Palantir's Premium Valuation, Yum Considers Offloading Pizza Hut, Spotify Rules Audio Streaming

Summary

Bloomberg Intelligence Podcast – Episode Summary

Episode Date: November 5, 2025
Hosts: Scarlet Fu, Paul Sweeney
Featured Analysts: Mandeep Singh (Tech), Michael Halen (Restaurants), Geetha Ranganathan (Media)
Main Topics: Palantir’s Premium Valuation, Yum Brands’ Potential Pizza Hut Divestiture, Spotify’s Dominance in Audio Streaming

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Episode Overview

This episode of Bloomberg Intelligence explores three key business stories: the debate surrounding Palantir's soaring valuation amidst the AI boom; Yum Brands’ consideration of selling off Pizza Hut after years of flagging performance; and Spotify’s strong financial results, strategic pricing power, and leadership in the audio streaming industry. The team leans on their expert analysts for deep dives into valuation metrics, strategic reviews, and the evolving competitive landscapes across tech, restaurants, and media.

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Key Discussion Points & Insights

1. Palantir’s Premium Valuation and Role in the AI Economy

With Mandeep Singh, Senior Tech Analyst
Timestamps: 02:32–06:13

• Extreme Valuation Debate:

  • Paul Sweeney frames the discussion, noting investor confusion over how to value Palantir in a world where AI companies trade at steep multiples.
  • Mandeep Singh: “Palantir still is the most expensive enterprise software business. So at a $500 billion valuation, you have to ask yourself, is this the best software company that I can own, or is there something else out there in the world of AI?” (02:50)
  • Compares Palantir’s $4 billion revenue run rate, growing 50% y/y, to OpenAI and Anthropic, which are growing at “triple digits” and already much larger in revenue.

• Valuation Metrics in Tech:

  • Sweeney jokes about how the industry moved from P/E to revenue multiples:
    “I can kind of get used to 5, 6, 7, 8 times revenue. Now you're telling me what, hundred times? Oh, my goodness.” (04:04)
  • Mandeep underscores the uniqueness of Palantir’s business, referencing its government and institutional clientele.

• Data Infrastructure as a Moat:

  • Palantir’s true differentiator is its ontology platform—organizing vast enterprise data and eliminating redundancies, especially for non-tech companies.
  • Quote: “Palantir can give you like a master data where they can help you get rid of all the redundancies and give you data that really matters for your AI.” (04:39)
  • Pitch: Even with AI spend rising, “the last thing you want to save on is...spending on data. Because if your overall project fails since you didn't have good data, then it's bad ROI. And that's where Palantir is really benefiting.” (05:30)

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2. Yum Brands’ Strategic Review of Pizza Hut

With Michael Halen, Senior Restaurant Analyst
Timestamps: 08:35–14:16

• Pizza Hut’s Slump as a Drag on Yum:

  • Halen reminisces about Pizza Hut’s heyday but acknowledges its decline: “I miss Pizza Hut from back in the day. You know, I feel like the quality has slipped since then...US has been a big time drag...on Yum Brands' results.” (09:02)
  • Taco Bell is “an absolute monster” with continued strong growth; KFC is growing overseas but had recent US challenges that seem to be stabilizing.
  • The street is excited about a potential divestiture, seeing Pizza Hut as holding back overall growth.

• Potential Buyers & Turnaround Prospects:

  • No obvious public company acquirers—private equity is likely, given the multi-year turnaround needed.
  • Quote: “It might take some of their markets two, three years to get them back to like their rightful position as market leader in those countries...private equity obviously looking at a five to seven year time horizon would be a good fit.” (10:21)

• Broader Restaurant Sector Trends:

  • Lower-income and Hispanic consumer weakness is broadening, impacting some fast-casual chains like Wingstop.
  • Smart kitchen technology (cutting service times to 10 minutes, improving accuracy and freshness) is boosting sales and customer experience.
    • “Stores that have had this technology...are outperforming on same store sales by 500 basis points.” (12:02)

• Labor Dynamics:

  • Staffing remains a challenge, with public chains reporting 4–5% annual wage inflation.
    • “That’s been pretty common year in and year out since the pandemic.” (13:59)

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3. Spotify’s Streaming Supremacy and Pathway to Improved Margins

With Geetha Ranganathan, Senior Media Analyst
Timestamps: 17:07–23:12

• Strong Quarterly Results:

  • Spotify beat guidance on both free and paid user growth, as well as gross margin expansion.
  • Geetha: “Spotify has done really well in terms of expanding their gross margin. They again delivered numbers ahead of guidance both for, you know, third quarter as well as ahead of forecast for the fourth quarter...” (17:25)
  • Ongoing question about pricing power—investors are “waiting for the next big US price hike.” (17:50)

• Market Leadership & Competitive Landscape:

  • Spotify holds ~33% of global subscribers, nearly 40% in the US—far outpacing competitors.
  • “Spotify just leads by a wide, wide margin...way ahead of their competitors. So obviously gives them a lot of...pricing power in the market.” (18:53)

• Cost Structure and Growth Levers:

  • Heavy content costs—70% of every dollar goes to music labels; thus, Spotify focuses on more profitable avenues like podcasts and audiobooks.
  • Royalty costs from music labels are projected to rise in 2026, putting margin expansion to the test.
  • “They're probably going to debut some new tiers. Again, all of that builds to that whole pricing power and monetization story.” (20:39)

• Apple as a Competitor:

  • Apple Music is far behind Spotify in market share and offers lower prices; not seen as a near-term threat.
  • Changes to iOS have actually improved Spotify’s economics.
    • “Apple Music, not too much of a worry for Spotify.” (21:06)

• M&A Rumblings in Big Media:

  • Warner Brothers Discovery has opened its books to suitors, including Netflix and Comcast.
  • “Price has been a sticking point, Paul, so...Paramount has come in with about $24 a share. It looks like David Salsa was looking for something north of $30.” (23:10)

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Notable Quotes & Memorable Moments

• Paul Sweeney on App Ride-Hailing:
  “I arbitrage between Uber and Lyft and people who don't do that. I don't understand those people because I get huge discounts 20, 30%...” (02:01)
• On Palantir’s Unique Value:
  “Palantir can give you like a master data where they can help you get rid of all the redundancies and give you data that really matters for your AI.” – Mandeep Singh (04:39)
• Nostalgia for Pizza Hut:
  “I miss those breadsticks especially.” – Michael Halen (09:02)
• On the Role of Smart Kitchens:
  “They're rolling out some kitchen technology that's boosting operations...stores that have had this technology...are outperforming on same store sales by 500 basis points.” – Michael Halen (12:02)
• On Spotify’s Content Economics:
  “For every dollar that they earn, about 70 cents goes back to the music label. So they have very little leverage.” – Geetha Ranganathan (19:38)
• On Media M&A:
  “Warner Brothers Discovery at this point has opened up their books to any of the interested parties. There were news reports Netflix is looking at some of the financials...This doesn’t necessarily mean that a bid is coming, but of course anybody who, you know, has a chance, I'm sure wants to take a look.” – Geetha Ranganathan (22:03)

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Segment Timestamps Guide

• Palantir & Tech Valuations: 02:32–06:13
• Yum Brands and Pizza Hut Review: 08:35–14:16
• Spotify Earnings & Audio Streaming: 17:07–23:12

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Tone & Style

The tone is knowledgeable yet conversational, with analysts providing data-driven insights peppered with personal anecdotes (pizza nostalgia, ride-sharing penny-pinching). Bloomberg’s analytical rigor is present, but discussions move briskly and remain accessible for general market-interested listeners.

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This episode is a must-listen for anyone tracking tech valuations, the unfolding fast food strategy battles, or media streaming’s next big moves.

Transcript

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[Paul Sweeney]

All right, let's get back to some of these tech earnings coming in here. Palantir, Uber. Yes, I arbitrage between Uber and Lyft and people who don't do that. I don't understand those people because I get huge discounts 20, 30% on wait.

[Commercial Narrator]

So you whenever you need to go somewhere, you're going to check both apps and then figure out which one to do.

[Paul Sweeney]

It takes an incremental like 8 seconds and it saves me real money. And Matt Miller and I had this fight on the air. He doesn't do it. He's brand loyalty. I'm like you leaving money.

[Commercial Narrator]

No, no, there's no loyalty to this. This is all about how much it costs.

[Paul Sweeney]

Yeah. I don't know.

[Commercial Narrator]

It's a commodity.

[Paul Sweeney]

All about the money. Exactly Right. Mandeep Singh. Somehow he's built a career on doing this stuff Mandeep Singh. He's our Senior Tech Analyst at Bloomberg Intelligence. Mandeep, let's start with Palantir. What's your call on that and what do you make of the stock action today? I'd love to just get your thought on the company, the stock, and what do you think of the action today, the sell off?

