Microsoft, Nvidia to Invest Up to $15 Billion in Anthropic

Summary

Bloomberg Intelligence Podcast: "Microsoft, Nvidia to Invest Up to $15 Billion in Anthropic"

Date: November 18, 2025
Hosts: Scarlett Fu & Paul Sweeney

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Episode Overview

This episode of the Bloomberg Intelligence Podcast dives deep into the recent news that Microsoft and Nvidia are making substantial investments―up to $5 billion and $10 billion respectively―in the AI startup Anthropic. Senior tech analyst Mandeep Singh joins to provide insight into what these deals mean for the AI industry, for Anthropic’s future, and for the shifting strategies of Big Tech. The episode then transitions to segments on Home Depot’s earnings and the home renovation market, Medtronic’s growth driven by new medical technologies, and a look at Amer Sports’ thriving premium sports brands.

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Main Segment: AI Investment Race – Microsoft & Nvidia Bet Big on Anthropic

The AI Funding Boom (Starts at 01:54)

• Microsoft and Nvidia Investment Highlights:

  • Nvidia pledges up to $10 billion and Microsoft up to $5 billion in Anthropic, an AI company focused on “frontier models” akin to OpenAI.
  • Anthropic, in return, commits to buying $30 billion worth of cloud compute from Azure.

• Circular Business Relationships:

  • Hosts note the dizzying sums involved and how investments and service commitments create tight interdependencies among cloud and AI giants.
  • Quote, Co-host (02:12): “We're just throwing out these tens of billions of dollars like it's nothing, right?”

Who (and What) Is Anthropic? (Starts at 02:39)

• Background on Anthropic:

  • Founded by ex-OpenAI employees.
  • One of the five “frontier model” AI lab survivors. Others: Google, OpenAI, Meta, XAI.
  • Investors include Alphabet and Amazon, with Microsoft now joining.
  • Mandeep Singh (02:39): "Anthropic is one of the Five frontier alums that are remaining, I mean, and they are leading the charge when it comes to generative AI."

• Why the Big Numbers?

  • AI companies require massive computational resources (“GPU compute”) to train and operate large language models (LLMs).
  • Unlike Google or Meta, Anthropic doesn't have a huge balance sheet, so it leverages cloud and silicon partners for both capital and infrastructure.
  • Mandeep Singh (03:20): "LLMs need compute. That's how you serve billion plus users. And that's where you know, the numbers get bigger and bigger when it comes to the tie ups with cloud providers."

Meta’s Standalone Approach (04:13)

• Meta's Different Path:
  • Runs its own LLMs, but uses GPU compute for its internal “family of apps” only—no external cloud customers.
  • Lack of cloud business may hurt ROI compared to Microsoft, which now gets $30 billion in Azure commitments from Anthropic.
  • Mandeep Singh (04:37): "In the Case of Microsoft, you don't have that with a meta. How are you generating ROI outside of your family of apps?”

Will the AI Labs Go Public? (05:25)

• IPO Prospects:
  • Anthropic seen as more focused, with better gross margins than OpenAI (which is engaging in a diversity of initiatives and risking overreach).
  • OpenAI’s risk: trying to do too many things could lead to strategic missteps.
  • Mandeep Singh (05:31): “Their gross margins at this point are probably better than OpenAI, which is doing too many things...biggest risk I see for OpenAI is they feel they can get into any business...and that’s where there’s a possibility of a misstep.”

Anthropic’s Structure & Growth (06:10)

• Corporate Structure:

  • Based in Silicon Valley; not incorporated offshore.
  • Nonprofit origin, but now more commercial (“profitable PBC” possible).
  • Mandeep Singh (06:12): "Silicon Valley...It's a nonprofit looking to have a profitable PBC and so all that could happen."

• Why Microsoft Is Diversifying:

  • After its exclusive relationship with OpenAI, Microsoft is hedging by also investing in Anthropic.
  • LLMs/AI capabilities are progressing rapidly, driving constant corporate realignments.
  • Mandeep Singh (06:26): “At the end of the day, these LLMs are showing constant improvement which is what's driving, you know, companies like Microsoft to partner with Anthropic.”

