Super Micro Falls on $7 Billion Offering to Fund AI

Summary

---

Bloomberg Intelligence Podcast

Episode: Super Micro Falls on $7 Billion Offering to Fund AI
Date: June 10, 2026
Hosts: Paul Sweeney, Scarlet Fu, Charlie
Notable Guests: Woo Jin Ho (Senior Technology Analyst), Caroline Hyde (BTECH Co-anchor), Steve Mann (Global Autos & Industrials Analyst), Diana Rosetta Pena (Consumer Staples Analyst)

---

Episode Overview

This episode dives deep into three of the biggest stories shaking financial markets:

1. Super Microcomputer’s surprising $7 billion equity offering to fund massive AI server orders and its short-term vs. long-term investor impact.
2. The highly anticipated SpaceX IPO, the fervor for its shares, and governance concerns around Elon Musk’s control.
3. Chewy’s cautious forward guidance despite strong results, reflecting shifting consumer patterns in the pet care industry.

The hosts are joined by various Bloomberg Intelligence analysts to break down the implications for investors, discuss competitive landscapes, and examine sector trends.

---

1. Super Microcomputer’s $7B Equity Offering: Steep Dilution, Big Ambitions

[02:25 - 06:31]

Key Discussion Points

• Massive Dilution: Super Micro starts the day with a $25B market cap, announces a $7B equity raise (20%-27% dilution for existing shareholders).
• Funding Explosive Demand: The raise is tied to $39B in AI server orders, most for fiscal 2027, with $30B arriving in the second half of this year.
• Razor-Thin Margins: Profit margin sits at just 4-5% net income; AI server segment is “probably one of the worst in the industry” for margins, mainly due to lack of control over GPU pricing.
• Competitors & Positioning: Dell is the major competitor, with $60B in server revenues, set to grow to $75B; Super Micro is one of only two U.S. players with this kind of scale.

Notable Quotes & Timestamps

• On Dilution:

  "The math quite frankly tells me at face value what we wrote was 20% plus dilutive to shareholders. ...Another sell sider said up to 27%...short term pain mainly to long term gain."
  — Woo Jin Ho, [02:56]

• Where the Funding Goes:

  "$7 billion in equity financing and you try to back that with $39 billion in orders...most of those orders are coming in fiscal 2027..."
  — Woo Jin Ho, [03:27]

• AI Server Economics:

  "A typical AI server deal can range anywhere between a billion to $5 billion each. So we’re talking about a handful of deals that they’re trying to fulfill."
  — Woo Jin Ho, [04:04]

• Profitability Realities:

  "Hardware margins are pretty awful, and AI server margins are probably one of the worst in the industry...they have very little control in terms of the GPU pricing."
  — Woo Jin Ho, [04:51]

• Competitors:

  "You gotta get a Dell, right? Michael Dell has just been killing it on the AI server side...Super Micro is only one of two of these providers in the US that can provide that level of scale."
  — Woo Jin Ho, [06:03]

---

2. SpaceX IPO: Hype, Valuation, and the Elon Factor

[08:45 - 14:50 & 18:16 - 23:50]

Key Discussion Points

• Unprecedented Demand: SpaceX targets a $1.8T market cap with $75B new equity, $250B in reported demand, and 30% retail allocation.
• Valuation Debate: Priced at 95x revenue, echoing Tesla’s stratospheric multiples; driven by Musk’s vision rather than fundamentals.
• Passive Fund Frenzy: Fast-tracked entry into indices (like Nasdaq) could force passive funds to buy at lofty prices.
• Governance Concerns: Heavyhanded control—Elon with 80% voting rights—draws concern from pension funds and Senator Elizabeth Warren.

Notable Quotes & Timestamps

• Retail Rush & Lockups:

  "30% allocated to the retail community...if you go and buy it through Fidelity, they’re going to punish you if you try and sell it on the day...there's a lot of volatility..."
  — Caroline Hyde, [10:10]

• On Institutional Demand:

  "Some big fund managers are coming in asking for up to $10 billion worth of SpaceX shares...Middle Eastern investors...pile into Xai, OpenAI, Anthropic..."
  — Caroline Hyde, [10:41]

• Valuation Surrealism:

  "Bloomberg Television had a great graphic...multiples of revenue...SpaceX, 95 times revenue."
  — Bloomberg Host, [12:14]

• The True Betting Thesis:

  "It’s all about whether you believe in ... the cult of Elon Musk...Tesla does not trade on fundamentals, nor does SpaceX. It’s bigger than the sum of its parts..."
  — Caroline Hyde, [12:44]

• Governance Pushback:

  "Controllers seem to be: Elon has too much control, governance...Elizabeth Warren is sending a last-minute ditch to the SEC…worried about your 80% voting rights..."
  — Caroline Hyde, [13:41]

---

3. Elon Musk, SpaceX & Tesla: Synergy or Distraction?

[18:16 - 24:58]

Key Discussion Points

• Merger Speculation: Debate on whether a SpaceX–Tesla rollup is inevitable or logical.
• Limited Synergies Near-Term: Tesla’s only major contribution would be its battery storage business; otherwise, practical synergies (Mars colonization, vehicle deployment) are far-future concepts.
• Autonomy Delays: Despite grand promises, Tesla’s robo-taxi rollout lags, with only 59 vehicles in three Texas cities.
• Battery as a Growth Business: Tesla's battery segment now makes up 13% of revenues and up to a third of gross profit, fueling AI data centers and home power needs.

Notable Quotes & Timestamps

• On Merger Logic:

  "The only thing that Tesla is really contributing in a consistent, meaningful way is actually their battery storage business...We don’t really see, you know, imminent or near-term synergies for a merger."
  — Steve Mann, [18:52]

• Autonomy Disappointments:

  “Tesla has just 59 vehicles in its robo taxi fleet as of Tuesday, limited to three Texas cities...company did tell us...bulk of rollout is in the second half.”
  — Steve Mann, [21:10]

• Musk Multitasking:

  "There was a concern from Tesla investors...that he wasn’t paying enough attention to Tesla. Is there a concern now with Space X?"
  — Bloomberg Host, [22:54]
  "He’s got one foot in and then he needs to. Right. A lot of these businesses require regulatory approvals..."
  — Steve Mann, [23:12]

• Battery Push:

  "Battery business is becoming a bigger, bigger part of Tesla...it’s 13% revenue, but...a quarter to a third of contribution."
  — Steve Mann, [24:05]

---

4. Chewy Earnings: Pet Economy Cools Off

[28:21 - 31:47]

Key Discussion Points

• Drop in Shares: Chewy’s shares fell 6.5% after cautious guidance—focus on the softness in customer additions.
• Consumers Get Strategic: Pet owners are cutting discretionary but not staple spending; toys & accessories hit hardest.
• Pandemic Adoption Unwinds: Pet population stabilizes as some pandemic-era adoptions reverse, softening demand for pet products.
• Growth Metrics: Chewy relies on active consumer growth and per-customer spend (typically $600/year), expecting both to plateau.

Notable Quotes & Timestamps

• Customer Spend Shifts:

  “They were cautious. Even though results were good, they lower revenue guidance...seeing that consumers are being strategic. ...Something we have seen across consumer staples.”
  — Diana Rosetta Pena, [28:49]

• Population Headwind:

  "Pet population...has been stabilized in the past couple of years...some surrendering more than adoptions because people that adopted pets during the pandemic, they had to get rid of them."
  — Diana Rosetta Pena, [29:46]

• Growth Outlook:

  "The active consumer growth...and also how much they’re spending. ...Typical consumer is spending about $600 a year on Chewy...that is the metric they're going to see softness in 2026."
  — Diana Rosetta Pena, [30:46]

---

Memorable Moments

• On Musk’s IPO Roadshow:

  "The next day I was reporting on it for the morning and I was trying to pull a cut of Elon. ...I don’t know what the hell he was talking about."
  — Charlie, [09:33]

• On the Reason for Super Micro’s Slim Margins:

  “Hardware margins are pretty awful.”
  — Woo Jin Ho, [04:51]

• Host Joking About Pet Spending:

  “If given a choice between cutting back on the pets and cutting back on the kids, the pet would win. I gotta be honest. Sorry.”
  — Charlie, [29:16]

---

Timestamps for Critical Segments

• Super Micro Equity Offering Breakdown: [02:25 – 06:31]
• SpaceX IPO Preview & Fervor: [08:45 – 14:50]
• Elon Musk/Tesla/SpaceX Synergy Debate: [18:16 – 24:58]
• Chewy’s Earnings and Pet Market Trends: [28:21 – 31:47]

---

Summary

This episode provides thorough analysis of major headlines driving markets:

• Super Micro’s bold equity raise for AI expansion comes with painful dilution but possible long-term gains if demand plays out.
• The SpaceX IPO is a test of modern markets’ faith in disruptive visionaries, with governance and valuation questions flying in tandem with overwhelming demand.
• Tesla’s role in Elon Musk’s cosmos-wide vision is still evolving, with batteries and autonomy as swing factors, while the consumer staples world watches the Chewy story for clues about pet economy dynamics post-pandemic.

