Trump Nvidia Deal Reshapes US’s China Strategy

Summary

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Bloomberg Intelligence Podcast Summary

Episode: Trump Nvidia Deal Reshapes US’s China Strategy
Date: December 9, 2025
Hosts: Scarlet Fu, Paul Sweeney
Featured Guests: Caroline Hyde (Bloomberg Tech), Laura Martin (Needham Co.), Matthew Griffin (Bloomberg stocks reporter), Diana Rosario Pena (Bloomberg Intelligence Consumer Staples analyst)

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Overview

This episode unpacks pivotal developments across tech, media, home improvement, and packaged foods, with a central theme: how the Trump administration’s Nvidia policy shift reflects — and may reshape — US-China tech relations. The episode also delves into Netflix’s proposed Warner Bros. deal amid a disruptive generative AI landscape, provides insight into Home Depot’s economic outlook, and reviews Campbell Soup’s latest challenges.

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1. US-China Tech Policy: Trump’s Nvidia Decision

The Debate Over Nvidia’s Chip Sales to China

Timestamps: 02:13–06:11

• Background: The Trump administration is now permitting Nvidia to sell H200 chips to China. These are not Nvidia’s latest chips, but a significant policy change with vast implications.
• Caroline Hyde (C): Explains the specifics: these chips are older (Grace Hopper architecture), "not the most advanced" and not as globally sought after as Blackwell or Vera Rubin models.

  “It is 10x superior to the H20s that…had also been deemed okay to ship…if a 15% cut was given to the US government. But that was never signed into law…most importantly, China doesn't want them.” (Caroline Hyde, 02:35)

How Trade Policy Is Set

• There’s frustration in Congress over being cut out of these crucial export restriction decisions, which recently have been made via executive orders (not legislation).
• Caroline Hyde:

  “…there is hand wringing going on from Congress that they’re being cut out…really they should have ownership of how much trade should be allowed…these are coming through executive orders and…Nvidia Jensen [Huang] want access to China…” (03:48) “Nvidia and Jensen want access to China—a $50 billion addressable market—they’re being forced to put down at the moment. He has 0% revenue coming from that country.” (03:48) On national security tensions: “You've got this tussle at the top of the China hawks who are worried from a national security perspective… But… Jensen Huang would say: ‘they're just going to build it themselves and we're forcing them to speed up that by limiting my technology…’” (03:48)

China’s Position and Domestic Push

• Large Chinese tech firms will buy US chips if possible (“more is more”) but “the government wants to focus on domestic supply here” (Huawei, Baidu, new chip entrants). (05:05)

Memorable Moment:

“We are underestimating how sophisticated China is at using the Nvidia chips, the small amount they already have, and some of those homegrown ones.” (Caroline Hyde, 02:35)

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2. Apple’s AI “Strategy”: The Strength in Waiting

Timestamps: 05:39–07:13

• Discussion: Apple’s shares have climbed 35% despite no clear AI strategy, with some speculating that “doing nothing” and avoiding huge capex is now a market positive.

  “So, do nothing and benefit.” (Host, 05:51) “Apple, we always say about Apple they don't have to be first…and when they do come into the market, they do it really well.” (Host, 05:52)

• Apple is perceived as a slow adopter in AI, prompting internal leadership exits, yet investors see potential upside if AI moves to consumer edge devices.

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3. The Netflix–Warner Bros. Discovery Debate & Gen AI in Media

Timestamps: 10:02–16:18
Guest: Laura Martin (Needham Co.)

Should Netflix Acquire Warner Brothers?

• Laura Martin: Strongly advises against it, citing cultural incompatibilities:

  “The big cultural Warner Brothers would create cultural problems at Netflix...it would be about twice as many employees from…an old world, 50-year-old studio, who really is averse to making—taking risks…” (Laura Martin, 10:32) “Netflix is sort of single purpose disruptor, everybody on the same page, move fast and break things, iterate if you get it wrong...Warner Brothers is an anchor…” (10:32)

• Generative AI is seen as collapsing production timelines, and “Netflix has the fastest [reaction times] in media...it would really slow their reaction times if they brought on twice as many employees stuck in the 50-year-old business model.” (10:32)

AI: Friend or Foe?

• Near-term, GenAI is “just like the other technological disruptions…a tool for humans…faster, better, safer.”

  “So far, Gen AI technology has been a tool or a utility for human beings. The vision...is to have…superintelligence, where machines train machines…that’s 10 years out.” (12:25)

Strategic Dogma at Netflix

• Netflix has previously reversed on ads, live sports, and theatrical windows despite claims otherwise.

  “…when they say we will never do something, please take that with a grain of salt because they often reverse themselves completely 180 degrees.” (Laura Martin, 15:08)

• Theatrical windows remain contentious with Hollywood talent.

Skydance–Paramount Parallel

• Paramount/Skydance combination is different: Paramount is subscale and “probably can't survive without bulking up…they must have scale or they're going to die.” However, culture risks remain.

  “So they might die because I'm right about the culture problem…but they're going to die if they don’t buy something anyway.” (Laura Martin, 13:46)

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4. Home Depot: Consumer Behavior and Economic Sensitivity

Timestamps: 19:39–24:20
Guest: Matthew Griffin (Bloomberg)

• Home Depot’s short-term outlook is muted—flat-to-2% comparable sales guided, well below expectations.

  “Next year, their preliminary view is they’ll be flat to up 2%. That’s lower than what Wall Street was looking for…” (19:39)

• Housing prices and interest rates remain high, depressing large-scale home projects, while DIY/trade-down activity supports smaller project sales.

Comparison: Lowe’s is Faring Slightly Better

• Both chains face similar headwinds; Lowe’s is “down about 2% on the year compared to down 10% for Home Depot.”
• Tariff costs are a concern, particularly with high building materials costs, indirectly influencing consumer behavior.

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5. Packaged Foods: Campbell’s Mixed Earnings and Brand Challenges

Timestamps: 27:36–32:51
Guest: Diana Rosario Pena

Two Sides: Snacks vs. Meals & Beverages

• Meals & Beverages: Ready-to-serve soups flat; broths and condensed soups “improving.” V8 remains a soft spot.
• Snacks: Mixed. Salty snacks challenged by consumer health trends, but cookies outperform (“the salad with the fries” effect).

  “You have salty snacks being, you know, challenged by people trying to eat healthier, reducing their sodium. But then you have cookies outperforming.” (28:10)

Tariffs and Supply Chain Maneuvers

• Campbell’s acquired a stake in its Rao’s supplier (La Regina) to manage tariff and supply chain uncertainty.

Executive Controversy

• Recent executive’s disparaging comments about Campbell’s “being for poor people” and Indian employees may cause a short-term reputational issue but not seen as major long-term threat.

  “…the company went ahead and tried to put on record that they're not necessarily agreeing with what he said… I don't necessarily see that as a significant headwind.” (30:19)

Private Label Competition Intensifies

• Private label is a mounting challenge: “I go to the supermarket, I'm going to get the chicken broth that's cheapest and it’s usually the one sold by the supermarket…”

  “...they’re trying to work with the retailers to position themselves in the best part of the shelf…” (31:59)

Packaged Foods 2026 Outlook

• Hopes for volume recovery in the second half as comps ease, but profitability constrained by tariffs, labor, and marketing costs.

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Notable Quotes & Memorable Moments

• Caroline Hyde: “We are underestimating how sophisticated China is at using the Nvidia chips… and some of those homegrown ones.” (02:35)
• Laura Martin: “Netflix is sort of single purpose disruptor, everybody on the same page, move fast and break things. Warner Brothers is an anchor…” (10:32)
• Host: “So, do nothing and benefit.” (on Apple’s AI strategy, 05:51)
• Matthew Griffin: “It does seem like they [consumers] are doing the home remodeling equivalent of trading down…” (21:31)
• Diana Rosario Pena: “…the salad with the fries… which I love…” (28:37)

