Tesla's Strong Earnings, Nvidia's Partnership in India
ANNOUNCER: THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW . CAROLINE: COMING UP, TESLA SPIKE ON STRONG EARNINGS AND LOFTY GOALS. ED: NVIDIA ON PLANS IN INDIA. CAROLINE: PLUS DAVID EINHORN.
ED: TESLA SHARES SURGE. IF THIS HOLDS, ON TRACK FOR THE BIGGEST DAY JUMP SINCE '21. PROFIT WAS AHEAD. PART OF THAT WAS SALES OF SOFTWARE, PART WAS REGULATORY CREDITS. THEY ARE LOWERING THE COST OF PRODUCTION. CAROLINE: ELON MUSK ON HIS GROWTH EXPECTATIONS.
>> SOME ESTIMATE, 30% VEHICLE GROWTH NEXT YEAR. NOTWITHSTANDING NEGATIVE EVENTS. CAROLINE: ARE THESE ESTIMATES LOFTY? >> THEY ARE LOFTY.
WE CANNOT RULE OUT THE POSSIBILITY THIS COMPANY WON'T DECREASE DELIVERIES THIS YEAR. PART OF THIS WAS HIS OPTIMISM THAT THEY WILL INCREASE. THIS 30% OUTLOOK NEXT YEAR -- I WOULD LIKE A BETTER SENSE OF HOW. THIS COMPANY HAS BEEN TALKING ABOUT AFFORDABLE VEHICLES COMING NEXT YEAR. WE DON'T KNOW WHAT THOSE ARE.
WE HAVE LITTLE INDICATION FROM THE COMPANY OF SPECIFICS, EVEN LAST NIGHT. ED: SLIGHT GROWTH WAS THE CALL FOR 2024. THEY WILL HAVE TO DELIVER 514,000 VEHICLES IN THE LAST FEW MONTHS OF THIS YEAR WHICH WOULD BE A RECORD.
MUSK WAS CLEAR ABOUT AUTONOMOUS DRIVING. I FELT WE GOT CLAIMS ABOUT RIDE HAILING. WHAT DID WE LEARN? CRAIG: THE ROBOTAXI EVENT WAS CONCEPTS. THIS WAS A PLAN PLAN. WE GOT BETTER INDICATIONS OF A PLAN TO PUT TOGETHER HAILING WHICH WOULD DEPLOY CALIFORNIA AND TEXAS NEXT YEAR.
IT WAS UNCLEAR WHAT TESLA NEEDS FROM CALIFORNIA TO OFFER THE SERVICE. IF HE WANTS TO OFFER THE ABILITY FOR PEOPLE TO NOT SUPERVISE THE WHEEL, IT'S NOT CLEAR THEY NEED APPROVAL BECAUSE OF THE FACT, I GUESS THEY NEED STATE APPROVAL FOR THAT. IN TEXAS, HE SOUNDED SURE THAT WAS ON THE WAY. WHETHER NOT THIS COMPANY HAS THE TECH TO OFFER THAT SAFELY REMAINS THE OPEN QUESTION. ED: HE SAID HE WOULD BE SHOCKED IF HE DIDN'T GET STATE APPROVALS.
UBER AND LYFT CONTINUE UNDER PRESSURE IN THE CONTEXT OF COMPETITION IN HAILING TO COME. LET'S BRING IN WILLIAM STEIN. YOU LARGELY COVER SEMICONDUCTORS AND YOU FOCUS ON THE WORK AROUND AI THAT TESLA IS DOING. IN THE QUARTER GONE, TESLA RECOGNIZED $300 MILLION WORTH FSD REVENUES. WHAT STORY DOES IT GIVE YOU? WILLIAM: THEY RELEASED IT ON THE CYBER TRUCK. CARS THEY HAVE BEEN SELLING A WHILE, THEY CAN RECOGNIZE THE REVENUE THEY HAVE BEEN PAID FOR THAT TECH THEY DELIVERED.
THAT'S GREAT. FSD IS AMAZING. IF YOU READ MY REVIEWS AND MANY REVIEWS ON YOUTUBE, THERE ARE KNOWN FAILURE MODES FOR THIS TECH. IT DOES NOT WORK IN THE SENSE THAT YOU CAN RUN IT WITHOUT A DRIVER AND THAT CONTINUES TO BE A PROBLEM. CAROLINE: ANY IMPROVEMENTS SINCE LAST YOU WERE ON? WILLIAM: WE REVIEWED THREE VERSIONS. I FORGET THE LAST TIME I WAS ON.
