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- [00:00]
EY Consulting Representative
You have invested in artificial intelligence. Maybe you have pilots or even proofs of concepts that show real promise. The next opportunity is scaling that success across the business. At EY Consulting, we help organizations redesign how work gets done so innovation can move beyond the nascent stage. By addressing architecture, operating models and governance, we help AI deliver real lasting value at scale. When AI fits how you actually work, that is EY Consulting.
- [00:31]
Oppenheimer Representative
At Venture Global, we think about what can be done, not what's usually done through innovation. Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost in a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy. The world is transforming faster than ever and standing still isn't an option. At Oppenheimer, we're working at the forefront of the innovation economy to invest where progress begins, finding opportunities that build and protect wealth for individuals and institutions that want a seat at the edge of tomorrow. Put the power of Oppenheimer thinking to work for you. Wealth management, Capital markets, Investment banking.
- [01:33]
Bloomberg Audio Studios Announcer
Bloomberg audio studios podcasts, radio news.
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Caroline Hyde
Bloomberg Tech is live from coast to coast with Caroline Hyde in New York
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Bloomberg Audio Studios Announcer
and Ed Ludlow in San Francisco.
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Ed Ludlow
This is Bloomberg Bloomberg Tech. Coming up, Elon Musk rejects another Wall street convention and sets a fixed price for his Space X IPO ahead of the marketing phase of the deal. The plan offer shares at $135 apiece
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Bloomberg Tech Host
plus Palo Alto Networks falls after the company reported its results failing to meet really elevated buy side expectations. This following a more than 60% run
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Ed Ludlow
to date and candidates backed by tech billionaires and founders fell short in California's primary elections yesterday. We break down the results and what it means for Silicon Valley.
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Bloomberg Tech Host
Let's ch what current geopolitics means for this market. We take a breather. We have been at record high after record high. The S and P have been on a nine day tear. The NASDAQ have been up for four straight trading days. Today we pause rough by just a tenth of a percent. Of course front and center is maybe conflict rubbing once more a little bit that cease fire under pressure between the US and Iran. Oil goes higher, bond yields, they go higher. Stocks just pull back a little bit. But what are you watching?
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Ed Ludlow
Let's get Today's big number 84.75 billion. Alphabet is upsizing its equity raise to that level up from the previously announced raise of $80 billion. All this to fund its Infrastructure expansion. Interesting. Like this is a multi day story. The stock's basically flat, but there's an element of dilution. The main point being parts of the equity offering really oversubscribe. So Alphabet saying, okay, we'll do a little bit more. Google's latest fundraising. There is a race happening here, guys. Highlights this scramble for capital in the air. And now Space X is taking things a step further. Elon Musk Co. Is planning a $75 billion IPO. Already set a fixed share price ahead of the traditional roadside process. Another sign Musk is willing to rewrite Wall Street's playbook. That's all according to sources. Bloomberg's Catherine Doherty is here with more. It's been, well, a bit of a whirlwind few days. So we report it's $135 a share, 556.5 million shares. Do the math, they'll raise $75 billion. That's not how this typically works in an IPO process. Why?
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Catherine Doherty
No, typically a company that's looking to list in the US markets is going to look at a range. They're not going with a firm number like this 135 that you're referencing. And that's because in the next week or so there's a lot of things that could change. This is supposed to be a marketing process, but locking in a price of $135 a share is giving some sort of stuff certainty. It's giving a signal to the market of what to expect. We're expecting that next week by around the 11th is when we could see these Space X shares come to market. But even leading up to it, it's just another indication of the difference in the approach that Space X and Musk's team are taking at this time.
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Bloomberg Tech Host
I mean, there is some precedent for doing it this way, Catherine, just not of the size, right?
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Catherine Doherty
Absolutely. So smaller companies can take this route that Space X is looking like it will. But it is not typical for a company, especially given that this is supposed to be the largest listing on record. So it's taking just some unconventional routes. But you are absolutely right, it's not the first time or likely the last, especially for companies of smaller sizes.
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Bloomberg Tech Host
I mean, Ed, you've been at the forefront of reporting each tick by tick when it comes to what's happening with Elon Musk and SpaceX more broadly. But is it just a lot of cooks in the kitchen right now? How are we understanding as to what this price point means and what it means for all of those friends, family, Those are about to potentially become millionaires.
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Ed Ludlow
Well, the price point is interesting. So $135 a share is a 28% premium from when they did a stock split on May 15th. So basically SpaceX's shares were above $500 in the private market. So it did a five for one, took it down to 105 at the valuation of 1.25 trillion. So this is like math, it's kind of, you know, a little bit dry. But the point is, is that the share price at 135 is not keeping up with the jump in valuation. There's dilution there, but the friends and family that will get an allocation. All of the mechanics are still in place. Like traditional IPO stuff. The roadshow will happen. It will price in the normal way. You're just saying, like, here's the number. It's a very, very unusual situation. By the way, Bloomberg's Catherine Dorsey, thank you very much. Top reporting as always. Some news crossing the terminal as well. Elon Musk's AI company X AI has paused hiring for professionals to train its Grok chat bot on a range of specialized skills. That's according to sources who say the decision is at least partly due to concerns that the company's HR department is overwhelmed and often unable to process new candidates. Read that one on the Bloomberg car.
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Bloomberg Tech Host
We always will. Meanwhile, read on the Bloomberg just how these markets are performing. You know, the S&P 500 had been riding a really powerful winning streak. It was up for nine straight days, maybe it's nine straight weeks. Stocks are at record highs as of yesterday. Next guest saying, look, we are just actually at the infancy of this industrial revolution. Joining us now with her outlook, Rebecca. Well, CEO, chief investment officer, also wealth management. And look, we take a breather today. It's more about geopolitics, Rebecca, but how when we have $5 trillion companies and we have Alphabet tapping the market for $85 billion, let's call it, how is that not some sort of sign that we're kind of nearer the end than the beginning here?
