:28
  Speaker 10: water Monster. How they different from PepsiCo is the much
• 26:31
  Speaker 10: more focused particularly specific categories. But PepsiCo, with the urging
• 26:37
  Speaker 10: of the activists urging them on, is bringing more focus
• 26:41
  Speaker 10: to this company. And what I mean is they're rationalizing
• 26:44
  Speaker 10: a lot of the SKUs that really aren't contributing much.
• 26:48
  Speaker 10: They're consolidating plans they are bringing more rationality to the
• 26:54
  Speaker 10: trade spending. So when I hear things that, like, you know,
• 26:57
  Speaker 10: cutting price, that's that's tactical. That's just a way to
• 27:00
  Speaker 10: move the need a little bit with near term sales.
• 27:02
  Speaker 10: But I think the bigger picture is to bringing more
• 27:05
  Speaker 10: focus to this enterprise.
• 27:06
  Speaker 3: Right, I mean, investors are excited about it strategy as
• 27:10
  Speaker 3: opposed to just kind of moving forward with the way
• 27:12
  Speaker 3: it's always been. When it comes to those price cuts, though,
• 27:15
  Speaker 3: I wonder if this is going to spark any kind
• 27:17
  Speaker 3: of price war, will other snack makers feel the pressure
• 27:21
  Speaker 3: to also reduce prices, even if they've gone up quite
• 27:24
  Speaker 3: a bit since the pandemic.
• 27:26
  Speaker 10: That's possible, Scarlett. In the case of Free Too Lay though,
• 27:30
  Speaker 10: they have such a dominant market share, and they have
• 27:32
  Speaker 10: like sixty percent of the market in the measure channels,
• 27:36
  Speaker 10: and when we have that much of a share, you
• 27:39
  Speaker 10: deserve a premium. Particularly with Pestico's direct store delivery system,
• 27:44
  Speaker 10: what that means is that they help their retailers much
• 27:47
  Speaker 10: more than a lot of their competitors, and that is
• 27:50
  Speaker 10: they actually go to the store quickly, respond to out
• 27:53
  Speaker 10: of stocks, They help you know, position the product, they
• 27:57
  Speaker 10: create the end caps in the store, or they do
• 28:00
  Speaker 10: a lot more for the retailer than their competitors, and
• 28:03
  Speaker 10: so that's how they are helped to get premium pricing. So, yes,
• 28:08
  Speaker 10: they're rolling back some prices. You know, it's no secret
• 28:11
  Speaker 10: that price increases have been up quite a bit since
• 28:13
  Speaker 10: the pandemic. A lot of it's cost driven, and private
• 28:18
  Speaker 10: label has encroached a little bit on PepsiCo's share. But
• 28:22
  Speaker 10: to answer your question directly, they are the dominant player.
• 28:25
  Speaker 10: I would not expect them to give back too much
• 28:28
  Speaker 10: over time. And while their competitors may cut prices as well,
• 28:33
  Speaker 10: I think retail would be alienating consumers if they push
• 28:37
  Speaker 10: too hard on Petsico's price increases.
• 28:40
  Speaker 2: Down the road, Ken talk to us about Elliott management.
• 28:42
  Speaker 2: They've been in this company, they've owned this stock here
• 28:45
  Speaker 2: pushing for some change. How much of an impactor are
• 28:48
  Speaker 2: they having.
