Loading summary
Transcript42 lines
- [00:00]
A
Indiana University strengthens tomorrow's workforce with practical real world experience. IU grads make a difference in your community, serving as teachers, nurses and engineers who rise to tomorrow's challenges and meet them. Learn more at iu.edu impact,
- [00:20]
B
Bloomberg audio Studios Podcasts Radio News for many people,
- [00:26]
C
and particularly the gloom crew out there, this is the pinata of the day. Dan Ives joins us now quietly Dr. With Wedbush Technologies and Securities I should say is what's the character of this pullback? There's 14 kinds of pullback. Which kind is this look?
- [00:44]
B
I think this pullback is it's look. I view it as it's all related to what's happened in Korea. Right. In terms of like the Cosby, what we've seen there. It's just this white knuckle moment that's going to be nothing more than a breather.
- [00:59]
C
You go to China a lot. The zeitgeist without question is about China developing through deep seek and others. 90% of the efficacy of AI for 110 the cost. Is it legit worry?
- [01:13]
B
No. Because for the first time in 30 years the US is ahead of China when it comes to tech. And the reality is it's not just from Nvidia to what we see with the miles with Anthropic to the hyperscalers to the software companies like Palantir and others, what could they do it cheaper? Yeah. Are they winning on robotics? Are they winning when it comes to energy because of nuclear? But when it comes to the air race, I don't even think it's a question in terms of right now where, you know, US is versus China. And that's why I think some of those fears and we've seen like the deep seat moments and some of the others, I think a lot of that are more fictional sort of fears.
- [01:53]
A
Microsoft Stock is off 23% year to date trades at 20 times earnings. Talk to us about Microsoft here.
- [02:02]
B
Look, I think it continues to be somewhere between a head scratcher to just a table pounder. In my view, very similar. When I think about Alphabet a year ago in terms of you like they were done, AI was going to crush search, the DOJ was going to break it up. Look, I think with Microsoft, I think the issue is just tied to OpenAI and right now whether it's Oracle, Microsoft, I think being tied to OpenAI is a negative relative to anthropic being golden.
- [02:32]
A
Why is that the case?
- [02:33]
B
Because I think anthropic relative to the model Claude golden child, best model out there. I think anyone tied to OpenAI right now that's been negative for Microsoft. Two is look when you look at Azure growth it's been strong but maybe not the overwhelming point where there's a view that Amazon and Google have started to narrow the gap. Co pilot clearly had stumbled out of the gate. So right now that is a penalty box stock that I think is ultimately a $550.
- [03:04]
C
Does a penalty box stock have to have active management helping the stock here? Do they do a share buyback? I got a dividend growth five year dividend growth of 10.2% put some steroids on it. Is that what they have to do?
- [03:19]
B
Well I think that, I think that Nadella and the team, it's getting to a point here where they're going to have to do 21 multiple to your point but, but then it goes back to like if you look at Apple, if I told you a year ago where Apple would be today relative to maybe some of the doomsday fears, a lot of that was also like cook one of their main pieces of success is that despite some of the bumps and you know the sort of rollercoaster they saw when it came to what they've done on the capital side I
- [03:51]
C
agree with that but come on, they're not pissing away money and I like everybody else does Microsoft have to adjust their timeline of spending on all this
- [04:02]
B
CapEx I think the markets telling Microsoft show us the execution, show us the growth otherwise you're going to have to get curtailed and the market's saying that not just to Microsoft but to Meta because for meta investors no longer want to see doggy at the homework type quarters when you're spending capex like that. For Google they've succeeded massively. So when they do equity raise and things like that, investors are fine with it. Now look, they have obviously lost engineers and others and with Anthropic and that caused some of the sell off but I just think now you're starting to see a separation in terms of you can't just own the names as a broader trade they each have their own sort of characteristics that are ultimately going to drive their growth.
- [04:46]
A
Dan, I don't think we've spoken to you since SpaceX has been in the market. I'm not even sure if it wedbush you're covering that stock but what's the conversations, what are the conversations you've been having with clients about Space X here?