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Rebecca Walsa
No, I don't think so, Caroline. I think this is the very, very beginning stages of monetization. Now, we have seen some financing changes. I think Alphabet, Google is just trying to get ahead of the three huge IPOs. Obviously just talked about the largest IPO in history will be the largest company valuation and the entire world. So that in and of itself is just crazy. Then you follow that with open an eye and anthropic Google go once to get more money. If you look at the hyperscalers, they're usually writing about a little under 30 billion of bonds a year. And last year, in 2025, they wrote 121 billion. So we're starting to see we can't get enough capital to do all of the investments, the capex that we want. And so I think if we get the capex, we're going to keep seeing this market go up. It's the beginning stages.
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Ed Ludlow
So, Rebecca, you are the capital, or you are a part of the capital, right? You have the Alphabet, equity, race, space, X, ipo, anthropics, filed confidentially, a lot of debt financing. And then there's the Nvidia bit. Is this the FOMO trade where you just have to have exposure to everything, or do you pick a horse in the race and say, actually, in the end, why, there are five lanes, but I only think three of them will. Will succeed?
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Rebecca Walsa
Yeah, that's a great question. It's so hard to pick the winners at the beginning stages of monetization because we don't know what technologies are actually going to win out or what methodologies. So I do think you have to sprinkle some capital kind of everywhere. But that's. And you have to hold. You have to be willing. Like, if you look at the monetization of NASDAQ in the 90s, we had, you know, 33, 33% overall, but we had 15 pullbacks. So people need to understand that monetization is volatile and get the steel, the band of steel, to stay the course and to be in for at least the long haul. Most of our IPOs usually are, you know, coming down in the first 12 months. So I think there's going to be a lot of emotion, possibly wait till the. At least the insider lockups expire in six months and then go in. But I do think if you're going to participate in the emotion of it, you're going to want to feel the pressure pulling back. So I would. I would wait and I would buy in strategically, and I would keep my. My investment broad.
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Bloomberg Tech Host
I mean, in many ways, people come what may well have exposure to these names just by the very weight within certain benchmarks. But, Rebecca, how much exposure do you want outside of the US that the IPO frenzy is stealing the thunder when it comes to big US Giants. But still, we've seen significant outperformance over an Asian trading, for example. Example.
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Rebecca Walsa
Yes, I definitely think that you've got things in Korea, obviously, you've got markets outside of the US that are going to be a Part of AI and I look really to the legislative policies. I'm really concerned about the Secure Act. If the banking lobby is successful and really pulling weight and teeth out of the stablecoin in the United States, it will route elsewhere. And that is going to be part of this whole monetization. We're changing our payment system to digital that's coming. So the United States need to be a part of that and facilitating that and not trying to stop it and keep legacy systems in place because they are on their out. It's going to take time, but they are legacy and we need to keep making sure the United States is the broad, you know, focal point of everything. But certainly I would pick up some international as well.
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Ed Ludlow
Just what you said a minute ago, by the way, Love that. Participate in the emotion of it. I'm not participating in the markets, right. For obvious reasons. Certainly participating in the motion, the emotion of what's going on. So now you've given me something to think about. There's this statement as well, right? Jensen Monks on stage again last night for the seventh time in five days saying that you would be insane if you didn't see the return on investment that is now real out in the world from AI and that you would be foolish not to keep investing in that space. Do you see it as clearly as he does?
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Rebecca Walsa
Well, I was just excited that he was on stage saying here's the first laptop for an agentic air agent. Like I was like yay, now we're buying laptops for agents. Agents, not people. This is really interesting. Listen. This is the largest technological change in the history of human time. You can't be more hyperbolic and parabolic. With these equity prices going up there is going to be volatility. It is going to be pull back. But this is the largest opportunity for wealth creation and for people, average people to get in on it. Take only to the risk that you can tolerate but definitely participate in this and just know that you're going to have volatility. Stay the course. That's the theme. Stay the course and you will be a winner in the long run financially anyways. We don't know about all the other bad side of AI but the financial side, positive.
- [12:06]
Ed Ludlow
Wow. On debut, Rebecca Walsa, CEO and Chief Investment Officer of Wall so Wealth Management on Bloomberg Tech hit every single story that we had to offer today. Thank you very much. Now coming up, Palo Alto Networks falls after the company failed to meet very elevated buy side expectations. Got the earnings story and a little chat about a pay package that's coming up next. This is Bloomberg Tech.
- [12:29]
EY Consulting Representative
You have invested in artificial intelligence. Maybe you have pilots or even proofs of concepts that show real promise. The next opportunity is scaling that success across the business. At EY Consulting, we help organizations redesign how work gets done so innovation can move beyond the nascent stage. By addressing architecture, operating models and governance, we help AI deliver real lasting value at scale. When AI fits how you actually work, that is EY Consulting.
- [13:01]
Oppenheimer Representative
At Oppenheimer, we're proven because we're grounded in discipline. For 145 years we've been building and protecting wealth through every market cycle with precision, clarity and the courage to think boldly beyond the moment. This is what market tested legacy looks like for this generation and the next. Put the power of Oppenheimer thinking to work for you. Wealth management, capital markets, investment banking.
- [13:29]
Brody Ford
Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same Premium Wireless for $15, a plan that I've been enjoying.
- [13:38]
Caroline Hyde
It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to do.