The tone is energetic and skeptical, mixing hard numbers with candid market impressions and industry insider banter. Listeners leave with a nuanced sense of risk, opportunity, and the narratives guiding today’s wildest tech stories.

---

Transcript

[Brookfield Narrator]

At Brookfield, we invest in the thing behind the thing behind the next big thing. Our focus across infrastructure, energy, real estate, private equity and credit is helping build the backbone of the global economy. We combine deep operational expertise with disciplined long term investing, uncovering value and partnering alongside clients to shape tomorrow's economy. Today Brookfield Own what's next? Learn [e-mail] this is not an offer to sell or investment advice. Investing involves risks, including loss of capital.

[IBM Representative]

So there's a lot of noise about AI. But time's too tight for more promises, so let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business IBM when you're

[Bloomberg Intelligence Host]

running a business, the best days are the ones where priorities stay on track. For midsize and large companies, that isn't always easy. Risk can touch multiple parts of an organization at the same time, often in ways that aren't immediately obvious. It might involve property liability or cyber. It could stem from regulatory requirements or challenges tied to a specific industry or the scale of an operation. At that level, managing risk becomes an ongoing discipline, not a one time decision. the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. That means working with companies to identify where they're exposed, decide what matters most and put practical standards in place so risk is managed as part of day to day operations. And and when losses do happen, the Hartford can pair that risk control work with insurance coverage grounded in underwriting, risk engineering and claims experience developed over time. Learn [e-mail] riskmitigation

[Bloomberg Intelligence Podcast Announcer]

Bloomberg Audio Studios Podcasts Radio news 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 Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Bloomberg Intelligence Host]

One of the stories that we've been talking about today, Super Microcomputer. Here's a company started the day with like 25 billion of market cap and they announced a 7 billion dollar equity raise. Kids, I don't know how you do the math but that's dilutive. I don't know by how much but and the stock's down 1718 today. You just don't see that very often. Woo Jin Ho joins us here. Senior technology analyst for Bloomberg Intelligence. Richard, which I've been doing this Wall street thing a long time. That's a monster follow on equity offering given the market cap size. What's the math tell you?

[Woo Jin Ho - Senior Technology Analyst]

The math quite frankly tells me at face value what we wrote was 20% plus dilutive to shareholders. I think there's another sell sider who said it's up to 27% dilutive to shareholders. So yeah, investors aren't happy about it. But, but quite frankly like Christina said earlier on a. On a recap, short term pain mainly to long term gain.

[Charlie - Bloomberg Intelligence Analyst]

Okay. They're going to use the money for. For what? And when does it pay off? Two big questions.

[Woo Jin Ho - Senior Technology Analyst]

Yeah, yeah. Hey. Hey Charlie. So, so really John, sorry about that. So really, really straightforward. Look. $7 billion in equity financing and you try to back that with $39 billion in orders. Most of those orders are coming in fiscal 2027 which is starts in July. And now the way I'm factoring it in is like 30, let's just say 30 billion of that comes in the second half of this year.

[Charlie - Bloomberg Intelligence Analyst]

Specifically orders for what?

[Woo Jin Ho - Senior Technology Analyst]

AI servers.

[Charlie - Bloomberg Intelligence Analyst]

Okay, right.

[Woo Jin Ho - Senior Technology Analyst]

And these deals are really really expensive. So if you think about it from this standpoint, a typical AI server deal can range anywhere between a billion to $5 billion. Each. Billion dollars each. So we're talking about a handful of deals that they're trying to fulfill. And look, they only had a billion dollars in gross cash and they really needed the cash to buy the GPUs to fill those orders.

[Bloomberg Intelligence Host]

So I go to the FA screen for super microcomputer and I'm looking at kind of their growth rates and profit margin. I'm surprised to see a profit margin on the net income line of kind of like 4 or 5%. That's not the usually seeing a lot fatter margins for tech companies. Talk to us about just kind of the business here.