• 28:50
  Speaker 10: I think on the margin there's an impact Paull maybe
• 28:53
  Speaker 10: to the degree that Petsico is hastening. It's moved to
• 28:56
  Speaker 10: more focus. You know a lot of the things that
• 28:59
  Speaker 10: it's been doing all along, and that is upgrading their
• 29:02
  Speaker 10: portfolio with more functionality. This is some of the things
• 29:06
  Speaker 10: we talked about in the past, they're bringing more protein
• 29:09
  Speaker 10: to their mix and bringing more protein by restaging muscle milk,
• 29:14
  Speaker 10: so bringing more value to the beverages. So they've always
• 29:21
  Speaker 10: been doing that, but to your question, Elliott is pushing
• 29:24
  Speaker 10: them to do things like, Okay, you can still do that,
• 29:27
  Speaker 10: but also cut costs a little more aggressively. You know,
• 29:30
  Speaker 10: maybe maybe you don't need all of these plants, Maybe
• 29:32
  Speaker 10: you can consolidate some. Maybe there's some SKUs, you know,
• 29:35
  Speaker 10: some products that aren't selling, well, you can roll those back.
• 29:38
  Speaker 10: Be a little more nimble when it comes to getting
• 29:42
  Speaker 10: rid of some products that aren't winners, because at the
• 29:44
  Speaker 10: end of the day, you have to grab as much
• 29:46
  Speaker 10: shelf space as the retailer as possible, and when you
• 29:49
  Speaker 10: have products on the shelf that aren't moving, you're not
• 29:51
  Speaker 10: helping them, you know, with their business. So be more
• 29:55
  Speaker 10: a little more aggressive with that. So it's helping and
• 29:59
  Speaker 10: I think that's a positive thing for shareholders.
• 30:01
  Speaker 3: Is this a company that's going to have to separate
• 30:03
  Speaker 3: its drinks business from its snack business.
• 30:07
  Speaker 10: Well, that's the age old question we've been talking about
• 30:09
  Speaker 10: for a while. And as I mentioned, if it can
• 30:12
  Speaker 10: prove to the market that this increased focus that they
• 30:15
  Speaker 10: have with just doing their you know, daily business or
• 30:19
  Speaker 10: running these operations, they can improve them. I think the
• 30:22
  Speaker 10: heat will be off for them to go to the
• 30:24
  Speaker 10: draconian measure of breaking up food and beverages. That's always,
• 30:29
  Speaker 10: you know, the wild card, I think down the road,
• 30:31
  Speaker 10: and I think will be well received by the market
• 30:32
  Speaker 10: quite frankly, but I don't think it's necessary at this point.
• 30:37
  Speaker 2: What are you consumer products companies telling you ken about
• 30:40
  Speaker 2: just the consumer out there?
• 30:44
  Speaker 10: Well, all Trea just the other day. I mean, it's
• 30:46
  Speaker 10: a different market with cigarettes, you know. They noted that
• 30:48
  Speaker 10: consumers are still hesitant in paying up for a premium
• 30:51
  Speaker 10: products and the cigarettes mention isn't the same category as
• 30:55
  Speaker 10: salty snacks, but they do note that consumers are reaching
• 31:00
  Speaker 10: for the private label, the low priced alternative, more than
• 31:03
  Speaker 10: they've done in the past, and so the extent that
• 31:06
  Speaker 10: carries over to snacks and beverages. I can see some
• 31:09
  Speaker 10: parallel lines here, and as more companies release their numbers,
• 31:14
  Speaker 10: I think that could be a common theme here that
• 31:16
  Speaker 10: private labels encroaching and maybe there needs to be some
• 31:19
  Speaker 10: more deceleration in the reliance on price increases to stimulate
• 31:24
  Speaker 10: sales growth.
• 31:25
  Speaker 3: That was ken Ja Bloomberg Intelligence senior consumer products analysts.
• 31:29
  Speaker 2: We moved next to Research. Bloomberg Intelligence recently put out
• 31:32
  Speaker 2: on global communications and networking equipment.
• 31:34
  Speaker 3: According to BI, the global networking sector heads into twenty
• 31:37
  Speaker 3: twenty six with multiple spending tailwinds led by cloud AI
• 31:41
  Speaker 3: infrastructure buildouts, and the money spent on networking gear is
• 31:44
  Speaker 3: expected to grow twenty percent according to the six to
• 31:47
  Speaker 3: fifty Group.