- [13:46]
Bloomberg Audio Studios Announcer
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- [13:51]
Catherine Doherty
3 month plan equivalent to $15 per
- [13:53]
Caroline Hyde
month Required intro rate first 3 months
- [13:55]
Catherine Doherty
only, then full price plan options available,
- [13:57]
Caroline Hyde
taxes and fees, extra fee, full terms@mintmobile.com.
- [14:06]
Bloomberg Tech Host
As check in on Palo Alto Network shares down. They're actually having their worst day in let's call it a couple of months, April 10th we're off by 5%. But that's just the cybersecurity firm reported really strong revenue growth. They've again been fueled by spending in the fiscal third quarter. It was up though against a high bar. Power Alto Network shares look they're up 53% so far year to date. They were up 60% going into this release. Let's talk more. Everybody's editor covering cybersecurity, Lindsay. And we've got plenty to talk about in the exact chair as well. But first talk about these numbers because there was a lot of anticipation. They beat, they raised, but it wasn't good enough.
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Lindsay
Caroline, it feels baffling at first, right? But as you noted just now, there was a huge run up in this stock ahead of the earnings. They have done amazingly since the beginning of the year. I think there was a lot of anticipation. I'm just going to call this like the Nvidia effect from here on out, right? Like you can beat on Every single key metric and that's what Palo Alto did. Every beat on revenue earnings outlook was solid. And yet your stock can still come down because of that run up, because analysts aren't really honest about what they want to see in those earnings and because of the macro view.
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Jay Parikh
Right.
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Lindsay
I mean, I'm sure that it doesn't help that the entire stock market is down on us. Iran News on top of all that, bad timing for Palo Alto, of course,
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Ed Ludlow
one of the issues that shareholders have with the company, or as we put it, the recurring beef is with the pay package of the CEO and other senior leaders. We ran this big feature 24 hours ago explaining it. Explain it to us. You know, that's a really interesting issue, as I said, going on in the background, isn't it?
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Lindsay
Now, this is an analysis that we did based on proxy data that is available on the Bloomberg terminal. And we went back several years to 2015 and what that revealed to us in a surprising way we didn't expect to see this, that Palo Alto Networks has seen more rejections on its say on pay votes which cover executive compensation for that past year than any other company in the S&P 500. They have seen seven total rejections by investors on those CMP votes since 2015. No other company in the index comes close to that.
- [16:33]
Bloomberg Tech Host
The last vote I think was in December. And at that point I think more than half of shareholders pushed back on the $100 million potentially coming Nikesh Arora's way. But to be fair to the guy, the stock has added a market cap of 100 billion. Is that sort of how they tend to say like, yes, he's paid more, actually more than some of the biggest CEOs in the world, like a Tim Cook. But a lot more is actually linked to the performance of the stock.
- [16:57]
Lindsay
You're raising such a good point, Caroline. And we actually hit at that in the story because the story itself isn't even just about Palo Alto. It's about the effectiveness of these say on pay votes. And in fact there have been reports done that suggest that investors like it and they like to compensate CEOs when the returns on their investments are strong. So in that way, Palo Alto and its CEO are a bit of an anomaly because Palo Alto has soared, as we just talked about in the past year. In fact, they've soared in the past like six years. They've been on the rise since Aurora took over. I think they've added well over 100 billion in market cap.
- [17:38]
Ed Ludlow
Right.
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Lindsay
So you would think that their shareholders would vote supporting that compensation, but they are an exception to that rule. They have voted against it.
- [17:49]
Ed Ludlow
Nikesh Aurora's package is valued at like nearly $100 million. And one of the things you do in this story is compare it with some of the titans of corporate America. Right. So it's not just tech, but you know, you've outlined the, the performance of the stock. Why is it that the shareholders think that's a, that number is too big relative to Nikesh's peers?
- [18:11]
Lindsay
Well, if you are comparing Nikesh and his pay packages to his peers, ISS would say, and Glass Lewis for that matter, both proxy advisory firms would say that it is not aligned. He is consistently paid well above his, his peers in the cybersecurity industry. What Nikesh would say and what he did say in our story is that that's because he's been capable of delivering outsized returns. And in fact, if you look at Palo Alto Network Network's performance this year, it has performed well, far and above the rallies that you've seen from other major cybersecurity stocks in the US the most.
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Ed Ludlow
Linda, I'm bringing that stuff story to life. Thank you very much indeed. CEOs and earnings are also top of mind for Adobe investors. The creative software giant is under pressure from AI native rivals and is in the process of finding a new CEO to replace Shantanu Narayan, who's led the company for nearly two decades. Bloomberg software reporter Brody Ford joins us with reporting that there are two internal candidates in the running. But the company, Brody is also looking elsewhere. What do we know?
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Brody Ford
Yeah, well we know that Adobe needs a new CEO. They decided to start Nice. Yeah, they, you know, they are kind of one of the air examples of the SaaS apocalypse or investors have decided that I might disrupt some of these leading software companies that enjoyed some of the best growth rates and margins for decades. And so Adobe announced back in March that they're going to do a whole search for a CEO. And what we have is today is that they've zeroed in on two internal leaders and they've also brought in one of tech's best known search firms to look for folks who might have a little more experience with cutting edge development.
- [19:57]
Bloomberg Tech Host
I mean, talk to us about the internal leaders and where they, where they've stood to lead before in the business units because this is a company that probably rather like Salesforce, a lot of the general revenue drivers are just slowing down. There's like a little bit of macro overhang. Companies aren't spending so much on software as much, unless it is sort of directly AI related.
