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Good morning, I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Well, Karen, the jump at Nasdaq Futures follows earnings from Apple and Amazon. Let's begin with the iPhone maker. Those shares are up two percent in early training. Apple did blame a surprise decline in China revenue on supply disruptions, but it's predicting it will return to growth in the world's biggest smartphone arena as the iPhone seventeen gains momentum. Mark German is Managing Tech editor for Bloomberg News.
What stands out here is iPhone obviously grew tremendously six percent year. Every year, they beat in nearly every product category except the iPad. Had an extremely slight miss on Wall Street forecast, and again those are just forecast numbers that get made up anyways, so I don't think too big of a deal there. The big one, though, is
a big decline in miss in Greater China. I think some of that can be attributed to the iPhone air delay, which was not expected, and they originally announced the iPhone.
Air Bloomberg's Mark German says Apple's iPhone seventeen and seventeen pro got off to a fast start in September, with twenty nine percent year on year China sales growth in the first two weeks of October.
Well, the big tech winner this morning, Nathan is Amazon. Those shares are more than twelve and a half percent. Amazon's cloud unit posted the strongest growth rate in almost three years. Amazon Web Services reported third quarter revenue of thirty three billion dollars. That's an increase of twenty percent from the prior year and the biggest year over year rise since the end of twenty twenty two. Punam Goyle as senior retail analyst at Bloomberg Intelligence.
They hit it out of the park. Sales ver very get across the board, across all business segments, AWS, online advertising, even physical stores. So from a top line perspective, very very encouraging results. In fact, AWS was probably the bright spot here. Twenty percent gains. We haven't seen that in a while.
And Bloomberg Intelligence senior retail analyst Punham Goyles has Amazon's total sales rows thirteen percent to more than one hundred and eighty billion dollars.
Gar Netflix shares are moving higher this morning as well. The streaming giant has announced a stock split. Let's get more from Bloomberg's John Tucker, John and Nathan.
This is the second split in the last ten years for the streaming industry leader, Netflix, approving a ten for one stock split. The company wants to make a share price more accessible for employees who take part in the company stock option program. Netflix is one of only ten in the S and P five hundred with a share price above one thousand dollars stockholders of record at the close of trading November tenth, they're going to receive nine
additional shares for every share held. At the same time, Netflix is kicking the tires over at Warner Brothers Discovery. Reuter's is the latest news service to report Netflix is exploring a bid for their studio and streaming businesses. Bloomberg New was reported earlier that Netflix and Comcast are weighing bids for parts of that company. Netflix shares up over three percent pre market this morning. You New York Ime, John Tucker, Bloomberg Radio.
All right, John, thank you well. Bloomberg News has learned Intel as in preliminary talks to buy artificial intelligence chip startup Samba Nova Systems. Sources say any deal would likely value Samba Nova at below the five billion dollars he garnered in a twenty twenty one funding round. Samba Nova designs custom AI chips that aim to rival those offered by in Video Well.
Speaking of in Vidia, Karen Bloomberg News has learned the AI chip giant plans to back another AI startup. Sources say plans to invest as much as a billion dollars in Poolside. In another development, in Video CEO Jensen wogtold reporters he still hopes to sell chips from the company's Blackwell lineup to customers in China, though he has no current plans to do so. Speaking this morning at the APEX CEO summit in South Korea, Wang talked about the AI revolution.
This year, AI became profitable, and when something becomes profitable, you want to manufacture more of it, just like when you're manufacturing chips and wafers and dram If the manufacturing of those chips were profitable, you want to build more factories to create more chips.
And earlier this week, Jensen Wongs and Vidia became the first company to reach a five trillion dollar market cap, and checking the shares right now, they're up nearly two percent.
Well, Nathan, let's get to the latest. Now on the US China trade shrews, Chinese President Xi Jinping is warning the world not to break supply chains. She's remarks at the APEX summit in South Korea came after he sealed a deal with President Trump to put rare earth restrictions on hold for a year, while the US will roll back some tariffs and export controls also for a year. Treasury Secretary Scott Besson says this keeps the relationship on hold for now.
