Apple Tops Sales Estimates Despite China Dip, Amazon Reports Cloud Unit Growth

Summary

Bloomberg Businessweek – Episode Summary

Episode Title: Apple Tops Sales Estimates Despite China Dip, Amazon Reports Cloud Unit Growth
Air Date: October 30, 2025
Hosts: Carol Massar & Tim Stenovec
Notable Guests: Putnam Goyal (Bloomberg Intelligence), Ed Ludlow (Bloomberg/BTech), Eric Clark (Acuvas Global Advisors), Jay Goldberg (Seaport Research Partners), Mark Gurman (Bloomberg News), Jessica Nix (Bloomberg Health), Caroline Freund (UC San Diego)

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Overview

This episode dives deep into third quarter earnings from Amazon and Apple, exploring how both tech giants outperformed Wall Street expectations in key areas, and where headwinds—especially those from China—remain. The conversation expands to cover a dramatic biotech acquisition battle, and closes with analysis of the latest US-China trade truce following a Trump-Xi summit. Throughout, the panel examines market sentiment, company strategies, and what might come next for these major economic players.

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Amazon Earnings: Cloud Growth, Margins, and Market Strategy

Segment Start: [01:56]

Key Points & Insights

• Strong Q3 Results:

  • Net sales reached $180.17B, up 13% YoY, topping analyst estimates.
  • AWS (Amazon Web Services) saw net sales up 20% YoY, the strongest in nearly three years, far surpassing analyst projections.

• Cloud as Profit Engine:

  • AWS remains the “majority of operating income,” fueling Amazon’s overall profitability.
  • Amazon is pitching their in-house AI chip (Trainium 2), calling it a “multibillion dollar run rate business” ([05:31] Ed Ludlow).

• Investor Reaction:

  • Shares surged up to 10% in after-hours trading due to the strong report and economic outlook.

Notable Quotes

• Putnam Goyal ([02:53]):
  “It definitely is. I mean, they hit it out of the park. Sales were very good across the board, across all business segments...20% [cloud] gains, we haven't seen that in a while.”

• Ed Ludlow ([04:28]):
  “This return to growth year on year of above 20% for the first time since 2022, it’s absolutely timely…this is a bit of a barnstormer from Amazon to say actually, on every metric...it's doing really well.”

• Putnam Goyal ([03:39]):
  "They want to drive market share gains…Amazon has stepped up its game on shipping…continuing to invest to get items to you faster, same day, etc.”

Margin Pressure & Retail Business

• North America margins weaker than expected, attributed to low-price strategy to retain customers and investment in fulfillment.
• Advertising:
  • “It grew 22% in constant currency in the quarter…75-80% profit margins...we see it going to $100 billion.” ([07:34] Putnam Goyal).

Layoffs & Automation

• Recent layoffs (over 14,000 roles) are “more about bloat and middle management” vs. just AI efficiency ([10:06] Ed Ludlow).
• Ongoing investment in robotics and automation aimed at boosting retail profitability.

Market and Forward-Looking Views

• Discussion about the upcoming holiday season and potential for continued retail growth.
• Panel largely optimistic, given Amazon's scale and resilience, despite macroeconomic and regulatory challenges.

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Apple Earnings: Record Revenues Despite China Weakness

Segment Start: [22:57]

Key Points & Insights

• Headline Results:
  • Revenue topped $100B for the first time in a September quarter.
  • China revenue disappointed, 12% below consensus.
  • Services delivered a strong beat; iPhone sales nearly matched estimates.

Notable Quotes

• Jay Goldberg ([23:59]):
  “It looks okay. It’s not perfect…services is much stronger than I expected. iPhone was good. iPad was surprisingly good...Gross margins were better than expected.”

• Mark Gurman ([27:59]):
  “iPhone obviously grew tremendously, 6% year over year. They beat in nearly every product category except the iPad…the big one though is a big decline and miss in greater China...some of that can be attributed to the iPhone Air delay.”

• Ed Ludlow ([32:50]):
  “Orders for the iPhone 17 started on September 12...Reported a quarter that ended on September 27. So they had eight days of data for the iPhone 17 generation…The CFO has guided very clearly on the trajectory of the iPhone 17 and its sales into the December quarter.”

China Drag Explained

• iPhone 17 Air not launched in China (production delay, regulatory issues), which likely pushed some consumer demand to the coming quarter.
• Ongoing vulnerability in China; need for localized products and a clearer AI strategy for the Chinese market.

Investor Focus: The Holiday Quarter

• Apple CFO Kevin Parik previews 10-12% YoY revenue growth in the crucial holiday quarter, boosting investor sentiment and sending shares up nearly 4%.
• Analysts see continued demand for premium iPhones (Pro, Pro Max) beneficial for margins.

Pricing & Product Segmentation

• Quiet but effective price increase: “They've effectively raised prices $100 this cycle” ([39:40] Jay Goldberg).
• Analysts are more focused on supply chain issues, segmentation, and upcoming products (anticipation of foldables).

Innovation & Capex

• Ongoing calls for Apple to increase capital expenditures and invest more aggressively in innovation (compared to peers like Amazon, Google, Microsoft).

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Pharma Watch: M&A Drama and the Obesity Drug Race

Segment Start: [43:36]

Key Points & Insights

• Novo Nordisk v. Pfizer for Metcera:

  • Novo Nordisk makes an unsolicited bid for Metcera, disrupting Pfizer’s earlier effort to buy the biotech for access to next-gen weight loss drugs.

• Why The Scramble?

  • Weight loss/GLP-1 drug market is projected to reach $100B by 2030.
  • Pfizer badly wants a foothold; their own offering failed, making Metcera critical.
  • Metcera’s candidate targets amylin, promising fewer side effects and possibly a competitive edge.

• Lilly vs. Novo:

  • Eli Lilly is “storming through” the weight loss drug market, increasingly outpacing Novo Nordisk despite Novo’s head start.

Notable Quotes

• Jessica Nix ([44:30]):
  “It's a market that's expected to grow by $100 billion by 2030. It's huge. It's the thing right now is these weight loss drugs and so Pfizer is trying to get in and now Novo sweeping out under, under from them.”

• On Pills vs. Injectables ([47:41]):
  “The real golden goose here is the pill. Eli Lilly...has been working on its pill...they’re saying, you know, by the end of the year, they're going to go to the FDA for approval.”

• Investment Community’s Take:

  • Pfizer’s need is more urgent, but the bidding war is heating up; Metcera shares soared more than 20% on the news.

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US-China Trade Truce: Stabilization, Not a Reset

Segment Start: [52:15]

Key Points & Insights

• Trump-Xi Summit:

  • US and China agreed to a one-year trade truce at the APEC summit:
    • US cuts fentanyl tariffs, China resumes soybean sales and rare earth exports.

• Analysis:

  • “We have the world’s top producer and the world’s top consumer meeting and they both have market power...needed each other...It was a game of chicken.” ([53:33] Caroline Freund)

  • “We’re close to pre-Liberation Day tariffs...but there are still tweaks: some fentanyl tariffs remain, and US firms face licensing regimes on magnets.” ([53:33] Caroline Freund)

• Unresolved Tensions:

  • Key issues (Taiwan, tech bans, AI chips, oil from Russia) left ambiguous; focus is on calming escalation, not long-term resolution.

• Market & Political Implications

  • Both sides recognized the mutual pain of further escalation; “market discipline” enforces the truce.
  • The need to diversify rare earth sources and secure supply chains highlighted; allies like Australia and possibly Latin America mentioned as partners.