[Woo Jin Ho - Senior Technology Analyst]

Yeah, look, hardware margins are pretty awful and and I server margins are probably one of the worst in the industry primarily because you're selling in large scale and you have very little control in terms of the GPU pricing. I will tell you and I'm going to get a little nerdy here is that there is part of the sales include something that they sell called, what is it, D.C. b.B. S. Right. And that's a margin. That's a margin accretive business. Now consensus has Gross margin around 8.2, 8.3% for the next next year. If they can get a half you know, 50bps on gross margin improvement. We're talking about a dollar dollar in EPS accretion if they were able to get $60 billion in sales instead of $50 billion in sales for next year. So look, this is why I think this could be ultimately positive over the long term even though shareholders are hurting right now.

[Charlie - Bloomberg Intelligence Analyst]

Who's their big competition like? Everybody.

[Woo Jin Ho - Senior Technology Analyst]

No, no, no. Look, we've been joking around on this program quite a few times. You got to get a Dell, right? And Michael Dell has just been killing it on the AI server side. $60 billion in servers on track for this year. And I think consensus has about $75 billion in next year. And that's one of the reasons why that super. I'm kind of positive on the demand side for Supermicro because they're only one of two of these providers in the US that can provide that level of scale of for AI servers.

[Bloomberg Intelligence Segment Promos]

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

[Brookfield Narrator]

At Brookfield, you can own wealth that's measured in generations. For 125 years, we've built long term wealth through expertise, discipline and a clear vision for the future, providing investors access to alternative strategies. Built for what's Next Brookfield Own what's next. Learn [e-mail] this is not an offer to sell or investment advice. Investing involves risks, including loss of capital.

[IBM Representative]

The thing about AI for business, it may not automatically fit the way your business works. At IBM we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced cost by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.

[Bloomberg Intelligence Host]

IBM support for the show comes from Public. Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades. And others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts? Yep. High yield cash. Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by

[Public Investing Advertiser]

Public Holdings Brokerage Services by Public Investing Member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor Crypto Services by ZeroHash all investing involves risk of loss. See complete [e-mail] disclosures.

[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.

[Bloomberg Intelligence Host]

Got a big IPO pricing tomorrow.

[Charlie - Bloomberg Intelligence Analyst]

We do, we do, we do.

[Bloomberg Intelligence Host]

And I it's spaceships, it's Mars, it's AI and it's Elon Musk. So it's got everything. It's got something for somebody, everybody.

[Charlie - Bloomberg Intelligence Analyst]

It's got a lot of promises.

[Bloomberg Intelligence Host]

Yes. And we need some clear reporting on that. So we turn to Caroline Hyde. She is a BTECH co anchor here. What are we hearing about the roadshow, Caroline? I mean there's what an extraordinary road show. What an extraordinary I saw Jimmy diamond

[Caroline Hyde - BTECH Co-anchor]

hosting the Bro Love that went on.

[Bloomberg Intelligence Host]

That was very cool. I saw the video looked pretty cool. I mean there's seemingly something for everyone out there but boy, you really have to just hit your wagon to Elon.

[Charlie - Bloomberg Intelligence Analyst]

I got to just say from that roadshow. The next day I was reporting on it for the morning and I was trying to pull a cut of Elon.

[Bloomberg Intelligence Host]

Yeah, I couldn't use anything.

[Charlie - Bloomberg Intelligence Analyst]

I don't know what the hell he was talking about.

[Caroline Hyde - BTECH Co-anchor]

Had to be there as a JP Morgan client listening inherently. And then Morgan Stanley's been doing it too. Look, all of this is as the hype around this IPO is extraordinary. It's done everything slightly differently. Like we know the price that they're aiming for, even though there's so called technical pricing. Tomorrow is going to be $135. We understand, of course it's we raising up to $1.8 trillion of market valuation and $75 billion of new equity. But this is going to be 30% allocated to the retail community. They're still going to mom and pop

[Charlie - Bloomberg Intelligence Analyst]

can get a piece of this tomorrow.