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Key Takeaways

• US-China Nvidia Policy: The US is reshaping export controls in real-time, with Nvidia’s chip sales reflecting not just tech competition but internal US governance tensions and the complex reality of Chinese tech self-sufficiency.
• Tech & Media: The platform wars are accelerating with AI, and strategic “inaction” in some giants (Apple) is being rewarded. Cultural fit, especially for legacy media integration (Netflix–Warner Bros.), is more critical than ever.
• Retail & Consumer: Home improvement and packaged goods face persistent economic and structural headwinds — tariffs, inflation, changing consumer behavior, and competition from private label brands.
• Across the Board: Decisions at the intersection of policy, technology, and business culture are moving faster than ever, demanding adaptive strategies and clear-eyed analysis.

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Transcript

[A]

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[B]

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 app. Listen and wherever you get your podcasts or watch us live on YouTube. President Trump has now opened the door to Nvidia selling some of its high end chips to China.

[A]

Yeah, I'm not sure. I kind of can't follow the policies. Some days the doors open, some days it's closed.

[B]

Yeah, and it could always move the other. I guess that's the other risk, right? Let's bring in Bloomberg Tech Co host Caroline Hyde to tell us a little bit more. So on BTech. I'm sure you're going to be talking all about this, but Caroline, what does it mean that Nvidia can Now sell these H200 chips to China? Because that is not the most advanced chips, is it?

[C]

It's not. It's based on Grace Hopper architecture, which isn't the Blackwell that We're currently in. It isn't the Vera Rubin that we're looking towards. It's the previous year's iterations. It is 10x superior to the H20s that remember, cast your mind back had also been deemed okay to ship from the United States to China if a 15% cut was given to the US government. But that was never signed into law. They were never able to execute on that and most importantly, China doesn't want them. And I think this is the key. The Financial Times is reporting that basically already China's looking at putting curbs, licenses, basically limiting the ability for certain companies to access the 200s, even if Nvidia is allowed to ship them. And I think this is what everyone's got to currently digest. I'm hearing time and time again from some of the most powerful people in the technology space that we are underestimating how sophisticated China is at using the Nvidia chips, the small amount they already have and some of those homegrown ones.

[A]

Typically how is this trade policy negotiated? Who typically says US Tech company, you can sell this into China or to other markets, or you can't is because it just seems like it's now the whim of the President and his in his X account or truth social account setting trade policies. How is it typically done?

[C]

Well, isn't it interesting that just last week Jensen Huang was meeting with the President but was meeting with some of the leaders over in Congress. Most crucially, he was with the Senate Banking Committee because it's the Banking Committee, oddly, that tends to be in charge export restrictions. And so it was that group of leaders. But many are frustrated and I was just at the Reagan Defense Forum, National Defense Forum this weekend and there is hand wringing going on from Congress that they're being cut out of. A lot of these discussions really they should have ownership of how much trade should be allowed. But at the moment these are coming through executive orders and we know that the President likes to cut a deal. Nvidia Jensen one likes to cut a deal. They have a very personal relationship and most broadly Nvidia and Jensen want access to China. They think there's something like a $50 billion total addressable market they're being forced to have to put down at the moment he has 0% revenue coming from that country. But you've got this tussle at the top of the China hawks who are worried from a national security perspective if you allow technology to go from the US into China. But on the flip side, Jensen Huang would say they're just going to build it themselves and we're forcing them to speed up that by limiting my technology, let our stack own that of China's big large language model development.

[B]

So you had mentioned that China didn't want to buy the H20 chips. Does China want to buy the H200 chips?

[C]

I think if you asked what the reporting shows is that if you turn to an Alibaba or a Tencent or a Baidu, they are limited by the amount of GPUs they have access to. So I think more is more from their perspective. And yes the 2000s build on the 20s but longer term the government wants to focus on domestic supply here. That's why you're seeing Camera Con do so well, why you're seeing Huawei do well while you're hearing Baidu wants to spin off its chip manufacturing. While we just had that superb entrance to the market just of the Moore's technology company that is shot up more than 400% they do want to make it homegrown.

