Anticipating Nvidia Earnings and Telegram CEO Faces Potential Charges | Bloomberg Technology
>> FROM THE HEART OF WHERE INNOVATION MONEY AND POWER COLLIDE IN SILICON VALLEY AND BEYOND, THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: LIVE FROM NEW YORK AND SAN FRANCISCO THIS IS BLOOMBERG TECHNOLOGY. TODAY ALL EYES ARE ON NVIDIA. MARKETS ARE ON HOLD AS INVESTORS ARE ANXIOUSLY AWAITING THE CRUCIAL EARNINGS REPORT. ED: THE AI EARNINGS PARADE CONTINUES WITH SALESFORCE AND CROWDSTRIKE RESULTS ALSO AFTER THE CLOSING BELL.
>> A CRITICAL 24 HOURS FOR TELEGRAM, THE CEOS FOR DAY DETENTION ENDS AS A FRENCH JUDGES PONDERING PRESSING CHARGES. BUT FIRST LET'S CHECK IN ON THE MARKETS. WE ARE UNDER PRESSURE DOWN BY 3/10 OF 1% ON THE S&P 500 OFF BY 9/10 OF A PERCENTAGE POINT ON THE NASDAQ 100 WHY IS THAT. IT'S BECAUSE THE MARKET WEIGHTINGS OF ONE PARTICULAR COMPANY WHICH IS ABOUT 6% FOR THE S&P 500 AND ABOUT 8% FOR THE NASDAQ 100. >> WE WILL HIT NVIDIA HARD. SOME NEWS ABOUT SUPER MICRO COMPUTER'S AS WELL. THE THREE DAY CHART.
THE STOCK IS DOWN 24% ON TRACK FOR ITS BIGGEST DROP AT ONE POINT IN SESSION LOW THEY JUST DROP SINCE 2018. THEY ARE DELAYING THE FIND AND YOU'RE SEEING FINANCIAL DISCLOSURES WHEN HE FOUR HOURS AFTER SHORT SELLER HINDENBURG ISSUED A CRITICAL REPORT AND MADE NUMEROUS ALLEGATIONS WHICH WE WILL GET TO LATER IN THE PROGRAM. WITH BLOOMBERG'S BRADY FORD. NVIDIA IS EVERYTHING IN THE MOMENT THE STOCK IS DOWN 2% NEAR SESSION LOWS RIGHT NOW.
WE ARE WORRIED ABOUT EARNINGS BECAUSE IT IMPACTS MARKETS OF THE INDEX LEVEL. IT TELLS US THE STATE OF PLAY FOR THE INVESTMENT CYCLE AND AI. IT'S A BIG HOUR OF BLOOMBERG TECHNOLOGY AHEAD AND BIG 24 HOURS FOR THIS NAME IN THE MARKET. >> TUNING IN A LITTLE BIT LATER AS WELL JUST PHENOMENAL WHAT WE NEED TO BE WATCHING FOR. SENIOR ANALYST AT CITY INDEX FINANCIAL MARKETS. THIS IS AN IMPORTANT MACRO
EVENT FROM YOUR PERSPECTIVE? >> YES COMPLETELY. YOU WILL NEED TO LOOK AT THE CHARTS REALLY OF NVIDIA AND OVERLAY THE S&P OVER THE NASDAQ TO REALLY SEE THAT CORRELATION AND HOW STRONG IT IS AND HOW MUCH SORT OF MOVEMENTS IN NVIDIA ALSO MOVE THOSE INDICES AND SENTIMENT MORE BROADLY. THIS IS SOMETHING WE CAN SEE HAVING AN IMPACT ACROSS NOT JUST THE FINANCIAL MARKETS BUT ALSO INTO CURRENCIES AND OTHER RISK ASSETS AS WELL.
IT IS DEFINITELY ONE TO WATCH. I THINK THEY'RE SO MUCH RIDING ON THAT BECAUSE OF THIS IMPACT THAT IT CAN HAVE BECAUSE THIS FEELS LIKE THE LITMUS TEST WITH THE AI TRADE IS REALLY ABLE TO TEST THE ENTHUSIASM OF THAT AI TRADE, HOW IT IS DOING, WHETHER THERE'S MORE UPSIDE AND CONSIDERING THE RALLY WE'VE SEEN BOTH IN THIS STOCK AND IN THE S&P, NASDAQ IT DOES RAISE CONCERNS AND A FEW QUESTIONS OF ARE WE AT THE SORT OF TOP OF THIS RALLY OR ARE THERE MORE LEGS TO GO? >> SHOULD YOU BE HEADS TO THE DOWNSIDE AND IF YOU DO DO DO THAT FROM AN INDEX LEVEL OR MORE MICRO-FOCUSED. >> I THINK THERE IS REASON TO BE A LITTLE BIT CAUTIOUS BECAUSE OBVIOUSLY AS I SAID WE HAVE HAD A PHENOMENAL RALLY AND WE STILL PICK UP 160% SO FAR THIS YEAR, 700 88% TO THE END OF 2022. THESE NUMBERS ARE PHENOMENAL. IT IS PRODUCING GROWTH BUT BECAUSE OF THESE LOST EVALUATIONS IT DOES HAVE THAT QUESTION OF A LITTLE BIT OF DISAPPOINTMENT TO HAVE QUITE A BIT OF IMPACT.
I THINK YOU CAN EVEN HEADS THIS ON AN INDEX LEVEL WITH THE S&P AS YOU'VE HIGHLIGHTED IT HAS AWAITING THAT'S QUITE HEAVY AND IN PARTICULAR THE NASDAQ AS WELL YOU CAN SEE A HEDGING POTENTIAL WITH THAT ONE AS WELL. JUST THOSE CORRELATIONS THAT WE SEE WITHIN THE MOVES. IF YOU HAVE A HEDGE WITHIN THE NASDAQ. OBVIOUSLY IT'S NOT TO BE PERFECT BUT IT DOES I THINK OPEN YOU UP TO A LITTLE BIT OF RISK PROTECTION. THERE ARE OTHER FACTORS THAT DRIVE THE MARKET RIGHT NOW AS WE KNOW. WE HAVE U.S. CORE PCE, THE FEDERAL RESERVE AND FOCUS. ED: THEY SAY THIS IS THE MOST
IMPORTANT CORPORATE EARNINGS SINCE THE BANKS AMIDST THE FINANCIAL CRISIS. THEY SAY WHATEVER JENSEN DISCLOSES WILL BE DISSECTED AND ANALYZED LIKE IT IS A FED MEETING OR FED PRESSER. REFLECT ON WHAT IT'S LIKE FOR YOU IN THE MARKETS RIGHT NOW. YOU AND YOUR COLLEAGUES, WHAT PEOPLE TALK ABOUT, HOW SIGNIFICANTLY THEY ASSIGN IMPORTANCE AT THIS MOMENT IN THEIR CAREERS. >> YOU KNOW WHAT I THINK THAT'S A REALLY GOOD COMPARISON THERE. WE ARE REALLY FEELING THIS AS THAT SORT OF MOMENT WHERE WE HAD BACK IN 2008 WHERE THE BANKS ARE IN FAVOR AND NOW WE HAVE THIS FEELS LIKE SECTION OF THE ROAD WHERE WERE FOCUSING ON TO SEE WHERE THIS AI TRADE IS GOING TO TAKE US AND REALLY IMPORTANT FOR US, OBVIOUSLY IT HAS BEEN THE TALK OF THE DESK AND THE TALK OF CLIENTS FOR QUITE SOME TIME THIS HAS BEEN IN FOCUS PARTICULAR SINCE WE SEEN THAT RECOVERY FROM THE AUGUST 5 AND PRICES DRIVE HIGHER.