THIS VERSION 12.5, THE LATEST ONE AVAILABLE TO CONSUMERS, THIS STILL DOESN'T WORK. HAVE THERE BEEN IMPROVEMENTS? CERTAINLY. THEY MOSTLY RELATE TO THE FEEL OF THE CAR. IT FEELS MORE HUMAN, LESS HERKY-JERKY. ALONG WITH THAT, THERE ARE DOCUMENTED CASES OF ROLLING THROUGH STOP SIGNS AND OTHER MINOR DRIVING INFRACTIONS THAT ARE MORE HUMANLIKE BUT MAYBE NOT WHAT ONE IS SHOOTING FOR FOR A DRIVERLESS CAR. CAROLINE:
NOT ONLY DOES HE NEED TO IMPROVE ON THE TECH, THEY NEED THE REGULATORY APPROVALS. THE EXTRAORDINARY NATURE OF ELON MUSK, CEO OF TESLA, ALSO POTENTIALLY A POLITICAL ROLE AND FSD REGULATION COMING. ED: HE DID NOT CITE THE ELECTION DIRECTLY AND DID NOT NAME DONALD TRUMP BUT HE SAID IF THERE IS A DEPARTMENT OF GOVERNMENT EFFICIENCY, HE WOULD LIKE TO WORK ON NATIONWIDE OR FEDERAL LEVEL RULES FOR THE DEPLOYMENT OF AUTONOMOUS TECH ON U.S. ROADS, WHICH IS AS CLOSE TO COMMENTING ON THE ELECTION IN THE CONTEXT OF AN EARNINGS CALL. WILLIAM: I THINK HE'S MAKING LOGICAL COMMENTS ABOUT WHAT WOULD BE THE SIMPLEST, LOGICAL WAY TO REGULATE THIS TECH. AT THE FEDERAL LEVEL, THAT MEANS ONE HURDLE INSTEAD OF 50.
I DON'T INTERPRET THAT AS SUPER PARTISAN. THEY WOULD MAKE HIS LIFE EASIER. THAT IS ALL I TAKE. ED: UBER AND LYFT -- THIS CONFIDENCE NEXT YEAR TESLA WILL OFFER SOME FORM OF HAILING IN TEXAS AND CALIFORNIA.
YOU CRITIQUED FSD. BASED ON THE HEADLINES, ARE YOU UNDERSTANDING THE JUMP FROM CONSUMER CARS TO PROPRIETARY HAILING SERVICE IN THE FUTURE? WILLIAM: I HAVE A COLLEAGUE THAT COVERS THOSE STOCKS. I DON'T. WHAT SHOULD BE CLEAR IS THESE ISSUES -- A HAILING SERVICE AND FULL AUTONOMY ARE NOT THE SAME THING. THEY ARE FAIRLY SEPARATE. THIS COMPANY COULD TURN ON THIS HAILING SERVICE, ASSUMING THEY GET APPROVAL FOR IT, WITHOUT HAVING FSD. IT COULD COME LATER.
THEY ARE COMPLEMENTARY. HAVING BOTH COULD RESULT IN EARNINGS GROWTH FOR THE COMPANY. THEY'RE NOT PERFECTLY LINKED. THEY ARE SEPARATE. CAROLINE: WITH THE AMOUNT THEY NEED TO SPEND, WHETHER THEY TURN THE SWITCH OR NOT, A DRIVER OR NOT, I'M INTERESTED, THE UPGRADE TO $11 BILLION SPEND IS WHAT NEEDS TO BE INVESTED NOW? WILLIAM: THIS IS NOT A HUGE DIFFERENCE.
PRIOR QUARTER, THEY GUIDED $10 MILLION. IT WASN'T DIFFERENT FROM OUR MODEL. WE HAVE A SIMILAR CAPX NUMBER NEXT YEAR. THIS MIGHT BE OFF THE RUN. THE BIGGEST WINNER IS NVIDIA. MUSK EMPHASIZED HOW MUCH THEY ARE SPENDING ON H 100, HOPPER GENERATION GPUS FROM NVIDIA, EQUIVALENT AND ANTICIPATING THE NEXT YEAR. THIS IS A BIG INVESTMENT. THIS TRAINING CAPABILITY DOES
NOT COME FROM THEIR INTERNAL D1 CHIP OR DOJO COMPUTER. IT WILL BE SPENT IN THE NEAR TERM FOR THE NEXT YEAR WITH NVIDIA. CAROLINE: GREAT TO HAVE YOUR TAKE. A DIFFERENT SET OF EARNINGS. IBM OFF 6%, WORST DAY SINCE APRIL. A SLOWDOWN IN CONSULTING
REVENUE AFTER THE BELL WEDNESDAY. SOFTWARE ROSE 9%. THE CEO TOLD ME CLIENTS ARE FACING HEADWINDS. THAT SHOULD EASE IN THE NEXT 12 MONTHS. ALSO TALKED ABOUT AI DEMAND BUT THE ENTERPRISE DEVELOPMENT IS BEING HELD BACK BY COSTS AND INSURING DATA AND SECURITY IS READY. HERE IS WHAT HE SAID ABOUT
OPTIMISM FOR NEXT YEAR. ED: COMING UP, ELON MUSK'S IMPACT ON POLITICS, NEXT. CAROLINE: OTHER EARNINGS. SHARES MOVING HIGHER FOR T-MOBILE, SERVICE NOW AT RECORD HIGHS ON THE BACK OF T-MOBILE SEEING STRONG RESULTS.
