>> 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:
COMING UP, THE CEO OF IBM JOINS THE SHOW AS BIG BLUE PROMISES
TO SIMPLIFY AND SCALE ENTERPRISE AI.
PALANTIR TUMBLES DESPITE RAISING REVENUE FORECASTS AND
EARNINGS FAILED TO LIVE UP TO ITS CURRENT VALUATION.
TESLA AS MONTHLY SALES CONTINUE FALLING HARD ACROSS EUROPE.
BUT FIRST WE CHECK IN ON THESE MARKETS.
WE HAVE THE FED COMING OUT TOMORROW LIKELY HOLDING RATES
BUT COULD WE GET A HAWKISH COMMENTARY COMING OUT OF THE
FED CHAIR. THAT’S WHAT BLOOMBERG INTELLIGENCE IS EXPECTING.
THE NASDAQ 100 UP AS WE HEAR THE TREASURY SECRETARY GIVING
EVIDENCE ON THE HILL AS WELL. WE ARE STILL DOWN BY 7/10 MORE
BROADLY AS WE HAVE ANXIETY ON TRADE.
INDIVIDUAL MOVERS ONE OF THE KEY STOCKS THAT TURNS US LOWER
THAT 12%. STILL THE BEST PERFORMER ON THE
NASDAQ 100 THIS YEAR. BUT THE FORWARD-LOOKING
GUIDANCE IS NOT ENOUGH TO SUBSTANTIATE AN EXTRAORDINARY
VALUATION. WE WILL DIG INTO THAT LATER IN
THE SHOW. IBM TRADING FLAT MANAGING TO
OUTPERFORM THE REST OF THE MARKET, WE WILL GET OUT TO
THEIR ANNUAL EVENT WHERE THEY UNVEIL MORE SOFTWARE TO ALIGN
AI, WE WILL HAVE ARVIN KRISHNA IN A MOMENT. WE GO TO U.S. SECRETARY — TREASURY SECRETARY
SCOTT BESSENT SPEAKING ON EFFICIENCY ON BUDGET CUTS AND
THE STATE OF THE U.S. ECONOMY. TYLER KENDALL JOINS US FROM
OUTSIDE THE WHITE HOUSE. IT SEEMS TO BE PUSHING ON DOGE
AND WHAT’S BEEN TOUCHED HERE. TYLER: THIS IS AN OVERSIGHT HEARING SO
IT WAS WIDELY EXPECTED THEY WOULD PUSH HIM ON DOGE, THE
TREASURY SECRETARY SAYING IT IS THE DEPARTMENT OF GOVERNMENT
EFFICIENCY NOT GOVERNMENT EXTINCTION.
THE TENT — HE INTENDS TO BRING IT — KEEP IT UP AND RUNNING
BUT DID NOTE HE HAS ALREADY CUT $2 BILLION FROM THE IRS WITHOUT
ANY DISRUPTION. BEYOND THAT HE DID GET INTO
SOME TARIFF POLICY GRILLED BY THESE LAWMAKERS WHO WANT MORE
CLARITY WHEN IT COMES TO THE TRADE STRATEGY AHEAD.
HE DID SAY AS OF NOW THE U.S. HAS NOT ENGAGED IN NEGOTIATIONS
WITH CHINA BUT REITERATED WHAT WE’VE HEARD FROM THIS
ADMINISTRATION, WE COULD EXPECT LUMINARY FRAMEWORK AGREEMENTS
AS SOON AS THIS WEEK. HE ALSO OUTLINED SOMEWHAT OF A
TIMELINE HERE. HE SAID ULTIMATELY WE COULD SEE
80% TO 90% OF 15 TROPPO — TOP TRADING PARTNERS CLINCH DEALS
BY THE END OF THIS YEAR. WHEN ASKED ABOUT THE IMPACT
CONSIDERING SCOTT BESSENT HAS BEEN THE FOREFRONT OF TRYING TO
DEFEND THIS ADMINISTRATION’S ECONOMIC POLICIES, HE SAID HE
IS NOT CONCERNED ABOUT THE U.S. RECESSION AND IS BLOOMBERG
ECONOMICS CAUTIONS THAT DOESN’T NECESSARILY MEAN THEY WILL BE
REVISED UP. THIS IS VERY IMPORTANT HERE.
WE WERE WONDERING IF WE WERE GOING TO GET A FIRMER DAY WHEN
THE U.S. GOVERNMENT COULD DEFAULT ON ITS
DEBT BECAUSE THAT IS SEEN AS THAT HARDLINE NUMBER THAT
LAWMAKERS ARE UP AGAINST A PASS THE RECONCILIATION PACKAGE THAT
THIS ADMINISTRATION IS BANKING ON WHEN IT COMES TO THEIR
TAX-CUT AGENDA. HE SAID IT IS FORTHCOMING BUT
CANNOT GIVE LAWMAKERS THAT UPDATED NUMBER BECAUSE THEY ARE
STILL SORTING THROUGH THE TAX RECEIPTS FROM APRIL. CAROLINE:
THAT’S WHAT’S GOING ON ON THE HILL.
SIMULTANEOUSLY WE GO TO WHAT’S HAPPENING WITH IBM.
I AM PLEASED TO WELCOME THE CEO FROM THE COMPANY’S THINK
CONFERENCE. AND I AM EXCITED TO HEAR FROM
YOU THE PACE OF CHANGE THAT’S HAPPENING.
I THINK YOU PUT OUT IN THREE YEARS TIME THERE WILL BE ONE
BILLION APPS. IT IS SO NOISY IT IS CLUTTERED,
HOW ARE YOU MANAGING TO STREAMLINE THAT FOR YOUR
CUSTOMERS? >> FIRST I THINK THE NUMBER IS
A REALLY FASCINATING NUMBER. A BILLION NEW APPLICATIONS
USING AI, A THIRD OF THEM AND THE WAY WE ARE APPROACHING IT
IS WHY NOT MAKE IT EASIER FOR CUSTOMERS LEVERAGE THEIR OWN
DATA, CONSERVE THEIR OWN DATA TO THE MODELS AND THEN LEVERAGE
IT TO MAKE THE ENTERPRISE A LOT MORE PRODUCTIVE. THAT’S WHAT WE JUST ANNOUNCED
TO ORCHESTRATE WITH THEIR CAPABILITIES INCLUDING 150 NEW
AGENTS, SOME FROM US AND SOME FROM OUR PARTNERS. CAROLINE:
SOUNDS LIKE AN EXTRAORDINARY NUMBER.
YOU HAVE A BIG BOOK OF BUSINESS WHEN IT COMES TO GENERATIVE AI.
$6 BILLION AND GROWING BUT HOW MUCH ARE YOU SEEING THE CEOS
YOU SERVE PUSHING BACK ON OVERWHELM?
HOW ARE YOU HELPING THEM NAVIGATE WHAT FEELS LIKE IN
SOME WAYS A LESS THAN PRODUCTIVE ENVIRONMENT FOR THE
AMOUNT THEY ARE INVESTING IN GENERATIVE AI. ARVIND:
I THINK WHAT CEOS ARE CONCERNED ABOUT IS NOW THE AIR OF
EXTREMITY SHE IS OVER. AS THEY ARE DOING THAT, THEY
DISCOVERED ABOUT 25% OF THE TIME THESE PROJECTS ARE PAYING
OFF VERY WELL FOR THEM. TO LEARN FROM THAT 25 AND THEN
FIGURE OUT WHAT ARE THE INHIBITORS IN THE OTHER 75 AND
TAKE THOSE OUT AND THOSE ARE INVARIABLE AS FRAGMENTATION AND
THE ENVIRONMENT. SO HOW DO YOU HAVE A MORE
INTEGRATED ENVIRONMENT. YOU HAVE TO MAKE SURE THERE IS
VALUE IN THE AI PROJECTS. DON’T JUST DO AN EXPERIMENT AND
LEAVE IT ON THE SHELF. YOU HAVE TO SCALE IT.