THIS IS VERY IMPORTANT FOR US AND OUR CLIENTS. >> HOW INTERESTED ARE YOUR CLIENTS IN THE ENERGY SECTOR IN THE ENERGY SIDE OF THE STORY? FIONA: IT IS A REALLY INTERESTING ONE. I THINK THAT SIDE OF THE PLAY IS REALLY MUCH MORE COMING INTO FOCUS NOW THAN IT HAS BEEN PREVIOUSLY. THEN I HAVE -- THAT IDEA OF WE
WILL GET THE ENERGY FROM, NUCLEAR ENERGY PLAY. I THINK THAT COULD BE VERY MUCH A SECOND SIDE OF THIS STORY WHICH HAS I DON'T THINK REALLY BEEN FULLY EXPLORED AND FULLY PLAYED OUT FOR ITS POTENTIAL. >> HOW FRUSTRATED ARE YOUR CLIENTS THAT THEY HAVE TO BE SO EXPOSED TO A FEW MEGA CAP NAMES TO NVIDIA WHETHER THEY LIKE IT OR NOT. >> I THINK THERE HASN'T BEEN TOO MANY COMPLAINTS JUST BECAUSE THERE HAS BEEN SO MUCH SORT OF HYPE SURROUNDING IT SO -- IT'S BEEN HYPE ON THE PLUS SIDE WE'VE SEEN SOME STRONG RALLY. THIS HAS BEEN A GOOD TRADE TO BE ON THE RIGHT SIDE OF. ON THAT SIDE OF THINGS THERE
HASN'T BEEN REALLY TOO MANY I WOULD SAY DISTRESSED COMPLAINTS, BUT I DO THINK THERE IS ALSO A KEENNESS AMONG CLIENTS FOR THE RALLY TO START BROADENING OUT MUCH MORE THAN WHAT IT HAS DONE. AND I THINK THAT IS SOMETHING THAT WE WILL BE LOOKING FORWARD TO HAPPENING POTENTIALLY AT THE FEDERAL RESERVE MOVING FORWARD WITH THOSE RATE CUTS. AND STARTS TO SEE SORT OF THE ECONOMIC PICTURE CHANGING, BUT I THINK HAVING THAT BROADENING OUT OF THE RALLY WE HAVEN'T QUITE GOTTEN THERE YET. THAT WILL BE SOMETHING THAT THEY WILL BE LOOKING FORWARD TO AS WELL. CAROLINE:
AUTOMATICALLY GOING OUT OF TECH INTO SMALL CAPS OF THE BROADENING OUT OF NAMES AND TECHNOLOGY FROM A GLOBAL PERSPECTIVE IN LONDON THERE SOME KEY EUROPEAN NAMES. FIONA: I THINK IT WAS INTERESTING BECAUSE AT THE START OF THIS WEEK WHEN WE SAW THE DOW JONES REACH RECORD HIGHS AND WE SAW THE NASDAQ AND THE S&P SORT OF COMING LOWER, THERE WAS THAT SENSE OF POTENTIALLY ARE WE GOING TO START TO SEE A ROTATION OUT OF TECH INTO STOCKS AND POTENTIALLY ECONOMICALLY SENSITIVE ON THE EXPECTATIONS THE POTENTIALLY THE FED WOULD START CUTTING RATES NEXT MONTH. SO I THINK THERE IS A SENSE WE COULD BE GETTING TO THAT STAGE SOON. AS HE SAID GEOGRAPHICALLY SPEAKING THERE ARE ALTERNATIVES TO BE LOOKING AT BUT I DO WONDER WHETHER THEY MIGHT BE A LITTLE PREMATURE GIVEN THE ECONOMIC PICTURE AND ECONOMIC OUTLOOK IN THE EURO ZONE AND IN THE U.K.
COMPARED TO WHAT WE ARE LOOKING AT IN THE U.S. AT THE MOMENT. SO I DO THINK THERE WILL COME A TIME WHEN THERE WILL BE MORE OPPORTUNITY FOR GEOGRAPHICAL DIVERSIFICATION. BUT I'M NOT SURE WE ARE QUITE THERE YET.
THAT'S ON THE TO KEEP AN EYE ON. ED: WHAT'S THE BIGGEST HEADWIND OR RISK TO THE TECHNOLOGY INVESTOR THROUGH THE END OF 2024. >> GOOD QUESTION. YOU KNOW WHAT I THINK, THERE IS A BIG RISK SURROUNDING A SLOWDOWN IN DEMAND FOR AI. WHAT WE KNOW RIGHT NOW IS A LOT OF COMPANIES EVEN OUTSIDE OF TECH HERE I'M TALKING COMPANIES MORE BROADLY VERY INTERESTED IN AI AND WHAT IT CAN DO AND THEY SEE VERY MUCH THE KEY PART OF THEIR FUTURE. WHAT WE NEED TO BE ABLE TO UNDERSTAND IS HOW MUCH OF THAT CAN BE TRANSFERRED TO HIGHER EARNINGS IN THE NEAR TERM AND I THINK THAT'S ONE OF THESE QUESTIONS REALLY COMING DOWN TO. ARE WE A LITTLE BIT OVER BOUGHT
IN THE PLAY NEAR TERM. I DON'T THINK WE ARE LONG-TERM BUT I WONDER IF WE ARE NEAR TERM. IF THAT DOES START TO COME TO THE SURFACE THEN MAYBE THAT COULD BE A BIG RISK FOR THE REST OF THIS YEAR. >> THAT TAPS INTO THE QUESTION BEING ASKED, OF THE ANXIETY BEING FELT BY A LOT OF PEOPLE EVERYWHERE. SENIOR ANALYST PROGRAMMING NOTE TONIGHT, AND EARNINGS EXCLUSIVE WITH THE NVIDIA CEO IN A SPECIAL EDITION OF BLOOMBERG TECHNOLOGY. YOU DON'T WANT TO MISS IT 6:30 P.M. EASTERN.