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Additional Segments: Markets & Companies in Focus

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Home Improvement Retail: Home Depot & Lowe’s (09:49)

Home Depot Earnings and Consumer Trends (10:29)

• Home Depot same-store sales: Slight miss versus consensus; underlying business remains stable.
• Demand Weakness:
  • Larger projects are deferred; small “maintenance” projects drive business.
  • Drew Redding (11:31): "It's smaller ticket projects, maintenance oriented type stuff, which is a huge part of their business."

Comparison to Lowe’s (12:19)

• Relative Performance:
  • Lowe’s has more exposure to DIY market vs. Home Depot’s strong “pro” segment.
  • Both are cautious as consumer confidence and discretionary spending dip with economic uncertainty.

Tariffs & Costs (13:28)

• Tariffs:
  • Not a major issue yet, but rising importance with new policies on wood and cabinetry.
  • Drew Redding (13:36): "They're able to offset...tariff costs with [premium positioning]...but it's something to keep an eye on."

Link to Housing Market (14:30)

• Stagnant Housing Market:
  • Home turnover down; fewer people moving hurts big renovation spend.
  • Home prices slowing or declining in key markets may erode consumer confidence.
  • Drew Redding (15:04): “Housing is extremely important to Home Depot and Lowe's...Movers tend to spend a lot more than people who are already in their house...If you think the value of your property is falling, you're less inclined to invest.”

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MedTech: Medtronic’s Growth Story (19:18)

• Strong Financials:

  • Medtronic raised guidance: organic revenue up 5.5%.
  • Cardiac ablation tech (pulse field ablation) saw 71% YoY segment growth.
  • Competing mainly with Boston Scientific.
  • Matt Hendrickson (21:10): "This is new technology...treat atrial fibrillation. That segment alone grew 71% year over year."

• Industry Context:

  • Minimal tariff or import disruption; most devices built and used in the US.
  • Activist investor Elliott’s friendly involvement credited with helping to push management for more discipline and growth.

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Premium Athleisure: Amer Sports (27:53)

• Brands:

  • Arc’teryx (focus DTC), Salomon (focus wholesale), Wilson all performing strongly.
  • Abigail Good Martin (28:55): "Sales up 30%. Broad based strength across regions, across channels and across brands."

• China Success Despite Environmental PR Crisis:

  • Recent fireworks incident in Himalayas was a risk, but China sales were up 47%.
  • Premium positioning allows Amer to raise prices and offset tariff costs.
  • Expanding store footprint for direct sales, especially for Arc’teryx.

• Competitors & Consumer Trends:

  • Nike maintains dominance, remains top choice for Millennials and Gen Z.
  • Other brands (Hoka, On) growing but still niche and coastal.
  • On Skechers, Abigail Good Martin (34:13): "No, they're [Skechers] the third largest footwear brand globally...right behind Adidas."

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Notable Quotes & Timestamps

• On the scale of the AI investment:

  • Co-host (02:12): “We're just throwing out these tens of billions of dollars like it's nothing, right?”

• On the AI ‘in-crowd’:

  • Co-host (03:46): "This is like the popular clique in high school where everyone knows each other and everyone's messing around with each other."

• On the differences between Anthropic and OpenAI:

  • Mandeep Singh (05:31): “Their gross margins at this point are probably better than OpenAI, which is doing too many things...there’s a possibility of a misstep.”

• On Home Depot customer behavior:

  • Drew Redding (11:31): “It's smaller ticket projects, maintenance oriented type stuff, which is a huge part of their business.”

• On Amer Sports and China risk:

  • Abigail Good Martin (29:27): "Arc’teryx [set off fireworks]...definitely a misstep for an outdoor brand that's really focused on sustainability...But Greater China was up 47%. Momentum is continuing into 4Q."

• Skechers' surprise position:

  • Abigail Good Martin (34:13): "No, they're the third largest footwear brand globally...right behind Adidas."

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Key Takeaways

• Big Tech is racing to lock down the best AI talent, models, and partnerships. The sums committed are enormous and the investments are often entwined with cloud consumption deals.
• Microsoft and Nvidia’s investments in Anthropic are both competitive plays and strategic hedges as the AI revolution accelerates.
• AI labs without massive balance sheets (e.g. Anthropic) need deep-pocketed partners, but focus is seen as a strength compared to scattershot expansion (as with OpenAI).
• Elsewhere in the episode, consumer belt-tightening is visible in small project demand at home improvement retailers, but premium global brands (sportswear, medtech) are proving resilient and even thriving where they can demonstrate differentiated value.