[Caroline Hyde - BTECH Co-anchor]

What's interesting is of course depending who you get allocation through is how quickly you're allowed to flip it. Now a lot of these retail offerings, if you go and buy it through Fidelity, they're going to punish you if you try and sell it on the day. So you're going to be like contained for 15 days. But there's a lot of volatility that's going to go into this and many think that the price is going to be pushed higher by the amount of passive funds they're going to rush in to buy Space X because there's been this fast tracking of entry into a lot of the main indices like the Nasdaq for example, of Space X shares. And so suddenly if you're a passive fund and you need allocation, there's going to be this sort of funeral and frenzy behind it. But all of this is to say that demand is clear. $250 billion worth is what's been reported by Reuters. And we understand from our sources that that is similar in of demand. Some big fund managers are coming in asking for up to $10 billion worth of space X shares because of course they've got so many funds they've got to distribute it within. And then you're looking at which particular areas in geographically the Middle Eastern investors who have been very long the trade very much piling into Xai OpenAI anthropic. While we know the Kuwaiti investment fund has been asking for about $5 billion worth, we know that there's been big demand coming from the other players as well. So clearly the hype cycles there. I mean we just got two more days to white knuckle this.

[Charlie - Bloomberg Intelligence Analyst]

Yeah, Like Prince Alawi Bin Talal, he was one of the early backers of Elon Musk. He's going to get a big payday, it looks like. Right.

[Caroline Hyde - BTECH Co-anchor]

And it's going to be interesting as to whether people hold on to their allocation, whether it's paper money, whether they want to sell more broadly in the future. And look, this is why there was that great reporting yesterday, wasn't there showing the truest data that if you look back at the 30 biggest tech IPOs in the last 15 years, generally they all, a majority of them will sink in their first 12 months of trade. That's because lockups expire CEOs and people want to be able to make some profits liquidity wanted from some of the people that work at these companies. So there is some sort of pressure. But more broadly, this looks as though a lot of people are going to be not only holding it in their private funds, but maybe wanting to even buy it in their public funds too. Maybe you want even more skin in the game.

[Bloomberg Intelligence Host]

All right, I'm going to put on my analyst hat here valuation. Bloomberg Television had a great graphic they ran yesterday just looking at IPOs, big tech IPOs, multiples of revenue and 15 here, 20 times there. Crazy stuff we never talked about back in the day. This one SpaceX, 95 times revenue.

[Caroline Hyde - BTECH Co-anchor]

It's kind of Tesla, right?

[Bloomberg Intelligence Podcast Announcer]

Yeah.

[Charlie - Bloomberg Intelligence Analyst]

What could possibly go wrong is There any pushback?

[Bloomberg Intelligence Host]

We've heard from the marketplace, from some of these meetings on valuation, I haven't really seen any.

[Caroline Hyde - BTECH Co-anchor]

I think it's all about whether you believe in a, the cult of Elon Musk, whether you believe in the idea of getting orbital data centers. They've started to at least show demonstrations, pictures if you like, how that might work. So that's been a key focus. But really in the same way that Tesla does not trade on fundamentals of electric vehicles, nor does Space X. It's bigger than the sum of its parts when you're putting all the business together because it is the idea of Mars, it is the idea of the moon. It is the idea though that this currently is almost a monopoly. Look who else has been making these reusable rockets. The cadence and the reliability that we've seen with the Falcon 9 now with Starship managing to demonstrate such feats of science, I think for many it's just like, well, I've been burned if I burn if I bet against him in the past.

[Charlie - Bloomberg Intelligence Analyst]

But there has been some pushback, particularly New York and California pension controllers. And the concern there by the controllers seems to be Elon has too much

[Caroline Hyde - BTECH Co-anchor]

control, governance and in fact, funnily enough, shock. Cara, who's weighed into this as well is Elizabeth Warren is sending a last minute ditch attempt to the sec Paul Atkins saying, look, you've got to stop this IPO process because I'm worried about governance and I'm worried about that safety of retail investors. As you are seeing the fast tracking of shares going into these, some of these big indices. Look, whether you like it or not, you're probably going to have exposure to Space X because it's going to be in your 401k, it's going to be in some of these, as you say, the funds that are managed by New York City, by New York State, that pension funds, right? And they're saying, look, we're not so averse to this that we're going to rule out them in our, in our funds. But we are going to keep trying to chew Elon's ear, trying to get letters to him, which he thus far hasn't responded to, saying we worried about this, worried about your 80% voting rights, we're worried about the, the overall governance structure of the business. But like for many investors, they want a founder mindset, they want the ability of Elon Musk to be able to drive forward with the big decisions. And for many long term bettors on him in the private markets, they kind of love that in fact that's why they think eventually Space X and Tesla should merge.