[A]

Great story on the Bloomberg terminal today. Apple shares have soared 35% since the end of June as the market scrutiny of AI development spending has made the company's lack of an AI strategy a strength.

[B]

So do nothing and benefit.

[A]

I don't know but I mean Apple, we always say about Apple they don't have to be first and typically they are not first but when they do come into the market they do it really well.

[B]

It's a thought out approach and that.

[A]

People, you know the Apple bullsman saying don't worry, don't worry, don't worry, they're going to be fine. There's 2 billion Apple devices out there, they'll be fine. I don't know. Yeah.

[C]

And meanwhile goodbye to the guy who is in charge of AI policy over at Apple. Because of that botched Apple intelligence rollout, people have been frustrated that Apple was seems to be a slow player to adoption. But longer term most in the generative AI space are thinking that we are going to be using this from a consumer perspective from our edge devices. Therefore compute is going to change in the way in which you know it. Your models are going to change in the way in which you know it. And eventually we will be doing running our ChatGPT or our Gemini, whatever model you like on your device. Eventually that means you'll need an Android or an Apple or maybe some future AI device that hasn't yet been created and is probably being developed in the minds of of the great leaders right now. But we'll have to see how Apple continues to be basically do the benefit of not having got a load of debt and not having spent an awful lot of money on the build out. Because at the moment the I think investors are just still grappling with the sheer scale of capital expenditure that's going into this and wondering whether there's going to be real upside. Can Apple get the upside without making the infrastructure investment?

[A]

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

What is actual investing? We believe that it's a real world task to deliver thoughtful capital deployment. It's not about spending 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] 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.

[B]

Disclosures being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. That's why they make your business growth their priority. The Chase team takes the time to understand your mission, where you are now and where you want to go. Their broad range of solutions is designed with you in mind so you can bring your ideas to life. From banking to payment acceptance to credit cards, you can conveniently manage all your business finances all in one place with their digital tools looking for tips and advice, their online resources are always available to give you the solutions you need to help your business thrive. See how your business can get stronger and go farther with Chase for Business. Learn [e-mail] business chase for business Make More of what's yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply JP Morgan Chase Bank NA Member FDIC Copyright 2025 JPMorgan Chase & Co.

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

[A]

YouTube. Our next guest, one of the most highly respected media analysts on Wall street for a long time and I think the value that I really find from her research consistently over the years is she is not afraid to be out of consensus here. And I think she's got a again a non consensus call here that even if you don't agree with it, it makes you think. And that's the value of a good analyst. Laura Martin joins a senior analyst at Needham Co. Laura, as it relates to Netflix, do you think they should even pursue this deal.

[D]

Here?

Yeah. So we published a note this morning saying no that the big cultural Warner Brothers would create cultural problems at Netflix. Netflix has about 14,000 employees and Warner Brothers about 35,000, some of which they wouldn't be buying but it would be about twice as many employees from let's call it the old world, the 50 year old studio who really is averse to making taking risks and they really do things the old fashioned way and siloed competitive internally fighting culture. And that isn't Netflix. Netflix is sort of single purpose disruptor, everybody on the same page move fast and break things iterate if you get it wrong. And I just feel like the culture that Warner Brothers is an anchor would be an anchor to Netflix at a time when generative AI technology risks are collapsing timeframes into weeks with the changes. So we think the next disruption created by generative AI requires really fast reaction times which Netflix has the fastest in media. And it would really slow their reaction times if they suddenly brought on twice as many employees that were stuck in the 50 year old business model of the Hollywood.

[B]

Studio. And you quantified the drag that this would have on Netflix. What does that look.

[D]

Like?

So I mean I think what we're saying is that the $83 billion purchase price that they would pay to buy Warner Brothers would add another that cash would be at risk of not returning its capital because they would bring all these cultural problems and envelop the entire consolidated $400 billion.

[A]

Entity. Laura. So as it relates to Gen AI, is that a friend or a foe to Hollywood, to the media.