Notable Quotes

• Carol Massar ([54:16]):
  “What is more significant, what they did talk about or what they didn't talk about?”

• Caroline Freund ([55:42]):
  “Yes, I think Trump has tried the kind of bullying technique, and it’s worked with everyone else... China said, no, we're not going to be bullied... Now there's kind of a truce... It'll hurt the US too much to do a lot more on China; it'll hurt China too much to do a lot more on the US.”

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Noteworthy Segment Timestamps

• Amazon blows out Q3 expectations: [01:56]–[11:34]
• Discussion on layoffs, AI, and retail margins: [11:34]–[18:49]
• Advertising and profitability: [07:34], [14:30], [17:31]
• Apple Q4 results: China dips, new optimism: [22:57]–[41:16]
• Jay Goldberg on iPhone pricing segmentation: [39:20]–[39:51]
• Biotech bidding war (Metcera): [43:36]–[51:53]
• US-China trade truce analysis: [52:15]–[59:43]

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Memorable Quotes

• On Amazon’s cloud strength:
  “20% gains, we haven’t seen that in a while. On the margin side I think really well.” — Putnam Goyal [02:53]

• On Apple’s resilience:
  “They beat in nearly every product category...the big one though is a big decline in greater China.” — Mark Gurman [27:59]

• On future innovation:
  “Why is it that Amazon, Alphabet, Meta and Microsoft have capital expenditures nearer to $100 billion per annum and Apple has $10 [billion]? When is Apple going to take some risk?” — Ed Ludlow [39:58]

• On the trade truce:
  “Both realized how much they need each other…the countries have settled the deals in the areas that really matter…but we’re going to see ambiguity on those much more complex issues.” — Caroline Freund [54:33]

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Summary

This episode offers a thorough breakdown of major corporate earnings and market-moving news. Key takeaways:

• Amazon impresses with robust cloud growth and advertising momentum, while also aggressively pursuing efficiencies and automation.
• Apple delivers record Q4 revenue with a bullish holiday outlook; Chinese sales drop due to timing and regulatory issues, but optimism prevails thanks to services and new devices.
• The pharma sector is roiled by rival takeover bids as Big Pharma races for the next blockbuster obesity drug.
• A US-China “truce” offers temporary market reassurance, but leaves many bigger questions—from tech to geopolitics—unanswered.

The discussions capture the cautious optimism and persistent uncertainty that define today’s economic environment, with guest experts providing both market context and inside perspective.

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For those who missed the episode, this summary distills all the need-to-know moments and insights from an eventful day in business and tech.

Transcript

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[Jay Goldberg]

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[Carol Massar]

Bloomberg Audio Studios Podcasts Radio News this is Bloomberg businessweek Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Massar and Tim Stenbeck on Bloomberg.

[Tim Stenbeck]

Radio it is Bloomberg Businessweek Daily. That's Carol Massar. I'm Tim Stanwak. I'm watching shares of Amazon in the after hours up 8 1/2% right now. The company reported net sales for the third quarter that beat the average analyst estimates. We're talking about $180.17 billion. That's up 13% year over year. The estimate was for $177.82 billion. AWS coming in net sales excluding FX up 20% versus 19% year over year estimates for 17.9%. As far as that forecast looks sees net sales of 206 billion to 213 billion. The estimate was for $208 billion. So kind of on the high, like.

[Carol Massar]

Yeah, some room for outperformance.

[Tim Stenbeck]

Yeah.

[Carol Massar]

Putam Goyal is Bloomberg Intelligence Senior analyst for E Commerce and Athleisure. She joins us from the Bloomberg Intelligence Princeton Bureau. Let's go to you. God put this looks like a really strong report on a lot of methods, on a lot of metrics.

[Putnam Goyal]

It definitely is. I mean they hit it out of the park. Sales were very good across the board, across all business segments, US online advertising, even physical stores. So from a top line perspective, very, very encouraging results. In fact was probably the bright spot here. 20% gains, we haven't seen that in a while. On the margin side I think really well. But then when it came to North America margins, they were weaker than we expected. So it's the only one area that I saw some skepticism and I think that's largely due to their ability to want to maintain low prices to make sure the consumer keeps coming back and investing in its fulfillment.

[Tim Stenbeck]

So you think that margins took a hit because Amazon is keeping prices low. Why?

[Putnam Goyal]

I mean they, they want to drive market share gains. Right. So if you think about what's happening in retail this year, tariffs have clearly added to costs and many retail have decided to offset those costs through efficiencies to try to keep and hold prices steady or raise them selectively. So that could be part of the pressure. And then also, you know, Amazon has stepped up its game on shipping where it was the leader and it still is the leader, but they're continuing to invest there to get items to you faster, same day, etc.

[Carol Massar]

Yeah, they still do it, right? They're definitely completing on that one. Hey Ludlow, come on into our conversation. Co host of Bloomberg of B Tech on Bloomberg Television watching these numbers. I mean investors are sending shares of Amazon much higher here in the aftermarket stock up about 9%.

[Ed Ludlow]

The cloud computing division accounts for the majority of operating income. Right. And this return to growth year on year of above 20% for the first time since 2022, it's absolutely timely. You know, I think Google gave us a lot of evidence that gcp, their cloud offering has a lot of momentum at the moment. But this is a bit of a barnstormer from Amazon to say actually on every metric that we track us is doing really well. One of the headlines that you spotted, really excellent, the appreciation in their investment on Anthropic that had a non operating income impact to the bottom line. Right. But also they're talking a pretty fierce game about their custom training, chip training to and calling it a multibillion dollar business. And what we've seen in the past is when Amazon hasn't necessarily put a specific dollar figure on something but said this AI thing is in the billions of dollars, the market has given them a lot of credit for giving us at least a little bit more detail.

[Tim Stenbeck]

Ed, where does the training to model fit in?

[Ed Ludlow]

Well, this is why I bring Google up. You know, when we broke the story that Anthropic had done a deal with Google for use of 1 million TPU's Google's custom AI card or accelerator, it was a bit of a black eye for Amazon because Amazon is also a major investor in Anthropic. And Amazon and Anthropic have this large project called Project Rainier, a data center in Indiana. What they're saying is that this is a multibillion dollar run rate business offering that in house chip to third party customers. We don't know any more than that, but it does indicate that both for Anthropic and for other customers outside of Anthropic, that it's a viable business. You know, they've invested a lot of money on custom silicon and at least on the one headline we have on that, it's paying dividends, so to speak.

[Carol Massar]

Hey, speaking of dividends and paying dividends and put them. I want to go back to you on the retail side of this. I mean we know that Andy Jassy, the CEO of Amazon has really been working on improving profitability of that business, automate automation. We've had their key head of robotics, Brady, talking about what Amazon continues to do at that company in terms of automation and robotics. So what else can you give us in terms of color on the retail side of the business, which is something that so many of us. Right. Identify very clearly with when it comes to Amazon?

[Putnam Goyal]

Yeah, I think, look, they're making all the right investments to improve profitability in the longer term. Amazon's retail businesses finally break even the profitable. It took a long time to get here and I think automation will be the next leg of growth to drive that further. But as I mentioned, you know, earlier, NWC is driving their EBIT margins. So us can compensate these investments to a certain extent and so can advertising because the margins here are just so much higher than they'll ever be able to get in the retail business.