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Brody Ford
The most obvious choice is somebody named David Wadhwani. I mean, he's been the main deputy for quite a while for the largest chunk of the business. I think a lot of folks within Adobe assumed that he would just be the next CEO. And so the fact that they announced this big public search made some folks say, oh, well, maybe David isn't going to get it.
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Ed Ludlow
Right.
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Brody Ford
Our understanding is, is David certainly still
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Bloomberg Tech Host
could get it to have an evident race. You know, you need to prove yourself that you are the right person for the job.
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Ed Ludlow
Happen at Disney as well. Right. Like, you know that you go in an internal candidate, but you put a little pressure by saying, well, we're also looking elsewhere. You said search firm, but you mean executive search. Right. Headhunters are on the case. Do we know if there's anyone out there?
- [20:59]
Brody Ford
Headhunters? Yeah, they're looking quite widely. One name that we have in the story is Microsoft's Charles Lamana. I mean, he's an ascendant executive at Microsoft. He held some talks with Adobe, ultimately backed out of those. But it's an illustrative example of the kind of folks that Adobe is probably looking at, those who are seen as being able to kind of develop and monetize AI at the scale that you need to at a company like Adobe.
- [21:24]
Bloomberg Tech Host
What about Shantanu right now and how he guides in this interim period where everyone's kind of just, we're kind of just holding our breath and find out more.
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Brody Ford
He's the chair of the board, so it's got to be a little awkward for him, right? I mean, you have these two deputies. The other one, Neil Chakravarti, he runs the other big part of the business. He's done very well that part of the business. While it's not what we think of as Adobe, it's marketing software. Marketing and analytics software, which is, you know, it's not Photoshop, but it's still a big moneymaker and it's grown quite a bit. You know, he has Anil and he has David likely saying, hey, take me, I should be your next CEO.
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Ed Ludlow
So that's why it's worth going back to basics. Right. You know, people will know Adobe because of Photoshop or PDF or some video editing equip software platforms. But the basic story is that a lot of that tool can be found for free from some kind of generative AI platform. Right. So Adobe, you know, you and I have worked on this together, right? When we've, we've sat down with Antonio in the last 12 months is to say, what are you good at here? Like, are you using. I have. They sort of dispelled those fears with investors or are people still saying, oh, you know, the companies are coming for you?
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Brody Ford
The big concern with Adobe is that their software is expensive and it's complicated. If you're a professional who needs all the knobs, you're not leaving. But if you're somebody who wants to make a stupid meme and show your friend and Photoshop them doing something silly, you might have bought Photoshop in the past and you're probably not going to today. That's the big concern.
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Ed Ludlow
The investor's Brady Ford.
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Brody Ford
Thank you.
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Ed Ludlow
The really important read on what's going on with the Adobe CEO.
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Bloomberg Tech Host
Sir, let's go out to the Bloomberg Global Credit forum where Bloomberg Surveillance co host Elisa Abramowicz is sitting down with Steve Tannenbaum, Scoring Tree Asset Management founder and cio.
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Caroline Hyde
Take a listen X and it also is very competitive. There's hundreds of different managers out there. I remember when I started at Mackay Shields, we were 89 out of 91 and within three years I was very proud. We got to be number one. But that's so there's a lot of people to compete against. And so. And you get your scoreboard every day. But more importantly, strategically, there was the mindset of why do people buy, why do they sell? And can you front run that? Can you predict if the premise if you're thinking of investments as maybe as short movies and how's the movie going to end? If your premise is if this happens and this happens, who am I going to sell it to and why are they going to buy it? Part of that could be liquidity, part of it can be the stats. Why isn't somebody going to buy the four times levered software company that's growing at 11%? Sure they're going to be upset that they didn't buy it at 20%, but it was 5.25 or 5.5 times leverage back then and the mindset was different. So I think that and if that looks attractive, for instance, just using an example to what else is in the market that's yielding 10% or 9%, there's going to be enough takers in that. So having that mindset's always been attractive and helpful. There's also the, you look at something like Covid and okay, how are people going to behave? There was usually, I remember in mutual funds that when people got redeemed they would sell what they could sell Quickest or what was most liquid. I always tried to sell my semi liquid product because I know I could never sell it in another week if this continued. So there's just different strategies to think about.
- [25:14]
Lisa Abramowicz
So if you fast forward to now.
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Caroline Hyde
Yeah.
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Lisa Abramowicz
At Golden Tree Asset Management, how do you perceive the mentality right now in the masses or in the funds that you go up against?
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Caroline Hyde
Sure. So there was a bigger question we were talking just a few moments ago about the perspective on credit, particularly total return credit. And there's probably frustration because some other asset equities are participating significantly and credit broadly speaking, is in the low single digits. So there's frustration and anxiousness. How do I, how do I capture returns against that backdrop? You have great current yields and still value when you subtract out versus defaults that justify being in credit just to have everybody participate.
- [26:06]
Lisa Abramowicz
This is a great time to bring in our question which is how you're positioned in credit for the remainder of this year. And I would love for you all to weigh in. Defensive, neutral or risk on from your perspective, how are you positioned? I mean right now do you want to take more risk? Are you looking for yields or are you looking for defense ahead of greater opportunities?
- [26:30]
Caroline Hyde
So when we spoke in January at Davos, I mentioned how the setup was poor for credit and good for equities. Historically, when you've had stretch valuations in a mid cycle where the economy is expected to grow at 2% or better, your returns in credit are less than the coupon. And that's exactly what's happened so far. In contrast, usually that's a great environment for equities and that's what's happened. And even if you look at the equal weighted S and P is certainly beginning to catch on. So it's been a more broader rally, particularly the last few weeks, even in the face of Iran. On again, off again conversations. Credit is still been, has still languished and we expect that to continue. Now that's not to say that it can't have a better second half, but I do think there are some pockets of opportunity. But this is historically a tough time to be in credit in terms of
- [27:31]
Lisa Abramowicz
in the cycle because of inflation and growth. That doesn't really benefit the instruments, it's
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Caroline Hyde
just how it's priced. It's priced as if defaults are going to be low and that the corporate earnings are going to and that they're more likely to disappoint. You're not getting paid to increase corporate earnings or for earnings to surprise on the upside and you're being heavily penalized at the surprise. On the downside in the equity market, there's still some acceptance or excitement if you're taking up numbers.
- [28:08]
Lisa Abramowicz
There are some opportunities, like you said, where's the distress? Where are you finding them right now?
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Caroline Hyde
So it's very situational. There's the expected distressed, which is in software, where the business model is getting called into question. Then there is also in telecom, another business model that's getting called into question. And there is an interesting relationship between the public equity. As you look at a Comcast, I think that's hitting a new low as we speak. A 52 week low. If not, it's certainly close to that. Charter is probably in the same camp. Cable one in the same camp, but yet some of the debt isn't. So I think that's kind of an interesting relationship. The debt and what happened, I guess recently with Altice with threatening a transaction. I think it's all a ploy for negotiation, but it probably brings people to the table sooner if it works. It's the same team that brought you Balash and we respect them an awful lot. But it kind of went nowhere when there was a bunch of, I guess, potential transactions being contemplated that didn't get to the finish line from the equity.
- [29:20]
Lisa Abramowicz
So playing the debt equity structure in creative ways is the way that you're playing with it.
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Caroline Hyde
Right. And within industry, I think the equity in cable is much easier. It's hard to see that the equities don't work or, excuse me, don't work and the debt works. So I think that relationship is kind of interesting. I'd say the same thing in health care, which seems like it's been a source of funding for technology stocks. And there are certain companies like Tenant, which strike me as very reasonable value. Sure there has been some volume issues, but the valuation seems very credible. Top notch management team and I think the equity market, excuse me, the credit markets would finance the entire market cap more broadly.
- [30:06]
Lisa Abramowicz
You started by talking about the frustration felt by a number of credit fund managers because right now this isn't an asset class that tends to work that well or give that many that give outsized returns, given the scenario we're in. And yet people are pouring trillions of dollars into AI infrastructure. Does that worry you, excite you for the potential down the line?
- [30:29]
Caroline Hyde
Well, when you look at the devil's in the details in terms of what the terms are, but when you look at who's backstopping it, they seem like good credits. And people tend to think of two and three years out, not five or 10 years out. And it looks like for two to three years out you're getting overcompensated for the risk. On the other hand, you're dealing with terrible technicals. They don't seem to run out of product. And I think even this Google financing is suggesting that they want to make sure to be out in front of the financing in terms of the equity. And there's almost, not almost. There is an arms race going on and the issue is will the infrastructure investment be justified or will this be more like underwater cable, which was a good thing until it wasn't.
- [31:19]
Lisa Abramowicz
Do you have a take on that? Are you embedding a sort of thesis into your investments?
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Caroline Hyde
I'm sure I'm somewhat agnostic, but history would have a bad record in terms of overinvestment for industries that have very high payouts, whether it's riverboat gambling to something like undersea cable. So, you know, it's not a great precedent, but there's not a great precedent. But there's an argument that, you know, I understand the arguments now and I think our view is to be very deliberate to have additional assurances by the users that they're committed to these projects.
- [32:04]
Lisa Abramowicz
Would you rather invest in the high yield part of the investment grade part with the all in backdrop, the idea that it tends to be lower duration, shorter maturity and the high yield but higher risk investment grade, longer duration but tied to very reputable.
- [32:19]
Caroline Hyde
My guess is at different points in this funding you're going to get high yield type of spreads in the investment grade market. So the issue is what you do in between then. So I think it depends on the pricing, but I think you'll get but at least every other stretched or over financed industry I've been part of, you usually have been able to get excellent protection with below investment grade pricing at some point. Now what do you do in between? There is the issue, but it's going to get there at some point.
- [32:56]
Lisa Abramowicz
You just dance and cable and pick up some distressed software and wait to invest in this area until it falls out of bed?
- [33:05]
Caroline Hyde
No, no. Because if it's two or three years, that's a lot of return to give up. But to be deliberate about what you're getting versus the opportunity of what you might be getting. And Lisa, I'm incredibly fickle on these topics, so I could in a month or two could just have a different perspective with more evidence.
- [33:24]
Lisa Abramowicz
How do you remain nimble at a time when you're going in and out of Sometimes less liquid instruments.
- [33:32]
Caroline Hyde
First is you got to assume you can't be nimble and less liquid instruments and lower prices brings in illiquidity, higher prices brings in confidence. So that's kind of the way the credit markets work. Just trying to ask as many questions and focus on what we think are the key variables in something like AI, you can be overwhelmed by so much. So to try and look at some of the larger issues and just focus on that and be deliberate, you know, because there's so much supply. The idea of, of you're going to run out of opportunities isn't a real. Yeah, that's not realistic. There's going to be something to do in this space, particularly as it continues to be successful.
- [34:21]
Lisa Abramowicz
Right now. Would you rather be in public securities or private securities? Just as a rule, I mean in terms of the interest, the demand.