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For listeners tracking AI, hardware, retail, medtech, and global brand strategies, this episode offers an up-to-the-minute look at market priorities, investment logic, and where the next big growth bets are being placed.

Transcript

[Baillie Gifford Narrator]

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[Host]

There's a lot of commitments going on out there in the technology world. Scarlett Nvidia is committed to investing up to $10 billion in anthropic. Microsoft is also committed to invest up to $5 billion in anthropic and Anthropic for its side. It's committed to buy $30 billion of Azure compute capacity.

[Co-host]

And we're just throwing out these tens of billions of dollars like it's nothing, right?

[Host]

I don't, I don't get it. It's just the circular stuff we see. But people tell me not to worry. Coming up right here, the best dressed man on Wall Street. His turban matches his tie every day.

[Co-host]

No accident.

[Host]

I mean, nice job. Mandeep Singh. He's a senior tech dude at Bloomberg Intelligence. Mandeep A lot of big companies making some big commitments in Anthropic. What is Anthropic again?

[Mandeep Singh]

Well, Anthropic is one of the Five frontier alums that are remaining, I mean, and they are leading the charge when it comes to generative AI. So it's one of the five. The other one are Google, OpenAI, Metta and XAI. And so look, when it comes to these commitments, it's pretty obvious that OpenAI has raised the bar by announcing they're going to spend 1.4 trillion. So the question is, what are the other LLM companies going to do? And Anthropic is also a pure play LLM. And in their case they don't have the funding. I mean they don't have the balance sheet like Google or Meta have. So they have to raise the money either in the private markets or from someone like Nvidia or get into an agreement with Microsoft which also has an agreement with OpenAI. So that's where you know, LLMs need compute. That's how you serve billion plus users. And that's where you know, the numbers get bigger and bigger. When it comes to the tie ups with cloud providers.

[Co-host]

This is like the popular clique in high school where everyone knows each other and everyone's messing around with each other. Just give us a little bit of background here on Anthropic because my understanding is that it was founded by folks who used to work at Open AI and some of the early investors, like big stakeholders, include Alphabet and include Amazon and now you've got Microsoft in there. I mean, is there anyone who's not part of Anthropic and not committed to investing in this company?

[Mandeep Singh]

Well, you could say matter, they're doing.

[Host]

Things, they're doing their own thing.

[Mandeep Singh]

They're doing their own thing in terms of, you know, using the compute internally and they don't have a cloud business.

[Co-host]

Is that, is that a problem for them that Met is out there on its own? I know it doesn't have its own cloud business, but it's not buying stakes or committed to invest up to 5 billion or 10 billion in any of these AI companies.

[Mandeep Singh]

I mean, so far, just to go to Metta, it feels like, you know, investors were okay with them using the GPU COMPUTE for their own family of apps. But the fact that they're talking about 100 billion plus in CapEx for next year without having a substantial ROI. And what I mean by ROIs, in the case of Microsoft, yes, they are raising their capex to 120 billion, but they're winning deals like the one with Anthropic, $30 billion in commitment from Anthropic. So somebody is paying for that compute in the Case of Microsoft, you don't have that with a meta. How are you generating ROI outside of your family of apps? And over there you have to show a really substantial increase in engagement to convince investors it's worth 100 billion plus in capex.

[Host]

Any of these open eyes Anthropics, are they going to ever come public, do you think?

[Mandeep Singh]

I mean, in the case of Anthropic. Look, I know the numbers are getting big, but their gross margins at this point are probably better than OpenAI, which is doing too many things. I mean, the biggest risk I see for OpenAI is they feel they can get into any business, whether it's chip business, whether it's, you know, obviously LLM is their turf, any type of applications and that's where there's a possibility of a misstep. You can end up wasting time because you just don't have the capability. Yeah, the focus. Whereas Anthropic is more focused.

[Host]

Dumb question of the day. Are these US companies anthropic, OpenAI, are they based, where are they?

[Co-host]

Oh, good question.

[Mandeep Singh]

Silicon Valley.

[Host]

They're in. Okay, so I'm going to go out there, visit my son at Santa Clara. Yeah, they're in the backyard right there. I can go knock on the door of chat.

[Co-host]

They're not incorporated in Dublin or, you know, some, some islands.