SO HOW DO YOU CREATE THE RIGHT HYBRID ENVIRONMENT.
AND THEN WE BELIEVE 35 WILL GO ALL THE WAY UP TO 50 AT WHICH
POINT THAT’S A GREAT RETURN FOR THE CEOS. CAROLINE:
THAT SOFTWARE YOU ARE UNVEILING, THOSE CONSULTING
PROVIDING AT THE MOMENT. HOW MUCH IS THAT BEARING FRUIT
IN THIS CURRENT ENVIRONMENT. HOW WILLING ARE THE CEOS TO
EXPERIMENT AND MOVE ON WHEN WE’VE GOT A REALLY UNCERTAIN
ECONOMY ON OUR HANDS. ARVIND:
I AM MORE OF AN OPTIMIST ON THE USES OF TECHNOLOGY IN THE
CURRENT ENVIRONMENT THAN A PESSIMIST. WHY DO I SAY THAT?
YOU HAVE SUPPLY CHAIN ISSUES, YOU HAVE COST ISSUES,
PRODUCTIVITY ISSUES. TECHNOLOGY BECOMES AN ANSWER TO
HELP SCALE THE BUSINESS WITHOUT HAVING TO ADD A LOT OF PHYSICAL
COST. I FIND THE APPETITE OF THE CEOS IS QUITE HIGH TO SPEND
ON TECHNOLOGIES. CALLING IT SHOCK TO MEDIUM-TERM.
SIX MONTHS, 12 MONTHS. I FIND PEOPLE LEADING IN —
LEANING IN VERY HEAVILY. I SEE IT REMAINING ROBUST
DESPITE ALL OF THESE ISSUES THAT COULD BE TALKED ABOUT.
CAROLINE: WHAT ABOUT GOVERNMENT AT THE
MOMENT. SCOTT BESSENT GETTING GRILLED
ON THE HILL AT THE MOMENT AND THAT HAS HAD IMPLICATIONS FOR
YOUR OWN BUSINESS. WE UNDERSTAND 15 CONTRACTS HAVE
BEEN CANCELED. OR MORE TO COME, ARE YOU SEEING
AN END TO THAT PROCESS. >> I ACTUALLY CHOOSE NOT TO
WORRIED ABOUT DOGE. WERE WE HAVE ROBUST CONTRACTS,
WE HELP THE GSA ON EXPENSE MANAGEMENT, WE HELP THE DOD ON
PAYROLL. THOSE HAVE BEEN VERY ROBUST AND
I DON’T BELIEVE THAT THOSE WILL COME UNDER ANY SIGNIFICANT
ATTACK. AREAS UNDER ATTACK ARE MUCH
MORE ABOUT DISCRETIONARY OR MUCH MORE TIME IMMATERIAL OR
LABOR AUGMENTATION BASED. THOSE MAY COME UNDER ATTACK.
IT DOES NOT WORRY ME. I BELIEVE EVEN IF THOSE COME
UNDER ATTACK THERE IS MORE THAN ENOUGH SET FROM — OFFSET FROM
AREAS. CAROLINE: ANY CANCELLATIONS WILL BE
OUTWEIGHED BY BUSINESS YOU CAN POTENTIALLY WIN WITHIN THE
GOVERNMENT AS WELL? ARVIND: I BELIEVE FROM HAVING TALKED TO
VERY SENIOR MEMBERS OF THE ADMINISTRATION THERE IS A HUGE
APPETITE TO USE TECHNOLOGY TO MODERNIZE GOVERNMENT AND HELP
MAKE GOVERNMENT ITSELF MORE EFFICIENT. YOU ALSO WILL HAVE TO INVEST IN
TECHNOLOGY AND I BELIEVE AND NOT JUST MY BELIEF BUT I’VE
SPOKEN TO THEM THEY HAVE AN APPETITE TO DO THAT. CAROLINE:
AIR TRAFFIC CONTROL AND TRUNK HIMSELF TALKING ABOUT MAYBE
RAYTHEON AND IBM COMING IN TO HELP SOLVE SOME OF THE REAL
ANXIETIES WITH THE LOSS OF RADAR HAPPENING IN NEWARK.
IS THAT PROGRESSING, ARE YOU ABLE TO SHARE ON HOW ANY SORT
OF CONTRACT MIGHT SHAPE UP? ARVIND:
I DON’T WANT TO TALK ABOUT ANY SPECIFIC CONTRACT OR AGENCY.
BUT I THINK WHAT WAS JUST POINTED OUT WAS A GREAT EXAMPLE
WHERE TECHNOLOGY WILL BE PART OF THE ANSWER.
WET — BETTER INTEGRATION, COMPETING CAPABILITIES, ALL OF
THOSE WILL PLAY A ROLE BECAUSE RIGHT NOW WE ARE LIVING ON NOT
EXACTLY BUT ESSENTIALLY LET’S CALL IT A SLIGHTLY EVOLVED
SYSTEM IN THE 1970’S. >> WHAT’S CRUCIAL ABOUT AIR
TRAFFIC CONTROL IS ACCURACY. THAT’S ALMOST WHERE EVERYONE’S
EYES ARE WHEN IT COMES TO GENERATIVE AI IS THE RISK OF
THE UNDERLYING DATA BEING INACCURATE AND HOW THAT
COMPOUNDS. HOW ARE YOU MANAGING TO TACKLE
THAT AREA OF ANXIETY AND REALITY. ARVIND:
I BREAK THE PROBLEM DOWN. THE CORE OF AIR TRAFFIC CONTROL
HAS TO BE BUILT ON VERY PRECISE DATA, COMPLETELY ACCURATE DATA.
YOU ARE NOT GOING TO USE THAT TO ESTIMATE WHERE IT IS. THAT WILL BE BASED ON PHYSICS
AND HARD ENGINEERING. GOOD AI COMING IN OPTIMIZED AND
WORRYING ABOUT HOW YOU INCREASE TOTAL FLOW AND CAPACITY AT AN
AIRPORT PERHAPS BUT I’M USING THE WORD PERHAPS BECAUSE THERE
WAS A LOT OF CAREFUL WORK TO BE DONE THERE.
BUT COULD THIS BE USED TO PROCESS CLAIMS FASTER AT SOCIAL
SECURITY OR THE V.A., ABSOLUTELY.
AND THEN YOU MAKE CITIZENS HAPPIER, DELIVER SERVICES
FASTER AT A LOWER COST. THAT’S WHERE I WOULD GO FIRST. >> IN
THE PRIVATE SECTOR, THEY ARE LOOKING FOR ACCURACY AND THAT
IS SOMETHING YOU’RE OFFERING AT THE MOMENT.
JUST SEEING THE ADOPTION AND THE USE OF PRODUCT OF A GENT TO
K.I.A. BEING LIMITED BY — AGENTIC AI.
ARE WE RESOLVING THAT ALREADY. >> START WITH THE USE CASES,
BUT YOU DON’T NEED TO BE 100% ACCURATE.
IF YOU THINK ABOUT CUSTOMER SERVICE, YOU THINK ABOUT
EXPERIENCE, I THINK ABOUT OUR INTERNAL HEALTH LIST. THOSE ARE
AREAS WE ARE DEALING WITH PEOPLE, YOU HAVE A 10 OR 15%
RATE. SO NOW YOU CAN ACTUALLY HAVE A
LOWER ERROR RATE THAN THAT BUT MAYBE NOT PERFECT BUT YOU CAN
STILL LIVE WITH IT. CAROLINE: THINK IS ALL ABOUT INNOVATION.
I’M LOOKING AT THE CAR BEHIND YOU, THE WAY IN WHICH YOU ARE
PUSHING THE AGENDA NOT ONLY WHEN IT COMES TO HYBRID, BUT
THINKING ABOUT THE INNOVATIONS ON MAINFRAMES, BLOOD QUANTUM.