[Mandeep Singh]

I mean, Palantir still is the most expensive enterprise software business. So at a $500 billion valuation, you have to ask yourself, is this the best software company that I can own, or is there something else out there in the world of AI, which, to my mind, OpenAI and Anthropic are also recurring revenue software businesses. Yes, OpenAI is much bigger in their ambitions with regards to a consumer business and an enterprise API business. But these companies, OpenAI and Anthropic, are growing triple digits. And OpenAI for example, is at a 13 billion plus revenue run rate. So when I compare an OpenAI Anthropic to Palantir, Palantir at $4 billion run rate, growing at a very healthy 50%, trading at 100 times CV2 sales. That is where I think the valuation is. What gives me a stop here.

[Paul Sweeney]

Okay, I was raised by gentlemen where you did P E ratio, and then I got converted to EV to ebitda. And then you people in technology got me focusing on multiples of revenue when.

[Mandeep Singh]

It comes to software companies, not other businesses.

[Paul Sweeney]

And then I said, all right, I can kind of get used to 5, 6, 7, 8 times revenue. Now you're telling me what, hundred times? Oh, my goodness.

[Commercial Narrator]

Yeah, that's, that's. It's like PEG ratio and eyeballs back in the day. So, Mandeep, when it comes to Palantir and what it does, though, there's no other company like it, right? That's the issue. It counts big governments as its customers and then now increasingly big companies. And as much as you can compare Palantir as a stock to other AI plays, what the, the, the actual responsibilities it has, the business that it conducts is Irreplaceable? No, irreplicable. That's.

[Mandeep Singh]

They clearly have a very strong mode in terms of, you know, creating an ontology. That's what they call basically making sense of data that an enterprise may have. And think about, you know, any enterprise, they'll have 10, 20 systems, a lot of data replication. And Palantir can give you like a master data where they can help you get rid of all the redundancies and give you data that really matters for your AI. And so think about an organization that has a billion dollar IT budget spending billions of dollars on AI. Why would you not spend $50 million on Palantir? Especially if you are a government or bank or a manufacturing company and not a tech company. That's why Palantir's customer base is not your sophisticated tech companies like Google or Meta or any of the tech players because they do their own thing but it's your banks and government. And not that they're not sophisticated, but they need more help with organizing their data and Palantir gives you an out of the box solution. And in this age of AI, when things are really kind of getting bigger and bigger in terms of spend, the last thing you want to save on is, you know, spending on data. Because if your overall project fails since you didn't have good data, then it's bad roi. And that's where Palantir is really benefiting and making a case. Guys, you're spending so much on infrastructure, why are you not spending on data? And I think that's a good pitch.

[Commercial Narrator]

Don't cheap out on the data.

[Mandeep Singh]

Yeah.

[Paul Sweeney]

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

[Baillie Gifford Representative]

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].

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[Paul Sweeney]

Looking at Yum Brands today. That's a stock in the news. Stocks up 5.6% today. It's up about 10% year to date. Launching a strategic review focusing on their Pizza Hut brand there. Let's break it down a little bit with Michael Halen. He's a senior restaurant analyst for Bloomberg Intelligence. Michael, when I was in college in Richmond, Virginia, Pizza Hut was the bomb. That's all we had down there for pizza. What's going on with Pizza Hut and what's Yum's thinking about?

[Michael Halen]

Yeah, you know I miss, I miss Pizza Hut from back in the day. You know, I feel like the quality has slipped since then. Man, I miss those breadsticks especially. You know, International has been okay, but us has been a, a big time drag on ufc on, on, on Yum Brands results. So yeah, so I, I think this was kind of a long time coming. It's really been a drag on the top and bottom line growth. You know, Taco Bell is an absolute monster. Is putting up strong unit growth as well as same store sales growth quarter after quarter after quarter. KFC has had some well documented same store sales issues in the US but that seems to be turning. They had a solid little quarter here with flat same store sales versus six straight quarters of decline. So that business seems to be accelerating a little bit. And KFC unit growth overseas is phenomenal. Absolutely phenomenal. They crush it overseas. Yeah. So, so Pizza Hut has been the, this drag on this business for quite some time. I think the street is, is really excited about a potential divestiture here.

[Paul Sweeney]

Any potential buyers out there that you can identify?