[Mandeep Singh]

Look, it's a nonprofit looking to have a profitable PBC and so all that could happen. But look, at the end of the day, these LLMs are showing constant improvement which is what's driving, you know, companies like Microsoft to partner with Anthropic. They had that exclusive partnership with OpenAI, but now they are diversifying.

[Host]

Stay with us. More from Bloomberg Intelligence coming up after this.

[Baillie Gifford Narrator]

What is actual investing? We believe that it's a real world task to deliver thoughtful capital deployment. It's not about speculating over the short term, it's about understanding the long term opportunities for companies through technological progress or new business models. So we seek out those exploring big new ideas that will change the world. Then we back them to give those ideas time to flourish. Baillie Gifford, Actual investors Find out [e-mail].

[Host]

Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The, the point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On public, you can put together a multi asset portfolio for the long haul. Stocks, Bonds, options, crypto it's all there plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing.

[Public.com / Sponsor Voice]

All investing involves the risk of loss including loss of principal. Brokerage services for U.S. listed registered securities, options and bonds in a self directed account are offered by Public Investing Inc. Member FINRA and SIPC. Crypto trading provided by ZeroHash Complete disclosures [e-mail] Disclosures when you own your own.

[Co-host]

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[Bloomberg Intelligence Podcast Announcer]

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app Listen on demand wherever you get your podcasts or watch us live on YouTube Home Depot.

[Host]

They cut their forecast on weak remodeling demands. Off to check in with John Tucker to see if that is in fact the case because he is like the do it yourself kind of guy.

[Co-host]

Really. What has he done in his house?

[Host]

It does everything and like big jobs that take a long time. Like he does remodel in the bathroom and he does plumbing. He does all this stuff. Oh so he complains about lumber that he can't get good quality lumber. He's got to go to. He's got a guy that he's like their model customer. Yes, exactly right. He's the guy. So let's check in with that Drew Redding. He covers all the home builders. He covers all the stores that cater to the home builders, like Home Depot. Drew, thanks so much for joining us here. What did Home Depot say about their customers?

[Drew Redding]

So they came in with the same store sales growth of about 0.2% which missed consensus this quarter. That was largely due to weather last year. They had pretty significant gains from storms this year that wasn't replicated. So that had about an 80 basis point impact on the comp. And that's important because if you back that out, the underlying business has been relatively stable with about a 1% compared to, you know, so underlying trends still pretty stable. I think the bigger problem is that last quarter they said that they had expected to see an acceleration in demand in the second half and that hasn't materialized. We have gotten the pullback in rates, but that hasn't translated into better housing activity.

[Co-host]

Yeah, and the problem there is that customers are deferring their large purchases. Demand has remained steady, but it's definitely not picking up at the same time. So when people are undertaking some kind of home renovation projects, they're just doing it a smaller scale. Does Home Depot still benefit from those customers?

[Drew Redding]

Sure. And that's what's driving a lot of the demand for the home improvement retailers. It's smaller ticket projects, maintenance oriented type stuff, which is a huge part of their business. But to your point, to really see, I guess, the turn in growth, what you want to see is a resurgence in those big ticket categories. Now big ticket spending was up 2.3% in the quarter, but that's more reflective of single item purchases. So think about things like appliances, power tools, gypsum. They also are taking share in the larger pro market, which is aiding the mix a little bit. But it really doesn't reflect an increase, as you mentioned, in big ticket projects such as kitchen and bath remodels or flooring projects. And that's really what we want to see turn and will likely drive the next leg of growth next year.

[Co-host]

So I ask about that big ticket items versus smaller projects because I wonder what this means for a competitor. Lowe's. Lowe's shares are down today, but only by about 1.3% versus Home Depot's 4%. And I wonder how much you can extrapolate from Home Depot to Lowe's, which will be Reporting on the 19th before the market opens. So that is tomorrow morning.

[Drew Redding]

Yes. So for Lowe's we're expecting to hear pretty similar commentary that we heard from Home Depot today. They're operating in the same environment with a weak housing backdrop, more cautious consumers. The main difference between the two businesses would be Home Depot's greater exposure to the professional contractor, which is 50% or more of sales compared to Lowe's at about 30%. So we have seen on a relative basis, more weakness among the DIY category with particular strength in Pro. So really that would be the only difference. But I think, by and large, the sentiment is going to be that consumers are taking on more caution because they're increasingly worried about the outlook for the economy, the outlook for their job, and that's causing them to defer spending on discretionary categories.