ARE YOU GETTING QUESTIONS ON QUANTUM RIGHT NOW?
SCOTT BESSENT WANTS THE U.S. TO LEAD IN AI AND QUANTUM
COMPUTING. ARVIND: WE ARE VERY PLEASED WITH THE
INNOVATION. WE CAN DO 450 BILLION AI
INFERENCES PER DAY. WE JUST ANNOUNCED THIS QUARTER.
THINK ABOUT USING THAT IN FINANCIAL SYSTEMS TO HELP
REDUCE FRAUD. THAT IS AN INCREDIBLE AREA OF
INNOVATION. QUANTUM, PART OF THE REASON WE
ANNOUNCED THE INVESTMENT LAST YEAR INTO QUANTUM AND WE
BROUGHT OUT THE QUANTUM SYSTEM TWO THIS YEAR IS WE ARE VERY
EXCITED WHERE THAT WILL GO. THAT IS AN AREA WE BELIEVE THE
U.S. MUST AND CAN LEAD ON QUANTUM
COMPUTING FOR NATIONAL SECURITY BUT ALSO FOR COMPETITIVE
ADVANTAGE AND GROWING A BUSINESS. CAROLINE:
DOES THAT CONTINUE TO GROW IN THE UNITED STATES?
YOU JUST UNVEILED A HUGE AMOUNT OF INVESTMENT INTO THE U.S
ARVIND: WE PUT 150 BILLION INTO THE
U.S.. WE BELIEVE IF I LOOK AT AI,
HYBRID AND A LOOK AT QUANTUM COMING, THE GROWTH
OPPORTUNITIES ARE HERE. WE WANT TO INVEST TO TAKE
ADVANTAGE OF THESE OPPORTUNITIES. CAROLINE: LIVE FROM THINK, WE VERY MUCH
APPRECIATE YOUR TIME TODAY. WE ARE ALSO WATCHING SHARES OF
OTHER PROVIDERS. ONE OF THE PARTNERS OFFERING IS
SERVICE NOW. ITS FLAGSHIP GENERATIVE AI
SOFTWARE PRODUCT APPARENTLY IS GOING TO HIT $1 MILLION IN
ANNUAL CONTRACT BUSINESS. SHARES IN LINE WITH THE REST OF
THE MARKET. MORE NEXT, THIS IS BLOOMBERG
TECHNOLOGY. >> LET’S GET BACK TO THE STATE
OF THE MARKETS CURRENTLY UNDER PRESSURE TRYING TO CONSIDER
WITH THE TARIFF IMPACT IS. SCOTT BESSENT TESTIFYING ON THE
HILL SAYING THERE WERE NO SIGNS OF A RECESSION.
PLEASE WELCOME HEAD OF MARKET ANALYSIS.
FOR A TECH INVESTOR RIGHT NOW THE ANXIETY HAS BEEN AROUND
VALUATIONS OF BIG TECH IN THIS CURRENT ENVIRONMENT.
DO YOU THINK WE ARE OUT OF THE WOODS ON A RECESSIONARY
ENVIRONMENT. IS IT STILL TOO EARLY TO CALL? >> THANK YOU FOR HAVING ME.
I THINK IT IS TOO EARLY TO CALL BUT THE BASE CASE IS NOT
RECESSION. WE SAW FROM THE LATEST MARKET
DATA THAT THE JOB MARKET IS PRETTY RESILIENT AND I THINK IT
WILL TAKE A LOT MORE PAIN FOR US TO GO INTO A RECESSION.
I UNDERSTAND TARIFF IS CREATING A LOT OF ANXIETY AND OBVIOUSLY
A LOT OF PARALYZES ON TRADE FLOW INVESTMENT POSITIONS BUT THERE ALSO WHAT’S HAPPENING,
AND POTENTIAL TAX PACKAGE THAT IS GOING TO HAPPEN.
I THINK THE U.S. THINGS ARE LOOKING OK AS WELL.
I THINK IT’S PREMATURE TO CONCLUDE THERE WOULD BE A U.S.
RECESSION. OBVIOUSLY THE STAKES ARE HIGH. >> MUCH HAS BEEN SAID ABOUT THE
U.S. IS A GOVERNMENT AND ITS BUYING
OR INDEED PULLING BACK ON EXPENDITURE.
WE JUST HAD THE IBM CEO JOINED THE SHOW SAYING HE’S MORE THAN
CONFIDENT ANY NEW BUSINESS WITHIN THE U.S.
GOVERNMENT WILL OFFSET FOR ANY CONTRACTS CUT.
PALANTIR SHOWING REAL RESILIENCY IN THEIR U.S.
GOVERNMENT OFFERING. HOW MUCH ARE YOU SEEING BIG
TECH BEING ABLE TO WEATHER AT THE MOMENT ANY DIAL BACK IN
GOVERNMENT SPENDING BUT ALSO PRIVATE SECTOR SPENDING. >> I THINK WHAT WE LEARN FROM
THE LATEST EARNINGS RESULTS REGARDING BIG TECH IS THE CAPEX
ON AI REMAINS UNCHANGED AND THERE IS STILL SOME PICKUP AND
THAT SPENDING. I THINK DESPITE THE
DISTRACTIONS ON TARIFF AND THE CYCLICAL OUTLOOK I THINK THE
LONGER-TERM AI THEME REMAINS DEBATABLE.
THAT’S ONE AREA WHERE IT CAN DRIVE PRODUCTIVITY AND THINK
THAT’S AN AREA AS WAS INTENDED AND HAPPY TO SPEND ON.
SO I THINK A LOT OF THAT IS IN TACT.
DESPITE THE RECENT POLLS IN SOME INVESTMENT POSITIONS THERE
IS SOME TO BE EXCITED ABOUT. CAROLINE:
IT IS INTERESTING THAT FOCUS ON SPENDING HAD REALLY BENEFITED
THE HARDWARE OFFERING OR AT LEAST THE CHIP DESIGN SIDE WHEN
IT WAS 2024. 2025 THE OUTPERFORMANCE
HAPPENED IN SOFTWARE OFFERINGS SUCH AS IBM AND PALANTIR.
IS IT STILL ABOUT A SOFTWARE WIN RIGHT NOW OR CAN YOU GO
BACK TO HARDWARE? JANET: IN THE NEAR TERM THE SOFTWARE
SIDE WILL LIKELY STILL OUTPERFORM AND BE THE INVESTORS
PREFERENCE. IT’S A TRADE UNCERTAINTY THAT
IS TOP OF MIND AND THERE IS SOME SCALE BACK ON TARIFFS, BUT
A BIG QUESTION MARK REMAINS. YOU CAN ALL — ARGUE IT IS LESS
IMPACTED. SO IT IS LOGICAL TO MAKE THAT
THE CONCLUSION. HAVING SAID THAT ON THE
HARDWARE SIDE, VALUATIONS OF SOME KEY INFRASTRUCTURES STOCKS
HAVE COME DOWN AND IT IS REALLY QUITE FAIR AND VALID TO BE
HONEST. A LOT OF THE CONCERNS ON PUBLIC VALUATION HAS COME
BACK DOWN. IT ALSO PRESENTS GREAT
OPPORTUNITIES FOR LONG-TERM INVESTORS BECAUSE THOSE ARE
GREAT COMPANIES. CAROLINE: I AM GOING TO GO GLOBAL WITH
YOU. I’M INTERESTED IN HOW TECH IN
EUROPE HAS PERFORMED. ASML, PINUP FOR THE INDUSTRY IS
DOWN A LOT. HAS THERE BEEN BUYING OF EUROPE
IN OTHER REGIONS? ARVIND: OVERALL — JANET:
OVERALL SPEAKING, THE TREND IS WE ARE SHIFTING A BIT MORE OF
EXPOSURE FROM THE U.S. TO EUROPE.
I THINK IT’S FAIR ENOUGH GIVEN WHAT’S HAPPENING AT THE MOMENT.
AND EUROPEAN TECH FOR EXAMPLE THOSE ARE GLOBAL LEADERS,
HAVING A MONOPOLY ON THE MACHINE THAT PRODUCES THESE
CHIPS. I THINK THERE ARE SOME CONCERNS
IN THE NEAR TERM CYCLICAL DIFFICULTY BUT OVER THE LONG
TERM YOU’RE STILL PRETTY CONFIDENT ON THESE SECTOR
LEADERS. CAROLINE: YOU CAN GO CROSS ASSET FOR US.
THIS HAS BEEN A BIG WEEK FOR CORPORATE DEBT SALES FOR BIG
TECH WHEN YOU THINK ABOUT APPLE COMING AFTERWARDS EARNINGS.
GOOGLE LAST WEEK FOR THE FIRST TIME IN YEARS.
HAVE YOU SEEN MORE APPETITE ACROSS THE FULL BREADTH OF
ASSETS WHEN IT COMES TO TECHNOLOGY? JANET: IF YOU TALK ABOUT CORPORATE
DEBT, RIGHT NOW WE HAVE A PREFERENCE ON GOVERNMENT BOND
OF JUST PURELY ON THE BONUS SIZE.
IT REALLY DEPENDS ON SPECIFIC SECTORS AND ISSUERS.
GENERALLY SPEAKING WE DON’T THINK THE CONFERENCE REFLECTS
THE POTENTIAL RECESSIONARY’S. IT’S A BASE CASE FOR SURE.
BUT WE JUST HAVE TO BE PREPARED FOR EITHER SCENARIO SO IF WE DO
GO INTO A RECESSION AND MORE ECONOMIC SLOWDOWN I THINK
UPWARD BONDS WOULD BE WHERE — THE PLACE TO BE. CAROLINE: WE STILL HAVE AND, WE HAVE THE
JUGGERNAUT THAT IS NVIDIA. WHAT ARE THE CATALYST FOR HERE
ON OUT AT THE MOMENT. IS IT FUNDAMENTALS OR THE
BREAKTHROUGH WHEN IT COMES TO TARIFFS AND TRADE. >> I THINK FOR THESE INDIVIDUAL
STOCKS THE FUNDAMENTALS WILL BE ABSOLUTELY IMPORTANT.
I THINK AS I MENTIONED THE AI CAPEX REMAINS INTACT.
BUT I THINK THERE IS CONCERN ON MARGINS.
ALSO THERE ARE CONCERNS FROM THE CHINESE COMPETITORS, ETC..
I THINK WE HAVE TO WATCH THE FUNDAMENTALS BUT MACRO
INVESTORS WILL STILL BE LOOKING A LOT AT WHAT THE FED PLANS TO
DO FOR EXAMPLE AND WATCH OUT FOR THE MAJOR ECONOMIC DATA
FROM THE U.S.. >> LET’S GO THERE TO THE FED.
I ARE YOU EXPECTING HAWKISHNESS OR DOVISHNESS OUT OF THE FED
TOMORROW? ARVIND: I THINK THEY ARE LIKELY —
JANET: I THINK THEY ARE LIKELY TO STAY
ON HOLD. WE SHOULD NOT BE EXCITED ABOUT
THE SHIFTING TO MORE DOVISHNESS. I THINK GIVEN THE INFLATION.
IN CONSUMER INFLATION IS REALLY HIGH AT THE MOMENT.
I THINK THERE IS A HIGH BAR FOR THE FED TO SWITCH TO MORE
DOVISHNESS SO I WOULD NOT BET ON THAT YET. CAROLINE:
GREAT TO HAVE SOME TIME WITH YOU. THANK YOU VERY MUCH.
ONE OF OPENAI’S MAJOR STAKEHOLDERS IS THE BIGGEST
HOLDOUT AS THE CHATGPT COMPANY TRIES TO RESTRUCTURE.
KEEP AN EYE ON TESLA SHARES. WE HAVE SEEN FURTHER SALES
PRESSURE OVER IN EUROPE. DISASTROUS NUMBERS OUT OF NOT
JUST SWEDEN AND SOME OF THE NORDICS, BUT ALSO IN THE U.K.
AS IT FINALLY TURNS NEGATIVE IN APRIL IN A BIG WAY. >> TIME FOR TALKING TACT.
PALANTIR SHARES ARE REALLY DRIVEN LOWER TODAY AFTER ITS
FINANCIAL RESULTS FAILED TO LIVE UP TO INVESTORS LOFTY
EXPECTATIONS. THEY BUMPED UP THE REVENUE
FORECAST REPRESENTING GROWTH OF 36% FROM LAST YEAR.
VALUATIONS OFF HIGH 12%. GOOGLE IS ARGUING THE DOJ’S
REMEDIES GO BEYOND THE COURT’S NARROW RULING. OPENAI HAS AGREED TO BUY NAI
ASSISTED CODING TOOL ACCORDING TO SOURCES.
THIS MARKS THE CHATGPT MAKER’S LARGEST ACQUISITION TODAY.
THE DEAL HAS NOT YET CLOSED PARADE WE WILL HAVE MORE IN A
MOMENT. WE ARE UNDER PRESSURE. 6/10 OF A PERCENT OFF BY THE
NASDAQ 100. WHAT WILL HAPPEN WITH THE U.S.
CANADA MEETING. WHAT WILL HAPPEN WITH THE
FEDERAL RESERVE IN TERMS OF TRAVEL FOR RATES WHERE WE GET
INFLATIONARY SETTLE — SENTIMENT.
WILL WE GET HAWKISH TONE. BITCOIN CURRENTLY UP A QUARTER
OF A PERCENT. COMING UP, AN IMPORTANT
CONVERSATION WITH THE CEO OF ARES MANAGEMENT JOINING US FROM
THE GLOBAL CONFERENCE. THIS IS BLOOMBERG TECHNOLOGY. ♪ >> WE ARE HERE AT THE MILKEN
GLOBAL CONFERENCE JOINED BY MICHAEL ERA GETTY.
THANK YOU FOR JOINING US HERE ON SET.
A LOT OF CONVERSATION GOING ON. IT IS KIND OF TAKING UP ALL THE
AIR IN THE ROOM THESE DAYS. WHAT DO YOU MAKE OF THE
STRATEGY YOU ARE SEEING FROM THE ADMINISTRATION AND HOW YOU
AS AN INVESTOR REACT TO IT? >> WE TRY TO STAY ABOVE THE
POLITICS AND THINK ABOUT WHERE THE MARKETS ARE GOING AND HOW
IT AFFECTS CAPITAL FLOWS IN OUR BUSINESS. THE GOOD NEWS GENERALLY FROM AN
ARES PERSPECTIVE IS THE BUSINESSES TEND TO BE
MIDDLE-MARKET SERVICE COMPANIES THAT HAVE THEIR CUSTOMER BASE
IN LOCAL CURRENCY AND LOCAL MARKETS.
WE DON’T REALLY INVEST IN A LOT OF COMPANIES AND MAKE THINGS OR
HAVE TO GRAPPLE WITH SUPPLY CHAIN ISSUES OR TARIFFS.
IN TERMS OF THE FIRST ORDER IMPACTS WE ARE PRETTY
UNAFFECTED. OBVIOUSLY THE LONGER THAT THESE
TRADE IMBALANCES GO ON, THE TRADE WAR GOES ON IT AFFECTS
EVERYBODY IN TERMS OF THE ECONOMIC IMPACT AND THAT’LL WE
ARE KEEPING AN EYE OUT FOR. HOPEFULLY WE’LL GET SOME
INFORMATION THE NEXT WEEK OR TWO TO GIVE PEOPLE SOME CLARITY.
SONALI: WHAT ABOUT THE DIFFERENCE THAT
YOU SEE BETWEEN SMALLER AND MIDDLE SIZED COMPANIES.
THERE’S A LOT OF CONCERNS THERE WILL BE A DISPROPORTIONATE
IMPACT TO THE CHANGES FOR THOSE MIDDLE SIZED COMPANIES. MICHAEL:
THE REALITY IS MOST OF THE MARKET COMPANIES ARE INSULATED
FROM SOME OF THE LARGE CROSS-BORDER IMPACTS OF THE
TARIFFS AND I COULD CRAFT AN ARGUMENT THAT THEY ARE ACTUALLY
MORE PROTECTED IN SOME RESPECTS FROM SOME OF THE ISSUES THAT WE
ARE GRAPPLING WITH. IF WE HEAD INTO A RECESSIONARY
ENVIRONMENT, THEY WILL BEAR THE BRUNT OF IT.
IT COULD BREAK EITHER WAY AND WE WILL HAVE TO REACT TO THE
MARKET GIVES US. >> WHAT TO MAKE OF THE
RELATIONSHIP CHANGING BETWEEN THE WORLD ECONOMIC SUPERPOWERS.
A LOT OF INVESTORS HAVE LOOKED MORE AND MORE TO CHINA AND ASIA
MORE LARGELY. THE TARIFF ESCALATION HAS NOT
BEEN HELPFUL TO THAT MOVEMENT. DO YOU THINK THERE SOME
REVERSAL THERE. MICHAEL: WE INVEST MONEY ON BEHALF OF
INSTITUTIONS AND INDIVIDUAL INVESTORS ALL OVER THE GLOBE.
WEAVER LARGE BUSINESS IN THE ASIA-PACIFIC REGION.
PART OF OUR BUSINESS IS BENEFITING IN TERMS OF PEOPLE
ALLOCATING TO OTHER REGIONS OF THE WORLD WHERE WE HAVE
CAPABILITY CAPACITY. OUR INDUSTRIAL LOGISTICS
BUSINESS IS BENEFITING FROM SOME OF THE CHANGES WE ARE
SEEING AROUND THE GLOBAL SUPPLY CHAIN NEAR SHORING AND
RE-SHORING AND TRYING TO PLUS ONE.
THERE WILL ALWAYS BE PUTS AND TAKES.
VERY FEW INVESTORS HAVE BEEN INVESTING INTO THE CHINA MARKET
OVER THE LAST MANY YEARS SO WE ARE NOT REALLY SEEING THAT
SIGNIFICANT AMOUNT OF DISRUPTION. >> AT A TIME WHEN A LOT OF
PEOPLE ARE LOOKING AROUND AND SEEING CAPITAL FROZEN YOU’VE
ACTUALLY RAISED A SIGNIFICANT AMOUNT IN PLACES LIKE PRIVATE
CREDIT. WHAT DO YOU THINK YOU ARE DOING
DIFFERENTLY HERE AND WHAT DOES IT MEAN FOR YOUR ABILITY TO
BRING IN MORE FROM INVESTORS FOR THE REST OF THE YEAR. >> LAST YEAR WE HAD A RECORD
YEAR OF FUND RAISING. CRAWLING BACK NEW A U.N..
THIS FIRST QUARTER WE HAD EARNINGS YESTERDAY TO THE DRY
POWDER ABOUT $145 BILLION TO INVEST. I THINK WHAT WE ARE
DOING DIFFERENTLY FROM A POSITIONING STANDPOINT IS WE
HAVE A BROAD DIVERSIFIED GLOBAL BUSINESS.
I THINK WE ARE GIVING INVESTORS A LOT OF CHOICE AS TO WHERE
THEY WANT TO PLAY AND WHAT RISKS THEY WANT TO TAKE.
AS ONE OF THE PIONEERS OR LEADERS IN PRIVATE CREDIT WE
ARE ONE OF THE FEW MANAGERS THAT HAS A TRACK RECORD THAT
GOES BACK 20 OR 30 YEARS WERE PEOPLE CAN SEE HOW WE HAVE
PERFORMED THROUGH CYCLES AND AS WE TALK WITH INVESTORS IF YOU
LOOK AT OUR PRIVATE CREDIT STRATEGIES BROADLY ACROSS REAL
ASSETS AND CORPORATE WE ARE GENERATING 12 TO 15% RATES OF
RETURN RIGHT NOW. SO ON RELATIVE VALUE BASIS,
THIS AMOUNT OF UNCERTAINTY ON THE FORWARD PATH OF EARNINGS,
VALUATIONS OR THINK MOST INVESTORS ARE FINDING IT
FRANKLY EASIER TO TAKE SHELTER IN THE CREDIT MARKETS AND MAKE
THOSE LOW TO MID TEENS RETURNS WITHOUT HAVING TO WORRY ABOUT
THAT EQUITY RISK PREMIUM. SONALI:
IS THAT BECAUSE RATES HAVE REMAINED HIGHER ULTIMATELY?
MICHAEL: IT’S CLEARLY A REFLECTION OF
THE BASE RATES ENVIRONMENT. AS THEY ARE CONCERNS ABOUT
ECONOMIC WEAKNESS OR SEEPING IN AND CREDIT SPREADS ARE STARTING
TO WIDEN OUT. SO RATES ARE COMING DOWN I
THINK PEOPLE FELT THE ASSET CLASS WOULD BE MUCH MORE RATE
SENSITIVE THAN IT IS BECAUSE WE ARE MAKING UP FOR THAT
REDUCTION IN CREDIT SPREADS WIDENING. SONALI:
I CAN’T HELP BUT THINK THERE MIGHT ACTUALLY BE AROUND THE
CORNER IN THE WAKE OF SOME OF THIS TURMOIL A GOLDEN
OPPORTUNITY THAT’S FORMING TO DEPLOY LARGER AND LARGER
DOLLARS GIVEN HOW MUCH VALUATIONS OF CORRECTED.
WHAT DOES THAT LOOK LIKE? MICHAEL:
WE NOW HAVE SEEN THAT WE ACTUALLY HAVE GROWN FASTER
THROUGH PERIODS OF DISLOCATION. SO THE FASTEST GROWTH WE HAD
WAS THROUGH THE GFCI TERMS OF PROFITABILITY.
THE SECOND WAS THROUGH THE COVID PANDEMIC AND THAT’S A
COMBINATION OF JUST LEANING STRUCTURES THAT WE MANAGE, THE
CAPABILITIES WE HAVE. SO WHENEVER WE HAVE MARKETS IN
DISLOCATION IT CREATES OPPORTUNITY.
WHAT’S UNIQUE ABOUT THIS MOMENT IS THE AMOUNT OF INVESTMENTS
THAT ALREADY MADE IN THE PRIVATE MARKETS AT HIGH
VALUATIONS THAT WILL REFLECT IN THE LOWER RATE ENVIRONMENT AND
THE MAGNITUDE WE HAVEN’T SEEN BEFORE.
SO THE RESOLUTION IF YOU WILL OF ALL OF THOSE ASSETS THAT
NEED TO RESET BASIS WE THINK WILL BE A MASSIVE OPPORTUNITY
IN PLACES LIKE SECONDARIES, OPPORTUNISTIC CREDIT,
OPPORTUNISTIC REAL ESTATE. WE ARE QUITE EXCITED ABOUT THE
FUTURE. SONALI: SECONDARIES IS A GOOD PLACE TO
DIVE IN BECAUSE YOU ARE SEEING LIMITED PARTNERS LOOKING TO
SELL. ALSO, THE PRIVATE EQUITY
INDUSTRY HAS BEEN HOLDING ON TO ASSETS FOR YEARS.
THE IPO WINDOW HAS NOT OPENED IN A MEANINGFUL WAY. M AND DAY ALSO PRETTY STALLED.
WHAT DOES THAT MEAN FOR THE PRIVATE EQUITY INDUSTRY.
CAN THEY KEEP BORROWING TO KEEP THE PARTY GOING? MICHAEL:
I THINK THEY CAN. THE FINANCIAL INCENTIVES ARE
ALIGNED TO LONG-TERM EQUITY VALUE CREATION AND THAT MAY
REQUIRE HOLDING THESE ASSETS FOR LONGER.