COMING UP, FRENCH AUTHORITIES WAY THE FUTURE OF TELEGRAM CEO. WE TAKE A LOOK AT THE POSSIBLE OUTCOMES NEXT. ON BLOOMBERG TECHNOLOGY. SEE YOU IN A MINUTE. ♪ CAROLINE: TELEGRAM -- ED: THE TELEGRAM CEO DETENTION IN PARIS ENDS AFTER ALLEGATIONS HE ALLOWED CRIMINALS TO USE THE MESSAGING APP UNFETTERED. SO WHAT'S NEXT, BLOOMBERG'S
PARIS BUREAU CHIEF JOINS US TO DISCUSS AND BASICALLY THERE IS NOW A SPECIFIC JUDGE PONDERING THE ISSUE OF CHARGES. >> THAT IS CORRECT. SO THE WAY IT WORKS IS HE WAS INTERROGATED FOR I WOULD SAY ROUGHLY 90 HOURS ABOUT AND THEN HE WAS TAKEN JUST ABOUT AN HOUR AGO A BIT MORE TO SEE A JUDGE.
AN INVESTIGATIVE MAGISTRATE REALLY. WHAT THAT PERSON WILL DO IS DECIDE WHETHER OR NOT TO CHARGE HIM FOR ANY OF THE 12 THINGS THAT HE IS ALLEGED TO HAVE DONE. MOSTLY AIDING AND ABETTING CRIMINALITY ON THE APP OR TURNING THE OTHER EYE. THAT COULD TAKE A RELATIVELY SHORT PERIODS OF TIME OR COULD TAKE HOURS. WE REALLY DON'T KNOW HOW LONG THIS PARTICULAR PROCESS WILL TAKE. CAROLINE: WHAT IS SO INTERESTING IS THE
BACKGROUND WITH FRANCE. I THINK IT WAS A FEW YEARS AGO MACRON WAS HOPING THE BUSINESS THERE ULTIMATELY HE IS A FRENCH RESIDENCE CITIZEN AT LEAST. WHY IS FRANCE TAKEN THIS ACTION. WHY THIS COUNTRY, WHY THIS GOVERNMENT? >> THAT'S A GOOD QUESTION BUT HE IS A FRENCH CITIZEN AND HAS BEEN SINCE 2021 AND BECAME ONE UNDER A PROCESS FOR PEOPLE WHO HAVE DONE EXEMPLARY THINGS FOR THE COUNTRY.
IT'S NOT CLEAR WHAT -- THEY DID A BIG INVESTIGATION INTO THIS AND DIDN'T REALLY COME UP WITH GOOD REASON FOR WHY BUT HE DOES HAVE IT. AND THE QUESTION SO YOU HAVE TO SEPARATE THE POLITICAL FROM THE CRIMINAL. SO IN THIS CASE THERE WAS A CRIMINAL CASE FOR ALLEGED LACK OF CONTENT MODERATION FOR PARTICULARLY THINGS ABOUT CHILD SEXUAL ABUSE MATERIALS ON THE PLATFORM THAT HE DIDN'T DO ANYTHING ABOUT ALLEGEDLY.
AND THAT'S VERY DIFFERENT FROM SORT OF THE POLITICAL PROCESS ABOUT GIVING HIM OR ANYONE ELSE CITIZENSHIP. SO FRANCE LIKE THE UNITED STATES OR THE U.K. THOSE THINGS ARE OFTEN QUITE SEPARATE SO ONE DOESN'T NECESSARILY PLAY INTO THE OTHER. CAROLINE: WE WILL HAVE TO SEE HOW THIS PLAYS JUST CONTINUES TO UNFOLD AND WHAT THE JUDGE DOES DEGREE. KEEPING UP TO SPEED WITH HIM. NOW LOOK TELEGRAM CEOS ARREST HAS SPARKED CONCERN AMONG SOME OF THE OTHER KEY NAMES WHEN IT COMES TO SOCIAL MEDIA IN THE INDUSTRY. DECISION-MAKERS WORRIED FRENCH AUTHORITIES HAVE CREATED A THREAT TO FREE SPEECH GLOBALLY.
THERE'S ELON, JACK DORSEY, ALL OF THEM WEIGHING IN HERE. >> THAT IS RIGHT. THIS HAS CAUSED A LOT OF CONCERN FROM FOLKS WHO ARE RUNNING SIMILAR PLATFORMS OR AT LEAST OTHER SOCIAL NETWORKS THAT PROBABLY HAVE TO DEAL WITH THIS CONTENT MODERATION. ON THE ONE HAND THEY ARE SAYING THIS IS A REAL THREAT TO FREE SPEECH. THE GOVERNMENT COMES IN THEY DON'T LIKE WHAT SHOWING UP AND SUDDENLY THE CEO WAS ARRESTED, OR KIND OF PRECEDENT DOES THAT SET. THAT'S WHY YOU'RE SEEING FOLKS EVEN SEEING JACK DORSEY OVER ON NOSTER WHICH IS SORT OF A DIFFERENT SOCIAL NETWORK BUT HE QUITE USES REGULARLY. YOU'RE SEEING THAT START
PUSHBACK ON THIS IDEA ANYONE INDIVIDUAL SHOULD BE HELD ACCOUNTABLE FOR WHAT SHOWS ON THE PLATFORM. >> IT IS A FASCINATING WEEK FOR SOCIAL MEDIA EXECUTIVES EVERYWHERE AND THE BROADER ISSUE OF OVERSIGHT I'M THINKING OF COURSE ABOUT MARK ZUCKERBERG'S LETTER TO THE JUDICIARY COMMITTEE, ALSO REFLECTING ON THAT. IS IT POSSIBLE TO ALMOST BUT I THESE TWO STORIES TOGETHER ITS GOVERNMENT OVERSIGHT OF SPECIFIC ISSUES.