My guess is a hear from now will be back to the table and we'll get another another delay, another role. Because what everyone misses is the Chinese have rarers, but you know we have President Trump's threat on tariffs. He gave the team maximum negotiating leverage.
And Treasury Secretary is go on bess and smoke on Fox News, we get more on President She's or marks from Bloomberg's jail desis in Hong Kong.
You're seeing something that's really kind of like outwardly focused on that idea of building unity within the region in particular. I think, you know obviously that freder Hick Aside from chi Jinping, you know, we've certainly seen some concerns elsewhere in the region, particularly from Western companies who are concerned
about being left out of the invest of market. We know that China itself has very many challenges within its domestic economy that it's really sort of focused on, and has actually made several efforts this year to try to build up those messic industries.
And Bloombergs deil Desis reports she used his speech to tell some seven hundred billion dollars in foreign investment that Shina has brought in over the last five years.
And Washington Care and the government and shutdown has now lasted a full month. On this thirty first day of the funding fight, President Trump is calling on Senate Republicans to end it by taking Democrats out of the picture. In a social media post late last night, the President wrote, in all caps, initiate the nuclear option, get rid of the filibuster, and make America great again. Senate majority leader John Thune says he has not had those discussions with
the White House. He says Democrats want to prolong the shutdown.
It's all a ball leverage.
That's what they're making.
It all about. Leverage.
The Majority Leader, John Thune spoke on the Senate floor as the CEOs of four major airlines met with Vice President JD. Vance at the White House. With air traffic delays piling up during the shutdown, I worry about the pilots who haven't gotten paid in a long time. I worry about the air draft controllers, who, of course make this entire system extra safey. Vice President Vance met with
the CEOs of United American, Delta, and Southwest Airlines. They called on Democrats to back the Republicans clean stop gap spending bill.
It's time now for a look at some of the other stories making news in New York and around the world, and for that we're joined by Bloomberg's Michael Barr Michael, good Morning.
Good Morning, Karen. Buckingham Palace says that King Charles is stripping his brother Prince Andrew of his remaining titles and evicting him from his royal residence. The move follows revelations about Andrew's relationship with convicted sex offender Jeffrey Epstein. Greg Gross is a UK Royals expert at King's College in London.
He's taken the maximum steps that I think are available to him, and this is about getting the house in order.
The palace, says Prince Andrew will now be known as Andrew Mountbatten Windsor. Two people were found dead in flooded basements after heavy rains in New York City yesterday. In one case, a Brooklyn victim was a thirty nine year old man. In Upper Manhattan, another man also drowned from flooding in a basement late last night, the FAA issued a temporary ground stop for Newark Airport in New Jersey
due to staffing issues. It comes as a Jet Blue flight from Cancun to Newark was diverted to Tampa, Florida Thursday after a sudden altitude drop led to multiple passengers being hospitalized. It may not be the lover, but the theft is no less devastating to the operators of the Oakland Museum of California. Police say suspects stole more than one thousand items from the museum's collection, including metalwork, jewelry, and Native American baskets. Museum director and CEO Lori Foguty.
We imagine a lot of this kind of material might end up in a pawn shop or an antique store, or even a flea market or swap meet, which is why it's so important to get the word out to the public, because people may see something that looks kind of not like it should be there.
Museum director Lorii Fogerty says the theft happened on October fifteenth at an off site storage facility. Global News twenty four hours a day and whenever you want to with the Bloomberg News. Now, I'm Michael Barrn. This is Bloomberg Karen.
Thanks Michael.
Time now for our Bloomberg Sports update, and for that we bring in John Stashauer.
Thanks Daron. Week nine in the NFL Underway in Miami, Baltimore got at star quarterback Lamar Jackson back after missing the last three games. He threw four touchdown passes. The Ravens beat the Dolphins twenty eight to six. They'll play Games six of the World Series tonight in Toronto, and the Blue Jays lead the Dodger three games to two. They can win their first championship in thirty two years. New manager of the Washington Nationals is Blake Puterra. He's
only thirty three years old. He'll be the youngest in the majors in fifty years. He started his minor league managing at age twenty five. That's a Bloomberg Sports update.