THERE WAS A REAL TENSION FROM LIMITED PARTNERS WHO WANT TO
SEE A RETURN OF CAPITAL BEFORE REINVESTING.
BUT THE OPPORTUNITIES FOR LIQUIDITY HAVE GOTTEN MUCH MORE
INNOVATIVE AND CREATIVE AND COMPLEX. SO IF YOU ARE A PRIVATE EQUITY
GP, TODAY THE ENTIRE MARKET IS ABOUT THREE PLUS TRILLION
DOLLARS OF PRIME EQUITY INVESTED.
60% OF THAT IS 4.5 YEARS OLD OR MORE.
THERE’S ABOUT $1 TRILLION OF EQUITY THAT HAS NOT BEEN
INVESTED. SO THE CHALLENGE THE PRIVATE
EQUITY INDUSTRY IS FACING IS DO I TAKE MY TRILLION DOLLARS AND
INVEST IT INTO THIS NEW MARKET WHERE THERE’S PROBABLY GOOD
OPPORTUNITY OR DO I USE IT TO SUPPORT VALUATION AND GROWTH IN
THE EXISTING PORTFOLIO. YOU CANNOT DO BOTH AND THAT’S
WHERE SECONDARIES COME IN. WE ARE SEEING SIGNIFICANT
DEMAND FROM THE GP COMMUNITY AS WELL AS THE LP COMMUNITY TO
KINDA FIGURE OUT HOW TO RECAPTURE SOME OF THAT 3
TRILLION AND GIVE IT BACK TO INVESTORS. SONALI:
DESCRIBE THAT TENSION WITH ASSET FIRMS. WHAT IS IT?
MICHAEL: I THINK MOST FOR SKID LPS WHICH
IS LARGELY ALL OF THEM UNDERSTAND THE WORLD WE LIVE IN
AND I DON’T THINK THEY WANT TO SEE ASSETS GETTING MONETIZED AT
VALUATIONS THE DON’T REFLECT INTRINSIC VALUE.
THEY WANT TO PARTICIPATE IN THIS NEW VINTAGE.
SO IF THERE IS A TENSION IT IS HOW DO I CAPTURE THIS WONDERFUL
OPPORTUNITY SET YOU JUST REFERRED TO WITHOUT
COMPROMISING VALUE PORTFOLIO AND NOT JUST THE DIALOGUE. GPS AND LPS WILL ALL BE IN A
DIFFERENT PLACE DEPENDING ON THEIR LIQUIDITY OR THE AGE OF
THEIR PORTFOLIO. SONALI: IT’S CERTAINLY THE TOPIC OF THE
DAY AND AREAS IS RIGHT IN THE MIDDLE OF IT.
THANK YOU FOR JOINING US ON SET. THAT IS THE CEO OF ARES.
BACK TO YOU. CAROLINE: THANK YOU SO MUCH.
LET’S CHECK IN ON THE BROADER MARKETS RIGHT NOW BECAUSE WE
HAVE BEEN UNDER PRESSURE COMING OFF OF OUR LOWS IN ANTICIPATION
OF THE FED TOMORROW AND WITH THE TREASURY SECRETARY HAS BEEN
SAYING ON THE HILL. DISCUSSION ABOUT DOGE, THE U.S.
NOT BEING IN A RECESSIONARY PATH RIGHT NOW.
LOOK AT WHAT INDIVIDUAL STOCKS ARE ON THE MOVE.
WE ARE CURRENTLY TRADING FLAT ON THE STOCK BUT THEY WERE A
TEA BACKER OF OPENAI. WE KNOW OPENAI SAID WALKED BACK
PART OF ITS MORE CONVENTIONAL FOR-PROFIT COMPANY BUT ITS
RESTRUCTURING PLANS HAVE NOT RECEIVED THE BLESSING OF A
MAJOR STAKEHOLDER WHO IS MICROSOFT.
NOW, PALANTIR IS ALSO SLIDING. SALES FORECAST FALL SHORT OF
WHAT IS A VERY LOVELY VALUATION ON THE STOCK.
THIS IS BLOOMBERG TECHNOLOGY. ♪ TECHNOLOGY PODCAST ON THE
TERMINAL, APPLE, SPOTIFY AND I HEART. THIS IS BLOOMBERG. LET’S TALK ABOUT DOORDASH.
IT’S ON A BIT OF A BUYING SPREE FOLLOWING HIS EARNINGS BEAT
ANNOUNCING TWO MULTIBILLION-DOLLAR
ACQUISITIONS. AND HOSPITALITY TECH COMPANY
SEVEN RUNS FOR 1.2 BILLION. THE ACQUISITION WOULD EXPAND
DOORDASH’S REACH. LET’S GET THE INSIDE TRACK.
WE START ON THE M AND DAY BEFORE THE FUNDAMENTALS.
WHY ARE THEY SUDDENLY EXPANDING OUTSIDE THE U.S.? >> IT REALLY COMES AT A TIME
WHEN DOORDASH HAD A STRONG FINANCIAL POSITION AND IT
THINKS IT CAN GO INTO THE U.K. AND SORT OF MORE URBAN EUROPEAN
MARKETS AND REPLICATE THE EVENT THAT TOOK THEM TO A DOMINANT
POSITION IN THE U.S. WHERE THEY COVER TWO THIRDS OF
THE MARKET. CAROLINE: THEY EXPAND GLOBALLY.
THEY ARE ADDING ON THE ABILITY TO BOOK YOUR RESTAURANT WITH
SEVERAL THAT HAVE ACTUALLY BEEN WORKING ALONGSIDE IN
PARTNERSHIP NOW THEY MADE THE ACQUISITION.
CAN YOU JUST TALK ABOUT WHAT THE FUNDAMENTALS ARE TELLING US
RIGHT NOW. >> THE REPORTED EARNINGS TODAY,
THE OUTLOOK WAS A BEAT. THE ADJUSTED EBIT OUTLOOK WAS A
BIT CONSERVATIVE. ANALYST ESTIMATES DUE TO THE
ONGOING INVESTMENT INTO THESE NEW INTERNATIONAL MARKETS AND
BUSINESSES. SO ANALYSTS WOULD BE LOOKING AT
HOW THEY ARE GOING TO INVEST AND READ ACROSS THESE MARKETS
AS THEY GROW IN THE COMING YEARS. >> DIG IN A LITTLE BIT.
WHY WANT TO BE BOOKING MY RESTAURANT VIA THE APP AS WELL
IS GETTING THE FOOD SENT TO ME. HOW WAS THAT THE RIGHT SORT OF
ALLOCATION OF 1.2 BILLION? NATALIE:
FOR DOORDASH THEY ARE EXPANDING THEIR ENTERPRISE OFFERINGS FOR
RESTAURANTS. THIS IS NOT ONLY A RESERVATION
PLATFORM LIKE OPENTABLE, BUT IT IS ALSO FOR RESTAURANTS TO
BUILD UP LOYALTY OR REACH CUSTOMERS MORE EASILY. WHETHER THEY ARE IN RESTAURANTS
OR THEY ARE ORDERING ON THE PLATFORM.
SO THERE ARE TWO SIDES TO THIS YEAR.
BOTH CONSUMER FACING IN THE B2B SIDE. CAROLINE: LET’S TURN TO ANOTHER SET OF
EARNINGS THAT SEEMED TO UNDERWHELM INVESTORS.
SHARES OF PALANTIR PLUNGING AFTER THE COMPANY PRESENTED IN
EARNINGS OUTLOOK THAT FELL SHORT OF LOFTY EXPECTATIONS.
PALANTIR IS ONE OF THE MOST POPULAR TRADE AMONG RETAIL
INVESTORS. LET’S JUST THINK ABOUT HOW MORE
INVESTORS ARE REACTING TO THE NEWS.
WE — RETAIL INVESTOR OF AK MEDIA. A QUARTER OF A MILLION
FOLLOWERS , YOU ARE VERY POPULAR FOR YOUR THOUGHTS ON
THE STOCK AMONG WHAT THEY’VE CALLED A RETAIL ARMY AND WHAT
DO YOU MAKE OF THE NUMBERS TODAY? >> I’VE BEEN COVERING THE
COMPANY FOR A BETTER PART OF FIVE YEARS AND JOINED — THERE
IS SOMETHING RETAIL SAW IN THIS STOCK ON THE SINGLE DIGITS THAT
WALL STREET DID NOT SEE. WE’VE SEEN WHAT’S HAPPENED
SINCE THEN AND HOW WALL STREET IS BUYING AT A HIGHER PREMIUM.
MAYBE THAT’S BECAUSE IT DESERVES A HIGHER PREMIUM?
A COMPANY THAT JUST A 39% YEAR ON YEAR GROWTH.
THE REMAINING DEAL VALUE IS UP 127%. THE U.S.
GOVERNMENT BUSINESS IS ACCELERATING.
IT’S A COMPANY DOING $900 MILLION IN REVENUE.
WITH LESS THAN 800 CUSTOMERS. I KNOW >> THE VALUATION IS
AGGRESSIVE. >>JUST DOUBLE-CLICK ON THE
MARKET CAPITALIZATION. $255 BILLION, THE STOCK RUN
EXCESSIVELY THIS YEAR FOR 60% HIGHER.
I’M INTERESTED IN YOUR TAKE WITH SOME OF THE ANALYSTS OUT
THERE. JEFFREY’S SAYING THIS IS A
RETAIL TRADE. I AM NOT HEARING PEOPLE TALKING
ABOUT PALANTIR IN THE INSTITUTIONAL MARKET IN ANY WAY
THE SAME AMOUNT WE ARE HEARING IN THE RETAIL COMMUNITY.
IS THAT RETAIL RESILIENCE THERE? AMIT:
IF YOU LOOK AT THE SPLIT IT IS 50-50. SO THIS IS NOT TESLA IN
20197030. THERE’S OBVIOUSLY INSTITUTIONAL
INVESTORS THAT ARE EXCITED ABOUT THE NAME.
LET’S TAKE A SECOND AND STEP BACK.
OPENAI IS WORTH 300 BILLION ON THE PRIVATE MARKETS.
AIG SAID THIS A MONTH AGO AFTER INVESTOR DAY IN THEIR EARNINGS.
AIG EXPECTS THE ADOPTION OF AN AI POWERED UNDERWRITING
SOLUTION LEVERAGING AIP TO DOUBLE ITS FIVE-YEAR REVENUE
FROM 10% TO 20%. THE CEO OF THE COMPANY HAS BEEN
SAYING LARGE LANGUAGE MODELS LARGELY ARE BECOMING
COMMODITIZED. I AM NOT SEEING THE STOCK IS
CHEAP I AM SAYING THE MULTIPLE IS AGGRESSIVE BUT IT MIGHT BE
WARRANTED BECAUSE THE IMPLEMENTATION OF AI IS WHAT
MATTERS. >> I SUPPOSE SOME AREA OF
CONCERN IS EUROPE. AND INDEED INTERNATIONAL
EXPANSION. THAT WILL BE THE CATALYST THAT
MAY BE STARTS TO HAVE PEOPLE GOING IT SHOULD BE WORTH 56
TIMES ITS 2026 REVENUES. WHEN WILL WE GET THAT
INTERNATIONAL EDGE. AMIT: ALEX SAID THIS ON THE EARNINGS
CALL. EUROPE IS IN A CRISIS. THEY ARE NOT GOING TO SURVIVE,
AT LEAST THE BIGGEST COMPANIES WON’T SURVIVE UNLESS THEY
SURVIVED THE AI REVOLUTION. THAT IS BECAUSE THE UNITED
STATES IS EMBRACING THE AI REVOLUTION.
ALSO SAYING YESTERDAY GOVERNMENTS ACROSS THE WORLD
ARE CERTAIN TO INCREASE THEIR INQUISITION OF PALANTIR AS WELL.
PALANTIR RECENTLY SIGNED A MASSIVE NATO CONTRACT FOR THEIR
MAVEN PLATFORM. I THINK WE WILL START TO SEE A
GROWTH SPURT AND S-CURVE IN EUROPE. THERE ARE STILL CULTURAL
DIFFERENCES THAT I THINK THAT WILL COME THROUGH AND WHEN IT
DOES I THINK THAT WILL BE A CATALYST >> FOR PALANTIR. >>WE’VE ALREADY SEEN RESILIENCE
SHOWN WITH U.S. GOVERNMENT CONTRACTS.
BUT IS THERE ANYTHING THAT GIVES YOU ANY SKEPTICISM ABOUT
A PULLBACK IN SPENDING FROM THAT SIDE? AMIT: NOT REALLY.
IT WAS FUNNY IN FEBRUARY WHEN THERE WAS A PENTAGON HEADLINE
THAT SAID THEY WOULD BE CUTTING DEFENSE SPENDING AND PALANTIR
WAS DOWN 10%. IF THE GOVERNMENT IS GOING TO
BECOME MORE EFFICIENCY WITH THEIR SPEND YOU NEED TO
EFFICIENTLY ALLOCATE. THIS IS ONE OF THE MOST LOGIC
THINGS THEY’VE BEEN TALKING ABOUT FOR A WHILE.
IF WE NEED A BETTER ALLOCATION OF CAPITAL TO GET MORE
TRANSFORMATIVE RESULTS I WOULD IMAGINE TO BE A MASSIVE
TAILWIND VERSUS A HEADWIND AND THAT’S WHY IT’S BEATING ITS
PREMIUM. IN TERMS OF THE STOCK BEING
DOWN THIS WAS 70% FROM THE LOWS OF APRIL.
IT’S A STOCK WELL ABOVE 10 EXTRA BLOWS OF 2022 WHEN WE
TOOK A CHANCE WHEN WALL STREET DECIDED HE WAS CRAZY.
SO FROM THAT PERSPECTIVE STOCKS GO UP AND DOWN.
I THINK THIS IS A REACTION TO THE NEWS BUT THE QUARTER ITSELF
WAS TREMENDOUS. CAROLINE: THEY BEAT AND RAISED.
THE STOCK IS STILL UP MORE THAN 42% OVER THE COURSE OF THE YEAR
THE BEST PERFORMING STOCK THROUGHOUT WHAT HAS BEEN A
PRETTY VOLATILE STATE OF TRADE. IT IS FROM YOUR PERSPECTIVE
GOING MORE BROADLY THIS THE NAME THE RETAIL COMMUNITY STILL
WANTS TO BE NUMBER ONE, WHERE ELSE HAS RETAIL STARTED TO GET
THEIR BETS WHEN IT COMES TO ATTACKING THEIR SYSTEM. AMIT:
I THINK IT IS PALANTIR. WHEN ALEX SPEAKS, PEOPLE LISTEN.
I WAS A NATIONAL LEAGUE COMPETITIVE DEBATER ONE OF THE
TOP THREE IN EUROPE. WHEN I DISCOVERED PALANTIR IN
2021 AND I SAW ON THEIR WEBSITE THEY REFER TO THEIR DATA
INFRASTRUCTURE AS ONTOLOGY. THAT IS A PHILOSOPHICAL WORK.
DR. KARP WROTE THE BOOK WHICH IS A NUMBER ONE TIMES NEW YORK
BESTSELLER. WHEN YOU TALK ABOUT RETAIL AND
WHAT CAPTURES THEIR INTEREST. WHAT CAPTURED MY INTEREST WAS
THIS GUY WHO DID NOT CARE WHAT ANYBODY SAID.
HE WAS GOING TO BE HIMSELF AND SAY HIS POLITICAL BELIEFS
REGARDLESS OF WHAT HAPPENED TO THE COMPANY.