- [34:28]
Caroline Hyde
So when we look at asset classes, probably the asset backed asset class, we find the best value, which is a private asset class. So we're finding good value there. In private credit there's some of the more anxious capital. The open ended private credit funds are out of the market. So that leaves the funds and other players in private credit who are more deliberate being the main buyers of private credit. So we're seeing good, good value there. We're seeing good value in some of the out of favor sectors, which is always the case. I mean by definition out of favor sectors are at discounts, but. So I'd say it's eclectic but we certainly are seeing better value in private credit today than we've seen in the last 24 to 36 months.
- [35:13]
Lisa Abramowicz
Are you getting paid for the illiquidity premium?
- [35:17]
Caroline Hyde
That's always after the fact comment, but it seems like you're getting better paid in the absolute. When I think of things, I think it's. If I were to say out of ten, maybe a six, you know, six and a half. So it's above average, but not by much.
- [35:37]
Lisa Abramowicz
Right now we're looking out for a year where a lot of people keep talking about inflation, inflationary risks and this is one of the reasons why credit hasn't been as much of a sweet spot. How do you price that in? I mean at what point you just start to increase the sleeve of equities and create some protection on the downside and kind of hope for the best with a couple of security selections.
- [36:00]
Caroline Hyde
Inflation is probably the biggest risk in the market and it's impacted because it's impacted rates much more credit than it has equities, which I'm surprised at, but it just is what it is. And if you look in the 70s there were equities did better than credit. So if you're looking at a bad environment, at least that's one example where equity outperform credit. It's very much data dependent. It's also what's going to happen with the war. You know, if you look at one of the big surprises so far this year is oil has been relatively calm in relative to what expectations. Most people thought if you got past Memorial Day you would be 125, 135. But yet we're in the mid-90s. So I think it's, you know, that's a factor that seems to, you know, be developing. So it's hard to, it's hard to have a line, you know, to draw a line in the sand, you know, on that.
- [37:05]
Lisa Abramowicz
You know, this is cognitive dissonance every single morning. We talked to a lot of people and we were speaking with Mike Worth of Chevron the other day and he said we're going to end up with shortages if this keeps going in the next couple of weeks we could start seeing shortages in the United States. Diesel inventories are the lowest level since 2003. And then you get an equity strategist on, a credit strategist on. We're not looking at that. That doesn't matter. How do you think about that?
- [37:30]
Caroline Hyde
So I kind of processed it a little different is how are equities pricing this and equities seem to not be pricing the futures curve. So on the strip curve it's just so oil service. Sure, Halliburton is having an excellent year, but when I look at some of the mid caps, very much pricing in, I'd say 70 to $75 oil. And when we see the M and A market in oil services and we have a company that we own more than half of that looks at the MA market and has bought a few companies in the past 12 months and that market hasn't changed that much. So in terms of levels and pricings and multiples and expectations. So we see the. Regardless of what people are saying, how they're voting with their feet, they're still very cynical of how long this will last. And that's probably, it seems like a better opportunity that it's going to be higher for longer than what's in the market.
- [38:28]
Lisa Abramowicz
So in other words, by mid cap oil names.
- [38:31]
Caroline Hyde
Yeah, and, and suppliers. But also when you're thinking about oil as an input to your companies, I'm thinking as a portfolio manager. Okay. What should we be assuming in terms of. Of whether it's in building material products in which oil can be a, an important input, you know, what does it mean for inflation, etc. My guess is going to be higher for longer.
- [38:54]
Lisa Abramowicz
I want to pull up the results to the poll and unfortunately we didn't have an answer to the poll of just frustrating. But the answer was how are you positioning credit for the rest of 2026? Not for ultimate frustration, but neutral. 42% defensive, 31% risk on 27%. Does that surprise you?
- [39:15]
Caroline Hyde
So I look at it as almost 75%, 73% of people who are like,
- [39:22]
Lisa Abramowicz
yeah, what else can you say?
- [39:25]
Caroline Hyde
Yeah. And so, you know, it seems about. About fair. What's being. What's a strategy that's been very popular this year in terms of inflows? Is opportunistic credit having a long playbook? And instead of a distressed manager, a private credit manager, how about a manager who can look for the best opportunities with a long playbook? So that strategy has been gaining a lot of traction. I think the positioning and credit credit in terms of getting alpha and dispersion is. That's not surprising with, with the results here.
- [40:01]
Lisa Abramowicz
You've been in the business for decades. You've seen a lot of cycles. You were talking earlier about the 70s. Yeah, I hope that's not the analog. But is there an analog to the moment that we're in right now that you can think of in terms of investing, in terms of the macroeconomic backdrop?
- [40:16]
Caroline Hyde
So we're mid cycle in a stretched environment where it's very narrow for what the opportunities are. That's like most markets I've been in, I mean, that's like.
- [40:28]
Lisa Abramowicz
Just doesn't feel like most markets for most people.
- [40:31]
Caroline Hyde
So if you were to go back and count, yeah, stretch valuations, very little dispersion, except for a certain percentage of the market, call it less than 20% of the market. That's kind of most markets. I bet I haven't. I bet it's three quarters of the market is, is what that it's certainly more than half.
- [40:50]
Lisa Abramowicz
So you think that the analog is almost every time except for the big extremes?
- [40:54]
Caroline Hyde
Well, I think that what's different this time because every cycle has something that's different and what's different this time is the AI expense and what the ramifications of who the winners and losers are. And you could have said that with media, with the Internet and who's going to be. When I think of software and try and conceptualize who the Winners and losers are. I look at legacy media and there was TV which went from call it nominal growth to less than nominal growth but still growth. You look at cable programmers who still had above nominal growth for about 15 years. So those were healthy businesses. You had radio that call it by 2008 or nine seemed to really be a more marginal product and then by the late teens really in trouble. And then you had newspapers which really peaked about. I'm trying to think of the Tribune transaction of 2006, 2007, I think 2005. So after 2005 really began to be disintermediated. So where does some of these industries fall with that methodology?