• 31:48
  Speaker 2: For more, I was joined by Woujenho, Bloomberg Intelligence, Senior
• 31:50
  Speaker 2: Hardware networking analyst. I first asked which to talk about
• 31:53
  Speaker 2: how investors are now looking at AI.
• 31:56
  Speaker 11: It's fairly straightforward, right, It's a very fairly concentrated space.
• 32:01
  Speaker 11: The AI networking space is expected to grow ninety one
• 32:04
  Speaker 11: percent on the switching hardware alone to twenty one billion dollars. Right.
• 32:09
  Speaker 11: The way to play it is fairly straightforward. It's a
• 32:12
  Speaker 11: three c's, an A and an N.
• 32:14
  Speaker 4: Right.
• 32:14
  Speaker 11: That's my new networking fang Cisco, Celestica, Corning and CNSO.
• 32:21
  Speaker 11: Four c's Arista and Nvidia, right, and those are going
• 32:26
  Speaker 11: to be the leading beneficiaries for the networking space in AI.
• 32:30
  Speaker 2: So give us a sense of kind of how investors
• 32:33
  Speaker 2: should think about the investment cycle for AI. I mean,
• 32:36
  Speaker 2: I'm going to say we're two three years into it.
• 32:40
  Speaker 2: I'm just not sure. How do you guys think about
• 32:42
  Speaker 2: the duration here?
• 32:44
  Speaker 11: Yeah, you know, it's it's quite odd, right, because you know,
• 32:47
  Speaker 11: some of us say it's two three years into it.
• 32:50
  Speaker 11: Michael Dell had this interesting quote a couple of weeks ago,
• 32:54
  Speaker 11: saying what inning are we and his response was, we're
• 32:58
  Speaker 11: just entering the stadium.
• 32:59
  Speaker 10: Wow.
• 33:00
  Speaker 8: Right.
• 33:00
  Speaker 11: He still thinks it's early on in terms of the
• 33:02
  Speaker 11: investment phase, and networking is going to be one of
• 33:05
  Speaker 11: the leading beneficiars of it.
• 33:07
  Speaker 2: So how are the networking equipment companies that you follow,
• 33:11
  Speaker 2: how are they financing some of their capex? Because again,
• 33:13
  Speaker 2: I think most of us grew up when technology companies
• 33:16
  Speaker 2: had so much cash flow that they could self fund
• 33:19
  Speaker 2: their R and D, their capex, that type of stuff.
• 33:22
  Speaker 2: Now they many of them need to come to the
• 33:24
  Speaker 2: capital markets.
• 33:26
  Speaker 11: Yeah, fortunate for the networking guys. It's a low capex
• 33:32
  Speaker 11: type of business, right, We're talking about seb ten percent
• 33:35
  Speaker 11: of the cash flow to capex or ten percent to
• 33:39
  Speaker 11: capex ratio to sales, So it is a fairly self
• 33:43
  Speaker 11: funded business. And it's also high margin business as well.
• 33:47
  Speaker 11: As long as the hyper scale cloud providers as well
• 33:50
  Speaker 11: as the tier two cloud providers like the Neo clouds,
• 33:54
  Speaker 11: are funded, they'll be able to buy the networking gear.
• 33:58
  Speaker 10: So how do.
• 33:58
  Speaker 2: You I mean, it's interesting here. You think about the
• 34:01
  Speaker 2: tech space and it's hardware, it's software, it's the networking equipment.
• 34:05
  Speaker 6: Here.
• 34:06
  Speaker 2: Who's kind of driving this this AI thing?
• 34:09
  Speaker 1: Is?
• 34:10
  Speaker 2: Are your networking in communications companies? Are they kind of
• 34:13
  Speaker 2: dependent upon I don't know what the hyperscalers are doing
• 34:16
  Speaker 2: or what the chip makers are doing. Who's kind of
• 34:18
  Speaker 2: leading this?