[Bloomberg Intelligence Segment Promos]

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

[Bloomberg Intelligence Host]

Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds and crypto, and they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend small cap stocks with improving operating margins or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on Public you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by

[Public Investing Advertiser]

Public Holdings Brokerage Services by Public Investing member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor crypto services by ZeroHash sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete [e-mail] disclosures running a small

[Bloomberg Intelligence Segment Promos]

business takes everything you've got, but with Chase for Business, you're not alone. They bring together local support and a broad range of resources to more than 7 million customers with a deep understanding of your day to day needs. They provide products and guidance built to help you thrive right now. Earn $500 when you open a new Chase Business Complete Checking Account for New Business Checking customers with qualifying Activities offer. Expires June 18, 2026 Chase Business Complete Checking has the flexible tools you need to accept payments, make deposits and manage your finances with confidence. Learn [e-mail] PodcastBizOffer Chase make more of what's yours Fees may apply to Chase Business Complete checking accounts. The $500 offer is available for new business checking accounts with qualifying activities through June 18, 2026. Eligibility and qualification requirements must be met. Additional restrictions may apply. Please speak with a business banker for more information. JPMorgan Chase Bank NA member FDIC Whether

[4imprint Advertiser]

you're planning a big tech event, launching a new campaign, or just stocking up on team gear, finding the right promotional products makes all the difference. 4imprint offers thousands of options from on trend apparel and premium drinkware to tech totes and giveaways so you can find the right fit for any audience purpose or budget. You can customize it all. Your logo, your message, your look and many items come with no setup charge to help you save. And if you're really watching the bottom line, you'll find standout choices at every price point so you can make a real impact while staying on budget. Plus you'll get expert help, fast turnaround times and their 360 degree guarantee. So you can be four imprint certain your order will arrive on time and look exactly right. Whatever your goal, 4imprint makes it easy to find your perfect promo match. Explore the possibilities [e-mail] 4imprint for certain.

[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.

[Bloomberg Intelligence Host]

We got the SpaceX IPO. That is the big news. But kind of like a corollary to that is what is Elon Musk going to do with the rest of his stuff that he owns and most notably Tesla and all the stuff that's in Tesla? What does he do with that? I don't know. A lot of folks I think are suspecting that at some point, if for nothing else, he'll just kind of roll it up into one big company there under SpaceX. Steve Mann, he covers Tesla. He's a global autos and industrials analyst for Bloomberg Intelligence. Hey Steve, when you talk to Tesla investors, is there an expectation that at some point Elon Musk and SpaceX will buy in Tesla?

[Steve Mann - Bloomberg Intelligence Analyst]

It really depends on the timeline you're talking about. I mean, it's, it's, you can speculate. There's a lot of synergies probably many years away from now that, for example, you know, the Tesla vehicles could be, could be riding on or driving on, you know, the surface of the Mars or the boring company is drilling tunnels in Mars for colonization, but that's very, very far away. We published a piece of research today and we looked at it and really the only thing that Tesla is really contributing in a consistent, meaningful way is actually their battery storage business. And even that it's a small chunk of Tesla's profits. So we don't really see, you know, imminent or near term synergies for a merger.

[Charlie - Bloomberg Intelligence Analyst]

Okay, so if there were to be a merger roll up or whatever you want to call it, is that an admission that one company is not really performing, that it would need the other to help prop it up?

[Steve Mann - Bloomberg Intelligence Analyst]

I wouldn't necessarily say that. I think Elon Musk really has a long term view on what he wants to do specifically in space exploration. And that's where Tesla could really contribute. Like I was saying earlier, you know, you can have, you know, cars, automated cars, driving on, you know, another planet, or you can have, you know, compute or satellites and communications through their satellite system that communicates between interplanetary communication. I mean you can see all the possibilities in both energy and vehicle. But I think a lot of those things need to be proven out first and I think that's what they're trying to do on earth first. And secondly, Tesla really, the focus is really on autonomy, the robo taxi and I don't think, you know, combining the two companies is, is a good time at the moment. It serves as a distraction really.

[Bloomberg Intelligence Host]

Bloomberg News has got some reporting out on the autonomous vehicle. Tesla has just 59 vehicles in its robo taxi fleet as of Tuesday, limited to three Texas cities. After Elon Musk, what happened would have an autonomous ride hailing in about half the population of the US by the end of 2025. Talk to us about that part of the business and where we are and maybe where the company is falling short.