[Tim Stenbeck]

How is, how is the advertising business doing?

[Putnam Goyal]

It's doing really well. It grew 22% in constant currency in the quarter. So right where we expected and I think, you know, that's a high Profit business. It's about 75 to 80% profit margins by our estimates. And that's flowing right to the bottom line. We see it going to $100 billion. So there's a lot of improvement that they can build in advertising and really drive that business higher from here.

[Tim Stenbeck]

Where is that coming from? Is that coming from interstitials placed in Amazon Prime Video? I think, you know, caught a lot of people off guard when they started doing that. Was it last year maybe, or. Yeah. Or is it, was it coming from like products that are paid for placement?

[Putnam Goyal]

I think it's a combination of both. You're absolutely right. These ads are driving incremental revenue. But if you think about the base of this revenue base, it's still coming from product advertisements. The ads do help and they will become a larger driver as the ad business grows in size. But the core of it is still product advertisement.

[Carol Massar]

Hey, Putin, before we let you go, what's kind of top of mind for you in the areas that you cover with Amazon that you would be asking on the earnings call?

[Putnam Goyal]

On the retail side, it's really about Holiday and how that's going. Their October Prime Day deals that they had, how that's going and how the customer is responding. We think the customer still holding up well, are they seeing the same thing and how do they see Holiday shaping out to be where we're entering Holiday?

[Carol Massar]

All right, love it, love it. Looking out for Putin's research too. That will hit the Bloomberg Putin Goyal as Bloomberg Intelligence senior analyst for E Commerce and Athleisure. We want to go back to the co host of BTech on Bloomberg TV every day, 11am to noon on Bloomberg Television. Ed Ludlow still with us. Ed, as you continue to pore over that release, what else is catching your attention?

[Ed Ludlow]

Yeah, I mean, Putin gave us the story with Amazon.com right? Most of the audience are going to be more familiar with the E commerce business than they are with the cloud computing business. They are number one in cloud computing and as Poonam put it so succinctly, the profit is compensated for the less profitable E commerce side through, through cloud. But Andy Jassy is really focused on retail being more profitable. Tim is absolutely right that you look at advertising and the role that that's played there and it has been improved. I would also just note that in the quarter, Amazon numbers reflect almost $2 billion in severance costs. That's the other story of Amazon and getting rid of the bloat.

[Tim Stenbeck]

That's, that's the, that was the previous quarter. Right. Not the current quarter.

[Ed Ludlow]

Previous quarter, exactly.

[Tim Stenbeck]

So the printed.

[Ed Ludlow]

Yeah.

[Tim Stenbeck]

Is the current quarter going to take a hit right now or is it going to be the, the upcoming quarter? It's always tough with, with this stuff because we don't know how these employment agreements work.

[Caroline Freund]

Yeah.

[Ed Ludlow]

But the third quarter operating income was $21.7 billion, almost $22 billion without charges when you strip the charges out. And so you know, this is a profitable business overall because of cloud. It's a funny thing to say, but what's a couple of billion, you know, to right size the company? And that is the thing here. Amazon has been inconsistent on this point. At one time Andy Jassy said that. Right. Sizing the company eliminating roles was because of the advent of AI, but the communication this past week when they cut 14,000 corporate roles was it was more about bloat and middle management. Right. Sizing areas and simplifying the management structure more than anything. So it's hard to know which of those two stories is, is the predominant or prevailing one here. But yeah, it's a, for Amazon, like it's a, it's a one time charge that. So what.

[Carol Massar]

All right, we want to bring into the conversation to Eric Clark, Chief Investment officer at Acuvas Global Advisors and Portfolio manager Chris for the Alpha Brands Logo etf, which has Amazon and Apple and Alphabet and Microsoft and Netflix in its holdings. Ed Ludlow is going to stay with us. He's of course co host of BTech on BTV. Eric, come on in. On Amazon. You like this?

[Eric Clark]

I love it. I mean, I think the market loves it too. How are you guys? I think the setup into the quarter was pretty attractive because people were nervous about us and losing market share. So the stock sold off into the print. And then you get some reality that Amazon is still doing Amazon.

[Tim Stenbeck]

Well, how do you read into this report in the context of the layoffs that we learned about earlier this week? Did, did Amazon need to do those layoffs? Do you see it as a directional shift for the company? Obviously they were doing pretty well with this same headcount.

[Eric Clark]

I mean, you're going to hear more and more of this and I don't love that as a consumer investor, but the reality is when you're implementing AI through your business and you're obviously serving other companies doing the same thing.

[Tim Stenbeck]

Right.

[Eric Clark]

Sizing of your headcount is a big part of the story. And so with robots in warehouses, plus all the typical rightsizing, I mean it's a very large company, a very Large employer. So I think we're, we're going to have to hear about that across most companies certainly deploying AI because they're, they're getting a lot of efficiencies and might not need the same kind of people.

[Carol Massar]

Hey Ed, I know you're doing double duty for us and for our TV team but you know, I'm just thinking about all these names, these hyperscalers, these big tech that have been reporting as Anuragrana said, they're not apples to apples. Even though we sometimes get up, we're getting Apple in seven minutes we pull them together and it's going to be back to, to talk Apple with us. But how are you thinking against kind of the big cap technique?

[Ed Ludlow]

Smart question.

[Carol Massar]

Yeah. How this fits?

[Ed Ludlow]

Well, so what they will have in common is capital expenditures. So okay, on the one hand they will have capital expenditures. It's what they then are able to say. On the other that they've been inconsistent. Matter didn't say anything about growth related to AI and the stock fell precipitously. I go back to the trainium to headline from us it being a multibillion dollar business, that commitment to invest in infrastructure but also giving us a number for what's come online. The kind of fighting talk from Andy Jassy on the US growth and its ties to AI specifically investors seem to be rewarding any more little bits of information that you can get that shows something coming out of the investment that's happened in prior quarters. And so while they will have capex in common, the story they have to tell about literal top line growth as it relates to AI has been very different than Amazon has. Something to say here clearly.

[Carol Massar]

All right Ed, we know you're going to probably head over to the TV side but you're going to come back with us a little bit later on when Apple reports in just a few minutes. Our Ed Ludlow of course co host of BTech on BTV still with us as though Eric Clark.

[Tim Stenbeck]

Hey Eric, I want to bring you back into this conversation. All the companies that we love to talk about are in your logo U.S. fund. That's the ticker logo U.S. amazon is one of the top 10 holdings in there. It's about 4.3% of the portfolio. Are you buying more on this?

[Eric Clark]

I don't know that I'm going to chase any because it'll be interesting to see if we get a little bit of fade. You know some of the bears might come out and say that well it, it was a beat but they're still losing market share to Google and to Azure, but off of such a big scale, I just don't think that's a very wise decision or a wise conclusion to make. And people still give the retail business no respect. Margins are going to keep going up. Headcount's going to be size.

[Jay Goldberg]

There's just.

[Eric Clark]

Yeah.

[Tim Stenbeck]

Why do you say margins are going to go up? They're eating tariffs right now.

[Eric Clark]

Well, it wouldn't let, let's say, let's say. I would bet you that there's at least more than 5050 chance that these tariffs get rolled back, whether it's the Supreme Court doing it or the administration saying that we need actual growth. And tariffs might not be, you know, pro growth in that perspective. I just think there are too many efficiencies to be had that will eventually lead to margin expansion.