[Michael Halen]

No, we don't have, we don't think any of the companies in the public Market are going to be a per an acquirer of Pizza Hut. Yeah, we, you know this, this thing is like I said, has struggled mightily. I mean we could see private equity, I think private equity would be a good fit. Right. Because it's going to take, you know, management said on the call it might take some of their markets to three years to get them back to like their rightful position as market leader in those countries. Would they which they see as their rightful, you know, position. I think Domino's would have something to say about that. But you know, it's going to take a few years to turn around some of these markets and private equity obviously looking at a five to seven year time horizon would be a good fit.

[Paul Sweeney]

All right, Mike, let's step back. The restaurant space in general getting through, you know, earnings season here. What are you learning about kind of the, the consumer out there from the restaurant perspective? Yeah.

[Michael Halen]

Today we, we heard from Wingstop and another fast casual chain that's struggling also partly been a victim of its own success. Right. It's absolutely crushed it over the last six years and is lapping very, very strong results from last year. But they talked some more about low income consumers and Hispanic consumer weakness and, and it broadening here in the third quarter. The stock is up pretty significantly though. We think there's some couple of things going on. Number one, the stock sold off big time off that Chipotle's poor third quarter print and, and secondly, there's some optimism here I think around the smart kitchen.

[Paul Sweeney]

So what's a smart kitchen?

[Michael Halen]

They're, they're so they're rolling out some kitchen technology that's boosting operations. It's speeding up service times. You know, they're, they're putting out consistent 10 minute service times which is 50% better than they were doing prior. Accuracy is better, food's getting to customers hotter and fresher and, and people are going to have a better experience. And so stores that have had this technology right now it's in about two thirds of the US stores. It's going to be in all 3,000 by the end of the year. But stores that this equipment and have had it the longest are outperforming on same store sales by 500 basis points. So we think that's, that's why the stock is up so much. People are now a little bit more confident in a positive 2026 despite the decelerating trends here in the third quarter.

[Paul Sweeney]

Boy, big, big pop today. Stocks up 13% today, down 14% year to date. But a good move Today, I don't think there's wing stops in Jersey, are there, Mike? I haven't seen one.

[Michael Halen]

Yeah, there's, there's some, but there's, there's not, you know, there's not a whole bunch, you know, Texas, it's strong in Texas. They're talking about the Southwest being strong. But no, man, we need some more New Jersey Wingstop franchisees. The product's pretty good.

[Paul Sweeney]

Absolutely. So what's going on on the labor front for restaurants? I'm thinking quick service restaurants. You know, with the southern border shut off, that was one of the industries that said we may have some labor problems associated with that. Have you heard from your companies about that?

[Michael Halen]

Yeah, you know, our companies just talk about the fact that they're, they use E Verify and they're, and they do everything by the book, which, you know, I think is predominantly the case. The impact that, you know, you're seeing A is with more of the independent restaurants.

[Paul Sweeney]

Okay.

[Michael Halen]

But then B also kind of causes labor costs to go higher here for the public chains. Right, right. They're seeing another 4 to 5%, you know, wage rate inflation this year. That's been pretty common year in and year out since the pandemic.

[Paul Sweeney]

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. 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 available at public.com disclosures Introducing the all.

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[Paul Sweeney]

Geetha Ranganathan she covers all the media names including Spotify, and she explained it to me very clearly early on in coverage of this company. Think of Spotify as kind of the Netflix for music. And I was like, okay, now I get it. Geetha, thanks so much for joining us here. What did you make of the Spotify numbers?

[Geetha Ranganathan]

Actually like the Spotify numbers, Paul? I mean, you know, the big numbers that we always look for are of course the user metrics. We want to see them kind of do well on both monthly active users, which are basically the free listeners as well as the premium subscribers, which is basically basically, you know, everyone paying about $12 a month for a Spotify subscription. And both those numbers came in well ahead of guidance. The other number that we look for in Spotify results is gross margin. This has been, you know, a constant point of debate, but Spotify has done really well in terms of expanding their gross margin. They again delivered numbers ahead of guidance both for, you know, third quarter as well as ahead of forecast for the fourth quarter in terms of guidance. So fundamentals seem to be really strong. I think the one concern, Paul, that really kind of emerged with Spotify over the past few months is pricing power. You know, are they going to keep, you know, being able to increase prices? And this is something that has dominated the conversation for not just Spotify, but of course, for any streaming company. We've seen Netflix, as you just pointed out, demonstrate really good pricing power. I think Spotify has very good pricing power as well, but people are really waiting for the next big US Price hike to really gain more confidence in the story.