[Steve Mann - Bloomberg Intelligence Analyst]

Yeah, I think, I think, I think for some investors it is falling behind. They were hoping the rollout's a little bit faster, but they, you know, the company did tell us in the first quarter earnings that, you know, a bulk of this rollout is in the second half. I wouldn't be surprised that they're waiting for that. The steering wheel, less, the brake pedal, less cybercap to be ready before they. Ramp up that service in more cities around the country. So let's wait and see. Maybe the cybercap, you know, build out and roll out will be, will be the turning point.

[Charlie - Bloomberg Intelligence Analyst]

All right. Did Elon over prom. I'm trying to get into trouble here. Did he over promise?

[Steve Mann - Bloomberg Intelligence Analyst]

Well, you know how he is, right? I think he has grand plans. What do you mean he has grand plans? It's not a bad thing, you know, stretch targets, you want to call it that. But you know, like reality is, you know, these technologies do need time to, to, to, to, to play out and to do, you know, to be invented, to be discovered, to be developed and to be, make it commercially viable. So these things do take time.

[Bloomberg Intelligence Host]

Steve, one of the concerns from Tesla investors when Elon Musk was in the US government running the Doge campaign was that he wasn't paying enough attention to Tesla. Is there a concern now with SP Space X that once again his attention will be diverted away from Tesla.

[Steve Mann - Bloomberg Intelligence Analyst]

It's very interesting. You know, he was very visible within the government early in the year, kind of quiet down. But now we're seeing him, you know, on Air Force One from time to time. I'm sure he's, he's, he's got one foot in and then he needs to. Right. A lot of these businesses require regulatory approvals and you know, I wouldn't be surprised that, you know, he's working on, on all those fronts to, you know, make sure his business, you know, runs well and gains, you know, gains business, new businesses.

[Charlie - Bloomberg Intelligence Analyst]

Is Tesla becoming more of this One thing that does excite me, Paul, more of a battery company where I can, you know, load up on batteries at my house and draw from the grid at night when electricity prices are much lower. You know, that sort of thing.

[Steve Mann - Bloomberg Intelligence Analyst]

Yeah, that's a, that's a great question because battery business is becoming a bigger, bigger part of Tesla. You know, it's 13% revenue but if you look at the, you know, the gross profit line, you're, you're looking at a quarter to a third or of contribution. And battery sales are becoming more important especially during this, in this AI, you know, build out phase. A lot of these data center actually requires, you know, their own power systems to, to, to, to run the chips and part of that is really having battery backup to make sure these AI data center is running 24 7. So you know, you saw Ford Motor Company getting into that business, you know, and Ford's been doing.

[Charlie - Bloomberg Intelligence Analyst]

Yeah, I think GM's doing the same thing too.

[Steve Mann - Bloomberg Intelligence Analyst]

Yeah, GM is also doing the same thing. You know, repurpose those battery plants that we use for EVs into battery storage. I think there's a demand for that.

[Bloomberg Intelligence Segment Promos]

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

[Bloomberg Intelligence Host]

Support for the show comes from Public. Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts. Yep. High yield cash. Yes, again, they even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio.

[Public Investing Advertiser]

That's public.com market and paid for by public holdings. Brokerage Services by Public Investing Member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor crypto services by 0/ash all investing involves risk of loss. See complete disclosures at public. Com Disclosures Running a small business takes

[Bloomberg Intelligence Segment Promos]

everything you've got, but with Chase for Business, you're not alone. They bring together local support and a broad range of resources to more than 7 million customers with a deep understanding of your day to day needs. They provide products and guidance built to help you thrive right now. Earn $500 when you open a new Chase Business Complete Checking account for New Business Checking customers with qualifying Activities offer. Expires June 18, 2026 Chase Business Complete Checking has the flexible tools you need to accept payments, make deposits and manage your finances with confidence. Learn [e-mail] PodcastBizOffer Chase make more of what's yours Fees may apply to Chase Business Complete checking accounts. The $500 offer is available for new business checking accounts with qualifying activities through June 18, 2026. Eligibility and qualification requirements must be met. Additional restrictions may apply. Please speak with a business banker for more information. JPMorgan Chase Bank NA member FDIC Whether

[4imprint Advertiser]

you're planning a big tech event, launching a new campaign or just stocking up on team gear, finding the right promotional products makes all the difference. 4imprint offers thousands of options from on trend apparel and premium drinkware to tech totes and giveaways so you can find the right fit for any audience purpose or budget. You can customize it all. Your logo, your message, your look and many items come with no setup charge to help you save. And if you're really watching the bottom line, you'll find standout choices at every price point so you can make a real impact while staying on budget. Plus you'll get expert help, fast turnaround times and their 360 degree guarantee so you can be fore imprint certain your order will arrive on time and look exactly right. Whatever your goal is, 4imprint makes it easy to find your perfect promo match. Explore the possibilities [e-mail] for Imprint for certain,

[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.