• 34:19
  Speaker 11: So at the end of the day, it's how quickly
• 34:23
  Speaker 11: and how fast and how large of the investments that
• 34:27
  Speaker 11: the hyperscalers are making on the AI side. I will
• 34:31
  Speaker 11: tell you, as these language models grow and the scale
• 34:36
  Speaker 11: of these compute investments grow, you actually need a lot
• 34:40
  Speaker 11: more networking. And networking is if you think about it
• 34:44
  Speaker 11: as the arteries and the veins of a human body.
• 34:49
  Speaker 11: Networking is probably at the center of that right now,
• 34:51
  Speaker 11: and that's why you're having a lot of investment on
• 34:53
  Speaker 11: their networking front.
• 34:54
  Speaker 2: Who are I mean, how are they dealing with?
• 34:57
  Speaker 4: Again?
• 34:57
  Speaker 2: These networking companies, I think of these big global companies.
• 35:00
  Speaker 2: Is that manufacturing dispersed around the globe? Is there a
• 35:03
  Speaker 2: pressure to bring it.
• 35:04
  Speaker 1: To the US.
• 35:05
  Speaker 2: How are they dealing with some of the changes we've
• 35:07
  Speaker 2: seen in global logistics, whether it's tariffs or just you know,
• 35:11
  Speaker 2: most favorite nation status, those types of things.
• 35:14
  Speaker 11: Yeah, that's a fantastic question, Paul. I will tell you
• 35:18
  Speaker 11: that there's a couple of things. Right when we had
• 35:20
  Speaker 11: the tiraff situation number one, and also the COVID situation
• 35:24
  Speaker 11: a few years back, the companies have actually done a
• 35:27
  Speaker 11: good job rearranging the supply chain. A lot of manufacturings
• 35:29
  Speaker 11: happening out of Mexico. There's some manufacturing that's happening in
• 35:34
  Speaker 11: Taiwan as well as in Canada. So we're bypassing some
• 35:37
  Speaker 11: of the tiff situation. And quite frankly, tariffs have become
• 35:40
  Speaker 11: a non story for the majority of my networking guys.
• 35:44
  Speaker 11: And on top of that, the dram story is inconsequential
• 35:48
  Speaker 11: for the networking games as well.
• 35:49
  Speaker 2: How are the stocks performing here? We've seen so many
• 35:52
  Speaker 2: parts of the tech space just rip. How have your
• 35:56
  Speaker 2: stocks been doing?
• 35:57
  Speaker 11: I will tell you, if you know, if you looked
• 36:00
  Speaker 11: at the Celestica two years back, you're seeing a ten
• 36:04
  Speaker 11: time performer to to where it is right now. You
• 36:08
  Speaker 11: know it has slowed down because I think people are
• 36:10
  Speaker 11: starting to catch up to the name Arista. It's a
• 36:14
  Speaker 11: double from from two to three years back. And Cisco,
• 36:18
  Speaker 11: I mean we've finally got back to it's two thousand
• 36:22
  Speaker 11: and one highs because of the business has actually stabilized,
• 36:26
  Speaker 11: so the stocks in itself have done well, the multiples
• 36:30
  Speaker 11: have actually gotten a little bit rich.
• 36:33
  Speaker 3: That was Ujinho, our senior hardware and networking analyst.
• 36:36
  Speaker 2: That's this week's edition of Bloomberg Intelligence on Bloomberg Radio,
• 36:39
  Speaker 2: providing in depth research and data on two thousand companies
• 36:41
  Speaker 2: and one hundred and thirty industries.
• 36:43
  Speaker 3: And remember you can access Bloomberg Intelligence if b I
• 36:45
  Speaker 3: go on the terminal. I'm Scarlett Foo and.
• 36:47
  Speaker 2: I'm Paul Sweeney. Stay with us. Today's top stories and
• 36:50
  Speaker 2: global business headlines are coming up right now.