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Katie Greifeld
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Katie Greifeld
Welcome to Bloomberg Tech. I'm Katie Greifeld. Coming up on today's show, intel shares fall on a report that Nvidia halted tests to use Intel's methods in chipmaking. Plus, a federal judge gives the okay for the Trump administration to move ahead on a $100,000 fee on new H1B visa applications. What that means for Silicon Valley hiring and Tesla faces more regulatory scrutiny with a new federal probe over its emergency door release. All that and more coming up. Let's take a look at these markets. It is Christmas Eve. There is no trading volume to speak of, but you can see The S&P 500 up slightly on this Wednesday, higher by about 2.10 of a percent. The Nasdaq 100 underperforming. We'll tell you why in just a minute. The Philadelphia Semiconductor Index also green but really slight gains here. Volatility continuing to drain out of these equity markets. The Vix trading with a 13 handle on this Christmas Eve. Meanwhile, let's get to two specific names that are restraining what you're seeing when it comes to the big tech complex, intel and Nvidia. Intel down about 1 1/2 percent. Nvidia down nearly 1%. Given how big in video is, that is really acting as a weight on the overall benchmarks here. Let's bring in Bloomberg equities reporter Ryan Vlastelica for the latest on what's going on here. The headline that I'm reading on the terminal intel falling on a report that Nvidia has halted a production tests of some of its advanced chipmaking capacity here. Ryan, what do we know so far?
- [03:31]
Ryan Vlastelica
Hey, good morning. Thanks for having me. So the background for this is that for several years now, intel has really struggled against the perception that it is falling behind in chip manufacturing, especially to companies like TSMC overseas. Now there was a lot of hope this year following an investment from Nvidia, following the government taking a stake that it would be able to better finance this ambitious turnaround program to sort of re establish its leadership position in chip manufacturing. So this report basically says, and Nvidia tried out some of the latest chip processing out of intel and it's pausing that. So I don't think this will come as a huge surprise because there was seen as a pretty significant gap between intel and tsmc, you know, and the other major chip manufacturers. However, this is probably just enough of a cause for disappointment in intel, which has really been bid up quite dramatically this year on the back of all this news that it's seen about the investments and so forth, Right?
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Katie Greifeld
Absolutely. Just to recap, Nvidia itself agreed to invest $5 billion into intel in September. That followed the US government announcing that it was also taking a roughly 10%, 10% stake in the company. So there's a lot of hopes, as you say, for, for a potential turnaround story here for Intel. We know that they have a new CEO as well. But just give us some context here. You know, how this specific year's performance compares to the last several years of disappointment for Intel.
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ServiceNow President Amit Zaveri
Yeah.
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Ryan Vlastelica
So one thing I would just say is that when Nvidia announced the stake in intel, they did make a point of saying that there wasn't any sort of agreement that it would be using the chip manufacturing here. But clearly they've been trying it out, they've been testing it. And the fact that they are pausing here is just enough of a, you know, you know, it sort of underlines how intel has really sort of fallen behind competitors in this pretty significant area now. There is still a lot of interest in building out domestic chip manufacturing. Intel is building a chip here. I believe it's in Ohio. TSMC has building a chip that I think is in Arizona. There's a lot of money surrounding this. The Chips act was involving this. There's a lot of significance here, especially when it comes to issues like national security here. So this is something people are paying a lot of attention to. And certainly if the news had been the opposite and Nvidia had come out and said that it is going to be using Intel, I think that would be a pretty significant game changer for intel as we go into 2026. The idea that is really reestablishing itself in manufacturing I think would cause a lot of people to reassess the stock and its prospects.
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Katie Greifeld
Absolutely. Intel definitely a story to keep an eye on in 2026. Ryan, before I let you go, you had a great story out on the terminal in the past few days talking about how it's the boring bets when it comes to tech that seem to be working the best this year. Memory chips, hard disk drives come to mind. What are some of the specific names that really stood out in the tech space this year?
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Ryan Vlastelica
Well, Micron especially has been a really big gainer this year. Its memory chips, the high bandwidth memory. That's a pretty significant part of overall AI infrastructure. That stock has, I think roughly tripled or so this year. It recently had results. Results were very strong. The stock moved up even more. And, and if you look beyond that, the companies that are, you know, typically don't get a ton of interest. Companies like SanDisk, Western Digital, Seagate Technology, makers of hard disk drives, also a part of the infrastructure. This is something that people were saying wasn't fully appreciated. Hard to make that case now. Some of these stocks have doubled, tripled. They're some of the biggest gainers on the S&P 500 this year. And it is, you know, I kind of ironically, in a part of the market that otherwise would be a little bit too dull for most people to be excited about.
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Katie Greifeld
Absolutely. Ryan, really appreciate your reporting this year. That is Bloomberg's Ryan Blastelica. Meanwhile, let's get a broader look at the tech markets and what investors are looking ahead to in 2026 with APEC. Oscar Desh Kaya CIS quote senior market analyst Great to have you with us. So I actually want to start where we left off with Ryan. It's really interesting that you think about what really worked in 2025. It was the so called boring parts of the AI trade. A lot of these, you know, memory disk makers, memory chip makers, that is in the likes of Micron. I wonder you know whether you expect that will be the momentum heading into 2026.
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Oscar Dash Kaya
Well, it's pretty much explainable why these memory chips boring pockets of the part of the market gain more than the other exciting parts. And one of the reasons for that is that because chip demand was so strong that many manufacturers actually assess more capacity in producing these chips in demand and they reduce their capacity for producing other and more boring pockets of the market. And that's one of the reasons why. It's what explains actually the rally that we've seen in Sane Seagate and Western Digital and likes into 2026. We think that not only that the boring, the most boring and undervalued pockets of the market will be in investors radar but we will also expect to see actually this technology and I rally broaden toward the non technology pockets of the market because AI productivity, air cost efficienc also benefits to any other sector out there including banks, health care industries. And I think that this is going to be the big story of 2026.
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Katie Greifeld
Yeah, absolutely. And we don't have much longer to wait. I want to talk a little bit about, you know, what didn't necessarily work when it comes to the overall AI trade in 2025. And it's tempting to talk about that as a monolith. But while memory chip makers seem to have a great year, you take a look at some of these software names, Adobe comes to mind for example and it feels like some of these companies just can't get their footing under them. ServiceNow Salesforce Force also examples there. I wonder you know what you make of what's going on in that sector.
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Oscar Dash Kaya
Well, these companies have come under the pressure of you would expect that making tools available to investors would boost their revenue but it actually had the exact opposite impact effect on these companies. They have not been able to monetize and sell and these AI boosted models to investors as much as they wanted. And actually the fact that other models, other AI models came to the market to challenge these companies have also been a big problem for these companies. We think that in terms of AI applications the competition is going to be quite rough in 2026 because there are a lot of AI models, some of them are going to be winners, some of them are going to be losers. But it's exactly the same story for the big AI applications and the likes of Adobe for example, or Shutterstock. All these companies that just integrated AI applications on their product offering will have to face that competition. I think that that's going to be also weighing on the margins.
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Katie Greifeld
Yeah, it's a good reminder that there are companies that are doing the disrupting and then there's companies that the market thinks are being disrupted right now. But I also want to talk a little bit about, you know, what we're seeing when it comes to capex. That has remained one of the dominant stories when it comes to, you know, every three months we get those earnings report and we've seen it start to really get expressed in certain companies. Oracle comes to mind both their equity and their debt. This pressure to see some sort of ROI when it comes to spending. I wonder if you see that pressure broadening out next year.
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Oscar Dash Kaya
Apec of course, I mean since the last three months, since, since the last earnings season, what we have seen is that the headline, shiny headline figures were not no longer impressive for investors. They wanted to dig deeper into these reports. One, how are the revenues are being accounted and to what's happening with the debt? Is the debt too high or is the debt being offloaded? Was also one of the questions that investors have been asking and have been worried about. So what investors want today is to see slowing investment until we see return on investment. The problem here with the technology is that if there is an overspending, the risk is that this technology gets outdated by the time revenues start coming in. So we really think that spending is going to be one of the major issues, a major, major talking points into 2026. And one way to go around this risk is to choose companies that are able to turn this overspending into an immediate revenue opportunity. Like the ones that do have data centers, the ones that are actually able to rent their chips out. And in this context what we see is Microsoft, Amazon and Google are the three companies that could help investors reduce this risk of overspending in AI and back.
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Katie Greifeld
I have less than a minute with you, but before I let you go, I would love to HEAR Heading into 2026, what is your highest conviction?
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Oscar Dash Kaya
Well, the highest conviction right now is rotation again from technology to non technology pockets of the market. I think it is important to note that the macroeconomic backdrop remains positive for technology stocks as well. So we think that the rally could continue but it might decelerate next year. And again, the enthusiasm will probably move toward the non technology pockets of the market, toward the toward the sectors that actually do also use technology that could be boosted by tools.
- [12:37]
Katie Greifeld
Absolutely. That rotation, especially from growth to value, has been fascinating to watch over the past couple of weeks. Apec Oscar Dash Kaya of Swiss Quote Great to get some time with you. Now coming up on B Tech, a judge has ruled in President Trump's favor, upholding $100,000 H1B visa fees. Some of the most vulnerable companies are in the tech sector, but the legal fight isn't over. More on that next. This is Bloomberg.
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Katie Greifeld
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- [16:17]
Katie Greifeld
Well, a federal judge says that the Trump administration can move ahead with a $100,000 fee on new H1B visa application occasions. Now that is adding pressure on US tech companies that rely on hiring foreign skilled workers. Erik Lawson Larson, he covers legal affairs and politics for Bloomberg News. Pleased to say he joins me now on set. So Eric, give us some context here. You know, we tend to talk about tech companies when it comes to these visa fees, but just how exposed is the industry to this potential $100,000 fee?
- [16:48]
Erik Larson
My understanding from these lawsuits that have been filed, from the data we've seen is that they're, they're pretty exposed. Notably, these companies did not file lawsuits challenging the visa. It was filed by other groups. The ruling we just got was from the Chamber of Commerce. So maybe they're they're waiting to see where where this goes. But certainly the Trump administration and other government officials say that these companies can afford them, even though they do use them quite a bit. And they are pretty exposed. The government simply argues there are plenty of American workers who they could be paying to do the same job. Just paying them more.
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Katie Greifeld
Yeah, I mean, you think about some of these giant tech companies with deep pockets. Talk to us about the public sector though, when it comes to health care and education, because again, we talk about tech all the time. But these sectors also rely on H1B visas.
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Erik Larson
Exactly. And there is another lawsuit that was filed by 19 Democratic attorney attorneys general. Most of the Democratic led states are part of this lawsuit. It's being led by California which has the most of these visas are mostly in California. And these states argue that they're suing on behalf of the public sector because of health care. They say that they have to look out for the health care industry, the residents in their states. They say that the quality of health care will simply suffer because there is a shortage of these skilled health care workers who use these visas and won't necessarily be able to afford $100,000 fee from these hospitals. You know, maybe the companies can afford that, but hospitals, not so much. So there's not really a carve out for them and the hospitals could suffer according to these states that sued earlier this month. And there's a hearing in that case in February. So remains to be seen how a judge will rule on that aspect.
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Katie Greifeld
Well, that's the rubber, right? You think about Amazon, Microsoft Media, Apple, for example, if they're paying millions of dollars Potentially for specific AI talent, a $100,000 fee probably doesn't seem like that much to them. But to your point, you know, if it's a hospital having to pony up that fee, it's a much different conversation. Walk us through how you might expect the legal fight to take shape next because it seems like there's a lot of different moving parts here.
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Erik Larson
So the, the ruling that we just got was from the lawsuit filed by the Chamber of Commerce in federal court in Washington. That case is essentially over unless there's an appeal. It was a summary judgment. The judge, who was an Obama appointee by the way, just ruled flat out that the government was correct. The President had broad authority to issue this under the powers given to him by Congress in the Immigration and Nationality Act. But the lawsuit filed by the Democratic led states, that is, like I said, there will be a hearing on their motion for an injunction against the visa in February. There isn't a hearing set on the third lawsuit which is filed by unions. So this could take months to play out. And as with so many of the other legal challenges involving the President's policies and executive orders, it could end up at the Supreme Court and that could be quite some time. The big question for employers and potential visa holders is whether or not this program, this fee will stay in place during the entire legal challenge. Right now it is. But these other lawsuits could result in different outcomes.
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Katie Greifeld
All right, Eric, really appreciate your report and great to see someone else in the office on Christmas Eve as well. That is Bloomberg's Erik Larson. Meanwhile, another story that's tying together tech and politics is that the Trump administration administration has imposed visa sanctions on former European Union commissioner Theory Breton, along with four other activists who have pushed for regulations to online content moderation. Now, Secretary of State Marco Rubio said in a post on quote, for far too long, ideologues in Europe have led organized efforts to coerce American platforms to punish American viewpoints they oppose. We stand ready and willing to expand this lifts this list if others do not reverse course for more. Let's go now to Bloomberg's Laura Davison, live in Washington. So, Laura, first give us the reaction that you're seeing and hearing. Was this move necessarily a surprise?
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Laura Davison / Nora Melinda / Other Bloomberg Correspondents
This move was a surprise and really came as a shock to both the people who were the subject of these visa sanctions as well as to other European officials, both at the EU level and at individual countries. There's been a, a really strong and forceful pushback saying that this is a move that amounts to censorship and is very inappropriate on the US Side. This is, you know, sort of just a one prong in what has really become a, a multifaceted cold war between the US and the eu, particularly as it relates to tech companies and who has the power to regulate and tax them.
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Katie Greifeld
Yeah. And, you know, we talk about, you know, this censorship potentially of American viewpoints. What specific, specific platforms, you know, was the Trump administration holding up as an example where censorship actually did take place? Yeah.
- [21:41]
Laura Davison / Nora Melinda / Other Bloomberg Correspondents
So there's a couple different here. Largely the big social media platforms, so Facebook, Instagram and X in particular. Elon Musk's platform has been the subject of a rather large fine earlier this year for not allowing these content moderation to feed out hate speech from the platform. So, you know, X had to pay this fine. This has kind of become this ongoing tit for tat war of you, you know, and you could almost see these visa sanctions coming from the US As a response to that fine earlier this year.
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Katie Greifeld
All right, Laura, really appreciate the update. That is Bloomberg's Laura Davison joining us from Washington. Well, as Warner Brothers discovery in Paramount weigh their next moves, media dealmaking is back in focus. Joining us now is Stephen Wolf Pereira. He is CEO and founder of Alpha, an independent AI governance intelligence firm for board directors and C suite executives. Great to have you with us, Stephen. So let's talk about Warner Brothers. You had Larry Ellison coming out with his personal guarantee of $40 billion for the Paramount Skydance hostile bid. That is do you think that that goes far enough to address some of the, the Warner Brothers board's concerns about financing?
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Stephen Wolf Pereira
So it's great to be here, happy holidays. But this is very going to be a gift for the Ellison because if you think about what they are doing, they are truly amassing one of the biggest and most important collection of media assets in record time. And you know, whether $30 a share is going to be enough, I think they're going to have to sweeten the deal. But I think you need to look at this from a larger vantage point because if you really look at the assets that they're starting to consolidate, it really is concerning on the one hand, exciting on the other. But when you think about Paramount combined with potentially Tick Tock, obviously Warner Brothers Discovery, you just look at all the different pieces of this puzzle. We're really seeing the reshaping of the American media landscape right before our eyes.
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Katie Greifeld
Well, let's talk through some of the concerns here. As you said, it's exciting, but there's also concerns in highest order. What would you say tops the list?
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Stephen Wolf Pereira
I mean, one is this really trying to understand what really is going to be the governance implications of this. When you think about the amount of data that they are now going to have to be able to train all their AI, Again, this is not just a media company, obviously, Larry Ellison, with Oracle understanding the tick tock angle, this is really connecting the dots. And all of these AI companies are desperate for more data to train their models. And so when you really look at this, this is a truly incredible opportunity to consolidate data all under this massive umbrella which is really going to be Skydance, Paramount and Oracle.
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Katie Greifeld
Interesting. So you're saying that Oracle, you know, if we actually see Paramount, Skydance be able to win the Warner Brothers Discovery bidding war, that Oracle might then potentially use their content library for training for their models.
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Stephen Wolf Pereira
I mean, again, you have 100% control over Paramount. You know, what's to say, what is the control going to look like, you know, for Warner Brothers Discovery once it's under that umbrella? You're just going to have a lot of ability to kind of blur the lines and just really see who is going to be able to have some type of guardrails, governance guidelines around all of this. And I think that that's something that shareholders need to look into. Obviously you want to have your fiduciary responsibilities as a shareholder, but certainly the board is going to have to make some really tough decisions. I think there is a really interesting reason why the board has actually Rejected the, the Ellison's repeatedly until they had to go public with this hostile takeover.
- [25:10]
Katie Greifeld
Yeah, it is a fascinating situation where you have the Warner Brothers board saying that, you know, we've approved, we recommend the Netflix offer. At the same time you have Paramount basically going directly to the shareholders with this tender offer. I mean, what do you make of it? Do you, how do you see the investor base actually swaying here when it comes to what the board is saying and what Paramount is saying?
- [25:32]
Stephen Wolf Pereira
I mean, look, the truth of the matter is you have a very diluted shareholder base. Obviously you're going to have the large institutional investors, the BlackRock's Vanguard State street controlling a lot of the shareholder count. But when you really think about where investors are going to be, they're going to really vote for what is going to be the best return for them. And so I think you really are going to see Netflix really trying to have to up the ante. They obviously have a very clean kind of approach. They have a very clean deal, obviously have the better credit rating. When you think about what the levered company is going to look like combined with Paramount as well as Warner Brothers Discovery, I think it's going to be north of maybe six, seven times you know, debt to ebitda. So just from a capital perspective, it's going to be an extremely levered asset. But that's part of the reason why Larry Ellison is doing the personal guarantee.
- [26:19]
Katie Greifeld
And Stephen, we have less than a minute here left with you. But you know, when you look into your crystal ball, how long do you think the saga will continue? How long will it take to actually get a conclusion here?
- [26:30]
Stephen Wolf Pereira
I mean, obviously they pushed out the shareholder vote down to January 21st and then you're going to have obviously all of the regulatory, you know, kind of theater that you're going to have to go through. But I feel like this is just the beginning because this is now the reshaping of American media. And when you really understand what is happening, this is a data play. And when you really connect the dots, this is truly going to reshape the way that all the AI companies are going to be able to have to access access to data. Who is controlling that and where are the governance guardrails around it?
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Katie Greifeld
All right, Stephen, really appreciate your time. That is Stephen Wolf Pereira. He is the CEO and founder of Alpha. Let's take a look at these markets on this Christmas Eve. The S&P 500. A little bit of green on the screen as I said at the top. No trading volume to speak of, but you can can see we're drifting about 3.10of a percent. Higher tech not quite outperforming today the NASDAQ 100 higher by just about 2.10of a percent. You can see the Philadelphia Semiconductor Index a little bit below that as well. Very quiet though when it comes to volatility as measured by the Vix. You can see we are down about 47 volume points and trading with a 13 handle. Let's talk about why you could see the Nasdaq when I hundred underperforming. A lot of that comes back to Nvidia and it comes back to Intel. Reuters reporting this morning that basically Nvidia has halted a test to use Intel's production process to make advanced chips. That is adding to pressure on intel down about 1.4%. Nvidia shares also in the red as well. For more on this story, let's bring in Bloomberg Television Markets correspondent Nora Melinda sitting to my left. So Nora, what do we we know so far about this so called 18A process?
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Laura Davison / Nora Melinda / Other Bloomberg Correspondents
Well, the fact that Nvidia is halting using Intel's 18Amanufacturing process, it actually is concerning for a lot of investors because we know that this is critical to Intel's turnaround story especially as it tries to scale and really compete against the likes of say tsmc. They are a global competitor and people are really concerned right now as to whether or not intel is really able to display the fact that it's able to keep up in this space.
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Katie Greifeld
And so talk to us about the Nvidia of it all and how it comes in. We know that Nvidia agreed to invest $5 billion into intel to September. So how are the two companies fortunes kind of aligned here?
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Laura Davison / Nora Melinda / Other Bloomberg Correspondents
Yeah, it's a bit of a complex relationship between Nvidia and Intel because it's not that intel is necessarily giving Nvidia is not necessarily a customer of Intel. Nvidia actually works primarily with tsmc. But the fact that Nvidia was able to test out the 18A from intel people really seeing this essentially as a marquee player in the mix, actually co signing this company and essentially giving more legitimacy validity to a name that we know. We've seen the US government coming in trying to back taking a 10% stake in this company as we're really trying to see more production in the chip space here in the United States.
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Katie Greifeld
And what sense do we have of why, you know, intel and the market in general is reacting in this way to this news? It seems to be some sensitivity here. Even though there wasn't necessarily a contract between these two companies wasn't necessarily a.
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Laura Davison / Nora Melinda / Other Bloomberg Correspondents
Contract between the two companies. But this still raises doubts about the fact of Nvidia stepping away from this partnership here, especially because Nvidia, sorry, excuse me. Investors are looking for proof that intel can essentially attract top tier customers. So that's what's really key here in this moment. The Nvidia name is what's really helping to elevate intel in this moment. And to see Nvidia potentially stepping away from that test run of the 18 manufacturing process is essentially giving investors some concern.
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Katie Greifeld
All right, great reporting, Nora. I'll be seeing you in just about 30 minutes time. Nora and I will take you through the close this early close today from 12 to 2pm on TV. But let's keep this conversation going right now because 2025 has been a landmark year for ETFs with actively managed funds taking the baton to surpass passive funds for the first time. Let's bring in Sylvia jablonski. She is CEO and CEO over at Defiance ETFs. Sylvia, great to talk to you on this Christmas Eve. And it's certainly the case that active ETFs have been on fire for the past several years. Years, 2025, no exception. And we're seeing a lot of activity, a lot of interest from investors in these leveraged single stock ETFs, which do count as actively managed products. We know that Defiance, of course, is involved in that space. Talk us through, you know, how you see that interest evolving, if at all, in 2026. Yeah.
- [31:06]
Sylvia Jablonski
Hi Katie, great to be with you today. And happy holidays, Merry Christmas and Happy New Year. Yeah, I think, you know, it's, it's been a stellar year for levered ETFs in general, both index based and single name funds. You know, we've seen billions of dollars of assets flowing into those funds and to your point, to active funds. And so what I think has happened over the last couple of years, and you and I have talked about this a bunch, is, you know, we went through this period of time where it was, it was all passive and a lot of the ideas that were coming out resembled the others. So there were a lot of me too products out there, whether it was thematics or anything else. And really over the last two years we've seen a lot of innovation and we've seen that in single name leverage stocks and we've seen that in options based products. So a lot of single names that pay income, for example. And I think that, you know, you've Seen huge amounts of growth in that because investors were looking for that. Right. And so what I expect to happen in the next couple of years is, is to see that transition with new and exciting names coming out in the single name leverage space, space. Some of the new picks and shovels of AI, for example, quantum names, some of the themes that are really popular and growing into the next year. And then I think we'll see other things grow out too. I think we'll see new thematics as some of these AI themes, quantum themes, you know, infrastructure, anything related to the advancement of tech really kind of change and grow. So investors are getting very comfortable with ETFs and exchange, expect that to continue.
- [32:31]
Katie Greifeld
And stepping back a bit, I always wonder, you know, if you're managing a stable of, you know, single stock ETFs, you know, that some will probably take off, be very popular. There are certain names that retail investors in particular just seem to gravitate to. At the other end of the spectrum, there's some names that, you know, probably aren't going to garner that same interest ever. And I wonder, you know, as an issuer of ETFs, do you basically just hope you get a few hits when it comes to the single names and hope that that sort of subsidizes the rest of the lineup, which may or may not take off?
- [33:05]
Sylvia Jablonski
Well, I think as an issuer, we, you know, we do a lot of due diligence on this, right? We, we, we research the names that we're interested in launching and we kind of look and see, you know, what is their beta, what is their sort of volatility score, what kind of interest there is in social media, what kind of interest there is amongst institutional clients, what kind of interest there is just in general media, press research on certain topics. So we do a lot of work before we actually bring a product to market. So we have high conviction in everything that we're launching, as I would think most ETF issuers do. Right? To your point, some of them just don't hit and, you know, and that's disappointing. But the way we view this is, you know, we, we essentially just, just move on and just try to make sure that we're capturing the right trends and the right themes that investors are looking at. And if products, you know, if some products are unprofitable, then that's a result of this moment in time and it can always change, right? We've seen products that sat for two years and did nothing take off three years later. So, yeah, all ages.
- [34:06]
Katie Greifeld
No, it's a good point. And I think Bloomberg Intelligence has some unofficial Lazarus list where, you know, a name does nothing for a couple of years, an ETF does nothing, and then all of a sudden, sudden it rises from the dead, if you will. But in any case, I do wonder, you know, when we talk about themes, obviously AI has been a big theme when it comes to equity ETFs, but then you think about what's happening in the bond markets right now and sort of the AI debt deluge, if you will, has definitely emerged as a theme when it comes to credit markets in 2025. Would you ever consider launching a fixed income thematic, et cetera, etf? Or is that something that maybe there just isn't a market for?
- [34:45]
Sylvia Jablonski
Well, I think, I think that there could be a market for different fixed income products. And you know, I would suspect that issuers such as ourselves are doing research in the space and you know, there could be some, some opportunities there. It's, you know, it's something that we're always looking at. And I think, you know, to your point, yes, there, there is, you know, sort of that debt issue with AI. There's also a concentration issue growing with AI. Right. I think a lot of the big, big ETFs are out there in the space, but I actually think there's more to come. You know, you saw on December 20, actually, the Trump administration just announced that they're going to be putting a big agenda and a big priority on researching and building out 6G so that the United States has leadership in that space. Right. And so that's an area that we're super excited about. Like we have a 6G ETF and that hasn't been talked, you know, to the point of like ETFs being popular at different times. 5G was all the rage and here we are now, you know, oh, we have to focus on this because of our build out and because of our quantum build out. And so, you know, there's always different directions to grow in terms of thematic ETFs, whether fixed income or equity based.
- [35:48]
Katie Greifeld
Well, let's talk about one ETF that did get a lot of interest of yours in 2025, and that was your quantum ETF. The ticker there is QT. Um, and it's a pretty steady stream of inflows all throughout the year, but especially starting in about mid summer or so. When you think about the quantum space and the different names that populated. What is your view heading into next year?
- [36:11]
Sylvia Jablonski
Yeah, so the view on quantum is, you know, kind of Very much the same. And it's evolving. You know, we view this as a long term investment. And in the last year, I think the reason that we've seen so much interest and so much inflow into the space is because you've started to get these proof points of, of reality and commercialization. Right? Whether it was the bond pricing example with HSBC or you know, some of the big kind of quality balance sheet mag7 or just, you know, large tech companies like IBM and Cisco and Oracle, in addition to the mag7 investing in the space and producing, you know, products there and having Quantum services available through clouds and Amazon and things like this. So I think as it becomes more commercial and scalable and you know, proves itself as a technology that investors are really buying into, you know, you could potentially see some performance in those names. But I do think it's like AI, right? It's very much in its infancy. AI is maybe a toddler. Quantum is still just learning to call.
- [37:11]
Laura Davison / Nora Melinda / Other Bloomberg Correspondents
Right.
- [37:11]
Sylvia Jablonski
So it's a long term buy and hold. And I think that investors understand that and they're in it for the long run.
- [37:17]
Katie Greifeld
Yeah, it is really interesting. I feel like Quantum, it's just starting to get socialized right now. But as you said, I don't think it exactly knows how to walk yet. But Sylvia, I mean, you make the point that this is a buy and hold investment when it comes to your lineup. And you know, you have a broad array of funds ranging from Quantum, which of course as you say is buy and hold. And then you have again those leveraged single stock ETFs. What is the profile of the investors coming into your lineup? Is it safe to say it's broadly retail?
- [37:47]
Sylvia Jablonski
It's not necessarily broadly retail. There's a good mix of retail and institutional clothes clients. What I would say is there, there are different risk profiles for our clients. So clients that are in the thematic products tend to be long term conservative, you know, buy and hold, looking to allocate to their portfolios for longer periods of time. Whether institutional or retail. In terms of the single name stocks, it tends to be sophisticated. Whether it's an institution or it's a retail day trader, it's a sophisticated trader who understands that these are meant to be traded and not held, that you know, you're getting return for a period of time, not beyond one day. And you know, kind of user beware and understand how these products work over time. And so it's just a different risk profile. But there's a mix of both types of clients, retail and institutional. Across all the product suites.
- [38:36]
Katie Greifeld
All right, Sylvia, great to get some time with you. Happy holidays. That is Sylvia Jablonski of Defiance ETFs. Now coming up on BTech, we'll discuss the outlook for Tesla. Its share price action has been on a tear, but what challenges await in 2026. Steve Wesley, founder of the Wesley Group. He joins us next. This is Bloomberg Tech.
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Katie Greifeld
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Katie Greifeld
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- [43:05]
Commercial Announcer
Look, it's a serious issue, but a lot of other auto companies have had similar issues. Ford, Volkswagen, General Motors. But it's not a simple software fix. So here's the time where Tesla's really got to be firing on all cylinders to fix this.
- [43:18]
Katie Greifeld
And I mean from what you can tell, the company's public posture. Do you think that they are treating this with the appropriate, appropriate degree of seriousness?
- [43:27]
Commercial Announcer
Well, we'll see. This is not a simple software fix. They're going to have to go in re engineer some things. The cost is probably going to take a while but it's not the first time it's happened. It's happened with other auto companies, but I think everybody in the sector is going to be focused in on this one. Tesla, as you know, has had some other brand challenges. So they want to come out. They're trying to position themselves and look like a test knowledge leader, not just an auto company. Fixing this would be top of that priority list.
- [43:54]
Katie Greifeld
Absolutely. Well, let's talk about the year for Tesla more broadly, because shares are up about 19% on a total return basis. We know that that has come with a lot of volatility. You think about where we stand right now. Sure, shares have surged in the past few months, but sales continue to be an issue. You think about the us, you think about Europe. You mentioned that Tesla wants to be positioned as a technology company here, but this feels like a pretty fundamental issue that is going to need attention.
- [44:21]
Commercial Announcer
Look, this is a huge issue in 2026. Going to be a pivotal year. Share price at record highs, $1.6 trillion market cap. That's astonishing. But Tesla's likely to see its second year in a row of declining sales and shrinking profits. So the Robotaxi approval they just got in Austin is great. They no longer need drivers in the cars. That still leaves them way behind Waymo. So Tesla's really got to get into a higher gear on regulatory approval. They've got to get into more cities faster and they need to get revenue growth to keep that share price up. Let's see how well they do.
- [44:53]
Katie Greifeld
Yeah, absolutely. I mean, you mentioned Waymo and you think about the gap. Waymo obviously has that first mover advantage. Tesla trying to close it here. Do you think that that is actually achievable when you think about how far out Waymo is and all the different markets, markets it has already entered.
- [45:10]
Commercial Announcer
Well, it's going to be tough for Tesla to catch up because, look, Way More is already in six cities operational, large cities, San Francisco, Los Angeles, Phoenix, Miami, Atlanta. But they've announced another 16 cities they're going into. They'll do 12 million to 14 million rides by the end of this year, next week. But next year I think they're looking at a number close to 35 million. They're already making plans to go international. They're doing trials now in London, Tokyo, New York City. Waymo's got a huge lead. Tesla's got its work cut out for it to catch up. If you're positioning yourself as a technology company, they've got to get in the race and go toe to toe.
- [45:49]
Katie Greifeld
With Waymo and Steve, we've got just about a minute left. We've talked about door handles, we've talked about sales, we've talked about the Robotaxis. What else should Tesla be focusing on in 2020, 2026?