[Host]

How about tariffs? What are the companies saying about tariffs at Lowe's and Home Depot? Like tariffs on wood hammers, I guess. I don't know.

[Drew Redding]

Sure. So not a whole lot of discussion this quarter. I think, you know, given Home Depot and Lowe's scale, I think they're relatively well positioned to kind of navigate this environment with their suppliers. That being said, they're certainly not entirely immune. They kind of shifted their stance on their pricing strategy earlier in the year. They said that they wouldn't be raising prices, but as the situation in the landscape continued to evolve, they said they would be raising prices selectively. We did see that I think, a little bit in the average ticket this quarter, the growth in that. But we don't really know at this point what the demand impact has been. There was a lot of noise in the quarter, as I mentioned, with the weather, so tariffs will certainly be something to watch, particularly since we just heard some new tariffs being introduced on lumber imports and as well as kitchen and bath cabinets, which. Which increase significantly as we get into next year. So not a huge impact at this point, but certainly something to keep an eye on.

[Co-host]

Okay, definitely. I'm curious, how much does Home Depot and Lowe's mirror what's happening in the housing market? Because when it comes to housing, of course, the affordability crisis is, you know, the big thing that's keeping it frozen. Mortgage rates are. Have come down, but they're still really elevated compared to where they were during the pandemic. Inflation is capping spending on big projects, and overall, home prices remain really, really high. So people just can't move and they're stuck in place and they don't necessarily want to spend more than they can afford.

[Drew Redding]

No, it's a great point. Housing is extremely important to Home Depot and Lowe's, as you would Expect, you know, housing. The housing market has been stagnant. We're running about a 4 million annualized sales pace. That's about 25% below normalized levels. We know that when people list a home for sale or when they purchase new home, there tends to be increased spending. Movers tend to spend a lot more than people who are already in their house. So they're certainly losing that piece of the business. I think one of the interesting things to keep an eye on looking forward is home prices. Home Depot and Lowe's have historically told us that that's probably the most important aspect of the housing market to them. And you know, as we well know, since 2020, home prices are up 50% or more depending on the market. So owners have a lot of equity. But what we're starting to see now is prices rise at a much slower pace. And in a lot of key housing markets across the country, we're actually seeing year over year declines in home prices. So when you start to get declining home prices, that hits at that confidence aspect. If you think the value of your property is falling, you're less inclined to invest. So it's something they called out. You know, it's not necessarily something we've seen at the national level, but if you look at particular markets around the country, it's something that's starting to happen.

[Host]

Stay with us. More from Bloomberg Intelligence coming up after this. Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On public you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto, it's all there. Plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing.

[Public.com / Sponsor Voice]

All investing involves the risk of loss including loss of principal. Brokerage services for U.S. listed registered securities options and bonds in a self directed account are offered by Public Investing Inc. Member FINRA and SIPC. Crypto trading provided by ZeroHash Complete disclosures [e-mail] Disclosures when you own your own.

[Co-host]

Business, you own every decision. Now own the card that rewards you for it. The Chase Sapphire Reserve for Business Card brings the best Sapphire Reserve benefits to business owners who expect hard working rewards. Designed to meet the needs of business owners at scale, this paying full card elevates your travel experience and offers premium benefits and value toward business services that can take your business to the next level. Sapphire, Reserved for business, provides over $2,500 in annual value. Fuel your business and maximize rewards with 8x points on all purchases through Chase Travel, 3x points on social media and search engine advertising, annual partnership credits and more. Make every journey more rewarding with a $300 annual travel credit and access to a network of airport lounges. Whether you're looking for pre flight productivity or time to rest and recharge. Chase Sapphire Reserve for business with over $2,500 in annual value, it's the card that gives back all you put in. Learn [e-mail] ReserveBusiness Chase for Business make more of what's yours Accounts subject to credit approval restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank NA member FDIC introducing the all new Adobe Acrobat Studio now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn [e-mail] do that with Acrobat.

[Bloomberg Intelligence Podcast Announcer]

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Host]

Way way back in the day at the Chase Manhattan Bank Credit Training program. Exhaustive program. At the end of it you had to do like a big project. Pick a company and do like a detailed credit report on it. My company was Medtronic.

[Co-host]

The device maker.