[D]

Companies? Yes. So to date, Paul, what isn't different about Jenny is it's being used as tools by humans, in which case it's not different than the web. It's not different than our smartphones, Our, you know, our Apple phones are, you know, flashlights and communication devices and map. They replace Thomas Guides. So they're utility. So so far, Gen AI technology has been a tool or a utility for human beings. I think the vision of Sam Altman at OpenAI, Elon Musk, Mark Zuckerberg over at Meta is to have, and certainly of course, of Nvidia, is to have to achieve what's called super intelligence, where machines train machines, in which case it replaces people at some level, it does better thinking faster, it's less emotional. So if that comes true, and they're saying that's 10 years out, that superintelligence, it would actually replace humans. But near term, it's just like the other three technological disruptions you and I have seen where it makes our life better. It's a tool for humans to do faster, better, safer.

[B]

Work. So, Laura, you make the case that Netflix doesn't need to buy Warner Brothers Discovery. It would be adding an anchor and it would drag it down because it's this disruptor. What about Paramount, Skydance? Doesn't that argument also apply? Or does it.

[D]

Not? It does, but the distinction I would make is Netflix is large enough to go it alone, and with generative AI collapsing timeframes, their culture is really well suited to the technological, you know, the future of the next five years. Peace Guy is subscale. It probably can't survive without bulking up. And it doesn't really have time to build in a generative world because it's just too small and change is happening too fast. So it needs to bulk up and buy in something. We think they could get it closed in six months because we think the senior Ellison is good friends with Donald Trump and he would have it sail through regulatory, so it would happen faster, there'd be less uncertainty, and it will allow Peace Guy to survive. So I think they have to take the technological risk because they must have scale or they're going to die. So they might die because I'm right about the culture problem and the anchor problem, but they're going to die if they don't buy something anyway. So it gives them a better chance to survive, I think, to Buy.

[A]

Warner and Laura, you follow Netflix since its inception here. This is a company and a management team and a board that's been pretty adamant they'd rather build from within then buy. What do you think has changed here? Because this is a huge turnaround for this company strategic.

[D]

Wise. You know, Paul, you know, I really wanted to write a note that says dogma is bad. I mean, they said they'd never do advertising. Yeah, they do advertising. They said we'll never do live sports. And now they broadcast NFL games on Christmas day. And then they said, well, we don't like the Hollywood, we don't like the theatrical window and we don't want to release any films in the theatrical window unless talent like directors force us because they want Academy Award consideration, which is a term which is a requirement to get an Academy Award. You have to have been released in theaters. So that is really hurting them in this, in this. Those words are really hurting them with the talent community. So when they say we will never do something, please take that with a grain of salt because they often reverse themselves completely 180 degrees. And it's really those words about the theatrical wind really hurting their, hurting the feedback loops with talent like big talent, like Jim Cameron and Scorsese, like all these people that really are big talent, they all want a theatrical window. And Netflix, they're scared to death that if Netflix bought Warner's, the theatrical window over five years would go to.

[A]

Zero. 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 [e-mail] Disclosures being a small business.

[B]

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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. All right, let's move on here and talk a little bit about Home Depot. Home Depot, of course did come out with earnings a while ago, but they are giving us a bigger long term outlook here for its business. It's an investor day kind of outlook and for that we have Matthew Griffin, he's a Bloomberg Stocks reporter, to just talk us through some of the issues that Home Depot has faced because at the last earnings report, Home Depot made clear that the expected rebound in demand that it was looking for had not yet materialized. Is the tone changing here from.

[E]

Home Depot? Well, Scarlett, I would say the tone really hasn't changed in a meaningful way. Everyone's trying to make sense of the economic moment that we're in. I mean, you were just talking about economic data that we got this morning that had some puts and takes in it. When you look at job openings versus layoffs and I would say that like pretty much any economically sensitive company, right now Home Depot is facing some puts and takes as well. So they gave an outlook for comparable sales. Now next year, their preliminary view is they'll be flat to up 2%. That's lower than what Wall street was looking for. But then they also gave this market recovery scenario where there's a bit more of a rebound in the US Housing market, more demand for home improvement. And in that scenario, comparable sales would beat estimates at up 4% to 5%. You know, you zoom out and you've got a picture where mortgage rates have come down, but consumers are still under pressure, housing prices still high, and so are rates historically. And so you've got the consumer trying to muddle through, companies trying to make sense of it and investors trying to make sense of it. You've got the stock down a little bit premarket and now just about flat on.