- [42:09]
Lisa Abramowicz
Fascinating. And everyone wants to be not radio, although radio is coming back with podcasts. So there's that.
- [42:15]
Caroline Hyde
Although it's not though it's not only on the band. Right. So when you're thinking about radio as I grew up with was am, FM and really FM for the most part though I think I remember being invested the largest creditor in amis, which was debut fan on the AM band. But it was. But that's a different. It's a different medium for radio. Yeah.
- [42:41]
Lisa Abramowicz
Different distribution mechanism. Is Stephen Tannenbaum always a clinic, always wonderful to speak with you, Stephen Tannenbaum of Golden Tree Asset Management.
- [42:49]
Caroline Hyde
Thank you.
- [42:50]
Lisa Abramowicz
You're so good here.
- [42:52]
Ed Ludlow
That was Steve Tenenbaum, Golden Tree Asset Management founder and cio, speaking with our own Lisa Abramovitz. Hello. Welcome back to Bloomberg Tech. This is what financial markets look like. Zeroed in on the tech sector. There is a lot in the market to do with the move in oil. There is some concern, concern about the current state of affairs in the relationship between the US and Iran and what that means for peace talks broadly. We're a little softer to flat on the NASDAQ 100. You know, that's our go to tech heavy index. But continued outperformance in chip stocks. And we've given you that story throughout the hour. We're going to get a lot more on it in just a moment's time. Bitcoin at 66,000 USD per token down 2% but you know, kind of risk off. And then there was that big number Alphabet boosting its equity offering to $84.75 billion. A little bit of dilution going on maybe down 6, 10 of 1%. Okay, markets are fun. What else is going on?
- [43:43]
Bloomberg Tech Host
Maybe politics is fun in certain places. Right here in California, several tech favored candidates. They delivered actually a poor showing in California's primary elections just yesterday. Look, results are still being tallied. But so far the big buck spent by Silicon Valley billionaires and founders they have a result of resulted in wide ranging wins for their favorite candidates. Bloomberg's California reporter Eliyahu Commissioner is here with us. And Eliyahu, why? Why has money not worked?
- [44:09]
Eliyahu Commissioner
That's a good question. I think we're seeing that a lot of this frustration in Silicon Valley has been concentrated amongst a very small group of tech elite and it didn't really translate to the voter base. So they spent a lot of money, money on Matt Mahan, the moderate San Jose mayor. And there's a lot of enthusiasm on X for him. A lot of venture capitalists, big names like Mike Moritz, Sergey Brin came in behind him.
- [44:38]
Bloomberg Tech Host
But he promising like no billionaire tax.
- [44:40]
Eliyahu Commissioner
Basically that was one of his promises. He was against the billionaire tax. He wanted to kind of do a more back to basics, smaller government, you know, kind of less taxation and little less regulation, a little more friendly to tech. And I think, you know, we've seen that there's a lot of actually frustration with Silicon Valley in California and these leaders who are making a lot of money in the tech boom and they're feeling very confident. It's actually not translating to the ballot box right now.
- [45:13]
Ed Ludlow
If you're watching Bloomberg Tech from outside of the California, we're talking about the gubernatorial primary, the race for governor, and the first instance of that has been and gone. The top two will go to the general election in November. Just where do we stand? You know, who is likely to go through on that and always on this show, give us the tech angle of whoever does go through.
- [45:34]
Caroline Hyde
Yes.
- [45:34]
Eliyahu Commissioner
So there's three candidates that are at the top. There's Javier Becerra, Joe Biden's former health secretary, Steve Hilton, who is a Republican, former Fox News commentator, and then Tom Steyer, who is a liberal, former hedge fund billionaire. And right now it looks like Javier and Hilton are going to go to the runoff. Although ballots are still being counted. And Tom could make a late run depending on, you know, to be determined, I think what the tech angle is. Javier has kind of started, started to coalesce some of the establishment Democratic interests and also a little bit of the tech money. So when he started surging as a late stage favorite, you saw Metta and you saw Airbnb come in for him and missing. They're kind of late in the stage. They acknowledge that he's going to be the front runner and they're trying to kind of pick a winning horse.
- [46:29]
Ed Ludlow
Bloomberg's early camel show on tech and politics and what happening in this election cycle here in California, GitHub is betting big on AI agents launching a new GitHub co pilot desktop app. While racing to keep up with surging demand, I sat down with Microsoft's EVP of Core AI, Jay Parik, to discuss GitHub's growth, its efforts to improve reliability and what comes next. Listen to this.
- [46:54]
Jay Parikh
For us, it is one where GitHub continues to get lots of help from the rest of Microsoft, right? So we have, even in just the year and a half I've been at Microsoft, we have brought in really great talent from other parts of the company to help us build products, to help us scale, to help GitHub be more secure, to build those enterprise.
- [47:16]
Ed Ludlow
Story was the outages, security issues, and then there was a change or departure of leadership. And you're describing what's happened since.
- [47:23]
Jay Parikh
So you know, we should start with the fact that beginning since the beginning of the year, the amount of traffic that has come to GitHub has gone up significantly, right? So last year we had about a billion commits that we processed in all of 2025. Now we process about 300 million commits each each week. So traffic has gone up pretty significantly. And we're very committed to improve the availability, the performance of the platform. We're getting help from more of the Microsoft engineers and the top talent that we have. We're attracting new talent to the team, we're bringing in more capacity to scale and we're re architecting these systems. But you know, I feel really good about the path that we're on.