[Host]

The medical device maker, exactly right. So I knocked him dead, by the way. It was killer. Anywho, the stock's up 4% today. Some good numbers. 52 week high. It's good to be in the medical device business, I guess. I don't know. So we'll check it out. Matt Hendrickson. Hendrickson joins us here. Senior MedTech Analyst. He's based in Jersey. But you're in the big town today.

[Matt Hendrickson]

Yep. Commute in every day.

[Host]

You come in Every day?

[Matt Hendrickson]

Yeah.

[Host]

Nice.

[Mandeep Singh]

Good for you.

[Matt Hendrickson]

That's what I'm driving to.

[Bloomberg Intelligence Podcast Announcer]

What?

[Matt Hendrickson]

Oh yeah.

[Host]

You drive to where?

[Matt Hendrickson]

Parking lot. Right out there, dude.

[Host]

And you do the congestion pricing?

[Matt Hendrickson]

I have to, yeah.

[Host]

Where do you drive from?

[Matt Hendrickson]

Well, Ridgewood.

[Host]

So we have trains, dude.

[Matt Hendrickson]

I know, but the Secaucus Junction, it's always a mess.

[Host]

Oh my God, what a knucklehead. All right, Matt, thanks for joining us here. Serious problems with your commuting strategy. Talk to us Medtron, what's going on there?

[Matt Hendrickson]

Well, you know, let's take a step back. 12 months ago they had a lot of promising products in the pipeline. The question was execution. And what we're seeing the last few quarters is you're starting to see some of that execution. So when they raised their organic revenue growth guidance by 50 basis points today to 5 and a half percent, that was driven a lot by what they call as their cardiac ablation segment. This is new technology that's being used to treat atrial fibrillation. That segment alone grew 71% year over year. So having that as off a billion dollar revenue run rate is what's driving that kind of growth and is what is expecting to accelerate that growth going into fiscal 2027.

[Co-host]

71% is going to get bigger.

[Matt Hendrickson]

Yes, they actually said that and we actually in our follow up questions with them, we asked just to confirm, are you going to accelerate that 71% growth in their fiscal third quarter, which is the one coming up. And they said yes. And it's basically the adoption of, without getting too technical, it's called pulse field ablation and it's a new way of ablating the heart to treat atrial fibrillation.

[Co-host]

Does it have a main competitor in this space?

[Matt Hendrickson]

Yes. So it's kind of turned into a duopoly right now between Medtronic and Boston Scientific. The ticker is bsx and what you saw this quarter is Boston Scientific was in first and their growth in the quarter was 60%. So Medtronic is highlighting that it was actually growing faster in the quarter than Boston. Its main competitor was how's in these.

[Host]

Medical device companies like Medtronic and how are they dealing with this administration and I don't know, tariffs, regulations, what's the backdrop for this for the sector of the health care space?

[Matt Hendrickson]

Yeah, so if you look at broadly it should be more insulated than some of the other kind of import export type of businesses. Procedure volumes remain steady. Devices that are used in the US are mostly built in the us. There's some caveats here and There. So it's overall relative to the broader market, minimal. Medtronic highlighted that, you know, the worst quarter is going to be coming up this their fiscal third quarter, which ends in January, a little bit worse in the fourth quarter, that ends in April. And then they haven't gone too much into fiscal 2027. But they said it should be incremental. Overall it should be about 180 million to the overall net income that you know. So. But that's talking about a company that's making 30 billion plus in revenue per year.

[Co-host]

What I noticed as well is that Medtronic has as one of its biggest investors Elliott Investment Management, the activist investors. And yeah, they've become one of the biggest shareholders earlier this year year and they've made some changes, adding some folks to its board as independent directors, presumably ones that Elliot finds favorable. What does this mean for that relationship? Is this an antagonistic relationship or is it something that's a little bit friendlier?

[Matt Hendrickson]

I would say more it's a friendlier type of relationship. I think it goes back to what I was talking about 12 months ago when we were looking at a company that had all these problems, missing developments in the pipeline and they just couldn't get that revenue growth from the 4 to 5% up to that 5 to 6% where we're seeing now. Now the question is how much of that is behind the scenes. Elliott is making a push or just the fact that the management team just needed that extra time to get that initial acceleration of the growth just internally. But yeah, they came in, I mean, honestly at the right time with kind of at the. When it was down, you know, more than 20%.