>> I FOUND IT INTERESTING MARK ZUCKERBERG SENDS THIS LETTER TO D.C. SINGH THE BIDEN ADMINISTRATION PRESSURED US TO REMOVE COVID CONTENT, THEY WARNED US ABOUT THIS HUNTER BIDEN LAPTOP STORY WHICH ENDED UP BEING A LEGITIMATE STORY. THE TIMING OF THIS, THE ACKNOWLEDGING GOVERNMENTS HAVE PRESSURED US TO DO THINGS WE SHOULD'VE PUSHED BACK MORE. THE FACT IS HAVING THIS LETTER RIGHT IN THE MIDST OF ALL OF THIS -- ALL THESE ISSUES GOING ON WITH TELEGRAM ENDURE OFF I DON'T THINK IS A COINCIDENCE. I THINK HE'S TRYING TO SIMPLY RAISE HIS HAND AND SAY IT'S NOT JUST TELEGRAM WHERE THERE'S A FEUD WITH THE GOVERNMENT. IT ALSO HAPPENS AT THE BIG PLAYERS HERE AND WE WILL TAKE A STANCE OVER THE LAST COUPLE OF YEARS. PERHAPS I'M CONNECTING DOTS
HERE BUT I DO THINK THE TIMING IS QUITE INTERESTING THAT HE WOULD SUDDENLY BRING THIS FORWARD AFTER YEARS AFTER IT HAPPENED RIGHT AT THE SAME TIME AS THIS TELEGRAM INCIDENT. >> WELL DOTTED. THERE'S A GREAT LINE IN YOUR PIECE THAT REALLY RESONATES WITH ME. IT'S REASONABLE TO BE A SUPPORTER OF FREE SPEECH WHILE SIMULTANEOUSLY FIGHTING AGAINST CONTENT THAT COULD GET PEOPLE KILLED OR RUIN A CHILD'S LIFE. THESE THINGS DON'T NEED TO BE MUTUALLY EXCLUSIVE. >> I DON'T THINK SO. I THINK THIS WAS THE POINT OF
MY NEWSLETTER THIS MORNING WAS YOU SEE THE SUPPORTERS COMING OUT AND SAYING WHAT'S CAN HAPPEN TO FREE SPEECH, IS THIS GOVERNMENT OVERSTEP ENDPOINT THAT WANTED TO MAKE WAS SIMPLY WE ARE NOT TALKING ABOUT FREE SPEECH IN THIS CASE. SOMETHING THE GOVERNMENT DIDN'T JUST LIKE. WE ARE TALKING ABOUT SOME ONE WHO WAS ALLEGED TO HAVE TURNED A BLIND EYE TO REAL CRIMES, TERRIBLE CRIMES THAT CAN RUIN LIVES. I THINK YOU CAN BE A FREE SPEECH SUPPORTER WHILE STILL SAYING WHAT CAN WE DO TO PREVENT CHILD PORNOGRAPHY FROM FLOURISHING ON THESE NETWORKS. I HOPE THAT THOSE TWO THINGS
DON'T FEEL TOO BLACK-AND-WHITE. RIGHT NOW ONE OF THE DISCUSSIONS IS MAKING THEM THAT WAY. THERE WAS SOME NUANCE IF THEY CAN SET ASIDE ONE OR THE OTHER MENTALITY. CAROLINE: KURT WAGNER -- ED: KURT WAGNER LITERALLY WROTE THE BOOK ON THIS. A DEEP EXPERIENCE OF THESE
PLATFORMS FROM EARLY DAYS TO PRESENT DAY, WHAT I'M TRYING TO GET THE SENSE OF RIGHT NOW IS WHAT IS THE TYPE OF CONTENT OR WHERE DOES THE LINE GET DRAWN BY THE COMPANIES THEMSELVES. META-, THEN FACEBOOK SAYING WE SHOULDN'T BE RESPONSIBLE FOR THIS, SOMEONE ELSE NEEDS TO TAKE OVER. KURT: HISTORICALLY THE LINE IN THE SAND WAS ALWAYS AROUND WHAT THEY WOULD CALL OFF-LINE HARM OR REAL WORLD HARM. SO IT IS SOMETHING THAT'S BEING DONE OR SAID ON TELEGRAM OR META-OR X, IS LEADING TO VIOLENCE OFF-LINE, IS THAT LEADING TO HUMAN TRAFFICKING ONLINE. IF THAT SO THAT'S WHERE THE LINE GETS DRAWN.
WHAT WE ARE SEEING IS PEOPLE PUSHBACK ON THAT. WE ARE SEEING CERTAINLY ELON AND OTHERS SIMPLY SAYING WE KIND OF WANT EVERYTHING TO BE OUT THERE WHETHER IT'S PERHAPS CRIMINAL OR NOT. I JUST THINK THIS IS CONSTANTLY GOING TO BE A TUG-OF-WAR BETWEEN WHERE STUFF GETS TAKEN DOWN AND WHERE IT IS ALLOWED. I THINK WE NEED -- IT'S CONTINUING TO SHIFT AND WE ARE SEEING THAT HAPPEN. CAROLINE: THANK YOU VERY MUCH -- ED: THANK YOU VERY MUCH PRETTY SUPERMICRO TAKING A HIT AFTER RESEARCH SAYING THEY WOULD SHORT THE MAKER AMID SERIOUS ALLEGATIONS IN THE REPORT NEXT, THIS IS BLOOMBERG TECHNOLOGY PRINT ♪ -- THIS IS BLOOMBERG TECHNOLOGY. ED: TIME FOR TALKING TECH. APPLE TOOK THE REST AT CUTTING
OUT 100 JOBS IN ITS DIGITAL SERVICES GROUP ACCORDING TO SOURCES PAID THE LAYOFFS INCLUDED ENGINEERING ROLES IN THE BIGGEST CUTS REMAIN FOR THE TEAM RESPONSIBLE FOR THE APPLE BOOKS APP AT APPLE BOOKSTORE PRETTY LAYOFFS ARE RELATIVELY RARE. FOUR ROUNDS OF REDUCTIONS IN 2024. APPLE DECLINED TO COMMENT ON THE CUTBACKS. THIS IS THE TIMING OF THE LITHIUM PROJECT REMAINS UP IN THE AIR AS THE CHINESE ELECTRIC VEHICLE JUGGERNAUT CONTINUES TO NEGOTIATE WITH AUTHORITIES IN THE SOUTH AMERICAN NATION. BYD WAS GRANTED ACCESS TO PREFERENTIAL PRICES FOR LITHIUM CARBONATE, BUT TERMS OF YET TO BE SETTLED. SUPERMICRO SHARES PLUMMETED
AFTER THE COMPANY DELAYED FILING ITS FINANCIAL DISCLOSURES. COMES A DAY AFTER SHORTSELLING HINDENBURG RELEASE TO REPORT WITH BLARING RED FLAGS, EVIDENCE OF TRANSACTIONS AND OTHER ISSUES OF THE SERVER MAKER. IT'S NOT UPDATED FINANCIAL RESULTS FOR THE PRIOR QUARTER OF FISCAL YEAR. CAROLINE: THAT IS A BIG SHARE REACTION FOR SUPERMICRO. THERE SEEMS TO BE GENUINE CONCERN FROM INVESTOR PERSPECTIVE. >> IS NOT A GOOD LUCK. THIS REPORT CAME OUT, THE
REACTION WAS FAIRLY MUTED YESTERDAY BUT THEN YOU ANNOUNCE WE ARE DELAYING OUR FINANCIAL FILINGS FOR A COMPANY OF THIS SCALE THAT IS VERY RARE. WITHOUT TWO OTHER S&P 500 COMPANIES ONE OF THEM WAS AUTODESK AND THAT LED TO MANY PROBLEMS THERE. I THINK FOR INVESTORS DELAYING THE REPORTING IT VALIDATES THE ANXIETIES BROUGHT UP BY HINDENBURG YESTERDAY. ED: I HAVE SOME EXPERIENCE COVERING COMPANIES THE SUBJECT OF HINDENBURG SHORT REPORTS, WHAT IS IT THAT HINDENBURG ALLEGES BASICALLY AGAIN SUPERMICRO? >> I THINK WAS HERE WITH THE ACCOUNTING ISSUES IS THE GENERAL IDEA OF RECOGNIZING REVENUE TO EARLY. IT IS WORTH NOTING THAT SUPERMICRO DIDN'T SAY EXACTLY WHAT'S DELAYING THIS PRIDE THEY LOOK INTO THE PROCESSES AROUND THE REPORTING, IT'S A LOT OF JARGON.