THEY BEAT EXPECTATIONS AND ARE RAISING FULL YEAR SUBS. THIS IS A STORY OF AI AS WELL. STRONG RESULTS AFTER THE BELL. THIRD QUARTER BEAT. PRETTY STRONG OUTLOOK. ED: ELON MUSK'S ONLINE PRESENCE AHEAD OF THE U.S. ELECTION. ACCORDING TO BLOOMBERG, HE'S BEEN SPREADING DEBUNKED THEORIES ABOUT UNDOCUMENTED VOTERS SWAYING THE UXO LEFT AND -- THE U.S. ELECTION, MAKING HIM THE BIGGEST PROMOTER OF ANTI-IMMIGRANT CONSPIRACIES ON X, THE PLATFORM HE OWNS. SARAH FRIER, THIS WAS A TEAM
EFFORT OF JOURNALISTS AND DATA EXPERTS BUT THE BEST PLACE TO START IS WHAT IS THE TOP LINE OF THE STORY? SARAH: INTERESTING FINDING. WE HAVE SEEN MUSK ON THE TRAIL WITH TRUMP TALK ABOUT THESE ANTI-IMMIGRANT THEORIES, PROMOTING THE IDEA DEMOCRATS ARE SHIPPING IN IMMIGRANTS TO VOTE FOR THEM, OF MASS ELECTION FRAUD . THAT SEEMED LIKE A FRINGE THING UNTIL WE LOOK AT THE DATA. IT SHOWED IMMIGRATION AND ELECTION FRAUD IS HIS TOP POLICY TOPIC ON X. HE GETS MORE ENGAGEMENTS ON THAT TOPIC THAN ANYTHING ELSE. IT HAS BECOME A DRIVER OF HIS FEED, SOMETHING HE TALKS ABOUT EVER MORE FREQUENTLY IN THE PAST YEAR, EVER SINCE HE VISITED THE BORDER AND GOT MORE INVOLVED IN TEXAS.
HE'S BECOME ENMESHED WITH THIS IDEA OF IMMIGRATION LEADING TO FRAUD. WHAT EXPERTS TOLD US IS THIS NARRATIVE AND THE WAY MUSK IS LAUNDERING IT FOR THE MASSES IS GOING TO HELP TRUMP DISPUTE THE RESULTS OF THE ELECTION SHOULD HE NOT WIN. THIS IS A SERIOUS FINDING IN MY OPINION. CAROLINE:
YOU RAN MACHINE LEARNING MODELS TO IDENTIFY THE SUBJECTS HE WAS MOST OFTEN TALKING ABOUT. 1300 POSTS IN 2024 REVOLVING AROUND THE ISSUE. WHAT ACTUALLY HAPPENS? NONCITIZEN VOTING IS INCREDIBLY RARE. SARAH: IT IS.
NONCITIZENS CANNOT VOTE FOR PRESIDENT. THERE IS A DIFFICULT PATH TO CITIZENSHIP IN THE U.S. THIS IDEA HE HAS BEEN TALKING ABOUT IS NOT BASED IN REALITY OR HISTORY THAT WE KNOW OF. THIS IS SOMETHING WE DIDN'T
TALK ABOUT JUST IN TERMS OF DATA. OUR REPORTERS WENT TO COLORADO, AURORA, TALKING TO IMMIGRANTS, WHO FEEL THEIR LIVES ARE IN DANGER BECAUSE MUSK AND TRUMP HAVE TALKED ABOUT THE DANGER OF THOSE IMMIGRANTS. WE WENT TO A RALLY IN PENNSYLVANIA WHERE THEY SPOKE TOGETHER AND TALKED TO THOSE WHO BELIEVE THE MISINFORMATION THEY ARE BEING TOLD. THIS ISN'T JUST HAPPENING ON THE INTERNET OR X. IT'S HAPPENING IN THE DAILY
LIVES OF AMERICANS NOW WITH THE ELECTION A FEW DAYS AWAY. ED: THIS IS DATA JOURNALISM AND THE TEAM DOES A GREAT JOB EXPLAINING THE METHODOLOGY AND CHRONOLOGY. HAVE WE HEARD FROM ELON MUSK OR X ABOUT OUR REPORTING AND HOW THEY FEEL ABOUT IT? SARAH: WE HAVE NOT. WE DID HEAR FROM THE TRUMP CAMPAIGN. THEY DOUBLED DOWN.
THEY SAID ELON MUSK IS NOT WRONG. THEY REPEATED MISINFORMATION MUSK ENDORSED ON X. OFTEN IT IS NOT MUSK HIMSELF SAYING THINGS.