[A]

The day. 470,000 employees at home Depot. That is amazing, but I don't think I could get a job there. It's like I really don't know a hammer from.

[B]

A screwdriver. Okay, so back up a little bit because Paul's goal is to become a greeter at Walmart down the road. Like that's what he, that's his.

[A]

Dream job. That's that, that's the final.

[B]

Career path, final destination.

[A]

For boss. So what are they saying about just the consumer behavior these days? I mean, interest rates are still high. Are people still working on their homes? You know, the professional versus the, the private? What's, what's going on with their.

[E]

Core customer? Yes. So we can actually look back to a few weeks ago when they reported earnings and actually cut their profit outlook for this year. What we saw then was a continuation of trends at the company, which is you have flagging demand for some of the bigger ticket home remodels. Again, because there's pressure on consumers. People are not taking on big projects, projects that require financing. At the same time, they are shifting maybe into projects like gardening, smaller projects. So it's not that people don't want to do anything, it's that people are maybe doing the home remodeling equivalent of trading down here, which is a trend that we've seen in other corners of the economy. For example, Walmart's business holding up. You know, if you want that greeter job, it might be open for you because consumers are trading down. That's good for Walmart's business, it's good for a segment of Home Depot's business. But not enough to support the overall outlook so far. And if you look at the slides from their analyst analyst day today, they see pressures continuing, including high home prices. And that's weighing on.

[B]

Consumers here. Yeah, the affordability crisis strikes again. So Matthew, I'm looking at Lowe's shares, which are of course a competitor to Home Depot, down at the moment as Home Depot is basically unchanged. Do we presume that these same headwinds that are dogging Home Depot are the same that kind of are clouding the outlook for Lowe's? Or does Lowe's have a.

[E]

Different approach?

Interestingly, you know, they both serve similar corners of the market. Home improvement so far it does seem like Lowe's has fared a little bit better this year, at least with how investors have viewed the way they've been managing through their shares. Currently down about 2% on the year compared to down 10% for Home Depot. If you look at that reaction today, it's possible investors are thinking there could be some of the same headwinds in their future. But again, it does seem like they've gotten a little bit more of a pass.

[A]

So far. How about tariffs here? What are the companies saying about tariffs and their ability to deal.

[E]

With them? So so far the companies in their commentary have really focused on the state of the consumer rather than directly talking or at least talking constantly about tariffs. I would say though that Home Depot did call out high building material costs as a reason that consumers are deferring home improvement projects. So you know, you do think about tariffs on lumber, things like that. That doesn't help that side of.

[A]

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

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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. We want to talk about Campbell's. The company came out with its fiscal first quarter earnings. Both the top line and the bottom line beat analyst estimates. But the direction of travel for revenue and profit is still lower. Let's bring in Diana Rosario Pena. She's Bloomberg Intelligence Consumer Staples analyst on the latest on Campbell's and of course the packaged foods industry overall. So Campbell's has two businesses, the snacks business and the meals and beverages portfolio. How are the.

[F]

Two businesses doing? Diana well, they are puts and takes on both of them. You know, for meals and beverages. There's some headwinds on ready to serve soup, whereas broth and condensed soup which is usually used in cooking is improving. You know you have V8, which is not really It's a brand that is not really.

[E]

Doing that well. So.

[F]

I love.

[B]

V8. You do?

[A]

Well, to me. To me, that's like my healthy eating for the day. When I drink a.

[B]

Little one in the morning when you're on the plane, you'll.

[A]

Get a V8. You're like, I'm good, I'm.

[F]

Good, I'm good. No need.

[A]

To work out. No need to go.