[Co-host]

I'm not used to seeing a potentially friendly relationship between Elliot and the target companies. At targets.

[Host]

Yeah, exactly. Good point. But maybe it's working this particular case. Matt, thanks so much for joining us. Appreciate it. Matt Henriksen, he's a senior Medtech analyst, Bloomberg Intelligence. He of the questionable commuting strategy. We'll discuss that.

[Co-host]

What would you do if you were him?

[Host]

I'll train, dude. I mean that's. I live in New Jersey for that reason.

[Co-host]

Is that New Jersey Transit or is that another one?

[Host]

Yeah, but he lives in Ridgewood, which is beat for no rail service. Good. You gotta. You gotta go to Secaus.

[Matt Hendrickson]

You're kind of almost supporting my thesis there.

[Host]

Yeah, but you don't come into the city. I mean that there's a river.

[Co-host]

Cause problem is with the driving into Midtown.

[Host]

Yes. You go to Secaucus, you hop on a train, you're in and then you're done. Drive to Secaucus Yeah, no but or.

[Matt Hendrickson]

I do my 5:30 commute too.

[Host]

Stay with us. More from Bloomberg Intelligence coming up after this. Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is, you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On Public, you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto. It's all there plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing.

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[Co-host]

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[Bloomberg Intelligence Podcast Announcer]

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Host]

Amherst Sports, that's Salomon. They got the Salomon. Best bindings, best bindings in the world. I think I've had, I've been skied on salmon bindings for like 40 years. But they have lots of other stuff, Wilson sports and all that kind of stuff. They had some pretty good numbers today. I mean, you know, raising their guidance for the third time this year. So I don't know, the consumer seems.

[Co-host]

I think in the case economy they serve the upper leg, upper part of.

[Host]

The K. All right, that's the place to be. Abigail Good Martin joins us here. She is the footwear and athleisure analyst. I don't know what Athleisure is for Bloomberg Intelligence. She's a proud spider. University of Richmond spider.

[Co-host]

Oh, I didn't know that that was the mask.

[Host]

It is. It's very unique, isn't it?

[Co-host]

I can't wait to see what that T shirt looks like.

[Abigail Good Martin]

Oh, it's a big spider.

[Host]

Yeah, we'll get you the, we'll get one for you. I got my 40th anniversary at the University of Richmond coming up this year, this spring.

[Co-host]

Are you gonna go?

[Host]

Damn right I am going. I might actually join your fellow spiders, force me to kind of go. So I'm on the committee. I'm in charge. I'll be dialing for dollars, getting people to come. And Abigail, she's a spider. So talk to us about Amer Sports here. I don't think a lot of people know them too well.

[Abigail Good Martin]

Yeah, no, because the brands underneath it is arc', Teryx, which is their outdoor performance brand as well as Solomon and Wilson are their three biggest. So I think today was a big day for them. They did really well. You know, sales up 30%. Broad based strength across regions, across channels and across brands. I think the key thing people are looking for was China. Arc' Teryx recently had some controversy in China with fireworks display in the Himalayas. That fireworks display.

[Host]

Who displayed fireworks in The Himalayas Arc.

[Abigail Good Martin]

Teryx for set off fireworks. Why exactly? It was definitely a misstep for an outdoor brand that's really focused on sustainability and there was definitely some concern that there would be a little backlash in China. There's definitely a lot of people upset about it and they were fined by the Chinese government and working to restore the ecology there. But Greater China was up 47%. Momentum is continuing into 4Q. So I think that was really a big takeaway just quelling investors concerns about potential backlash in China especially because they're the number one outdoor sports brand in China.

[Co-host]

Carrick so I had no idea that they have such strong brands. I mean Amerisports on its own is kind of. It doesn't. It's not memorable. The name, the parent company name. Right. But the brands of course are Salomon, Arc, Tyrex, Wilson, as you mentioned. What does the tariff picture look like for this company?

[Abigail Good Martin]

Yeah, I think it's very similar to most of the other companies. I think for them what benefits them is their premium positioning. They're able to raise prices and they're not seeing any backlash from consumers or pullback. They're still seeing very strong full price sell through. So they're able to offset some of those tariff costs with that which I think is really helping. And we're seeing that with a lot of more of the premium brands are able to kind of navigate through the tariffs since our consumers are willing to.