HE WILL FLOAT TWEET OR PUT A MODE RESPONSES TO SOMETHING BUT WITH HIM, HAVING 200 MILLION STRONG FOLLOWERS, HE'S THE TOP INFLUENCER ON THE PLATFORM HE OWNS AND HAS A LOT OF INFLUENCE OVER THE ALGORITHM. OFTEN HIS POSTS DO NOT GET FACT CHECKED BY THE SYSTEM X USES TO FACT CHECK. CAROLINE: GO READ THE FULL PIECE, EXTRAORDINARY. THANK YOU. MICROSOFT COFOUNDER BILL GATES HAS HIS EYES ON THE APPROACHING ELECTION. HE SPOKE WITH JOHN MICKLETHWAIT ABOUT THE ROLE OF INNOVATION IN ADDRESSING THE WORLD'S CHALLENGES. THIS WAS AN SAO PAULO, YESTERDAY. HE ALSO WEIGHED IN ON TRUMP'S
PROPOSED TARIFFS. >> WE WILL SUFFER OVERALL. WELFARE WILL IMPROVE LESS. IF U.S. PUTS TARIFFS ON, OTHER PEOPLE
WILL AS WELL. THE ECONOMIC DYNAMISM, SPEED OF INNOVATION WILL BE SIGNIFICANTLY SLOWER. >> IT'S EASY TO MAKE THE ARGUMENT THIS MEANS HIGHER PRICES FOR CONSUMERS. THIS ISSUE OF DYNAMISM, YOU
HAVE BEEN ENTERED -- YOU HAVE BEEN INVOLVED IN ENTREPRENEURISM MOST OF YOUR LIFE. THIS MUST HAVE AN IMPACT ON IT. IT IS BACK TO A CREED YOU BELIEVE IN. IN PRACTICE, IS THAT ARGUMENT POSSIBLE TO MAKE A VOTERS? BILL: WE SHOULD FIND ARTICULATE POLITICIANS WHO CAN MAKE THE CASE. IF YOU TAKE MOST OF THE INDUSTRIES I THINK ABOUT LIKE INVENTING A NEW DRUG OR WRITING NEW SOFTWARE OR A NEW CLAIMANT TECHNOLOGY, THESE GIGANTIC COSTS, YOU CAN DO THAT WORK AND SELL IT ON A GLOBAL BASIS. IT MEANS EVERYONE IS GETTING FASTER INNOVATION AND LOWER PRICES. IF YOU START TO FRAME MARKETS
BECAUSE OF TARIFFS OR REGULATORY BARRIERS TO THAT TRAIT, IT ABSOLUTELY TAKES AWAY THE LOWER PRICES AND HIGH-SPEED INNOVATION. ED: BILL GATES WITH JOHN MICKLETHWAIT. COMING UP, NVIDIA HAS ITS EYE ON A MAJOR NEW MARKET. ED: ATOS SAYS ITS RESTRUCTURING PLAN HAS BEEN APPROVED BY A FRENCH COURT. THEY WILL RECEIVE $1.8 BILLION OF NEW MONEY BEGINNING IN '25. SK HYNIX REFLECTED STRONG DEMAND FOR ITS MEMORY CHIPS USED IN NVIDIA PROCESSORS.
NVIDIA EXPANDS AI INFRASTRUCTURE IN INDIA. THE CEO STRUCK A DEAL WITH ASIA'S RICHEST MAN TO BUILD A NEW DATACENTER USING THE BLACKWELL CHIPS. JUSTIN: IN ORDER TO LEAD, YOU NEED TO HAVE AI MODEL TECHNOLOGY THAT INDIA HAS. YOU NEED TO HAVE DATA, MASSIVE QUANTITIES. YOU NEED AI INFRASTRUCTURE.
WE ARE PARTNERING TO BUILD AI INFRASTRUCTURE IN INDIA. CAROLINE: MORE ON THAT STORY, IAN KING. HOW SIGNIFICANT ARE THEY IN INDIA? IAN: INDIA HAS BEEN A LONG-TERM SOURCE OF GOOD ENGINEERING AND MATH TALENT. A LOT OF SOFTWARE EFFORTS. IT'S NOT SIGNIFICANT AS A MARKET YET. ED: THEY SPENT TIME IN THE PAST YEAR TRYING TO DO DEALS AT THE NATION LEVEL. IAN: THIS IS PART OF THE WORLD TOUR. HE IS IN INDIA NOW. HE IS GOING TO JAPAN.
THERE WILL BE OTHER EVENTS SCHEDULED. HE'S TRYING TO SPREAD THE USE OF HIS TECH AWAY FROM THE CONCENTRATION, THE BIG CLOUD PROVIDERS. ED: CONTINUES TO BE A WILD WEEK IN SEMIS.
TSMC IDENTIFIED A CLIENT FOMENTING CHIPS TO HUAWEI. IAN: THERE'S BEEN A LOT OF SPECULATION. A LOT OF REPORTS. FINALLY TSMC SAID YES, WE FOUND A CUSTOMER WHO WAS NOT THE CUSTOMER WE THOUGHT THEY WERE, THEY WERE SUPPLYING HUAWEI.
WE CUT THEM OFF. WE DON'T KNOW HOW THAT HAPPENED. THERE WILL BE FURTHER INVESTIGATIONS. THE U.S. GOVERNMENT WILL LOOK SERIOUSLY. THIS IS WHAT THEY DON'T WANT. CAROLINE: THAT STORY HAS MORE ROOM TO RUN. THANK YOU.
COMING UP, DAVID EINHORN. CAR >> BLOOMBERG LP IS WORKING WITH THE ROBIN HOOD FOUNDATION FOR A STOCKPICKING COMPETITION, FOR $10,000 THAT WILL GO TO CHARITY TO FIGHT POVERTY IN NEW YORK. YOU PICK A LONG AND A SHORT INVESTMENT. YOU CAN SIGN UP AT ROBINHOOD.ORG. THIS DOES NOT CONSTITUTE FINANCIAL OR INVESTMENT ADVICE. FOR MORE ABOUT THE COMPETITION AND HIS OWN INVESTMENT CHOICES, WE ARE JOINED BY DAVID EINHORN OF GREENLIGHT CAPITAL.