[Tim Stenbeck]

This is part of a much bigger conversation. But those tariffs are supposed to at least partially offset the revenue decreases coming from the one big beautiful bill act and tax cuts.

[Carol Massar]

Right.

[Tim Stenbeck]

That are included as part of that. So how does that, how does that square for the fiscal. I mean, look, this is not a conversation about the fiscal health, but this all affects the consumer at the end of the day. And that's what you look at.

[Eric Clark]

It does, it does. I mean, the smaller companies don't have as many levers to pull to try to, to keep prices where they are. And I think this, this massive headcount is being underappreciated too, because that's a pretty large number that ultimately will have an effect on their ability to keep prices, which drives traffic. And Amazon, Walmart, you know, Costco, they're still the three brands that people are turning to when they're looking to save money. So there's, at this amount of scale globally, there's a lot of operating efficiencies that keep margins higher. And I still think the cost to serve goes down and continues to go down, which pushes margins up over time. And I just don't think the, the, the tariffs are pro growth. And you know, it's, it's mid, it's midterm elections next year. Pro growth is going to get a lot more focus as we head into 2026.

[Carol Massar]

Hey, if you're just joining us, Amazon out with earnings. Just shortly after the market closed, Amazon's cloud unit posted the strongest growth rate in almost three years. So reassuring investors concerned that the largest seller of rented computing power was losing ground to rivals, Amazon Web Services posted revenue of $33 billion, an increase of 20% from the prior year and the biggest year over year rise since the end of 2022. Analysts on average had estimated about 18% growth. We are still looking at this stock up about 9.2%. In the aftermarket, we've seen it up as much as 10%. But again, investors definitely all in on what they got.

[Tim Stenbeck]

Okay, so Eric, on the US side of this, I know you look at the consumer, but us powers this company from a profitability perspective. Still more room in your view for us to get market share. That was a question that a lot of people had going into this call.

[Eric Clark]

You know, I mean, I've been listening to a bunch of calls from a bunch of different tech companies and retail companies. There is so much demand for these products and services and tools that I think there's enough business to go around for everybody. And you know, I understand that Google has, has Gemini and, and Azure has, has Open Air and Chatbots, but you know, don't, don't underestimate Anthropic and its role. Every company is going to do things a little bit differently and the inference is obviously the most important part long term. So I think there's enough business to go around and, and I have learned not to underestimate Amazon's management team. The stock can lag when they're in these big capex cycles and then it plays wicked catch up with, with the monetization part of it. But they've said now for two quarters that they, their business is stable enough at the retail and ATB that they can fund the growth while not, you know, spending too much. Meta got crushed because the expense structure is out of control and I don't see that here with Amazon.

[Tim Stenbeck]

So to be fair, Alphabet is your fifth biggest holding in your logo etf so you are able to kind of get exposure to both.

[Eric Clark]

We do, we do. I mean the Google, the Google quarter was stellar. Growth is strong and clearly with that big acquisition on cybersecurity that is the next phase of Google rather than search. Because we know search might be a bit of a melting ice cube over time, but it is a slow moving melting ice cube and so they're doing exceptional things and clearly underestimated. Looking at the stock over the, you know, over the last couple of months.

[Carol Massar]

Erica, do you want to go back to Amazon again? Still up about 9% here in the aftermarket. Know you mentioned Anthropic and in the release I did a search as soon as it came out because investors and analysts were curious about that. Net income increased to 21.2 billion in the third quarter for Amazon compared with 15.3 billion in the third quarter one year ago. Third quarter 2025 net income includes pre tax gains of 9 and a half billion included in non operating income from their investments in anthropic. So that investment paying off very much so.

[Eric Clark]

And the same thing could be said about Microsoft and and and open AI. So you know they've picked a bunch of the mega caps have all picked a handful of these companies and obviously it's about computing power and energy because the demand is clearly there. They just need to be able to to serve the demand. And the good news is they don't. They don't do it all in one or two quarters. This is probably sustainable demand and sustainable growth for the next couple of years for all these companies.

[Tim Stenbeck]

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[Carol Massar]

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[Tim Stenbeck]

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[Carol Massar]

That's metronome.com you're listening to the Bloomberg Businessweek Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube. Apple is out. Let's get to it, folks.

[Tim Stenbeck]

Okay, well, there were some beats and there were some misses. Let's start with the misses fourth quarter Greater China revenue, a big, big miss there. $14.49 billion. The estimate was for $16.43 billion. Overall revenue, though, coming in above $100 billion. That for the first time ever for the September quarter, Greater China revenue, 12% below consensus estimate. Services came in with a nice beat. Another miss, surprisingly, the iPhone, 49.03 billion versus $49.3 billion.

[Carol Massar]

Yeah. Mark Gurman saying operating expenses, expenses which everyone is now closely watching thanks to Metta, came in line with expectations of 15.91 billion. I'm sure we will hear more about investing on the call. That's coming from our Mark Gurman who covers Apple so closely and looks at consumer tech over all. Let's get to it with Jay Goldberg. He's senior analyst, semiconductors and Electronics at Seaport Research Partners. He's got a buy on Apple, joining us from San Francisco. Take it away, Apple. What do you think?

[Jay Goldberg]

Yeah, it looks, it looks okay. It's not, it's, it's not perfect. It's not totally clean, but it's got some good stuff. It's got some, you know, okay stuff.

[Tim Stenbeck]

Yeah. Go ahead, Carol. Well, what's good?

[Carol Massar]

What's okay?

[Jay Goldberg]

I mean, just going against my numbers, it looks like services is much stronger than I expected. IPhone was good. IPad was surprisingly good. I don't know if anyone tracks that anymore, but iPad was good and gross margins were better than expected. I've been a little cautious about gross margins in consumer companies lately because memory prices are going up. But that's not, I don't see that in Apple's numbers. So, you know, the China stuff, you pointed that out. I think that's concerning. Not entirely surprising.

[Tim Stenbeck]

It's not surprising, but it's 12% below consensus. So it surprised some people.

[Ed Ludlow]

Yeah.

[Jay Goldberg]

I mean, just given the state of the world, I think expecting too much from an American company selling it in China right now is going to always disappoint. But hopefully we have a trade deal and that all goes away.

[Tim Stenbeck]

It's a trade truce, I think is the way that we heard about it today.

[Carol Massar]

Trade truce.

[Tim Stenbeck]

Is a trade truce enough for that to go away?

[Jay Goldberg]

I think so. I think more, more practically what was going on in China is the iPad, the iPhone air is not available there. It's hard to get here. Production hasn't fully ramped yet and I think that's going to be the real hit. Right. And this is Apple. They know how to get their supply chain in time for the year end holiday shopping season. And I don't think iPad, I don't think the iPhone air is readily available in China. So I think that will, that will help. And so if you're a Chinese consumer and you're looking at it, you see the iPhone air coming, you're going to hold off on your iPhone purchases now and wait for that.

[Carol Massar]

All right. Shares of Apple now up about 1% here in the aftermarket. So bouncing around, no doubt about it. Or Mark Gurman on our live blog who covers Apple and often is breaking exclusives on the company, noting that while China is harsh, they are likely pleased investors. They are likely pleased with the overall revenue growth of 8%, the giant services number. That's something Jay just pointed out. And the 6% year over year iPhone growth overall, a solid quarter. So top of mind for you, like what is it that you would. What do you want to know more from when it comes to Apple here? Jay?