[Co-host]

Pay upper K. Upper K of the K shaped economy I guess.

[Host]

I know that's I guess where you want to be there. Talk to us about the footwear market here. I think you know, Nike, Adidas, all that kind of stuff. What's going on there?

[Abigail Good Martin]

Yeah, I think, you know, we're in store for a very interesting holiday season. I think that we're going to continue to see the premium brands continue to do well on holdings recently just reported and did phenomenal and and they also said they're not seeing any backlash on raised prices and they'll continue to do, you know, limited discounting through the holidays. So we may see some differences between the two companies. But we just had our recent buy survey and Nike continues to lead. I think there's been concerns over Nike but they still are the major shareholder and still the favorite brand of millennials. Gen Z is everyone for the holidays. So they should continue to do well too.

[Co-host]

What is Amer Sports distribution strategy? Do they have a DTC offering or are they going through third party retailers?

[Abigail Good Martin]

Yeah, that's a great question. So it's A little different for each brand. For Arc', Teryx, they're leaning a lot more into DTC. They've changed their distribution strategy from basically 80% wholesale to 80% DTC over the last three years. And they're really focusing on growing their store base because I think not a lot of people know about arc'. Teryx. It's really going to help the brand awareness. So Even in the US they're looking to double their store count by 2030. So that's that. Through Solomon continues to be wholesale, especially for footwear. We're seeing this holiday season, consumers strapped for cash. They're wanting to go into the stores and try on their shoes and make sure it's the right fit and buy them versus, you know, buy five pairs and return them. Yeah. So the wholesale distribution for Salomon is really key. And they're in a lot of key premium partners, I would say, and the running specialty stores as well.

[Host]

I mean, I'm looking at your report here, research report on the sneaker business. I didn't know there were so many shoe manufacturers. I mean, Nike's the dominant one, as you said, but there's like 14 in your survey here.

[Abigail Good Martin]

Yeah, yeah.

[Host]

That's a competitive marketplace.

[Abigail Good Martin]

Definitely. It's getting even more competitive as consumers with AI technology. You know, there's just such more of a breadth of discovery. So that's where product is really coming into play this holiday season, I think. You know, the innovation, product and style.

[Co-host]

Abigail, if there's one thing to be worried about when it comes to amerisports, what would it be? I mean, what's an area that they're not executing on?

[Abigail Good Martin]

So I think the China thing was the one uncertainty for this quarter that we were definitely. It could have gone either way, so that would be the biggest thing. But honestly, they're executing on most of their things. Their biggest drivers are dtc, women's and China. And all of those were up double digits and more. And they're really gaining share in women's, which I think is a big new opportunity for them as more women join the outdoor market.

[Host]

All right, which have you purchased in the last 12 months? Sneaker brands for baby boomers. Skechers.

[Abigail Good Martin]

Yeah.

[Co-host]

What.

[Drew Redding]

What.

[Matt Hendrickson]

Is that?

[Abigail Good Martin]

Honestly, they're so comfortable. They're like the price point, the quality. I know, I know, I know, I know. But you'd be.

[Co-host]

That is not something that they market out there, that they put out there.

[Abigail Good Martin]

No, they're the third largest footwear brand globally.

[Co-host]

Really?

[Host]

Yeah.

[Abigail Good Martin]

I think right behind Adidas.

[Co-host]

Next you're going to tell me that, you know, the boomers are using the shoes with the little wheel in the back of the.

[Host]

No, the wheels. The wheels, yeah.

[Abigail Good Martin]

No, they're doing the step ins. You don't even have to bend down for your shoelace. That's it.

[Host]

That's what I think it is.

[Co-host]

Yeah.

[Host]

Okay. I think you're right.

[Co-host]

All right.

[Host]

There you go. I mean, the kids, the Gen Z, the millennials, they're still in that Nike brand. The Nike brand still.

[Co-host]

And Hottie does or Hokas.

[Abigail Good Martin]

Yeah, right. Hoka. Hoka. And on are gaining, but they're, you know, they're still small. And I think people don't realize that just because there's been such a big boom. They're still very like West Coast, east coast oriented, you know, they still have a lot more room to grow brand awareness in the US Especially in the middle of America. So, yeah, Nike continue in their higher price points. Right. Not everyone can afford them.

[Bloomberg Intelligence Podcast Announcer]

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