IT IS GAME APPLYING CHARITY. WHY DID YOU DO IT THIS WAY? YOU ARE CLOSELY INVOLVED WITH THE FOUNDATION. WHAT DO YOU EXPECT? DAVID: WE THOUGHT IT WOULD BE FUN TO DO IN CONJUNCTION WITH THE ANNUAL INVESTOR CONFERENCE THAT HAS BEEN GOING ON FOR 11 YEARS. ANYONE WHO WANTS TO PARTICIPATE AND DONATE $10,000, PICK A LONG AND SHORT AND SEE HOW IT DOES OVER THE NEXT SIX MONTHS. WHOEVER WINS, GETS TO CHOOSE WHICH ROBINHOOD SUPPORTED ORGANIZATION GETS A CHUNK OF THE MONEY. >> DID YOU PARTICIPATE? DAVID: 100%.
>> WHAT ARE THEY? DAVID: THE SHORTS PEOPLE ARE ALLOWED TO KEEP CONFIDENTIAL. I WILL PICK PELOTON, WHICH I PITCHED YESTERDAY AT THE CONFERENCE. >> FROM WHAT I UNDERSTAND, YOU CAME DRESSED IN FULL GEAR TO MAKE THIS PITCH TO THE AUDIENCE. WHAT IS IT ABOUT PELOTON YOU LIKE? YOU SAID IT IS UNDERVALUED. WHAT'S THE CATALYST? M&A OR SOMETHING ELSE? >> THERE'S A LOT TO LIKE WITH PELOTON. THEY HAVE A LARGE CUSTOMER BASE THAT PAYS $44 A MONTH AND IS EXTREMELY ENGAGED. THEY HAVE VERY LOW ATTRITION.
MOST SUB MODELS LIKE THIS TRADE AT HIGH VALUATIONS. PELOTON SUFFERED THE LAST NUMBER OF YEARS BECAUSE THEY THOUGHT THEY WOULD BE BIGGER. MATURITIES HAVE COME SOONER THAN EXPECTED. THEY HAD A COST BASE THAT WAS BASED ON THE ONLY THING THAT MATTERS IS REVENUE BECAUSE WALL STREET VALUES US ON PRICE TO SALES. THERE'S A LOT OF COST-CUTTING
FOR PELOTON TO DO. PELOTON PROBABLY NEEDS TO SPEND MORE TIME ON THE PELOTON. IF THEY DO THAT, THE MARGINS WILL IMPROVE AND THE STOCK IS INEXPENSIVE RELATIVE TO OTHER SUBMODEL TYPE OF COMPANIES. THEY WILL GET A NEW CEO. IN THE WORST CASE, IF THEY ARE NOT ABLE TO TURN AROUND, THERE ARE A NUMBER OF LARGER COMPANIES THAT WOULD BE INTERESTED IN OWNING THIS.
>> I WANT YOU TO WEIGH IN, AS WE SPEAK NOW, TESLA CAME OUT WITH EARNINGS IN THE LAST 24 HOURS. THE STOCK IS UP 19%. YOU HAVE BEEN SHORT BEFORE. WONDERING WHAT YOU THINK AT THIS VALUATION? WHETHER YOU WOULD GO SHORT AGAIN? DAVID: WE DON'T COMMENT ON SHORT POSITIONS ANYMORE. WE STOPPED DOING THAT A FEW
YEARS AGO. SONALI: CAN YOU SPEAK TO THE VALUATION? DAVID: I'M NOT GOING TO GO ANYWHERE NEAR THAT. SONALI: VALUATIONS GENERALLY, THE AI TRADE HAS BEEN A HOT ONE.
WONDERING IF YOU THINK THESE STOCKS HAVE GONE TOO FAR AND HOW YOU ARE PLAYING THE TRADE? DAVID: WE DON'T HAVE TO BET AGAINST THINGS THAT SEEM LIKE THEY ARE EXPENSIVE WHEN THERE IS EXCITEMENT AROUND THEM. THESE STOCKS ARE HIGH. ENTHUSIASM FOR A LONG TIME. THE MARKET IS EXPENSIVE CONSIDERING STRONG CYCLE AND 23 TIMES EARNINGS. AS SOMEONE WHO PAID ATTENTION TO WHAT I PAY FOR THINGS, TO WANT TO CHASE THOSE THINGS IT'S HARD.
WE HAVE A COUPLE COMPANIES THAT MAYBE HAVE OPTIONS ON AI. WE OWN HP. PCS ARE DUE FOR A REGULAR REPLACEMENT CYCLE. A LOT WERE BOUGHT AFTER COVID. WE COULD HAVE A BETTER THAN NORMAL CYCLE IF AI PCS TURN OUT TO BE A THING.
10 TIMES EARNING, 3% SOMETHING, SPENDING 100% CASH FLOW, RETURNING TO SHAREHOLDERS, 7% BUYBACK. COULD SEE MIDTEENS GROWTH FOR THE NEXT COUPLE YEARS DURING RECYCLE INTRODUCTION. 10 TIMES EARNINGS IS REASONABLE. SONALI: I UNDERSTAND YOU DON'T WANT TO TALK ABOUT INDIVIDUAL SHORT WAGERS.