- [46:00]
Commercial Announcer
Well, I think there's two things. The key one is their energy division is booming. And say what you want about Tesla needing new models and maybe being behind in full self driving, but every other company in the world today is also an energy company. And Tesla provides three products. Powerwalls. You probably seen them in garages, megapacks, energy blocks. For utilities. The takeaway is there's a revolution in AI and data centers forcing utilities to at look, look for new power suppliers. Tesla's filling that void. Their energy division will grow from 10 billion in 2024 to I think about 14 billion this year.
- [46:36]
Sylvia Jablonski
Right.
- [46:36]
Commercial Announcer
They can provide 40% year over year growth. That's going to help.
- [46:40]
Katie Greifeld
All right, Steve really enjoyed this conversation. Happy holidays. That is Steve Wesley. He is CEO of the Wesley Group. ServiceNow reaching an agreement to buy cybersecurity startup Armis in a cash deal valued at $7.75 billion, marking its biggest acquisition to date. I caught up with ServiceNow President and CEO Amit Zaveri yesterday. Take a listen.
- [47:07]
ServiceNow President Amit Zaveri
When we saw this opportunity and seeing the way that adoption is going, this is a great opportunity for us to continue expanding in our security space. So today our security business has crossed billion dollars at ServiceNow and addition of Armis will allow us to now get into more new capabilities which customers are demanding from us as well as allow us to really be differentiated as we add AI, data workflow with all of it being around security and making sure there are no breaches customers have to deal with. So that's really the thinking. And Armies is a very innovative company, very well regarded, great team, very good domain experience, expertise. And the combination of us and them can really change the game in the cybersecurity space and build the cybersecurity automation capabilities very fast.
- [47:53]
Commercial Announcer
It gets to this idea too. I mean you mentioned sort of the potential addition to revenue. I think they talked about a $300 million run rate right now that they're sort of dealing with. This isn't obviously just about the additional revenue that you get specifically from ARM.
- [48:07]
Katie Greifeld
As I assume this is also about.
- [48:08]
Commercial Announcer
Bringing in new clients and more importantly.
- [48:10]
Katie Greifeld
Keeping the clients you have there.
- [48:13]
ServiceNow President Amit Zaveri
This is a very strategic play. I mean we are very confident about our own revenue plans. Right. We don't depend on ARM is to deliver our 50 plus rule of 50 plus right. Which is 20 plus percent subscription revenue growth and 30 plus percent in terms of having free cash flow margin. So we've been 50 plus the last 10 years and we keep on delivering that and we're not dependent on armies to deliver on what we have been sharing with the Street. So this is much more of a strategic play. They are 340 million in revenue already growing at 50%. But the key thing is the technology and the IP we're bringing in together with ServiceNow capabilities as well as a lot of the joint customers we can go together with and really provide them a full capability around cybersecurity and help them with all the issues they're dealing with. From one platform perspective, right they have Armis has a lot of data around all the assets. Company has the physical assets. If you look at now physical AI is coming into play as well robotics and other things like that. That information combined with our ServiceNow's Configuration Management Database which has access around software and hardware, we can really give you a full security posture management and really give you the exposure a guarantee that nothing can go wrong.
- [49:26]
Katie Greifeld
And I want to talk about your dealmaking posture overall because we're talking about Armis today. But you rewind the clock to March. You struck an agreement to buy Moveworks for about $2.85 billion. Should we expect to see more M and a from ServiceNow in 2026?
- [49:42]
ServiceNow President Amit Zaveri
No, I think we have all the assets we require. I think this is an opportunity for ServiceNow to really get into spaces where customers are asking us to get get quicker. So roadmap acceleration plus scaled capabilities we require But I think we are very confident with what the things we have announced so far as the core things we require from our portfolio perspective and exploration we need to do we always can you continue doing what we've been doing before around tuck ins and small IP purchases from but from the security perspective I think we have what we need to become the premium security platform provider in the market today.
- [50:16]
Katie Greifeld
That was ServiceNow President Ahmet Zavari. Now before we go it's time for talking tech. First up Bitcoin missing out on the Christmas chair currently trading around 87,000 today. That comes after a brutal sell off in October saw not from record highs token on track for its worst quarterly performance since 2022 plus ads could be coming to chat GPT OpenAI said to be working out the details to integrate ADS into its AI chatbot according to a report from the information and Alphabet's Waymo said it's updating so software across its fleet to better handle power outages. The move comes after self driving taxis froze and caused a traffic jam during major power failure last weekend in San Francisco. That does it for this edition of Bloomberg Tech. Don't forget to check out our podcast. This is Bloomberg.
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Laura Davison / Nora Melinda / Other Bloomberg Correspondents
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Katie Greifeld
Gift that's perfectly theirs.
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Katie Greifeld
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