WHICH PERSONALLY MAY BE A LITTLE ANXIETY INDUCING FOR INVESTORS IS THEY SAID WE HAVE NOT UPDATED OUR FINANCIALS. THEY DID NOT SAY WE WILL NOT. IN OTHER PLACES WE SEE COMPANIES SAYING WE DO NOT PLAN TO UPDATE OUR FINANCIALS. SO THEY LEFT THAT A LITTLE BIT OPEN WHICH IS DRIVING THE PALPITATIONS. CAROLINE: PALPITATIONS WHICH BACK IN 2020 RESULT IN AN INVESTIGATION OF THE SEC WITH ACCOUNTING AND DISCLOSURES. TOO MUCH DEJA VU.
PUSH US FORWARD BECAUSE YOU DON'T JUST COVER THE STOCK YOU COVER A MULTITUDE OF AUTODESK. AND WHAT'S HAPPENING WITH SALESFORCE. SALESFORCE IS ALSO TRYING TO ANNOUNCE. BRODY: WHILE NVIDIA IS MAKING MONEY FROM AI, SALESFORCE, POOR OLD REST OF THE SOFTWARE SECTOR SAYING DON'T FORGET ABOUT US CAN MAKE MONEY FROM AI AS WELL. THAT'S WHAT WERE LAUNCHING TONIGHT.
IS THERE NEW AI FUTURES AND PRODUCTS BREAKING IN REVENUE? OR ARE CUSTOMERS NOT READY TO PAY FOR IT YET? SO FAR IT HAS BEEN THE LATTER. ED: YOU GAVE US A CLUE QUICKLY DOES THE FORECAST HOLD UP FOR SALESFORCE? BRODY: A LOT OF FOLKS ARE WORRIED ABOUT THAT REVENUE. IT USED TO BE REALLY EASY TO GET COMPANIES TO BUY SOFTWARE AND NOW THEY ARE SAYING HOW TODAY END UP SAVING ALL THIS MONEY. IT IS TOUGH. WE SAW THIS FROM WORKDAY IS WELL-PAID IT'S TOUGH TO EKE OUT THE PERCENTAGE POINTS OF GROWTH THE WAY YOU USED TO BE ABLE TO.
ED: BRODY FORWARD, THANK YOU VERY MUCH. COMING UP AGAIN A PREVIEW OF WHAT TO EXPECT WHEN NVIDIA REPORTS ITS QUARTERLY RESULTS AFTER THE CLOSE OF TRADING TODAY. THAT IS NEXT, THIS IS BLOOMBERG TECHNOLOGY. ♪
CAROLINE: WELCOME BACK TO BLOOMBERG TECHNOLOGY. ED: I'M ED LUDLOW IN SAN FRANCISCO. CAROLINE: ONE NAME AFFECTING THESE BENCHMARKS. WE ARE AWAITING NVIDIA EARNINGS. 8% OF THE NASDAQ 100 IT IS 14% OF THE KEY CHIP INDEX WHICH IS DOWN BY 2.3% IN EVERY SINGLE NAME FALLING. NVIDIA'S OFFICE 3.3%. ANXIETY GROWING, LET'S GET
RIGHT TO IT IN THE BROADER MARKET IMPLICATIONS. CARMEN, IT FEELS AS THOUGH THIS COULD MOVE SIGNIFICANTLY THE BENCHMARKS AND THE STOCK OF NVIDIA COULD MOVE ALONG. CARMEN: OPTIONS TRADERS ARE BASICALLY LOOKING FOR A MOVE OF NEARLY 10% IN EITHER DIRECTION FOR NVIDIA. THE COMPANY'S MARKET CAP IS NORTH OF $3 TRILLION SO THAT BIG OF A MOVE COULD BE $300 BILLION ADDED OR SUBTRACTED TO THE MARKET. OBVIOUSLY THAT HAS HUGE IMPLICATIONS NOT ONLY FOR SHARES OF NVIDIA BUT FOR THE S&P 500, ALL OF THOSE INDEXES YOU WERE JUST MENTIONING.
IT HAS A HUGE WEIGHT. WHAT THIS COMPANY REPORTS IS IMPORTANT FOR EVERYONE GOING FORWARD. >> SHOWING THIS BRILLIANT CHART WHICH IS THE BIG EARNINGS SWINGS THAT NVIDIA HAS GONE THROUGH. WHAT DO YOU MAKE OF THAT. >> NVIDIA IS LOOK AT THIS MOST PURE PLAY FOR ARTIFICIAL INTELLIGENCE, IS ONE OF THE BENEFICIARIES OF THIS BIG MARKET THEME THIS YEAR. PEOPLE ARE WATCHING IT IT'S
CHIPS OF THE MOST SOUGHT AFTER, AND THAT GIVES IT THE UTMOST IMPORTANCE IT'S BASICALLY BEING LOOKED AT AS AN ACADEMIC BELLWETHER. THE OTHER THING IS THE TIMING FOR NVIDIA MAKES IT MORE PARAMOUNT. IT COMES AT THE END OF EARNINGS SEASON. IT'S LOOKED AT AS THE GRAND FINALE. THERE AREN'T A LOT OF CATALYST MOVING MARKETS RIGHT NOW.
BECAUSE OF THE SIZE OF THE STOCK , ALL EYES ARE REALLY WATCHING NVIDIA. CAROLINE: LOOK AT VOLUMES ACROSS THE BENCHMARKS. THIS IS MEANT TO BE YET THEY'RE HAVING TO STAY THESE -- TO WATCH THE SETS OF NUMBERS. WHAT ARE THEY SAYING ABOUT THIS MACRO EVENT. CARMEN: BECAUSE IT IS IT SHOULD BE.
WE KNOW AI IS IMPORTANT, NVIDIA'S RESULTS WILL REFLECT IF THE DEMAND PEOPLE ARE HOPING FOR IS CONTINUING AND IF THE LEADERSHIP IS STILL OUT THERE THERE IS A QUESTION OR NOT. ONE THING PEOPLE ARE LOOKING FOR IS ANY COMMENTARY ON THE BLACKWELL CHIP, IF THERE IS A DELAY, HOW THAT IS GOING. IT IS ROLLING THIS ALL FORWARD AND SHOWING WHAT THE FUTURE COULD HOLD FOR THIS TECHNOLOGY AND THIS COMPANY AND ITS BEEN AT THE FOREFRONT OF IT. ED: THANK YOU VERY MUCH. LET'S GO CLOSER TO THE NVIDIA
STORY, OUR NEXT GUEST HAS COVERED SEMICONDUCTORS OUT OF SOUTH KOREA FOR BLOOMBERG. FOR MORE THAN 25 YEARS. WITH IAN KING. YOU KNOW THE SECTOR THAT'S WERE THE MOST JOURNALISTS ON THE PLANET. THERE'S A LOT OF HYPE. THAT'S THE BASICS OF WHAT WE EXPECT. WHEN THE EARNING STATEMENT HITS. >> WHAT THEY'RE FOCUSED ON IS REALLY THE OVERALL REVENUE GUIDE.
IT'S A MASSIVE PLAY FROM WHERE IT WAS. SOME ESTIMATES ARE AS HIGH AS 37 BILLION. THE CONSENSUS ABOUT 32. SO THERE'S OBVIOUSLY HUGE ROOM THERE FOR HOW GOOD THIS CAN BE. BECAUSE OF WHAT IS BEEN DOING RECENTLY. ED: THE FACT -- CAROLINE: THE FACT THE MARKET THINKS HE CAN KEEP ON DOUBLING QUARTER ON QUARTER ULTIMATELY WE HEARD FROM CARMEN SAYING ONE ISSUE WOULD BE BLACKWELL, SOME OF THOSE REPORTS THAT THERE WAS A DELAY IN GETTING SOME OF THOSE CHIPS OUT? WHAT YOU MAKE OF IT? >> ALL I CAN PASS ALONG IS WHAT NVIDIA SAID THEMSELVES WHICH IS NOTHING TO SEE HERE. WE HAVE A HUGE DEMAND FOR OUR
EXISTING PRODUCT AND WHAT THE ANALYSTS HAVE SAID IN SORT OF REACTION TO THE REPORTS WE'VE SEEN IS YES WE THINK THERE IS AN ISSUE, THERE ARE SOME GLITCHES HERE BUT THOSE DON'T MATTER, DOESN'T AFFECT THE OVERALL STORY. IT DOESN'T MEAN THERE WON'T BE A LOT OF QUESTIONS FOR JENSEN AND HIS LEADERSHIP TEAM TODAY. ED: THERE ARE SOME THINGS BUT QUARTER COMPANIES COVERAGE, SUPPLY CONSTRAINT AND GETTING THEIR AMAZING PRODUCT TO THE PEOPLE WHO WANTED. WHAT ABOUT SPECIFIC MARKETS. CHINA, HISTORICALLY IMPORTANT THEY FACED TRADE BARRIERS IN THAT INSTANCE. WHAT YOU EXPECT TO BE DISCUSSED? IAN: CHINA HAS BEEN LARGELY DISCOUNTED FROM A LOT OF THE EARNINGS ESTIMATES FOR THIS COMPANY IT'S REALLY BEEN LOCKED OUT.
IT'S ONLY LIKELY GOING TO BE ABLE TO SEE LESS THAN. SO THAT'S NO LONGER FRONT OF MIND FOR A LOT OF PEOPLE. REALLY THE FOCUS IS WE PUT ALL OF THIS GEAR INTO THESE DATA CENTERS ARE THEY BEING USED, WHAT'S THE ECONOMIC BENEFIT.
THAT'S THE FUNDAMENTAL CONCERN FOR THIS COMPANY AND THAT'S THE KIND OF QUESTIONS THEY'VE BEEN TODAY. CAROLINE: THESE EARNINGS CALLS, PRESENTATIONS, AS ED SO ELOQUENTLY PUT IT, MORE THAN 25 YEARS. WHAT DO YOU THINK IF WERE TUNING IN RIGHT NOW GETTING TO A PARTY THERE SEEMS TO BE THESE WATCH PARTIES TODAY. HOW DOES IT GENERALLY PAN OUT ON NEW YORK TIME? IAN: THE ANSWERS IN THE NAME OF THE PERSON WHO WILL BE ON THE CALL.
HE HAS A VERY COOL STORY HE WANTS TO TELL AND HE WILL TELL THAT STORY REGARDLESS OF THE QUESTIONS HE GETS. HE'S A GIFTED SPEAKER AND KNOWS EXACTLY WHAT HE WANTS TO SAY. DON'T EXPECT, EXPECTING TO DRIVE FORWARD A NARRATIVE OF HOW HE SEES THINGS GOING. THERE MIGHT BE SOME FRUSTRATION FOR SOME FOLKS. HE'S VERY GOOD AT WHAT HE DOES. CAROLINE: THANK YOU VERY MUCH INDEED.
SOMEONE'S GOING TO BE DISSECTING IT. SENIOR RESEARCH ANALYST, DANIEL, WHAT WOULD YOU WANT TO HEAR FROM JENSEN REGARDLESS OF WHETHER THE REACTION TACKLES IT, WITH THE NUMBER ONE PIECE OF INFORMATION YOU WANT HIM TO GIVE TODAY? DANIEL: THE NUMBER ONE PIECE OF INFORMATION IS CONFIRMATION FOR ONGOING SCALING FOR IMPROVEMENTS SO THE IDEAS YOU'RE THROWING TENS OF MILLIONS OF DOLLARS IT AI AND AI CONTINUES TO IMPROVE WE MARK ZUCKERBERG ON HIS EARNINGS CALL SAYING TRADING THE NEXT MODEL WILL BE 10 TIMES MORE , THOSE TYPES OF COMMENTS ARE VERY IMPORTANT FOR LONG-TERM STORY AND I THINK THE CORE FOCUS OF THE CALL IS PROBABLY GOING TO BE SOME SORT OF THEME LIKE THAT BECAUSE THAT GOES TO THE NEXT FOUR OR FIVE YEARS. SCALING LAW STILL HOLDING TRUE AND THE AI WITHIN THAT.
CAROLINE: WHAT'S INTERESTING IS EVERYONE IS USING THIS TURN OF PHRASE OF RETURN ON AI. DOES IT MATTER WHAT THE RETURN ON THAT INVESTMENT IS IF COMPANIES HAVE TO STAY NO MATTER WHAT. DANIEL: SOME COMPANIES ARE BENEFITING MASSIVELY. THEY STARTED GROWING TO ANY PERCENT, BUT I THINK FROM NOW THE QUESTION OF ROI IS TOO EARLY. FIRST OF ALL WE ARE GOING FROM THESE CLUSTERS, AI CLUSTERS OF LESS THAN 100,000. THAT MEANS WE WILL TRADE WAY BIGGER MODELS, WAY BETTER MODELS.
WE WILL HAVE TO SEE WHAT THESE MODELS CAN DO TO ASSESS ROI. THE SECOND QUESTION IS ACTUALLY IF YOU GO BACK IN TIME AND THE INTERDICTION OF MICROSOFT XL, THEY HAD TO USE IT TO STAY COMPETITIVE. AI IS PROBABLY GOING TO BE SIMILAR. SOME COMPANIES GENERATE MASSIVE REVENUE GROWTH, SOME COMPANIES THE ROI TO STAY COMPETITIVE IN THE INDUSTRY AND YOU HAVE TO PASS ON THE BENEFITS TO YOUR CUSTOMERS AND YOU HAVE TO DO IT NO MATTER WHAT. MAYBE IT COMES BACK TO THE POINT, THIS IS A BIT LIKE A SPACE RACE 2.0.
YOU HAVE TO BE IN IT TO SURVIVE. ED: THE STORY SO FAR HAS BEEN ABOUT THE HYPER SCALARS PLUS META-SPENDING. THAT'S BEEN ALL OF IT. I WONDER WHAT STANDARD YOU HOLD JENSEN TO DEMONSTRATE THAT THERE IS MORE THAN THAT OUTSIDE OF BASICALLY JUST FIVE COMPANIES AS CUSTOMERS. DANIEL: I THINK THERE'S WAY MORE THAN THAT. THERE'S SOME GPU CLOUD COMPANIES THAT ARE SIGNIFICANT CUSTOMERS. AND THE SECOND THING, SOME OF
THE HYPER SCALARS THE USE CASE IS NOT INTERNAL BUT IS ACTUALLY EXTERNAL. THEY ARE BUYING THESE GPU'S AND RENTING THEM OUT TO COMPANIES, USUALLY VENTURE BACK TO START UPS. THE KEY THING HERE IS WHEN DID THE BIG COMPANIES START GOING TO THESE CLOUDS AND TRADING THOSE MODELS. NVIDIA HAS A SOLUTION FOR THAT TRYING TO MAKE IT EASY FOR THEM. BUT WE HAVE TO START SEEING THAT. ED: I'M TRYING TO DEFINE WHAT IT IS.