WOULD YOU EXPLAIN THE THINKING AROUND SHORT INVESTING NOW? THERE ARE PEOPLE THAT FEEL BURNED IN THE WAY MARKETS HAVE MELTED UP. WHAT DOES THE ENVIRONMENT LOOK LIKE? WHAT ARE THE PARAMETERS YOU THINK AROUND? DAVID: WE ARE HAVING A DECENT YEAR IN THE SHORT BOOK CONSIDERING THE MARKET. WE MADE A CHANGE A COUPLE YEARS AGO IN RESPONSE TO THE MEME STUFF. WE FIGURED OUT THE RIGHT TAIL FOR YOUR BEST SHORT IDEAS HAS CHANGED. THAT USED TO BE THE MOST MONEY
IN THE BEST IDEA. YOUR BEST IDEA IS PROBABLY SOMETHING YOU THINK WILL GO ZERO. THAT'S WHERE CRAZY STUFF GOES ON. WE FLIPPED THE PORTFOLIO.
THE BIGGER SHORTS TEND TO BE MORE BORING. THE SMALLER SHORTS TEND TO BE MORE EXCITING. IT'S ENABLED US TO MANAGE THE VOLATILITY. SONALI: THIS YEAR YOU WROTE TO INVESTORS SAYING IT DOES NOT MATTER WHO WINS THE ELECTION. I'M CURIOUS ABOUT HOW YOU ARE
THINKING ABOUT THE ELECTION LESS THAN TWO WEEKS AWAY, UNCERTAINTY ABOUT HOW LONG IT WILL TAKE TO KNOW WHAT THE VOTES COME OUT TO BE -- HOW DO YOU THINK ABOUT THAT, INVESTING AROUND IT? DAVID: I DON'T KNOW HOW TO HANDICAP. THE ONLY PROJECTION IS IT WILL BE HELD ON NOVEMBER 5. BEYOND THAT IT IS HARD TO KNOW. THE ELECTION SEEMS TO BE CLOSE.
I DON'T KNOW WHETHER WE WILL HAVE A WINNER SOON. I DON'T KNOW WHETHER EITHER CANDIDATE IS PREPARING TO CONCEDE. WE WILL HAVE TO SEE HOW THAT PLAYS. I'M TAKING A CONSERVATIVE POSTURE. I DO THIS AS AN UNCERTAIN EVENT. SONALI: INVESTORS ARE TAKING A RISK OFF TONE. WHAT TAKES OFF AFTER? DAVID: IF YOU HAVE A CLEAR WINNER, AND IT'S CLEAR WHAT DIRECTION THE COUNTRY WILL GO, I'M CONFIDENT INVESTORS WILL CHASE WHATEVER IS PERCEIVED BENEFICIAL. SONALI:
YOUR MACRO VIEW ON THIS. PEOPLE ARE WORRIED ABOUT INFLATION. THE 10 YEAR TRAILING HIGHER RECENT DAYS. SOME THINK IT IS A TRUMP TRADE. THE DIRECTION OF TRAVEL FOR BONDS? THE MACRO MARKETS LARGELY ON THE HEELS OF THE ELECTION? DAVID: WE HAVE MOVED FROM SECULAR DEFLATION FOR MANY YEARS TO SECULAR REFLATION. WE'VE HAD REDUCTION IN INFLATION FROM THE PEAK. A LOT OF THAT HAS RUN ITS COURSE. THERE'S A CHANCE WE HAVE
INFLATION RE-ACCELERATE AS SOON AS THE NEXT READING. EVENTS STILL HAVE TO FLOW THROUGH. COMMODITY PRICES ARE STRONGER. THERE ARE OTHER INDICATIONS,
LABOR PRICES GOING UP. YOU SEE THE BOEING STRIKE. THESE INCREASES ARE SUBSTANTIAL STILL. THE DEFLATIONARY PERIOD IS COMING TO AN END. YOU CAN SEE IT IN THE DERIVATIVES MARKET AND THE BOND MARKET. ADDITIONALLY, REGULAR GROWTH IS
GOOD. RUNNING 3%. AT LEAST 2.5% INFLATION RISING, THAT'S NOMINAL GDP 5.5 PLUS, IT'S HARD TO SEE WHY TREASURY BONDS, 4% OR BETTER ARE MISPRICED. SONALI: ANOTHER BET, IT'S FAIR TO CALL YOU A GOLD BUG. WE'VE SEEN GOLD HIT RECORD HIGHS THIS YEAR.
I'M WONDERING HOW MUCH FURTHER YOU THINK IT WILL GO AND WHY? DAVID: WE HAVE BEEN LONG GOLD FOR 15 YEARS. NOTHING NEW. IF WE HAVE THE FED THAT SEEMS DEPENDENT ON TRYING TO REDUCE RATES EVEN AS INFLATION MAY BE BOTTOMING, THAT SHOULD BE PRETTY GOOD FOR GOLD. YOU SEE THAT IN THE PRICE. GOLD HAS HAD A STRONG YEAR. IT'S BEEN A BIG HELP.