[F]

To the gym. Exactly. So. But it's still facing some headwinds for snacks. It's. It's kind of. I found it odd because there seems to be a bifurcation of the consumer trends here. You have salty snacks being, you know, a challenge by people trying to eat healthier, reducing their sodium. But then. Then you have cookies outperforming. So I guess is the salad with the.

[B]

Fries all right? Which I love.

[A]

By the way. Yes. Yeah, absolutely. Campbell agreed to take a 49 stake in LA Regina. What is La Regina? What's Campbell's trying.

[F]

To do here? Yeah. So that is the supplier for Rao's, which they bought it a year or so ago, and that it makes it kind of like, have a little bit more control on the supply side. There has been some headwinds on this brand because tomatoes are being exported or imported to the United States. So they have to face some tariffs. So, you know, with this, they are. They're trying to not only offset tariffs, but have a little bit more on the. On the supply chain, have a little bit more.

[A]

Control on that. Here's my rail story. I mean, it's for. People aren't in New York City. It's a very famous restaurant in New York. It's very difficult to get a table there, to get a reservation. On my 30 years of wall Street, I've asked people to take me who I know go there to take me. I.

[B]

Haven'T.

[A]

Gone once. Really? Yeah. I mean, it is impossible. Like, I never asked people to take me out on their great golf course. I just wait for the invite to come. But for Rao's, I've actively.

[B]

Tried to get. And.

[A]

Haven'T gotten.

[B]

Any. Struck out. So anyone who has an invite into Rao's, let Paul.

[A]

Sweeney.

[B]

Know. Exactly. Exactly. You know, I did actually get to eat there. We ordered takeout during the pandemic when they were takeout. Yeah. So that was my one time I.

[A]

Got to.

[B]

Eat. Very good. But, Diana, I want to ask you about, of course, the controversy that surrounded Campbell's just last month. There was an executive, he was the vice president of the IT department, who talked about how the company's products are being made for poor people and you know, had some disparaging remarks about some of the employees, the Indian employees. Is that something that's going to cast a pall over Campbell's? I mean, do you see any long term.

[F]

Effects from that? Well, usually they did not address that during the call, but I think it's, it might be a short term headwind if there's any boycott happening. I don't, I'm not necessarily, I don't necessarily think that there's going to be one. It's just one executive and the company went ahead and, and kind of tried to put on record that they're not necessarily agreeing with what, what he said. So it's, you know, it's, I don't necessarily see that as a significant headwind.

[A]

For the company. Packaged goods companies, I kind of think of them kind of a GDP top line growth story at best. What's the 2026 outlook for your companies? What are, what are.

[F]

Investors looking for? So for 2026, they're hoping that there's some light at the end of the tunnel in terms of volume growth.

Again, it might be a second half of the year story because comps get a lot easier going forward. But you know, profitability seems to be a little bit more difficult because they have tariffs. They have to contend costs still are a little bit higher. Specific specifically on the employee side. And there's also marketing that they have to do because they want to spur growth and pricing is not necessarily the, you know, the only lever that.

[B]

They have to. But you know, I think about Campbell's and other packaged foods companies and how much competition they must face from private label products. I go to the supermarket, I'm going to get the chicken broth that's cheapest and it's usually the one sold by the supermarket and not Campbell's or anyone else's. So that's, I mean, and for private label you don't need to.

[F]

Do.

[B]

Any marketing. Exactly. So what is there? How do.

[F]

They counter that? Well, more marketing. They're, they're trying to work with the, with the retailers to position themselves in the best part of the shelf to be able to feel like a losing battle. Yeah, well, obviously retailers have to contend with increasing their private label penetration and at the same time have a good relationship with this national brand. So they're not necessarily want them to go against, you know, this product. So they're trying to, there's some negotiations happening and usually, you know, when I speak to retailers because I do cover Canadian retailers. They mentioned that they tried to expand their private label into white spaces not necessarily served by national brands. So you're while you might might see some, you know, condensed to private label, it's not as, as, as intricate or as better quality.

[B]

Than probably Campbell's. This is the Bloomberg Intelligence Podcast available 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.

[A]

The Bloomberg Terminal.

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