I THINK BECAUSE PALANTIR HAS A BACKBONE, ALEX KARP IS RUTHLESS
ABOUT EXPLAINING WHAT THAT VISION IS, GROWTH IS THERE TO
JUSTIFY WHY RETAIL WANTS TO BET ON A TECH STOCK THAT IS
ACCELERATING IN THE AGE OF AI. CAROLINE:
WHAT’S THE SENTIMENT LIKE MORE BROADLY? AMIT:
IF YOU LOOK AT THE J.P. MORGAN DATA IN APRIL AND MAY,
MARCH HAD $40 BILLION OF NET INFLOWS FROM RETAIL.
APRIL HAD ABUT $42 BILLION OF NET INFLOWS FROM RETAIL.
HEDGE FUNDS TOOK DOWN THEIR POSITIONING TO THE MAG SEVEN
THE LOWEST SINCE 2023 AND HEDGE FUNDS SHOWED THAT THERE SHORT
POSITIONING ON THE BROADER S&P IS AT 2022 LEVELS.
THIS IS A GAME OF IT RETAIL IS RIGHT ON BY THE DIP WHICH WILL
ALLOW VALUATIONS TO BECOME MORE MATURE OR IF THE HEDGE FUNDS
WILL BE RIGHT. WE RECOVERED EVERY THING FROM
THE APRIL LOWS. I CAN IMAGINE HEDGE FUNDS AND
THAT CRATES MORE FORMAL AND MOMENTUM.
BUT RETAIL HAS BEEN BUYING THE DIP AND I THINK THEY WILL
CONTINUE ON PALANTIR. >> WE THANK YOU FOR YOUR TIME.
CEO OF A CAME MEDIA. SHARES OF TAS LOWER AS SHARE
SLIDE ACROSS EUROPE FOR THE MONTH OF APRIL.
THIS DESPITE THE COMPANY ROLLING OUT AN UPDATED VERSION
OF THEIR SUV. LET’S GO TO CRAIG FOR MORE.
MANY BLAME THE LACK OF A FRESH ITEM TO BE ABLE TO BUY INTO,
THE FACT THAT THEY HAD PUT ON ICE THAT PRODUCTION.
BUT NOW WE GET THE TELL THAT PEOPLE ARE STILL NOT BUYING.
CRAIG: THAT’S RIGHT. THAT WAS KIND OF THE BIG EXCUSE
YOU COULD THROW OUT IN THE FIRST QUARTER WAS WE HAD THIS
CHANGEOVER FROM THE MODEL Y THAT WAS GOING TO INEVITABLY
LEAD TO SOME LOST PRODUCTION AND THAT SORT OF CHANGEOVER IS
FAIRLY COMMON IN THE INDUSTRY. IT’S MAYBE WHAT WAS UNIQUE FOR
TESLAS THAT THE MODEL Y IS SO IMPORTANT TO THE COMPANY AND
ACCOUNTS FOR SUCH A HUGE PORTION OF THEIR VOLUME AND FOR
THEM TO HAVE TO TAKE THEIR PRODUCTION LINES DOWN AT EACH
OF THE FACTORIES WHERE THEY MAKE THE MODEL Y WHICH IS IN
ALL OF THEIR ASSEMBLY PLANTS AROUND THE GLOBE, THAT IS A BIG
DEAL FOR THEM. BUT BY THE TIME MARCH ROLLS
AROUND YOU HAVE THE MODEL Y STARTING TO SCHOOL BACK UP AND
DELIVERIES OF THAT REFRESH MODEL Y’S STARTING IN EARLY
MARCH, GETTING INTO APRIL FOR SALES TO BE THIS DRAMATICALLY
DOWN IS A TROUBLING SIGN IF YOU ARE A TESLA INVESTOR. CAROLINE:
SWEDEN OFF BY 81%. U.K. OFF BY 62%.
WHAT ARE REAL NUMBERS TALKING HERE. HOW FEW CARS ARE BEING
PURCHASED. CRAIG: IN THE U.K.
IT WAS JUST OVER 500 UNITS THEY MOVED SO THIS IS A REALLY
DRAMATIC DROP FOR THE COMPANY. I THINK THIS IS A CASE HERE IN
EUROPE WHERE YOU STILL SEE VERY PATCHY TAKE-UP OF ELECTRIC
VEHICLES WHERE SOME SMALLER MARKETS YOU HAVE A HUGE TAKE UP.
I WOULD POINT TO NORWAY BEING THE SORT OF BRIGHT EXAMPLE, TO
THE POSITIVE. BUT IN OTHER MARKETS, EV’S ARE
TAKING QUITE A WHILE TO ACCELERATE AND GERMANY AND THE
U.K. HAVE HAD SORT OF TRADED PLACES
IN TERMS OF BEING FAR AND AWAY THE BIGGEST WITHIN EUROPE AND
FOR THOSE COUNTRIES TO BE INCLUDED AMONG SORT OF THESE
COUNTRIES WHERE WE ARE SEEING REALLY DRAMATIC DECLINES IS
TROUBLING BECAUSE THAT IS WHERE ALL THE VOLUME IS IN THE REGION.
CAROLINE: THE OTHER PART IS HIS POLITICAL
REPUTATION, THAT IS CRIMPING DEMAND? CRAIG:
THAT IS WHAT IS TOP OF MIND FOR PEOPLE FOLLOWING THESE
DEVELOPMENTS IS HOW MUCH IS HE HURTING THE BRAND’S STANDING.
THE EUROPEAN MARKET IS A LOT MORE COMPETITIVE THAN THE U.S.
IS, WHERE A LOT OF EUROPEAN COMPANIES WERE BRACING FOR THIS
YEAR BEING A MUCH TOUGHER COMPLIANCE YEAR.
CO2 REGULATIONS WERE SCHEDULED TO TAKE ANOTHER SORT OF STEP UP
WHERE YOU HAD TO MEET A LOWER CO2 STANDARD FOR YOUR FLEET.
IT LOOKS LIKE THE MANUFACTURERS ARE GOING TO GET SOME RELIEF ON
THAT FRONT BUT IT SORT OF ALREADY IS THE CASE THAT WE ARE
SEEING THE FRUITS OF THOSE EFFORTS OF TRYING TO MEET THOSE
NUMBERS. A LOT OF PRODUCT HAS COME TO
MARKET. YOU HAVE CHINESE COMPANIES
COMING TO MARKET IN SPITE OF TARIFFS.
TESLA HAS MORE COMPETITION. CAROLINE:
THANK YOU SO MUCH ON ALL THINGS TAS LOVE. WE SEE PRESIDENT TRUMP
WELCOMING TO THE WHITE HOUSE THE NEW LEADER OF CANADA MARK CARNEY WHO IS BUT A WEEK AFTER
WINNING THE ELECTION PROMISING HE IS THE MAN TO GUIDE CANADA
THROUGH THE ECONOMIC TURMOIL, CHECK THEM AGAINST AGGRESSION
FROM THE WHITE HOUSE, EXPORTS IN CANADA PLUMMETING AS IT
WOULD SEEM FROM THE TARIFFS THUS FAR. SO CURRENTLY SEEING THAT
CONTINUATION OF DIALOGUE BETWEEN MARK CARNEY AND
PRESIDENT TRUMP. LET’S RETURN TO THE MARKETS.
BECAUSE OF TARIFFS AND WHAT THIS MEETING WANTS TO BE
DELVING INTO BETWEEN THE LEADERS.
WE HAVE SOME EARNINGS AFTER THE BREAK AS WELL. AND UP BY 1.5%. WHAT WILL THEY SAY ABOUT AI
DEMAND, WILL THEY SHAKE OFF THE ANXIETY.
ARM, A DESIGNER UP BY 4/10 OF A PERCENT. FROM NEW YORK, THIS IS
BLOOMBERG TECHNOLOGY.