IS IT A CHIP COMPANY, SYSTEMS VENDOR AND THEN THEY HAVE NVIDIA GPU CLOUD. I LOOK AT THAT AND GO DOES JENSEN JUST WANT TO BE A CLOUD PROVIDER IN HIS OWN RIGHT? DANIEL: I THINK NVIDIA IS THE WORLD'S LEADING SYSTEM OPTIMIZATION COMPANY AND IT STARTS WITH THE CHIP AND CONTINUES WITH SOFTWARE AND CLUSTER SCALE. SOME OF THE SYSTEMS HAVE SIX UNDER THOUSAND PARTS. IT'S A BIG PROBLEM TO SOLVE. I THINK WITH THE COMPANY IS DOING, THE IDEA WILL BE THE CLOUD WITHIN THE CLOUD, SO IT'S ACTUALLY MUCH MORE TO SELL TO MANY PARTIES AND GET A BIG FEED RATHER THAN THEIR OWN CLOUD. I THINK NVIDIA WILL CRATE THEIR OWN CLOUD. SELLING THROUGH THIRD PARTIES
LIKE HYPER SCALARS. >> $46 BILLION IN ASSETS UNDER MANAGEMENT. THERE HAS BEEN SO MUCH SITE DICED, EUPHORIA AROUND THIS ONE SINGLE NAME THAT MANY HAVE LAUNCHED ABOUT OVER 11 -- DOUBLE LEVERAGE THE PARTICULAR MOVES OF NVIDIA AND YOU SEE THE DEMAND RECORD SHARES OUTSTANDING. >> EXACTLY PRUDE WHAT A CHART. THIS IS ALL ABOUT ULTIMATELY WANTING TO GET ALONG IN WHATEVER WAY YOU CAN.
WHAT YOU SEEING IN TERMS OF YOUR EXPOSURE. HOW LONG DO YOU GET NVIDIA? >> WE WILL GO OVER TIME MAYBE WILL GET SMALLER OVER TIME. I CANNOT IMAGINE NOT BEING INVESTED.
I WILL TELL YOU SUPER SIMPLE WHY. IT'S PRETTY OBVIOUS WE WILL NEED MORE IN THE FUTURE. MORE COMPUTING WITHIN HEALTH CARE. SELF-DRIVING VEHICLES. ENTERPRISE AI, YOU NAME IT. THE SECOND THING IS FAIRLY OBVIOUS IS IT'S A LEADING COMPANY THAT PROVIDES COMPUTER AND THERE ALSO COMPANIES DOING THE SPRAYED IF YOU ADD THOSE TOGETHER IT'S VERY LIKELY TO BE MUCH BIGGER COMPANY IN THE NEXT FIVE TO 10 YEARS. IT DOESN'T MEAN WE DON'T HAVE A DOWNSIDE.
MAY BE A BIT OF AN OVERBUILD AT SOME POINT AND FACTOR ACCELERATION BUT THAT SINKING ABOUT LONGER TERM. THE GROWTH IN COMPUTER NEEDS. >> HE WOULD KNOWLEDGE THEIR OTHER AI ACCELERATORS OUT THERE TO YOUR MIND, HOW IS IT THAT NVIDIA MAINTAINS ITS POSITION AS MARKET LEADER. >> I THINK IT'S A LITTLE BIT LIKE THE WAYNE GRETZKY SAYING.
JENSEN TENDS TO BE THERE ALREADY AND THE OTHER ONES ARE FOLLOWING A LITTLE BIT. IT IS BEAUTIFUL. STARTING UP WITH THE CHIP. CAROLINE: WE ARE TALKING ABOUT -- ED: WE ARE TALKING ABOUT COMPUTER HARDWARE. [LAUGHTER] POT CALLING KETTLE BLACK.
KEEP GOING DANIEL. DANIEL: THIS IDEA OF YOU WENT FROM ONE CHIP TO A BIG SYSTEM AND YOU OPTIMIZE THAT OVER TIME. IN ORDER TO DO THAT YOU NEED MANY PARTS. YOU NEED SOFTWARE AND HARDWARE.
IN NETWORKING CHIP, AND JENSEN HAS SEEN THIS EARLIER THAN ANYBODY ELSE AND CONTINUES TO BE THE WAY. THE OTHERS ARE CATCHING UP. THAT IS FINE FOR THEIR GREAT COMPANIES BUT ULTIMATELY IF YOU WANT THE CHEAPEST COMPUTER, OF THE CHEAPEST DOLLAR PER COMPUTE, NVIDIA'S BEST COMPANY TO GO TO END IT'S UNLIKELY TO CHANGE IN THE FUTURE. IMAGINE TODAY WE HAVE A CHIP OUT THAT WILL SHIP IT TO ALL OF US. WE WOULD KNOW HOW TO USE IT. WHEREAS WITH NVIDIA THE CREATED THIS. IT'S EASY TO USE BECAUSE OF
THAT. AND THEN HAVE TO HIRE PEOPLE IF YOU WANT TO DO A THIRD PARTY. CAROLINE: -- ED: DANIEL FOR AN INTERESTING AND IMPRESSIVE COMMAND OF THE TECHNICALS, THANK. A REMINDER, ANOTHER ONE. WITH NVIDIA CEO JENSEN LATER ON
TONIGHT. IN A SPECIAL EDITION OF BLOOMBERG TECHNOLOGY. 3:30 P.M. PACIFIC TIME. COMING UP, MEDA IS CLOSING THEIR AUGMENTED REALITY STUDIO TO PRIORITIZE THE AI BUSINESS. THIS IS BLOOMBERG TECHNOLOGY. ♪ FEATURING AN EXCLUSIVE INTERVIEW WITH THE NVIDIA CEO 6:30 P.M. EASTERN. THIS IS BLOOMBERG. CAROLINE: LET'S LOOK AT META SHARES. CLOSING THEIR AUGMENTED REALITY STUDIO TO PRIORITIZE INVESTMENTS IN OTHER AREAS.