SONALI: A LOT OF CONVERSATION ABOUT HOW YOU'VE BEEN THINKING ABOUT VALUE INVESTING, WHETHER THE INDUSTRY HAS DIED OR NOT, BUT PEOPLE ARE LOOKING BACK TO THE TRADE, PARTICULARLY THE RUSSELL 2000 TRADE. WHAT ADVICE WOULD YOU GIVE THEM? DAVID: WHAT SO MANY PROFESSIONALS, NO LONGER PRACTICING THEIR TRADE, THERE'S A LOT LESS COMPETITION. YOU CAN FIND EXCITING VALUES IN COMPANIES THAT ARE LESS TALKED ABOUT OR EXCITING. YOU HAVE A BIFURCATED MARKET. WE FIND COMPANIES THAT ARE
PAYING LARGE DIVIDENDS AND BUYING BACK LOTS OF STOCK, WE WILL MAKE A GOOD RETURN. WE DON'T CARE WHAT OTHER INVESTORS DO. SONALI: DAVID EINHORN, GREENLIGHT CAPITAL, HIS FAVORITE LONG PICK.
THANK YOU. ED: THANK YOU VERY MUCH. MORE BLOOMBERG TECH COMING UP. STAY WITH US.
ED: ON MONDAY WE WILL BE SPEAKING WITH SARAH FRIER RIGHT HERE ON BLOOMBERG TECHNOLOGY. THE LINKEDIN CEO SAYS IF YOU DON'T CHANGE YOUR JOB, YOUR JOB WILL CHANGE DUE TO AI. HE TALKED ABOUT THE PLATFORM'S GROWTH, THE IMPACT ON CAREER SEARCH AND DEVELOPMENT AND COUNTERING MISINFORMATION AHEAD OF THE U.S. ELECTION. >> COUPLE TRENDS, ACROSS-THE-BOARD THE NEED FOR PEOPLE TO UPSCALE WHAT THEY ARE DOING, AI AND HUMAN SKILLS ARE IN HIGH DEMAND. FOR THE FIRST TIME ON LINKEDIN WE SEE GROWTH OUTSIDE THE CORE KNOWLEDGE WORKER AND THAT IS HAPPENING IN INDIA AND INDONESIA.
SMALL BUSINESS OWNERS, FREELANCERS ARE GRAVITATING TOWARD THE PLATFORM. SEVEN PEOPLE PER SECOND JOIN. INTERESTING TO SEE THOSE PATTERNS. FOR ME, THE IDEA THAT IF YOU ARE NOT CHANGING YOUR JOB, YOUR JOB IS CHANGING ON YOU. IT'S IMPORTANT THING TO GRASP AS AI TAKES MORE SHAPE. HASLINDA: THERE IS FOCUS ON THE U.S. ELECTION AND AI GENERATED MISINFORMATION. HOW ARE YOU COUNTERING THAT?
RYAN: LINKEDIN EXISTS TO CREATE ECONOMIC OPPORTUNITY. IT'S ATTACHED TO YOUR REAL IDENTITY/RESUME ONLINE. WE DON'T FACE A LOT OF ISSUES OTHER PLATFORMS MAY FACE.
TO THE EXTENT, WE STILL HAVE A LOT OF SAME TRUST IN PLACE ACROSS-THE-BOARD, THROUGH AI AND HUMAN REVIEW, THINGS ARE REPORTED BUT THERE'S NOT A LOT OF POLITICAL CONTENT ON LINKEDIN. IN 2018, WE DISALLOWED POLITICAL ADVERTISING ALTOGETHER. IT'S NOT A PLACE WHERE POLITICS ARE HAPPENING.
CAROLINE: MEANWHILE, IRELAND'S STATE PROTECTION COMMISSION JUST FINED LINKEDIN FOR ILLEGALLY PROCESSING PERSONAL DATA OF USERS IN THE EU TO DELIVER TARGETED ADVERTISING. GRAHAM DOYLE CALLED IT A CLEAR AND SERIOUS VIOLATION OF DATA SUBJECTS' RIGHT TO PROTECTION. LINKEDIN BELIEVES IT IS NOW IN COMPLIANCE WITH REGULATION. ED:
TESLA IS SURGING AFTER A SUCCESSFUL QUARTER. WHAT'S NEXT? ED: TESLA NOW UP 19%, THE BIGGEST SINGLE DAY JUMP FOR MARCH, '21. A LOT OF THIS IS ABOUT THE BUSINESS OF SELLING EV'S. BIG GOALS NEXT YEAR AND GETTING MORE PROFITABLE AT DOING IT. THIS IDEA THAT THEY SEE GROWTH IN THE AUTOMOTIVE BUSINESS OF 30% NEXT YEAR. INTERESTING. WHAT DO YOU MAKE OF THAT AND DOES YOUR RESEARCH SUPPORT IT? JESSICA: THAT INDICATES THEY HAVE A HIGH VOLUME OF ONCOMING.
IN THIS MARKET, I DON'T THINK ANY CAR COMPANY IS PROJECTING THAT GROWTH. THEY HAVE HIGH EXPECTATIONS FOR THE LOWER COST EV, WHETHER THE 3 OR THE Y. THAT DOES NOT TRACK WITH THE INDUSTRY. WITH ELON MUSK, YOU NEVER KNOW WHAT THAT IS AND IF THEY WILL HIT THOSE MARKERS. THERE WOULD HAVE TO BE INCREMENTAL VOLUME. CAROLINE: IF THE MATH DOESN'T ADD UP THIS QUARTER, POINT US FORWARD NEXT YEAR WHEN WE SEE A PLAY OF CATCH UP AND WHAT PRICE POINT THEY HAVE TO COME IN AT FOR 30% GROWTH, WHERE IS THE DEMAND? JESSICA: THE WAY HE DESCRIBES THE CAR MARKET, HE'S DONE THIS ON PAST CALLS, HE SAYS THINGS LIKE IF WE HIT THE RIGHT PRICE, THEN DEMAND IS INFINITE.