- [48:07]
Ed Ludlow
Could you just give us a real time view of how much work is being done, real work by an agent and where you see that going over the next 12 months and beyond?
- [48:18]
Jay Parikh
And I think we're just at the start of this is right because it's early, but it is amazing to see how people are translating these ideas into these use cases and building these platforms. Right? And lots of use cases even internally where teams are building agents to continually improve their product. Even when they're sleeping, you know, on the weekends, these agents are running and then analyzing all sorts of sorts of different telemetry to find ways to then make suggestions for the engineers, for the product folks when they wake up in the morning to how to improve the systems. Right. And this is technology that works today. You need that observability as you keyed on earlier, you need that human in the loop to make sure that things stay on track and that it is doing what you expect it to and prioritizing it correctly. It's early but it is going to be, I think think a really, really quick ramp and it's exciting that we're seeing this and you know, the team's super energized to be working closely with our customers to be iterating on these platforms, on these technologies.
- [49:21]
Bloomberg Tech Host
Microsoft's EVP of core I Jay Parikh there with that. Coming up, all eyes on Qualcomm as they get set to report after the closing bell what earnings could tell us about the trade shares higher this is bring back tank.
- [49:38]
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Rebecca Walsa
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- [50:40]
Caroline Hyde
I'm the host of Earsay, the audible and I Heart Audiobook Club. This week on the podcast, I am sitting down with Ray Porter, the narrator of Andy Weir's audiobook project Hail Mary, Massive sci fi adventure about survival and science and what happens when you wake up alone, very far from Earth.
- [51:02]
Ray Porter
I really had to make a decision because I caught myself getting that frog in my throat and starting to get teary as I'm narrating some of these sections and it's like, okay, yo, yo, yo, is this indulgent? And I really thought about it. I was like, no. At this point it would kind of be betraying the trust the author and the listener have in telling this story if I don't go through it. But there's places in this book that that deeply, emotionally affected me and I left it on the mic. That's great because it served the story. People will say like, oh my God, I cried at the end. It's like, yeah, dude, me too.
- [51:34]
Caroline Hyde
Listen to Hearsay, the Audible and iHeart audiobook club on the iHeartradio app or wherever you get your podcasts. The next trillion dollar company, ladies and gentlemen. Whoa, that would be exciting. Let's do it together.
- [51:52]
Ed Ludlow
Let's do it together.
- [51:54]
Bloomberg Tech Host
Video CEO Jensen Huang alongside Marvell CEO Matt Murphy over in Taiwan at Computex.
- [51:59]
Rebecca Walsa
That was yesterday.
- [52:00]
Bloomberg Tech Host
And look Shesson hover continuing to run high. Look at that move over three trading days that we are getting closer to potential $1 trillion as Jensen was just talking about for more most. Dina Bass joins us now. It's the power of the 5 trillion dollar giant in the room to anoint the next 1 trillion. But is that real fundamentals behind it, Dina?
- [52:22]
Dina Bass
It's where I think waiting to see, you know, what Broadcom reports today. Marvell's made competitor but also Marvell, you know and Broadcom are basically competing for the business around custom AI accelerators that aren't in video. Now Jensen is not objective when he, you know, so to speak annoys Marvell in that manner. But Marvell is the horse that Nvidia has backed in that space they've invested and you know, he wants to set them up as an even stronger competitor to Broadcom because Broadcom itself has, you know, been positioned and has positioned itself as a, the alternative to Nvidia if you don't want to use Nvidia's GPU.
- [52:58]
Ed Ludlow
Right. And Broadcom is now a $2.3 trillion company as a result. This is an important earnings print. Explain what why it's important but also why Broadcom is, is a genuine competitor to Nvidia.
- [53:11]
Dina Bass
So the vast majority of the chips that are used are Nvidia's GPUs. If the alternatives increasingly are coming from, you know, some of the hyperscalers and the large frontier labs that are making their own custom chips and Broadcom has several of those, the biggest, you know, customers there. We talk a lot about on this show in the past few months about Google's TPU that's made with Broadcom. Anthropic is buying a bunch of those and paying Broadcom for them. Meadow works with Broadcom and those three companies have signed extended, you know, long term deals with Broadcom in the last few months. They already had deals and they expanded them. And so what we're seeing from Broadcom is, you know, according to Bloomberg intelligence analysts, a better visibility of what the long term picture looks like for that pipeline. That's been something I think investors have been a little bit concerned about. You know, what is the long term pipeline? When do these contracts come online and if they're multi year contracts? What is the amount of revenue that Broadcom is going to be able to get from each of them in, you know, in each quarter? How does that kind of play out? But there is now greater visibility.
- [54:19]
Ed Ludlow
Bloomberg's Dana Bass with the Broadcom preview. And stay with Bloomberg Tech tomorrow. We're live from the Bloomberg Tech conference. Hock Tan, Broadcom president and CEO, joins us. This is just pure timing. Carrie. Earnings after the bell conversation tomorrow.
- [54:32]
Bloomberg Tech Host
What a phenomenal executive discussion to be having. Tom Giles, our executive editor, is going to be leading that conversation. What an array of people we're going to speaking to throughout the day. I mean, you're going to be speaking with Andrews chair and of course big player over at Founders Fund. I'm going to be talking to San Francisco Fed president. We've got a lot to digest tomorrow and it's a big show.
- [54:50]
Ed Ludlow
It was a good show today. So recap it you know where on the podcast and you can find it online. Spotify, iHeart and on Apple and then of course on all the Bloomberg platforms. This is Bloomberg Tech.
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Caroline Hyde
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