[Jay Goldberg]

I think I'm willing to wait on the story. I know your previous guest was talking about that and he's absolutely right. The story is important for Apple, but I don't think it's important today. I can wait six months, nine months, a year for them to sort it out right. When, when, Remember when Apple maps launched, whatever, 10 years ago, it was terrible. It was a joke. Now I use Apple Maps more than I use Google Maps. It's gotten better. Sometimes Apple just takes a while to get there. So I'm okay waiting. They need to solve it. That's really important. But they don't need to solve it this quarter. I would like to just hear them talk about supply chain and what's going on in China and what are the dynamics in the iPhone business. I think that's most important.

[Tim Stenbeck]

Is there a compelling reason for people to upgrade to 17 to the iPhone 17?

[Jay Goldberg]

I think the air is pretty intriguing. I'm on the fence. I usually upgrade every year. I think I'm gonna hold out though because I'M pretty sure they're gonna have a foldable phone next year. So that'll be exciting. But I think that everyone I talk to has the air is just raves about it like they're enthusiastic about this iPhone in a way that I haven't heard people be enthusiastic about an iPhone in many years.

[Carol Massar]

Just to rehash, we've got now shares of Apple up about 1.8% here in the aftermarket. So this is despite those disappointing sales in China, which did fall short of analyst estimates, but strong over sales in the overall sales in the period. Hey, let's go to our L A Bureau for a moment. We're going to come back to Jay Goldberg in just a minute or two. Mark Gurman is Bloomberg News managing editor for Global Consumer Technology. He is out there in our L A bureau. Mark, fascinating in a short period of time, 12 minutes to see the stock being sold off a little bit to now rallying almost 2%. Walk us through this quarter. What stands out here?

[Jay Goldberg]

Yeah, what stands out here is iPhone obviously grew tremendously 6% year over year. They beat in nearly every product category except the iPad had an extremely slight miss on Wall street forecasts. And again those are just forecasts that numbers that get made up anyways. So I don't think too big of a deal there. The big one though is a big decline in mist in greater China. I think some of that can be attributed to the iPhone air delay which was not expected when they originally announced the iPhone air, they anticipated a September release alongside the other models. That model has been doing decently in China since it was released just about a week ago. Now the other thing to point out is the seesaw you saw originally the stock dipped on the China development and maybe iPhone sales weren't as strong as some had anticipated. But Tim Cook told news outlets that got pre briefed on the Apple earnings results earlier today that the December quarter would grow 10 to 12% on an annual basis, which is obviously a fantastic jump for them. That is a year over year growth in holiday period we have not seen for a very long time and Apple hasn't provided guidance in a very long time because of COVID and everything that's happened since then. So it's pretty significant.

[Tim Stenbeck]

Yeah. Shares up 2.9% as we speak right now. Mark, just one more question for you and then I know you got to run on China and the big miss on China you said it's not too surprising yet still came in 12% below consensus estimates is just I'm not going to say Apple should throw in the towel in China. But how vulnerable is Apple in China?

[Jay Goldberg]

They're certainly vulnerable in China, but they have obviously a big retail portfolio there of about 50 stores. As I've said multiple times, they need to start launching products that are specific to the Chinese market. They still don't have their, their AI strategy together in China. And so we'll see once AI is implemented in iPhones in China next year if that begins helping turn some things around. And we'll see, you know, we're going to have some pent up demand in China now for the current quarter, the first quarter of the holiday period because the iPhone air didn't go on sale in September, during the September period.

[Carol Massar]

All right, Mark, we know you got to run over to the TV side so appreciate you jumping on with us. Mark Gurman, he's Bloomberg News managing editor for Global Consumer Tech. Really as we remind everybody our go to on Apple breaking all these exclusive and right now the stock is trending higher now up about 3.5%. I will point out that Mark mentioned some news that the chief financial officer had shared with some various media outlets. I'm just looking at the Financial Times and again just going back to that. Apple gave a bullish outlook for its crucial holiday sales period. Reported record annual profit today. The CFO Kevin Parik saying Apple expects total company revenue to grow 10 to 12% year over year in the three months to December with iPhone revenue growing double digits. So that's what Mark was talking about and that is probably why we are seeing Apple shares do that Turnaround now up almost 4% in the aftermarket.

[Tim Stenbeck]

Yeah, pretty remarkable to see the turnaround but you know, that's what happens and you get more detail from executives. The call hasn't even started yet. So we'll wait for the call also to start and maybe we'll see some more movement there too. Just to repeat, fourth quarter iPad revenue coming in ever so slightly below estimates at $6.95 billion. Products revenue coming in above estimates. Greater China revenue a big miss there. $14.49 billion, 12% below consensus estimates of $16.43 billion. Fourth quarter earnings per share coming in above estimates at $1.85. Mac revenue beating at $8.73 billion. Fourth quarter services revenue also a beat there, $28.75 billion.

[Carol Massar]

Quite a turnaround in the after market trade. Let's go back. We've got still with us Jay Goldberg, senior analyst, semiconductors in electronics. He's got a buy rating on Apple he's over at Seaport Research Partners. He's there in San Francisco. Also in San Francisco, at the Bloomberg news bureau, Ed Ludlow, co host of BTech joining us, of course, that airs on Bloomberg Television. I do to ask you, Ed, since you've had some moments too, to, to look at that Apple release. We just talked with Mark Gurman about what the CFO has said to, I guess sharing with some media outlets about Apple revenue growing 10 to 12% per year or year over year, excuse me, in the final quarter of 2025. And what he sees with iPhone revenue growing double digits. I mean, that sounds pretty optimistic.

[Ed Ludlow]

We can explain this. Orders for the iPhone 17 started on September 12th. The iPhone 17 went on sale September 19th. They've just reported a quarter that ended on September 27th. So they had eight days of data for the iPhone 17 generation. There is another outlet that clearly has had a briefing or an interview and the CFO has guided very clearly on the trajectory of the iPhone 17 and its sales into the December quarter. And that's kind of what always happens. It doesn't explain necessarily or explicitly the Greater China numbers though. And you know, Mark, I think, forgive me, I was covering for him. I was doing the blog and he.

[Jay Goldberg]

Was running on the.

[Carol Massar]

Well, you said Apple's now up 3%. Markets are weird.

[Ed Ludlow]

Markets are weird. But that's before I read the FTSE. But, but on the, on Greater China, yes, the iPhone 17 Air did not go on on sale because of the regulatory restriction on a, on a handset that has ESIM design. Does that explain the full thing, really? Because, you know, the most bullish estimates for Greater China saw revenue from that country of $17 billion. You know, that's quite a gap to where they landed. And so maybe it's something else. But right now, I think we discussed this with this program before, right? It applies to both Tesla and Apple. If you're a consumer and you're faced with the choice of buying a domestic product or an American product, there is a pressure and it's part of the calculus you have to make. We know that from the data.

[Tim Stenbeck]

We're speaking with Ed Ludlow. He's the co host of Bloomberg tech on Bloomberg TV, 11 o' clock wall street time. I want to bring in back Jay Goldberg, senior analyst, semiconductors and electronics with Seaport Research Partners. He's had some time to take a breath and look at some of these numbers. And I'm wondering if you've also had a time, Jay, to see that shares now up close to 3.3% or 3.4% in the after hours, apparently executives including the company's CFO, telling the Wall Street Journal that total company revenue will increase 10 to 12% in the holiday quarter. Was that above your, your estimate? Was that above your expectations?