FOR MORE WE ARE JOINED -- WHAT WAS THIS PARTICULAR STUDIO UP TO? >> THE STUDIO HELPED THIRD-PARTY INDEPENDENT DEVELOPERS CREATE IMAGE AND VIDEO, IT'S ONE OF THE THINGS SNAPCHAT BECAME POPULAR FOR, YOU COULD OPEN UP THE APP AND A PICTURE OF YOURSELF AND YOU HAVE DOG YEARS OR A DOG KNOWS. IT'S ALL DIGITAL. SO META OFFERED THE SAME THING, ON THE STAIRWAY TO COMPETE WITH SNAPCHAT. THAT IS WHAT'S GOING AWAY NOW. ED: IT IS THE LATEST EXAMPLE OF THE REFOCUS OR DEEPER FOCUS ON ARTIFICIAL INTELLIGENCE WHICH IS THE COMPANY STRATEGY RIGHT NOW. AISHA: EXACTLY. IF YOU THINK ABOUT IT A COUPLE WEEKS AGO, OBVIOUSLY FACEBOOK CHANGED ITS NAME TO META FOR METAVERSE. AS WE REPORTED AND TALKED ABOUT BEFORE, TALKING ABOUT AI.
PEOPLE FROM THOSE DEPARTMENTS MOVED ONTO AI TEAMS. THE SPENDING SHIFT, THEY HAVE NEW AI GROUPS THEY CREATED. THEY ARE SPENDING BILLIONS OF DOLLARS SO IT'S REALLY FEELING LIKE A HUGE SHIFT. THEY ARE STILL WORKING ON THE METAVERSE AND THAT IS TRUE TO AN EXTENT BUT RIGHT NOW IT'S ABOUT AI. CAROLINE: ARE THEY STILL GOING TO BE INNOVATING ENCZ -- IN THE HARDWARE AREAS OF THAT REGION? AISHA: THEY ARE STILL SPENDING ON HARDWARE, BUT WHEN YOU GO ON AN EARNINGS CALL YOU HEAR ABOUT THE METAVERSE, AR, BUT YOU HEAR A WHOLE LOT ABOUT AI. THEY KNOW AI WILL GET INVESTORS
GOING WHEN THEY START TO INVEST HEAVILY IN THE METAVERSE THEIR STOCK WENT DOWN, IT WAS ONE OF THEIR WORST PERFORMANCES EVER AS A COMPANY SO THEY KNOW FOCUSING ON AI IS WHAT'S GOING TO GET THE STOCK GOING UP. IT'S GOING TO GET INVESTORS EXCITED. SO THEY ARE STILL SPENDING, BUT IF YOU THINK ABOUT WHERE THE PRIORITIES ARE IT DOES FEEL VERY MUCH AI FOCUSED. ED: THANK YOU VERY MUCH. COMING UP WILL LOOK INTO CROWDSTRIKE EARNINGS REPORT, FOLLOWING THAT GLOBAL OUTAGE LAST MONTH. ED: LET'S TALK ABOUT CROWDSTRIKE.
FOLLOWING LAST MONTH'S GLOBAL OUTAGE, THE CYBERSECURITY COMPANY CENTER RELEASED ITS FIRST EARNINGS REPORT AFTER THE MARKET CLOSED TODAY. FOR WHAT TO EXPECT WE ARE JOINED BY SENIOR EXECUTIVE EDITOR TOM GILES. IT'S WEIRD BECAUSE THE QUARTER HAD GONE PROBABLY QUITE GOOD, THE CURRENT PERIODS THEY ARE AT A BIT OF A CRISIS. TOM:
THERE ARE SO MANY RANSOMWARE ATTACKS, SO MANY ATTENTION RIGHT NOW BEING FOCUSED GLOBALLY ON CYBER THREATS AND CROWDSTRIKE HAS A PRODUCT PEOPLE WANT. MILLIONS OF MILLIONS OF COMPUTERS AROUND THE WORLD ARE PLUGGED IN TO CROWDSTRIKE AND HAVE IT ON IT. CONSULATE MONITORING FOR THREATS. THEY HAVE A UNIQUE VALUE PROPOSITION AND THAT'S WHY SO MANY PEOPLE ARE INTO THIS SOFTWARE, BUT LATE JULY THEY HAD THIS SNAFU, IT WAS A ROUTINE UPGRADE THE JUST WENT BADLY, WE SAW THE RESULTS. BUSINESSES AROUND THE WORLD,
DELTA AIRLINES. WE SPOKE TO SEVERAL ANALYSTS AND READ A LOT OF ANALYST REPORTS. IN THE AFTERMATH OF THAT BUNGLED UPGRADE, A LOT OF PEOPLE HAVE PUT ORDERS ON HOLD ACCORDING TO ANALYSTS WE TALKED TO. THEY'VE GONE OUT THERE AND DONE THIS AND BASICALLY THE VIEW IS THERE WERE FEWER PEOPLE PLACING BIG ORDERS, THERE WAS A TENTATIVENESS AROUND IT THAT WAS SO CONCERNED, SO BLOOMBERG INTELLIGENCE ANALYSTS ARE LOOKING AND THEY ARE CONCERNED THAT WE MIGHT SEE SOME CHANGES IN CROWDSTRIKE'S EXPECTATIONS FOR ITS SALES FORECAST FOR THE YEAR. CAROLINE: GUGGENHEIM IN PARTICULAR SAYING
THIS WAS A BIG ISSUE THAT MIGHT TAKE LONGER THAN EXPECTED TO RESTORE REPUTATIONAL DAMAGE. HOW IMPORTANT IS IT TO HEAR FROM EXECUTIVES ON THIS? IT WAS A BIT OF A PR DISASTER THE WAY THEY HANDLED IT. TOM: THERE WERE QUESTIONS OF HOW QUICKLY AND ATTENTIVELY THE REST OF THE MANAGEMENT AT CROWDSTRIKE WERE BEING IN RESPONSE TO THIS. SOME OF THE THINGS THAT WERE SAID TO BACK-AND-FORTH WITH DELTA AIRLINES FOR EXAMPLE, SOME OF THAT PROBABLY THE BLAME SHIFTING. WHEN YOU GO TO OFFENDER WITH CYBERSECURITY YOU WANT TO KNOW THAT THE COMPANY HAS YOUR BACK. SO THERE WERE SOME PEOPLE
ASKING THE QUESTION DOES CROWDSTRIKE HAVE MY BACK OR WILL THEY THROW ME UNDER THE BUS WHEN THINGS GO WRONG. SO REPUTATIONAL ONLY, YOU WANT TO KNOW SOMEONE'S NOT JUST MONITORING YOUR NETWORK PROTECTING YOU FROM THREATS AND THE THREATS ARE VERY REAL AND CROWDSTRIKE HAS A RELIABLE PRODUCT, BUT IF IT IS -- BUT IF IT IS A ROUTINE UPGRADE WILL IT HURT MY BUSINESS. CAROLINE: WE WANT TO BE WONDERING ULTIMATELY OF PEOPLE WILL BE TUNING IN FOR THOSE SET OF EARNINGS. SOME MICRO-FOCUSED INVESTORS VERY IN TUNE TO WHAT TOM GILES HAS LAID OUT FOR US. THIS IS IT FOR OUR ADDITION OF BLOOMBERG TECHNOLOGY. ED:
LATER TONIGHT A SPECIAL EDITION OF BLOOMBERG TECHNOLOGY FEATURING AN EXCLUSIVE INTERVIEW WITH JENSEN HUANG.
2024-08-30 17:30