[Bloomberg Intelligence Host]

All right, let's go go to some some earnings here, chewy for those dog lovers out there and pet owners out there. Shares dropped as much as six and a half percent after management gave additional guidance metrics on the conference call, including cautious comments on customer additions. It's all about the pooch out there. Diana Rosetta Pena, consumer staples analyst for Bloomberg Intelligence, joins us here. How's business at Chewy? Because we got a lot of viewers and listeners that are big fans and consumers of Chewy.

[Diana Rosetta Pena - Consumer Staples Analyst]

Yeah, well, I mean, they were cautious. Even though results were, were good, they lower revenue guidance. And that was pretty much because they don't necessarily expect a lot of discretionary spending going forward. They're, you know, they're seeing that consumers are being strategic. It's something that we have seen across, across our consumer staples world. So we're not that surprised. But steal.

[Charlie - Bloomberg Intelligence Analyst]

I don't know. If given a choice between cutting back on the pets and cutting back on the kids, the pet would win. I got to be honest. Sorry.

[Diana Rosetta Pena - Consumer Staples Analyst]

I agree. I think it's more on like, the discretionary spending of it.

[Charlie - Bloomberg Intelligence Analyst]

Like, not food, but like the big fluffy, whatever. Squeak, squeak.

[Diana Rosetta Pena - Consumer Staples Analyst]

Yeah. Toys and the like. Obviously, there's some stabilization on the pet population. So. So that is also a headwind to discretionary. So you're not going to.

[Charlie - Bloomberg Intelligence Analyst]

There's a lot on the pet population.

[Diana Rosetta Pena - Consumer Staples Analyst]

There's, there's fewer. Well, it's, it's been stabilized in the past couple of years. There's been some surrendering more than adoptions because people that adopted pets during the pandemic, they had to get rid of them. So that obviously diminished the population in the United States. So now it seems to stabilize, which is not necessarily a good omen for discretionary spending in terms of crates and, and new, like, leashes and stuff like that.

[Bloomberg Intelligence Host]

Is Chewy a global company or the US Only?

[Diana Rosetta Pena - Consumer Staples Analyst]

US only. They're having some operations in Canada and the like. They're exploring that, but it's mostly us.

[Bloomberg Intelligence Host]

So when you're modeling out this company and the revenue, do you do it by dog? Is the dog population increasing or is it just a function of GDP kind of growth? Because it seems like we did. As you mentioned, people probably peaked in their dog adoption and so on during the pandemic. Then it's been winding down since.

[Diana Rosetta Pena - Consumer Staples Analyst]

Yeah. So there's two metrics that are important for Chewy. It's the active consumer growth. So people going into the platform and being acquired in the platform, like, you know, becoming customers of Chewy and also how much they're spending. And right now they're getting closer to. Usually the typical consumer is spending about $600 a year on Chewy. That has increased. And that is the biggest metric that they say that they're probably going to see softness in 2026.

[Bloomberg Intelligence Podcast Announcer]

This is the Bloomberg Intelligence Podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live each weekday 10am to noon 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.

[Bloomberg Intelligence Segment Promos]

This Dog Salon Operational Excellence thanks to Genius from Global Payments Scheduling Personalized Checkouts Instant Absolutely Genius Big league reliability for any business, that's genius.

[Bloomberg Intelligence Host]

When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering and claims experience. Learn [e-mail] riskmitigation policies provided by Hartford Fire Insurance Company and its property and casualty affiliates. Hartford, Connecticut Ryan Reynolds here from Mint

[IBM Representative]

Mobile with a message for everyone paying Big Wireless Way Too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month, of course, if you enjoy overpaying. No judgments.

[Bloomberg Intelligence Host]

But that's weird.

[IBM Representative]

Okay, one judgment anyway. Give it a try. @mintmobile.com Switch upfront payment of $45 for

[Caroline Hyde - BTECH Co-anchor]

three month plan equivalent to $15 per month required intro rate first three months only, then full price plan options available,

[Bloomberg Intelligence Segment Promos]

taxes and fees extra.

[Caroline Hyde - BTECH Co-anchor]

See full [e-mail].