[Jay Goldberg]

That's meaningfully above my estimate. That's pretty encouraging.

[Tim Stenbeck]

Why is that so encouraging to you and why was it so far? Why is that so far above or why is that meaningfully above your estimate?

[Jay Goldberg]

I think it comes down as simple as the 17 and the air are good phones. And as much as we want to talk about services and AI and all that, sometimes it's just as simple as make good phone number go up.

[Tim Stenbeck]

You make it sound so easy. There's a complicated supply chain.

[Jay Goldberg]

We just, Mark said we make up estimates, so I think it's that easy.

[Tim Stenbeck]

I would tell him you said that. No, but in all seriousness, the 17. So you see that, you see the 17, you see the 8 or I don't want to call it the 18, but you see the foldable being a much, much bigger opportunity. That's where the supercycle in your view is going to come from?

[Jay Goldberg]

I don't know. I get a little wary of using the term supercycle. I'm not sure in today's market where everybody has a cell phone that we. And they cost 1,000 plus dollars. I don't know if we're going to have super cycles anymore. I do know there's a pretty substantial installed base of older phones like 15s and 14s. Even those people are probably going to look to upgrade. You made a point earlier that Apple's always a little bit late to the game in some of these developments. And I think one of the, one of the big ones they missed a few years ago was large, large screens.

[Ed Ludlow]

Right.

[Jay Goldberg]

This is a big debate. They didn't want to make it too big and then they made them and they did really well. It took them two, three years to get in that market. And I think we're going to see the same thing with foldables. That's going to be a big category, but that's going to be an expensive phone. And in the interim there's a really good alternative on the market right now for, you know, and you and I know about the foldable because I talk about this stuff all day. But I think the average consumer isn't, you know, isn't that forward looking and is pretty happy with what's in front of them now. And that's, that's, that's compelling, a compelling buying proposition for them.

[Carol Massar]

So Ed Ludlow, come on back in here. I mean everybody's kind of keying in on this outlook and obviously with good reason. Again, I kind of think to the call with investors and analysts, I mean, are people going to be asking all about that outlook? Is that what's at this point got to be the focal point?

[Ed Ludlow]

Yeah, I mean I compare and contrast with last quarter. We were still asking about pull forward in the tariff effects of consumers going out and buying handsets. Again, that is not the same and doesn't explain behavior in sales data where the quarter they just reported was just 8 real days of sales for the September quarter. And they're telling us via interviews with the FTA and the Wall Street Journal that they're looking at 10% to 12% I think is the range increase in sales in the holiday quarter. Where were those sales? Also like a lot of the optimism, and maybe your guests can weigh in on this, but a lot of the optimism about the third party or soft data for the iPhone 17 generation was about asps and mix. So yes, okay, the iPhone 17 wasn't on sale in China, but there was a lot of evidence that people were going for the pro and pro max, the more expensive rather than the basic base version, which is really good for Apple's print. Right. In its financials. But we don't have anything to go on in the statement to support that, you know, generally speaking because they didn't in real terms raise prices or they didn't put higher price points on the iPhone 17 necessarily. One way to get around that is to say look how great the pro version of this is. It's really great. It's just a lot more expensive and then encourage the people to buy that. You know, that's an interesting story to dig into.

[Carol Massar]

Yeah, Jay, dig into it for us. Anything on that.

[Jay Goldberg]

So one of the things I'm sort of teasing through with my numbers is earnings are much higher than expected. Right. I mentioned earlier gross margins were better than expected. And I think some of that is Apple has effectively put a price increase in place. You can't necessarily see it. Obviously the cheapest phone is still pretty expensive. But the way they segment the market and the way they put the 17, they price the Pro, the Air and the 17, they've effectively raised prices $100 this quarter or this, the cycle. And I think that that has helped a lot. And right. And in terms of what I was saying about China, the consumer there, I think consumers there are actually very, very trend conscious, especially the iPhone consumer there.

[Tim Stenbeck]

Right.

[Jay Goldberg]

They have a pretty good idea of what's available and maybe may wait as a result.

[Tim Stenbeck]

Jay explained that the segmentation when it comes to pricing, though consumers might not see it, analysts certainly know it. How did, how did Apple do it this time around? Oftentimes they do it with, with the memory, with storage.

[Jay Goldberg]

Yes. The lowest, the cheapest phone there is $100 more than it used to be effective.

[Tim Stenbeck]

Okay.

[Jay Goldberg]

I don't like for like basis that you know, they didn't actually raise prices of the old phones but they didn't lower them as much as they usually do and they price the new one 100 bucks higher than the old, the previous lower lower.

[Tim Stenbeck]

So that's the segmentation.

[Carol Massar]

Hey Ed, just want you to come back in with a final thought certainly on these Apple results.

[Ed Ludlow]

Yeah, I think all of the long term questions still linger. You know, Apple continues to get a lot of criticism for innovation. You know, this is a really basic argument but on Bloomberg Tech every single day and like all of the investors I speak to on the phone, they'd make the very simple argument that why is it that Amazon Alphabet Matter and Microsoft have capital expenditures nearer to 100 billion per annum and Apple has 10? When is Apple going to take some risk and throw crazy money behind either talent or literal capital expenditures to do something like that? Apple doesn't do that necessarily. But the world is a different place and you know, maybe it's pie in the sky thinking to that a sell side analyst on the call is going to ask that. But they might and then it might get an answer. And you know, that's kind of where we're at in this cycle.

[Carol Massar]

All right gentlemen, going to leave it on that note. Jay Goldberg, senior analyst, Semiconductors and Electronics at Seaport Research, joining us from San Francisco. Thank you so much. Ed Ludlow. Be sure to catch all of his coverage on BTech tomorrow at 11:00am Wall street time. He is co host of BTech on BTV every Monday through Friday. He's two out there in San Francisco at the Bloomberg News Bureau.

[Tim Stenbeck]

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[Carol Massar]

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[Tim Stenbeck]

Don't let billing slow you down. Legacy systems can't handle usage based billing. That means your team is stuck gluing code together, piecing through spreadsheets and running ad hoc queries just to figure out what to bill. With Metronome, you can roll out new pricing in minutes instead of months, whether it's usage based, seat based or a hybrid model. Visit metronome.com to see how companies like OpenAI and Anthropic launch billing as fast as they launch products.

[Carol Massar]

That's metronome.com you're listening to the Bloomberg Businessweek Daily podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.

[Tim Stenbeck]

So much happening when it comes to big Pharma today, it's not just about big tech. Shares of the clinical stage biotech company met Sara surging more than 25% at one point today. This afternoon, Ordisk made an unsolicited bid for it, sparking a heated battle with Pfizer to get their hands on weight loss treatments that both drug makers want in order to regain lost ground in the booming market. Speaking of that, Eli Lilly raised its full year guidance as revenue from its blockbuster weight loss and diabetes drugs. Merck also shaved the top end of its 2025 revenue guidance. Now expect sales between 64 and a half and $65 billion. So that's just some of what's happening when it comes to Big Pharma for More. We're joined by Jessica Nix. She's a Bloomberg News health reporter. She joins us here in the Bloomberg Interactive Brokers studio. I want to start with this fight for Met Sarah.

[Putnam Goyal]

Yeah.

[Tim Stenbeck]

Not every day we see sort of like a company being the belle of the ball like this.

[Putnam Goyal]

Oh, it has been quite the drama for a Thursday and quite a lot of news out of Big Pharma today. So overnight, Novo Nordisk, the Danish GLP1 drug maker has made a bid for this biotech company, Met Sara, trying to go after its new GLP1 drug. Interestingly, Pfizer made a bid for it back in September for about 5 billion. Things were, you know, clean cut with that deal ready to go. We thought Novos come in with this unsolicited bid. Pfizer's been trying to get in on this GLP1 and weight loss drug action. It's a market that's expected to grow by 100 billion by 2030. It's huge. It's the thing right now is these weight loss drugs and so Pfizer is trying to get in and now Novo sweeping out under, under from them.

[Carol Massar]

Wait, so remind me. So Pfizer doesn't have anything yet in this.

[Putnam Goyal]

Pfizer does not have anything in the weight loss drug space. They tried and then they failed with their first drug. And so they were looking at Matsera as their way in on this fight. But Novo, interestingly, is also kind of losing in the weight loss drug fight. Just because you're first to market doesn't mean you're going to be.

[Tim Stenbeck]

Why is Novo losing? I mean, the last couple of years there were stories about how important this company was to the Danish economy. I mean, I mean, is it just because of Eli?

[Putnam Goyal]

Yes, it is. It's because Eli Lilly has come in guns a blazing and storming through the weight loss drug space. So Novo started with Ozempic. Obviously, everyone knows Ozempic now. Eli Lilly has now come in with that same class of GLP1 drugs and their zeppbound prescriptions are rising even today. In their earnings guidance, they said that those prescriptions were increasing. So everyone's going towards Eli Lilly right now in some instead of Novo Nordisk. Novo's been falling behind.

[Carol Massar]

We've talked with our Madison Mueller, Bloomberg News, who's covered this space kind of from the beginning here too. And you are covering it as well. I'm always like, well, what's the difference? I do know people who have taken the drug and gone from Ozempic to another brand or another name drugs. Because they're similar, but they're not all the same. You do see patients. Is. Is Eli Lilly's offerings better? Is Zepbound better? Is Mounjaro better?

[Putnam Goyal]

It's just a matter of what works better for your body. So Eli Lilly works with an ingredient called tirzepatide. Novo Nordisk works with semaglutide. And so it's just a matter of what works better for the patient. But Eli Lilly has been able to really market and go to physicians with these drugs as well and move ahead. Novo, interestingly, also has a new CEO who's trying to shake things up, to be able to bring Novo up to the forefront of this fight. They've owned this. Yes.

[Carol Massar]

Like, it felt like, right, Tim?

[Tim Stenbeck]

Oh, yeah.

[Carol Massar]

Out of. Out of the block. What's the special sauce that Medcera has? Like, what is it? What is it that they are offering up?

[Putnam Goyal]

They are offering a new type of drug that's also an injectable, but it's targeting a different hormone. So the hormone that's targeted right now with the current weight loss drugs is something called a GLP1. You hear that term a lot when we talk about weight loss drugs with Met Sarah's new drug, it's a hormone called amylin. And it also includes less side effects. When you take their drugs, you're not going to be getting those nasty, like, nausea, vomiting side effects that you get with the GLP1. So it sounds like a better deal. Yeah.

[Carol Massar]

Why would I take any time?

[Tim Stenbeck]

You can avoid the nausea and vomiting.

[Putnam Goyal]

I think is right. Exactly.

[Tim Stenbeck]

You said something that's interesting, which is still it's an injectable. And as Madison Miller reminds us all the time, the real golden goose here is the pill.

[Putnam Goyal]

It is the pill. And so Eli Lilly has been working on its pill. It is ahead in marketing and in development for its pill. And they're saying, you know, by the end of the year, they're going to go to the FDA for approval.

[Tim Stenbeck]

And this would be a GLP1 pill.

[Putnam Goyal]

This would be a GLP1 pill.

[Tim Stenbeck]

How do you make a pill? I mean, we're getting into the nitty gritty a little bit here, but how can you do something that is traditionally an injectable and make it pill form and have it still be effective?

[Putnam Goyal]

That is a really great question and people much smarter than me, but it's.

[Tim Stenbeck]

It's got to be really tough because if it were easy, then Novo would have this. They would just put this in Pill forum. And I think that. And I, when I Heard you talk about Medcera and this idea of it going after something different than a GLP one. I was surprised that it was still an injectable because I think that would hold a lot of people back from actually using a drug.

[Putnam Goyal]

And it does. That's part of the reason why these companies want to go into the pill space, because a lot of people who are interested in taking a weight loss drug for whatever reason, as we're saying, it's, it's tackling a lot of different, different problems that people are having. Sleep apnea, heart disease, what have you. Pills now are a new way that, that people would be wanting to get into on this space.

[Carol Massar]

So let's just talk. Novo shares are down about 2.3%. Pfizer's up about 1/3 of 1%. It was up as much as 1.7% earlier in the session. And then, of course, you've got Mitcera, which is just off and running like crazy. That stock, which is a target 22%. Yeah. And continuing to hold on to that. Who has more to lose? It sounds like Pfizer because they just, they're not in this game yet.

[Putnam Goyal]

Pfizer definitely has a little bit more to lose here. Pfizer is not in on the game right now. They've been losing since, you know, Covid. They were big during COVID They made the shots. They really turned things around for the company there. They've been looking for their next big thing and they thought this was it. So they do have a little bit more to lose. But interestingly, the shares are mostly unchanged today. Pfizer does have four days to respond to this bid to see if they can come in a little bit higher and start this, this bidding war. And who knows? Pfizer also made a deal with the Trump administration earlier this year, and so they might be trying to use some of their, their White House connects because they claim that this bid is against antitrust law in the U.S. i guess.

[Carol Massar]

What I would say right now the market cap is about 6.7 billion. So I don't know if that's a great gauge of kind of where investors think this.

[Tim Stenbeck]

That's for Mitsuro.

[Carol Massar]

Yeah. So in other words, which is up.

[Tim Stenbeck]

Now 23% as we.

[Carol Massar]

Yeah, I mean, if Novo is offered to debate, you know, six and a half billion dollar deal and they think it's.

[Tim Stenbeck]

Then they think there's going to be someone else coming in, potentially more, but.

[Carol Massar]

Just a little bit higher. Right. Like it doesn't feel like it's off and running. That they think there could be even somebody else coming in. It is kind of fascinating, the market for GLP1s or this class of drugs, even if the underlying agent is changing, it just continues to grow and grow.

[Putnam Goyal]

It completely continues to grow and grow. We expect by, by 2030 that the market's going to reach 100 billion.

[Carol Massar]

Where are we today?

[Putnam Goyal]

Oh, that is a great question. I don't know where we are at today, but I mean, it's only going to grow from here. It is the drug to watch.

[Tim Stenbeck]

So you said we're. Well, I said that we had a big news, a lot of big news in big pharma today. I mentioned Merck shaving the top end of its 2025 revenue guidance, Lilly raising its full year guidance. We talked about that. What else does our investing audience need to know about what we've heard thus far?

[Putnam Goyal]

I think this deal is probably driving the news today. Everyone's talking about it. We've got, you know, the clocks on for the four days. Interestingly, Albert Bourla, the Pfizer CEO, was supposed to appear at a conference here in Manhattan with some other pharma executives, including a Merck CEO as well. He ended up pulling out of the conference and the chief scientific officer went on instead and even said at the conference that he only had an hour to prepare before going on. So we're still figuring that out. Yeah, he might have a little bit happening, but we don't, we don't know for sure. So it is this, this deal is definitely going on today. Not necessarily investor related, but down in D.C. the Surgeon General nominees hearing was supposed to happen today with Casey Means. She ended up going into labor and so they're having to delay the hearing.