THAT'S NOT THE WAY PEOPLE IN THE U.S. GET CARS. WE WOULD NOT HAVE LUXURY BRANDS OR LARGE SUVS, SPORTS CARS. IF THERE WAS A $25,000 EV, WOULD EVERYONE STILL WANT THAT ESPECIALLY IF IT LOOKS LIKE WHAT EXISTS TODAY? THAT'S THE BIGGEST QUESTION I HAVE FOR NEXT YEAR. PEOPLE LIKE TO SEE NEW THINGS. IF YOU WANT SOMETHING CHEAPER, YOU CAN GET A USED ONE. ED: TESLA SHARES UP 19%. THE S&P IS DOWN.
FUN STAT. THE PREVIOUS BIGGEST GAIN TESLA POSTED ON A DAY WHERE THE S&P WAS DOWN WAS 7.5%. WE ARE UP 19% NOW. A BIG PART OF IT IS THE AUTONOMOUS FUTURE. HOW MUCH HAVE YOU LOOKED INTO
FSD AND HOW MUCH DOES IT RESONATE WITH THE CONSUMER? JESSICA: IT'S NOT FOR EVERYBODY AT THIS TIME. PEOPLE LIKE THE IDEA. WHO DOESN'T WANT THEIR TIME BACK? IN THE NEXT FEW YEARS, ARE PEOPLE READY FOR IT? SOME PEOPLE LIKE IT. YOU WILL HAVE A LOT OF OPPOSITION, PEOPLE WHO FEEL LIKE THEY ARE BEING SUBJECTED TO THESE VEHICLES ON THE ROADS THAT THEY DID NOT ASK FOR.
GETTING THE PUBLIC READY IS A BIG HURDLE THAT WE ARE NOT TALKING ABOUT. WE ARE TALKING ABOUT THE TECH AND REGULATORY THAT HAS TO BE SOLVED. BUT THESE WILL BE IN OUR STREETS AND THERE WILL BE CONCERN OUT THERE IF WE DON'T TALK ABOUT HOW THIS WORKS. CAROLINE: REGULATION IS SOMETHING MUSK WAS TALKING ABOUT POTENTIALLY PUSHING FORWARD IF HE GETS A ROLE IN THE NEXT ADMINISTRATION.
A LOT OF IFS. THE FACTS OF THIS QUARTER, DO YOU BELIEVE THE TARGETS OUTLINED ON THE CALL WILL BE MADE FOR THIS QUARTER, LET ALONE 30% NEXT YEAR? JESSICA: IT SEEMS LIKELY. THIS QUARTER WILL SEE SOME SORT OF INCREASE IN SALES OVERALL LIKELY. WE KNOW THE FED CUTS. RATES ARE EASIER. TESLA HAS BEEN AGGRESSIVE WITH INCENTIVES. THEY ARE OFFERING GOOD DEALS. THAT'S HELPFUL. NEW VEHICLES IN GENERAL, A NEW EV RELEASE IS THE BEST DEAL.
THAT'S WORKING IN THEIR FAVOR. IT'S NOT GOING TO NECESSARILY MAKE MASSIVE SALES JUMP NEXT YEAR. ED: TESLA WANTS TO CHANGE THE RELATIONSHIP OF AN INDIVIDUAL WITH CARS. I HAD A MODEL Y.
CAROLINE HAS ONE. WE BOTH USE FSD. IN THE FUTURE TESLA SEES, IF WE OWN OUR OWN CAR, WE SUBMIT THEM TO A FLEET WHEN WE ARE NOT USING THEM. YOU COVER THIS INDUSTRY. HOW ARE YOU GOING TO COVER IT
GOING FORWARD? JESSICA: BIG QUESTION. IN TERMS OF PERSONAL OWNERSHIP, DO WE OWN VEHICLES? SOME PEOPLE WILL NOT FLEET IT OUT. THERE ARE PEOPLE THAT WILL USE THIS. THIS WILL BE AN INCOME DIFFERENTIATOR, PEOPLE THAT HAVE THEIR OWN, AND PEOPLE WHO CAN GET AROUND NOT HAVING TO WORRY ABOUT A MONTHLY PAYMENT OR INSURANCE, WHICH HAS GONE UP RECENTLY. IT'S GOING TO CHANGE.
IT'S GOING TO BE SLOWER THAN WHAT WE ARE PROMISED. RIGHT NOW WE ARE PROMISED HOPES AND DREAMS IN THE NEXT FIVE MINUTES. THE ROLLOUT IS MORE CONSERVATIVE THAN THAT IN REALITY. CAROLINE: GREAT HAVING YOU, THANK YOU. THAT DOES IT. ED: BIG FOCUS ON TESLA. A LOT TO RECAP ON THE PODCAST, YOU KNOW WHERE TO FIND IT.
2024-10-26 09:46