- [04:59]
B
Look I think just like we'll see with Anthropic and OpenAI you know it's, it's Something where it's been this juggernaut that one way or another, investors like it or hate it. It's definitely a huge conversation. I think the big thing is, is that investors are more looking at it as a proxy for what would be with an OpenAI or an anthropic or what it says about the broader tech trade. And I think this is one where it's almost been. Investors are viewing it a little as a proxy and that states to what I think is important in terms of broader attack. Look, it's our view, like in the AI revolution, whether it's space chips, cybersecurity, this is going to spread. You could talk about it on the SpaceX side. I could even talk about on the Caterpillar side.
- [05:46]
A
Yep.
- [05:46]
B
So I think that, I think you're really seeing right now this AI revolution spreading to second, third, fourth derivative investors. Figure out how to own it.
- [05:54]
C
Is Microsoft a software company? Do you pull them together with Salesforce and Accenture? And I don't do that. They're like, how do they convey that to the public other than the CEO's wonderful interview in the Wall Street Journal the other day?
- [06:08]
B
Look, it's really. You have to show it in Azure growth. You have to show it in numbers. Then investors start to feel that Microsoft basically own the enterprise is an acceleration story from a growth perspective. Acceleration from what will ultimately be free cash flow. I think right now they are lumped with Salesforce. They are lumped with ServiceNow.
- [06:32]
C
Exactly. What's the target price again on Microsoft?
- [06:34]
B
550. Because to me, look. And when I look at Microsoft, that continues to be the 1 meta in the penalty box for a good reason. Microsoft, I think, is way disconnected by what ultimately is fundamental.
- [06:48]
C
47%, Paul.
- [06:49]
A
Yeah, exactly.
- [06:50]
C
That's like a bright, shiny green coat that you can't even concentrate the rod. Alexis, the rods and cones of my retina are shocked when he walks in. That's a Bill Cosby line.
- [07:01]
A
I mean, the shirt, sport coat combination today is particularly troublesome. But I don't know how even.
- [07:06]
B
I think it's a kind of. I think it's kind of like. It's kind of like. It's like keen style.
- [07:11]
A
Yeah, it could be. It could be back, you know, back in the day.
- [07:13]
B
Back in the day.
- [07:14]
A
Real quickly, Elon, does you roll up Tesla into Space x?
- [07:19]
B
We've said 80% chance that Tesla ultimately gets bought by Space X. Because for Musk, it's about having all the AI under one ecosystem, under one control. It's also that and that continues to be our view as a data play.
- [07:33]
C
Then how do you respond to really, really competent people like George no, founder with Peter lynch of Fidelity Overseas, who's harshly critical of just the core financial dynamics of Tesla. How do you respond to somebody that esteemed?
- [07:50]
B
What I'd respond is that there is pressure on Tesla to show Robotaxis autonomous growth sop. In other words, like you show the actual numbers over the next. When are they going to do that?
- [08:05]
C
Come on. I ended up here with. What's his Ed, who's our tech guy? Ludlow. Ludlow had. Ludlow ended up with that. Ludlow. They're in three cities with like 42 robo taxis. It's a starter project.
- [08:17]
B
But ultimately it's the view that over the next two, three, four years, when it comes to autonomous and it comes to robot, that Tesla will really be the one that kind of owns the market. Look, market is basically saying, like, if you look at things today, do you justify the valuation? No. Market saying, look around the corner. I'm going to say where this could go two, three, four years. And to your point, in terms of the skeptics, like that will determine if the bears will be wrong, and I believe they will be. But it comes down to execution. From Musk and Tesla.
- [08:50]
C
I just had to take photographs of. You know, it's just something that came
- [08:53]
A
just worse than others. I can actually see the boots.
- [08:55]
B
I personally. This, you know, this in a bow tie. Yeah. For him it would work.
- [09:01]
A
It would.
- [09:01]
B
It would work. I think it would work perfectly.
- [09:03]
C
Who is it? Pee Wee Reese. Pee Wee.
- [09:07]
A
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 more@thehartford.com Riskmitigation policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut.