Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business Weekdaily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Stenebeck on Bloomberg Radio.
Dell shares rising as much as six percent earlier in the session, They've come back a bit three point three percent to the upside. Right now. The company roughly doubling its growth estimates for sales and profit for the next two years. It said demand for AI products will extend those higher projections at least through the twenty thirty fiscal year. We've got a special treat in the Bloomberg Interactive Broker's studio. Wujinhoe. He's Bloomberg Intelligence Senior Hardware and Network anat.
Say, he's usually at a box, usually is, but he's at least in our box in our studio.
Yeah, it's really good to have him here in the studio. Usually out in Princeton, New Jersey, where Bloomberg Intelligence headquarters is. Okay, I'm putting Carol on the spot here anywhere you're gonna go, Carol's Carol's not convinced Dell as an AI company. Should we think of Dell as an AI company?
No?
Right, boom, Carol, I'm a good company, all right, so laid out for us.
So so look, they're they're involved in AI servers.
At the end of the day, they are a box maker that takes un video chips and put it assembles everything together in the box.
This is the whole on premise thing, right, this is the help It's a built out from yeah, neo clouds like the core Weeds and the n scales and Thebeuss in the world.
Right, we got those companies and then also the sovereign AI sovereign AI companies and just just to break down their guidance, right, they guide it to seven to nine percent, up from three to four percent that the last analyst day. What's really driving that is twenty to twenty five percent growth in AI servers right now. This is phenomenal growth considering how much it's grown over the past couple of years. Right, And what it tells me is, like, I know, there's
a lot of bubble concerns on AI servers. It shows the durability of a server revenue. To put it in context, their revenue guidance, the AI server guidance implies from twenty billion in fiscal twenty twenty six to about forty five billion in twenty thirty.
That's amazing, it's these are phenomenal numbers.
That's off the chart. But why is that not a sign of bubble. Well, this is a bubble.
So there was a couple of things.
I'm actually here from the analyst date, which is why i'm which is why I'm in New York. And what they're telling me is that, look, they're very early on that s curve, so the demand cycle is still fairly fairly early.
Right.
They're not really involved in the hyperscale cloud guys, but they are c new data centers cropping up every every day, every week, every month, and they have good visibility into sales at least for the next couple of years on what the order flow is. Right now, think of Michael Dell, Right, he's involved in every AI deal that's possibly out there, right, so he's going to be exposed to every type of as every deal globally x China of course, right, So do.
You mean he's he's involved in every AI deal his equipment you say, his equipment.
Well, well, he's probably one of the best sales people that's out there for from an IT hardware standpoint. Right, Let's let's look at some of the involvement that he's been in recently. If we think about the TikTok deal that was announced, right, he's involved there. He has global footprint in terms of what type of deals there are. He's probably he's probably involved in some of that open AI sales as well. Right, So he's got some you know, some breadth and and and good exposure to what deals
are coming in. So he is going to the company itself is going to be involved in all of those deals.
Biggest competitor Lenovo HP Who is it?
You know, we bring it up all the time. It's it's biggest competitor right now? Is super Micro?
Oh god, remember we kind of stopped talking about them.
Yeah, how is the biggest competitor?
Well, if we, if we, if we, if we look about look at super Micro right now from an OEM standpoint, they're doing they're on pace too, about thirty three billion dollars in total revenue. I would say about seventy percent of those sales are going to be AI server related and that's going to be comparable to tell right, and
they're going to gonnect connect. Now, the one company, the one group of company, or the white white box vendors think about the fox cons of the world, the Quantitas of the world, and they kind of dispelled them as as a competitive threat to some degree because they can make custom servers number one and also help with the time to market.
Right.
Uh, these uh, these neo clouds as well as the sobigs, they actually want their AI servers now, right, and the sooner the better, and if and if they can get the GPU supply which is part of the components and delivery, they'll they'll be able to win those seals.
Right.
I'm waiting for you to be convinced that it's an AI company though Wujin says, you're right, it's not an AI company not yet.
Well does it does it? Or well, it's a box maker.
It's a box maker, right, but it's at the intersection of all this technology that that is correct. It's it's a box provider for these companies help support every is every deal.
Well, so so when when I when I think about their their deal activity in general, right. I I'm from a profitability standpoint, AI servers only generated about five percent for doubt operation Dell an almost industry wide, right, So from a profit standpoint, it's almost comparable to a PC selling a PC. Right, So what's really driving profitability is gross profit dollars and operating profit dollars. To really drive up that EPs growth, I would call it an AI company.
If we think about the gross margin profiles of someone like an Nvideo or Broadcom or the chip makers. They're actually selling the picks and shovels, right, Dell is only selling.
The cart Okay, good to know. So is it the move up in the share price justified? You think?
Yeah?
For a couple of things. AI server revenues are higher than expected. More importantly, the EPs growth of fifteen percent much higher than expected. So if they're able to execute on their margin profile, on their margin targets as well as a cash flow targets, there are going to be a lot of satisfying investors.
Wow.
Interesting to see.
I mean, the company reports November twenty fifth, after markets. We have a little bit of time stucks up about thirty one percent years.
We're from three Q Guidance, So that helps.
Right, exactly, exactly, always helps when you're here, and to have you in studio, My.
God, what a gift.
Nos on mine?
No, no, oh, good stuff.
Next time you're in the city, tell us, tell us and you'll take us to dinner.
We'll do that. I'll bring some more tea. Does that sound good?
I know you guys want the tea, so you always want the te too, All right, love it?
Going to leave it there.
We didn't thank you so much, really appreciate it.
Well before you leave.
Since we just have you, I mean, we have been spending so much time this week looking at the AI spend and I really feel like it's been over the last few weeks when we continue to see all these deals.
Are is it wise to be asking is it a bubble? Or when you do your.
Channel checks does this all seem legit in terms of the spend. And Ernie's is going to show us whether the spend is.
Paying off for some of the companies that are spending time.
But what's the smart I don't know you talking to the executives in these worlds?
Yeah so so so when I look at it right now from I think there's a disconnect in terms of the revenues generated from AI to the AI build out.
Right.
I know that the recent news flow has been you know, look, the AI uptake hasn't been as strongest as we had hope. But if we if we recall back a couple of weeks right ago, when open ai talked about the token generation, the token is consumed for these AI models, and I believe they had like some ridiculous summer of like one hundred ten billion or one hundred million dollars in revenue.
I mean, we're starting to see consumer AI really starting to ramp up, right, So essentially what they're doing is they're building before they really start seeing that revenue slot machine happened.
All right, Good to know, like it gets like all the stuff we've been talking about this week. Wu Jinho, thank you again, so appreciate it, Senior hardware Networking analyst at Bloomberg Intelligence.
Right here in our interactive broker studio.
Stay with us.
More from Bloomberg Business Week Daily coming up after this.
You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five eastering Listen on Apple Karplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
As Tim mentioned just before, Charlie McKinsey expects women to control thirty four trillion dollars, or roughly thirty eight percent of investable assets by twenty thirty. That's close to double last year's total. We have definitely seen the figure grow over the last decade. Let's get to our weekly discussion on Women, Money and Power, where we explore the economic implications of these changes and how to navigate them.
There's so much going on. Great to have back with us.
Aaron Harklessmore, she's vice president managing director of Investments for Pivotal Ventures, right here in studio.
Welcome, It's so good to see you.
How are you.
I'm doing great, Carol, Tim, thanks for having me on today.
Thank you.
Well.
You know, this is a big issue.
We've been talking about it for years, about the amount of money that's either shifting into the hands of women, what it means, what the differences are. I am curious and maybe not everybody's aware of all the work that you guys are doing. You have this very specific mission at Pivotal remind everybody what you're up to, and I am curious about what it means on a day to day best basis what you're looking forward to, invest in relationships and so on.
Yes again, well thank you for having me.
Pivotal is an organization founded by Melinda French Gates in twenty fifteen.
We are focused on advancing.
Social progress and specifically when Melinda set up Pivotal, she realized that there would we would need multiple levers and tools to do that, including philanthropy and investment capital to get more power in the hands of more people, particularly women,
So we invest in women led funds. We also invest in companies that are innovating in areas and themes like women's health and caregiving where women carry a lot of bird and there's great opportunity to drive innovation, and we think make a lot of money investing behind those themes as well. So that was the real impetus to found
Pivotal for Melenda. She wanted women to be in a position to make decisions, control resources and capital, and influence the decisions that are happening in our workplaces and our communities, in our schools, and in our homes. And that's what we're setting out to do with our investments every day.
So when you identify those investments, when you identify where you want that money to go, what are the things that actually advance power and influence for women? In your view, it's.
Having women in positions to make decisions.
So as we invest in funds that again are predominantly women owned and led firms, they're investing across a spectrum of sectors, everything from AI enterprise, digital health, financial technology, fintech, the care economy, which I'm it's one of my favorite topics. I'm happy to talk a lot more about that too. But that's what women's power is for us. It's women again in a position to make these decisions. And it's
also true for our direct investing as well. You know, many of the companies that we backed have female leaders and some do not. But we're just trying to find founders and innovators that are really solving problems for everyday Americans and everyday women.
You know, I love that, and we want to get into some of the specifics in terms of where you guys are investing. But this idea of getting money in the hands of women, you know, how many times do we sit around this table and it doesn't matter what group we're talking about.
Money talks.
Yes, it gives you a seat at the table, whatever table that may be. And it's just fascinating that here we are still in twenty twenty five and it's still a struggle. But this idea that you guys are specifically targeting women and making sure that they are having the money they need to.
Kind of grow their power, that's really important.
It is, it's incredibly important, Carol, And you know the numbers have improved.
About a decade ago, about.
Nine percent of decision makers partners at US venture capital firms were women. That number has grown to about eighteen percent. So we've made meaningful progress in the last ten years, but we have a long way to go. And as you both share it in the opening, you know that thirty plus trillion dollars of assets that are held by baby boomers that are going to most of that transferring now to women. Women are going to want different things
with their money. They want different advisors, they want products that meet their needs and solve some of the issues and problems that they're facing. And so we see again a huge opportunity if we can change the face of who is making the decisions that brings real power and real change.
Can we talk about caregiving for a minute. It's an area of your focus, It's an area of focus at Pivotal Ventures. It's something that Carol and I think a lot about, but involved in it. Yes, how do you make this work structurally in an economy like ours?
We have to start with the care infrastructure.
We've supported research at Pivotal Ventures that sizes the care economy at six hundred and forty eight billion dollars. I'm going to pause and let that sink in every time I see.
So that's for people offspring, but also for people's parents and other loved ones they might be taking.
Care exactly Tim, It's the full spectrum. I describe it as end of life, back to beginning of life, childcare, elder care. We think of women's health solutions, solutions to help you optimize your.
Home life better, to care an age in place.
All of that is a part of that six hundred and forty eight billion dollar market, and we've ignored caregiving for too long. It's the most important work.
As you said, we all do.
Everyone's a caregiver at some point in their lives, and as we thought about sectors or themes where women specifically carry a big burden.
Caregiving is one of them.
And we want to fund the innovators and the founders that are building companies to address these solutions and again just make that loving work that we do easier.
Yeah, because you don't.
I mean, the gaps that are out there is tremendous, and if you have money, it's a lot easier. If you don't, it's really really a struggle. One thing I want to get to and I think about how you guys are going about this. Last month, Aspen Institute launched the Workplace Innovative Innovation excuse me, Workplace Innovation Now Challenge, Win Challenge. You guys are involved in it a sixty million dollars grant competition.
What's the goal here, what's the mission?
The goal is to find better solutions for women in the workplace. We are thrilled to partner with the Aspen Institute and this initiative and looking at ways that we can improve the workplace environment for women around AI, around culture, around narrative. So there'll be more coming out in the weeks and months ahead. I encourage you know, social entrepreneurs, philanthropists, to take note and support that work alongside us because we need better solutions for women in all facets of our lives.
We've made progress, but we could do better, we could do more. It's just you know, this is I feel like we have talked about.
Women in money for a long time, women in power in a long time, and like you say, we've made progress, but you know, if you could change one thing, we've just got about thirty seconds that really improve women money power, like the whole thing, what would it be.
I think it's knowing what you own and asking questions, not being satisfied with the status quo. I think that's probably the biggest thing. One thing that we try to do with our investment process and that our founder, Melinda Frigates has empowered us to do, is to build a diligence process, a sourcing process that's more inclusive, that tries to build and find new patterns of success as investors.
And I think that's one thing that I would encourage all of us, whether it's with your personal your four to one K or if your or other institutional investors to take that.
Tact as well.
I like that ask questions.
Aaron Harkless Moore, VP and Managing Director of Investments for Pivotal Adventures.
Stay with us more from Bloomberg Business Week Daily coming up after this.
You're listening to the Bloomberg Business Week Daily podcast. Catch us live weekday afternoons from two to five these during that listen on Applecarplay and Android Otto the Bloomberg Business app, or watch us live on YouTube.
It is Bloomberg BusinessWeek Daily. We love checking in with mayors. They're the ones on the ground in cities and towns across the country. They're the ones who are making the decisions that affect the lives of people in their communities, and they hear from people in their communities when they're just walking down the street. Mayor Brandon Scott of Baltimore is one of those mayors, and he joins us now in the Bloomberg Interactive Brokers Studio. We should note that
the city has received money from Bloomberg Philanthropies. It is the philanthropic arm of Bloomberg Elipy, the parent company of Bloomberg Radio. Mayor, welcome to the program. Re elected in twenty twenty four, You've been mayor since twenty twenty. I want to start with the government shutdown because you are pretty close to Washington, DC. You've got some folks in your community who certainly work there and obviously benefit from
people working in the government. The President making comments earlier today that we can expect layoff details in four to five days. How's the shutdown affecting your constituents right now.
Well, there's a lot of my constitionis on on ease right when you're thinking about over twelve thousand Baltimoreans work for the federal government, either directly or on contract, and then when you think about what that's going to mean for them and their families, they're just not at ease right now.
And folks want to go to work. They want their government to be working.
And of course then all of ratherdents who depend on programming and things that are just going to be out there that may not be having a direct impact as if yet father shut down, but as it continues and goes on, it would be what do.
You consider what do you consider your biggest problem in running the city?
I mean Baltimore. You know we report about it a lot.
It is the fourth most dangerous according to US News and World Report this summer, ranking Baltimore the fourth most dangerous city in the country, behind Memphis, Oakland, and Saint Louis based on FBI data.
They look at property crime, they look at murders per capita. But what do you, as mayor. I'm sure there's a lot that's on your plate. What's top of mind?
Well, listen, violence is always top of MI us, the reason why I got into off and we understand.
That we have a long way to go. But I know you guys know.
Here Bloomberg Radio the many years that we were number one on that list, and as you and I are talking today, I think it's the mode and the talversation around Baltimore and violence has shifted significantly. We have the fewest amount of homicide through any October seventh on record today.
That is a big change.
When I said twenty twenty one, laying out our conference and violence Prevention Plan, that we were going to reduce homicide by fifteen percent from one year to the next.
People literally laughed.
Right now, it's down thirty percent from last year, and last year was a record reduction for us.
We're going to continue that.
How did you do it?
We did it throughout our conference's plan a week, which is which is a bunch of things. One first and foremost, we go and we identify those who are most likely to be the victim of perpetrator of gun violence, and we focus on them. We give them opportunities to change their life, and if not, we remove them.
Via law enforcement. And that's how we're driving down violence.
We're focusing on guns and the flow of guns into our city, going at the gun traffickers, those who are using gun arresting them at my direction with the police department, turning them over to our state's attorney and our attorney general. We have historical levels of investment into community violence intervention where we.
Have people who used to be on the other side of the law.
Going out and preventing conflicts from escalating into violence.
All of it. We're going after gun manufactured people.
Who understand where the problem the problem is. If you're pulling them in to help you, they were.
The problem and there they're part of the solution, and what better way to do that?
Get does people to do that well?
Easy?
First and foremost, many people who have made that mistake don't want people come in behind them to make.
That and they know that we're growing this.
Network of community violence intervention workers in our city. So the word is out that we want to give people a second chance to be a part of solving a problem that they once were causing.
The city though in the crosshairs of the President he called it a hellhole. Last month, you and Governor Wes Moore said that law enforcement from the state will patrol some areas.
Has that begun?
Yeah, that's begun, and that's the governor is actually restarting something that was ended by his predecessor.
Think about it like this.
You would not find any other state police department in any state in this country not operating at all in its only major city. That's Baltimore City was the only jurisdiction in Maryland that our Maryland State Police did not operate in the Governor's restarting that, we're grateful for that support and to continue that work.
Are you open to the President's sending National Guard troops to this.
We've been very clear about that. Why we know how to reduce violence in Baltimore. We have reduced violence to its lowest levels ever recorded on record, even lower than the President's first term. The way that we have done it in partnership with our community, with our Police Department with ole station Attorney Ourtorney General, and our federal law enforcement partners who work beside us each and every day.
That's how we should continue that work.
If the President wants to help us, he should restore grants and funding that was cut to organizations that helping that. Restore grants, I mean funding cut from those law enforcement agencies. This president has had the biggest reduction in funding for federal law ENSFM agencies.
They should be restored.
What funding are you not getting as a result?
For us, we have not been directly impacted as of yet.
It's our partner organizations like for example, a Life Bridge helps them runs the Center for Hope that's a part of our CVI network that has programming around CBI's community violence intervention. They lost a five hundred thousand dollars grant, the same thing for living classrooms.
That's big work that is going to be.
Not happening, whether it be a hospital based response, our community based responders. We need a victim assistance for young people, getting those young people the services they need that helps to prevent balance as well.
What will you do though, if the President sends troops, well, listen, will.
Be prepared to take whatever action that we can, be it legal others alongside our governor and our team, based on when, what and how the President does something, if he does anything.
But what we hope the President.
Does is to continue to support those agents that are already working in our city and let them do their work and lit the law fortionate partnership that has driven up results.
This far curious all the way.
But even though crime has improved, even though you shared statistics that show they're the best that they they've ever been. Like Carol mentioned this, your city is still on a list. But yeah, that you don't want to be on. So I say to people out there who are saying, well, I would feel more comfortable if there were an increased law enforcement presence, and that could include federal trips.
Well, we had the National Guard in Baltimore in twenty fifteen following the unrested Freddie Gray.
It's one of the most violent years ever. It didn't help.
Right, We have to remember this is not what those folks signed up to do. Allow those folks who sign up to go after a gun, traffiers, murderers, robbers, carjackins to do their work and allow the other people to do their work and listen. There are other lists, you know, there are many of these lists. We were on some list on some list we weren't on. How the list that we want to be on is the list of
who has the largest reductions. And you will be hard pressed to find a city in this country that's had a sustainable, long term reduction like Baltimore's had from a September of twenty twenty two, I mean in twenty and twenty three until now.
What do you see as what's wrong with politics today? What do you think is wrong with what some say is the Democratic Party not very clear in its mission and kind of stepping.
Up well, very simply, I think that, And I ask.
You because I think there's a lot of forgive me, but there's a lot of folks who think there are politicians who become career politicians and things haven't changed and we need some change.
Well, I think that what folks have to understand is that for me, and I say this about the Democratic Party all the time, more recently, they have to let the folks that are closest to the problem be outfront and part of the solution, meaning they need to listen to mayors, the mayors are the ones that have to solve the problems. The mayors are the ones that have to meet the people in the grocery store. And we've proven in city after city at the city we know how to drive down crime.
And you have to talk to people where they are.
We have to get out of being up in the sky with pie and the sky, talk to people.
In real sense, real things that.
Impact them, and explain to them how these things are going to make their communities better.
How long do you want to be mayor?
I want to be mayor for as long as the residence of Baltimore will have me. This will be my second term, believe it or not. I've been an elected office since twenty eleven and this is I've been in city Hall since two thousand and seven.
But you're a young man right now, Yes, a young man.
I'll be forty two on my birthday. But this is about making my city better. I got into this service because I saw someone get shot at seven years old and no one care and wanting to drive down that violence. To have vacant housing be it as lowest point in my lifetime in Baltimore, something we're proud of.
But we're not celebrating. We have a lot of work to do and we're going to do it.
The reason I go back there is I do think we talked about this in media that there isn't a lot of you know, local publications anymore. A lot of newspapers have shut down, and so we get.
Kind of the high in the Yeah, that get that view, but we don't. It's why we love talking to mayors.
But often people are mayors and then they move up and they go to governor or then they go to Congress and stuff.
So I'm just curious, is how long do you want to stay on that log?
Yeah?
Well, everyone knows the endgame.
Everyone knows I don't want to be governor, and everyone in Baltimore knows that I'll be quite okay if being the mayor of Baltimore is the last elected office I've had.
This is my dream job as a child. I will hold it.
As long as the residents of Baltimore will allow me to do so, and as long as I'm living within term limits.
Before we let you go, because you have a train to catch to get home, Yes, and we want to be respectful of your time. The attracting and retaining business to the city. We know that's a economic development is a way to improve cities. What are you doing right now to say Baltimore is open for business?
Yeah? I think that way.
We have to understand we had a four billion dollars of investment into Baltimore. We have seven billion dollars investment coming into downtown Baltimore. Whether it's t ro Price's new headquarters, so under Armer's new headquarters, everyone knows throughout downtown Rise Play we are open for business in the City of Baltimore.
Reforming our permit process and reforming our zoning code, all the things that we need to do to help grow business in Baltimore, especially in the tech and life science industry that is taken off out of Hopkins and out of the University of Maryland, putting a lot of money and a lot of tech businesses out into the EFILM.
Any signs that we're headed towards a.
Recession, well, we'll see.
We know that with terrorists and all the other things going, we just have to all be mindful of what's happening and prepare as we're doing our budgets.
I've been talking to my brother and system maas to make sure that.
We're being responsible right now because we do not know yet what is to come.
So appreciate it.
Go for your train, yes, ma'am, thank you very much.
He's running for that train. Well, well be safe.
Brendan Scott, the Baltimore mayor joining us here in our Interactive Brokers studio. As Tim mentioned earlier, that city has definitely received money from Bloomberg Philanthropies, which is of course owned.
By Michael R. Bloomberg, founder a Bloomberg LP and Bloomberg Hilana.
Stay with us more from Bloomberg Business Week Daily coming up after this.
You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five e's during this listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube. I'm bub Mac.
Now about you.
Let me drive?
Oh no, no, no no, this is not a.
Toy to honey.
Please, how do the ride gravels?
Let's wait, I want to drive.
It's good question. This is the drive to the clothes plums for me?
A thing?
Well, dunla don on Bloomberg Radio.
Good time, everybody.
We got about eighteen minutes to go until we wrap up the trade on this Tuesday. Carol Master Tims Stanovik live in our Bloomberg Interactive Broker studio. Right now, we've got three hundred and seventeen names to the downside on the S and P five hundred, one hundred and eighty six actually gaining ground. But as you heard from Charlie and Bill Maloney, you are seeing stocks kind of stay down for most of the day, just bouncing around, bouncing around our worst level.
Not every day it can be a record day.
Nope, it cannot. Right, doesn't necessarily make.
A market, doesn't, but it kind of felt like for the last week that's what we saw.
I'm curious to see what Eric Clark has to say.
He chief investment officer of Acuvas Global Advisors. They've got one point two billion in assets under management. He manages the Alpha Brands Consumption Leaders ETF began trading this year. It's up about two percent in the past month. Top holdings include Uber, Netflix, Amazon, Microsoft, TJX, Apple, and more.
It sounds like sounds like my life.
Love those names.
Last time we saw Eric, he was working hard in Huntington Beach, California.
Says, we were working hard with the future.
Proof conference California, enjoying the sun, enjoying the beach. Yes, and talking all these companies.
Anybody who's out there for you're going to do a financial conference, We love you, We love going, but do it on a beach.
Now.
He's working hard in San Diego. So it's all good.
All right, Hey, listen, good to have you here.
Eric.
How are you.
I'm great. I'm great. Well, at least we're not baking in the sun in Huntington.
Oh, it's okay. Maybe thinking when January rolls around, we'll be looking longingly on that early satire.
Day control rooms like, oh yeah, too bad. You were picking in the sun.
Hey, talk to us about this market environment. Remind us too, Like you are known for investing in these well known brands.
How much movement do you do?
Remind us when it comes to buying, selling, or kind of parking it and let it just kind of ride for a while.
Yeah, I mean, you know, the goal isn't to turn over the portfolio. But you know, since the pandemic, the consumer spending trends and how we've dealt with inflation, you know, it's been a unique environment. For the consumer trying to navigate all those things. So turnover has been a little bit higher because consumer spending in the trends have been a little bit more unique. Usually, you know, you want to have exposure to really important spending themes like apparel
and travel and goods and the service economy. But it's just, you know, it's been a while wild ride since the pandemic and then with the tariffs and changing supply chains, so it's you know, the portfolio is very kind of what I consider to be very stable, predictable, good subscription revenue in important categories that we either need or we love, and so it's a little bit more concentrated than maybe normal.
But you know, if we see the economy accelerating in twenty twenty six, we'll probably want to have a little bit more exposure to some areas of spending that we haven't wanted to have exposure to in twenty twenty five.
Jamie Diamond said, consumers okay now, but recession.
Could happen in twenty twenty six, And so.
We talked about he said that earlier today, said the bank will be fine, but he would feel for customers. Of course, Yeah, it's not something he worries about right now, if that were to happen, and we would look at your portfolio and say, okay, there are some names in here that are wants, and there are some names in here that are needs. What are the needs and what are the wants?
GJX is a necessity? Necessity?
Yeah, Walmart, TJ, Max Costco. I mean, I would even argue Netflix and Spotify are pretty needs oriented. Nobody's going to get rid of those in a in an economic slowdown. If anything, you'll transfer your your pay over to the ad tier. So, you know, from a wants, I mean, we still gosh, we still want to go to concerts and live events the you know and live nation. Stock is pulled back. We've had a little bit of a pullback here, kind of a silent pullback with with tech
kind of doing all the heavy lifting. There has certainly been some pullbacks since the middle of September. So you know, there's some good opportunities for people that aren't just looking at the index level, but I mean into It's another good example. I mean, we got to do our taxes. If you're a small business, you got to you know, continue to market and try to generate new clients and engage those clients. So there's a lot of great brands deploying AI that that are going to really see the
benefit of that over the next couple of years. And everybody just wants semiconductors right now, I understand. But there's a lot to like about this market, and we just don't see a recession. It's always possible, we just don't see it. The labor market, obviously is the big the big worry for everybody.
Well, is there anything that's a new ad or is there anything that you've already gotten rid of, like tell us about in terms of movement or adding to positions.
It looks like you're pretty consistent.
On some of these big names, the amount of exposure that you have.
Yeah, we are. We actually have been out of the food names. The quick service Chipotle le down here, I think is pretty intriguing, you know, for a twelve month period. You know, maybe they have a little softness in the in the current quarter, but we still think this The stock has derated pretty pretty immensely. I'm even looking at Lulu. I don't want to get in there just yet, but I think there's some interesting retailers that have been left for dead that are really starting to look intriguing.
And so if that, that's probably why isging to you? Why why is Lulu intriguing to you? Isn't it getting taken to lunch by your neighbor over there in San Diego?
Viori Viory, Yeah, you know, it would not shock me if the CEO of Lulu goes. I think he's made a he's made some pretty bad missteps. And I says, it wouldn't shock me if an act, if an activist gets involved in there. So I I that's why I haven't you know, we haven't. We haven't bought it yet. We we owned it, gosh, you know, over a year ago at much higher prices. So the athleisure story is
still important. Nike, I think is a little interesting. I mean there, you know, it's a slow but steady recovery, so that one's a little bit interesting on a dip after earnings. But you know, the service economy is just much more intriguing. It's it's it's where the demand is. I think booking is still interesting. Goods right now are just a bit of a struggle because we're just going to start feeling the impact of higher prices from tariffs,
you know, heading into holiday shopping too. What have you gotten out of We've gotten out of some of the defensives like Coca Cola, Progressive insurance. It's just right now people just don't want defense in particular. They'll want it again. These are great, stable businesses, but we've just added more to the you know, to the more cyclical side of the ledger in favor of Staples. So we're we're still a little bit overweight Staples, but that's strictly through Walmart and Costco.
You own app.
Loven and that has certainly been in the news in the last twenty four hours.
Down about fort down fourteen percent.
Yesterday we see a bounce back city actually coming out and saying that they would be buyers on any weakness. They say the regulator is not officially accused app Lovin of wrongdoing. There's more in their call. So we are seeing app love and come back a little bit. Are you holding onto your position anything you're doing there?
No, absolutely, I want If I could have bought it yesterday, that would have been that would have been ideal. We just didn't get a chance before the close. It's amazing how massive companies can move Witness Oracle today in a very short period of time. It just, you know, it reminds us that algorithms drive everything. But we still love
app Lovin. Not a cheap stock but growing really well, generating a massive amount of free cash flow, super high you know, revenue to employee, driver of the digital advertising world. They're expanding outside of video gaming with this AI algorithm.
So we love the stock and we just don't Eric. Sorry, we got to run big. Thank you, Rational Dynamic Brands.
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