[Tim Stenbeck]

Yeah.

[Carol Massar]

So there's a lot going on in this space. It's kind of wild, fascinating space. I really just, it just blows my mind. Jess, thank you so much. Jessica Nix, health reporter at Bloomberg News, joining us in our Bloomberg Interactive Broker studio.

[Tim Stenbeck]

Stay with us. More from Bloomberg businessweek Daily coming up after this.

[Carol Massar]

You're listening to the Bloomberg Businessweek Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube. So let's get to that US China meeting earlier today in South Korea between President Trump and President Xi. Deal? No deal. How about that one year truce? That's what they're calling it. The two did meet on the sidelines of the APEC summit. US Cutting the fentanyl tariff, extending the existing truce and reciprocal tariffs. China resuming soybean sales and rare earth flows. But maybe just a stabilization of relationships. Nothing more dramatic here, Tim?

[Tim Stenbeck]

I don't know. Let's ask Caroline Freund. She's dean of the UC San Diego School of Global Policy and Strategies, former senior fellow at the Peterson Institute for International Economics. She's Global Director of Trade, Investment and Competitiveness, formerly at the World bank and earlier did time at the Fed and the imf. She's out there in beautiful La Jolla, California. So the news today, the one year, one year truce, where does that bring us in the context of the relationship in the between the US And China from a trading perspective before President Trump took office for the second time, is it back to what it was then or is there still tension from when he. From, from his policies early on?

[Caroline Freund]

Look, we have the world's top producer and the world's top consumer meeting and they both have market power in their own way and they need each other. And that's what we saw. It was effectively a game of chicken. Trump started it and she stayed in the battle and both just put on the brakes. I think we're close to pre liberation day tariffs, not necessarily close to where Trump came in. There are a few tweaks because we still have some of the fentanyl tariffs. US Firms are still facing this licensing regime on magnets. So there's still some things that are in place, but we're pretty close to the pre Liberation day tariffs.

[Carol Massar]

Caroline, what is more significant, what they did talk about or what they didn't talk about, meaning Taiwan, TikTok, Nvidia's high tech chips, those Blackwell chips. China. Boeing buying oil perhaps from Russia. Like there's some really important issues out there that felt like they were missing.

[Ed Ludlow]

Yeah.

[Caroline Freund]

And I think we're going to see that going forward. There's going to be ambiguity on all of those difficult issues. But I also think there's market discipline on the worst case scenario of an escalating trade war. So they both realized how much they need each other. The US market is just impossible to replace. We account for 15% of total global imports. There just is no one else who's going to, who's going to take that? China accounts for the same 15% of global exports of goods. Who's going to, we can't completely replace China. So the countries have settled the deals that are in the areas that really matter for them right now for their economies. But we're going to see a lot of ambiguity on those much more complex issues.

[Carol Massar]

So were we played? Were citizens of both countries played? Were investors played? Like, did we kind of start at point A and go through the whole Alphabet and then come back to point A?

[Caroline Freund]

Yes, I think Trump has tried the kind of bullying technique, and it's worked with everyone else. Early on, it looked like EU would also retaliate, but they're just too dependent on the US for security, and that's very important right now. So they didn't. China is equivalent to the us. And China said, no, we're not going to be bullied. We also have things you absolutely need. And now there's kind of a truce, and I think we'll see this muddling along with market discipline on both sides. It'll hurt the US too much to really do a lot more on China. It'll hurt China too much to do a lot more on the us. But in this period, in this period of truce, the most important thing is that we work with our allies to develop secure supply chains so we are not dependent on China for rare earths in the way we are now.

[Tim Stenbeck]

So those allies, including Australia, Canada, where else?

[Carol Massar]

Yeah, exactly.

[Caroline Freund]

So the agreement with Australia is fantastic, and we should be looking for more agreements like that. Latin America has a lot of rare earths that could be explored, that we, you know, we're part of the Western.

[Tim Stenbeck]

Hemisphere, but we have a complicated relationship with some Latin American countries currently.

[Caroline Freund]

Yeah, that's absolutely right. And so the, the strategy, we can't take on everyone at once. And China really is the boat, the biggest competitor, the biggest strategic threat to the us. And we should be working to have agreements with countries where we can both pull them out of the China sphere and where they have things we might need.

[Carol Massar]

It couldn't possibly be thinking about the US shooting on Venezuelan ships.

[Tim Stenbeck]

Thinking about that. I'm thinking about. Yeah, yeah, I'm absolutely thinking about.

[Carol Massar]

It's funny. Not funny. Right.

[Tim Stenbeck]

I'm also thinking about Argentina.

[Carol Massar]

Yeah, yeah.

[Tim Stenbeck]

It's complicated in a different way.

[Carol Massar]

Well, Caroline, and, you know, I do think about the US's position in the world at large. Like, we still have trade agreements to be worked out with what used to be a big friend of ours called Canada, and yet that is still up in the air. What is, how does the rest of the world feel about the United States right now against China? Because I do feel like there is this thinking about China domination and so people trying to do alliances to combat that. So is the us, as we see it, do that deal with Australia and maybe reaching out, realizing it can't do things alone. Are things changing a little bit in terms of the US Perception by the rest of the world?

[Caroline Freund]

You know, I hope so. And I think if Trump leans into these agreements where countries haven't retaliated and goes forward in a respectful way, we could see that and we could see a lot more cooperation. But the problem is that so far, the US has proven to be a kind of unreliable trade partner. Deals are made and then we back off from them and then new threats come up, and that's really problematic. So I think there's a lot of distrust, a lot of dislike with the US and that's going to be a hurdle to overcome. At the same time, other countries need the US Market. Again, we're the world's top consumer and they need the defense from the US So they will play. But it will work a lot better if we work on cooperative agreements than purely in, in this kind of bullying mentality.

[Tim Stenbeck]

We're going to hopefully talk to you a lot more between now and one year from now, but just make a prediction for, for us, for, for one year from now, will this truce hold?

[Caroline Freund]

Yeah, I think it will. There might be little glitches along the way, but again, the market will discipline Trump, whether it's the stock market, bond yields, companies complaining, and similarly, the China. Chinese economy isn't that strong. We saw, you know, bid tank today or recently because there's just not enough demand for Chinese goods. So I absolutely think it will hold, but we won't get a lot more hold.

[Ed Ludlow]

Muddle along.

[Carol Massar]

And China continues to try and get that domestic economy going, but it's really been a struggle. Caroline Freund. She's dean of the San Diego School of Global Policy and Strategy. This is the Bloomberg businessweek daily podcast available on Apple, Spotify and anywhere else else you get. Your podcasts. Listen live weekday afternoons from 2 to 5pm Eastern on Bloomberg.com, the iHeartRadio app, TuneIn and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal. How can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology from Amazon business. From fast free shipping to in depth buying insights and automated purchase approvals, they deliver everything you need to achieve your goals. It's not easy to stand out from the crowd. Simplify how you stock up to get ahead. Go to amazonbusiness.com for support. Hiscock Small Business Insurance knows there is no business like your business. Across America, over 600,000 small businesses from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online'@hiscox.com that's his c o x.com there's no business like small business. Hiscox Small Business Insurance. At gsk, we believe that to get.

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