[Paul Sweeney]

Geetha, what's the competitive landscape for Spotify out there? Because as we think about the video business, it's Netflix and then kind of a big drop down to Disney and then a bigger drop to kind of everybody else fighting it out. What's the landscape for in the audio business?

[Geetha Ranganathan]

It's actually very similar, Paul. In fact, you know, Spotify just leads by a wide, wide margin. So if you just look at both the global audio streaming market in terms of subscribers, they have about a 33% share globally. They have close to almost a 40% share in the US market. So way ahead of their competitors. So obviously gives them a lot of. I think, you know, again, we come back to pricing power. Gives them definitely a lot of pricing power in the market.

[Paul Sweeney]

So what's on the cost structure for them? What are the real levers for them? It seems like, you know, the, I know at Netflix and they got to write big, big checks to, you know, either license content or, you know, create their own content. What's it like on. On the Spotify side?

[Geetha Ranganathan]

Yeah, you bring up an excellent point, Paul. And this is kind of, again, been one of the pain points for Spotify because again, this is a music streaming service. They don't own any of the music. Music itself, that's all kind of controlled by the labels. And as you well know, content is king. So this is really where Spotify has a lot of trouble because for every dollar that they earn, about 70 cents goes back to the music label. So they have very little leverage. They've been trying to kind of change that whole dynamic, that whole equation come more of their content. So a big investment area for them has been, you know, podcasts, has been audiobooks, where they kind of get better, you know, profit dynamics. It has worked well. But actually, one of the things that we're kind of looking for next year is we're going to see a step up in all of the royalty costs. And that's again, something that the street and investors are a little bit nervous about because we need to see how, you know, Spotify kind of manages their whole margin expansion story as those royalty costs go up. So the amount of that they're paying all of the music labels, the Warners and the Universals of the world is going to go up slightly. But we still think that they're in good shape. They've been adding a ton of new features to all of their tiers. They're probably going to debut some new tiers. Again, all of that builds to that whole pricing power and monetization story.

[Paul Sweeney]

And how is Apple as a competitor here? Because anytime I see a company that's even remotely in competition Apple, I get nervous.

[Geetha Ranganathan]

So Apple, you know, if you're just kind of looking at it in terms of share, they are way below Spotify, both globally as well as in the US market. So not much of a competitor from, from a share standpoint. In fact, they've even priced their products slightly lower. Some of the, you know, some of the noise around Spotify and Apple has been, you know, in terms of the iOS and whether, you know, Spotify can kind of get better terms and they've managed to do that as well. So some of the changes on the iOS system have actually helped Spot Spotify in terms of getting a better market share and getting better economics, actually. So Apple Music, not too much of a worry for Spotify.

[Paul Sweeney]

All right, let's switch gears to some of the big cap media names you cover. I need to get an update. Geetha on Paramount, Warner Brothers Discovery, Comcast, Any movement forward there? I have to wait to the Allen Company conference next summer to get something done.

[Geetha Ranganathan]

Yeah, we really don't know. We haven't heard anything. So just a few days back, Paul, I think it was just for last week and we heard that Netflix was kind of poking around. So Warner Brothers Discovery at this point has opened up their books to any of the interested parties. There were news reports and Netflix is looking at some of the financials of Warner Brothers Discovery. Again, this doesn't necessarily mean that a bit is coming, but of course anybody who, you know, has a chance, I'm sure wants to take a look at the Warner Brothers Discovery, especially the studio and the streaming assets. So right now we know Comcast is interested, we know Netflix is definitely interested and of course Paramount Skydance is interested. But again, Paramount Skydance interested for the whole company. So streaming studio plus the TV networks. So this is again, you know, I don't know it's how it's going to play out, but hopefully we should get to hear from, you know, somebody pretty soon. Warner Brothers Discovery is reporting a little later this week.

[Paul Sweeney]

Boy, yeah, you think about it. I mean, you've got a company whose board and whose CEO seems to be open to a deal. You would think that something could happen quickly, but it's not happening, is it?

[Geetha Ranganathan]

Price has been a sticking point, Paul, so.

[Paul Sweeney]

Gotcha.

[Geetha Ranganathan]

We know that. Yeah. So we know that. You know, Paramount has come in with about $24 a share. It looks like David Salsa was looking for something north of $30. So again, it's, you know, it's, it's all going to come down to those negotiations.

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