Stay with us. More from Bloomberg Day Break coming up after this.
Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg dot Com and the Bloomberg Business opp This is Bloomberg Day Breas.
Good morning, I'm Nathan Hager on a very good morning for big tech investors. The big lift of the market after the latest earnings from two of the Magnificent seven, and Amazon is leading the charge after posting its fastest growth in the cloud in about three years, while Apple's forecast for the holidays may be overshadowing some disappointment in China. Joining us now is Dan Ives, globalhead of Tech Research at web Bush Securities. Dan, good morning. Let's start off
with Amazon. We are seeing a big surge in those shares after Amazon Web Services posted a twenty percent year over year growth number. Is that gonna be enough to keep up after what we saw from Azure and Google Cloud this week?
Yeah? Nathan, this is a breakout quarter from Amazon. And you know, did dyben on the outside looking in of the AI revolution and these numbers show they're now starting to see massive demand. And look, the New York City cab driver is embarrass from Amazon.
Right.
So I think this is a huge movement from Amazon, and I think you're going to see the Amazon bulls. They'll be enjoying their candy on Halloween.
Okay, Well, of course, coming into these earnings, we had the outage at AWS. Does that still pose a concern for Amazon investors?
Well, gold standard, the reality is was that a little black eye moment? Yeah, but it's not moving the new relative to Amazon. Look, I think the key here is that the advertising business looks strong, the AWUS business looks like it's accelerated. And for a company that's really been back against the wall, it's a huge breakout quarter. Now, you know, I mean three thirty is are a new price target. But I mean this is a stock that could really have legs over the next sixty nine months.
And of course the shares are trading around two point fifty pre market this morning. Is Amazon justifying the spend on AI? It hit a record in the quarter thirty four point two billion dollars. Of course, we saw all the blockbuster numbers from some of these other AI players as well. In terms of what Amazon is reporting on its AI spend. Is that justified?
Look, it's an AI arms race. They have to spend. I mean, look at Microsoft, look at Google, look at Meta.
Hey.
Look the reality is this is an AI party. Okay, it start at nine pm, it's down ten thirty pm, party goes to four am. No tech company wants to be on the outside looking in, and for Amazon, investors want to see them spend to make sure they monetize this fourth Industrial revolution?
Is Apple still on the outside looking in?
For you?
There's been a lot of talk heading into their earnings and over the last several quarters about how much catch up Apple needs to do in the AI race.
Book from the AI party they're looking through through the window from the outside, right or everyone else on the dance for But for Apple, the reality is iPhone seventeen looks strong. That's a huge positive. And I believe this is a drum roll. They're going to partner with Google for a mejor AI partnership, and that from a consumer perspective, that's gonna be a huge wrap. I know that could
be seventy five two hundred dollars per share. That's why for Apple twenty twenty six, I think is going to be their year.
In terms of what we saw in the quarter from Apple, A lot of focus for investors on the outlook after the kind of a slowdown in China. Is China still a concern?
China actually looks like it's showing met your growth into next quarter because iPhone seventeen the air looks very strong. I mean, i'd call those almost like Otani like guidance for the December quarter, which is why the stock's going to be up. And I think now you're starting to look at the company's finally get back into mojo. You have a lot of good news in the horizon, and
that's why. Look, I think from a large cap perspective, Apple and Amazon are basically saying, don't forget about us, and that was a huge validation what we saw last night.
It was interesting, though, to hear on the call of Apple saying that they're facing supply constraints that have kept the iPhone revenue slightly below expectations. What about the possibility of further supply constraints in quarters to come.
Look, they're trying to do a dance around with tariffs, right, I mean Cook ten percent politician, ninety percent CEO. So we started to advocate that in terms of Trump administration, we've seen that. But there are some supplies shoes. I think a lot of those get rectified going into the
next quarter and the quarter after. This is a company that's had a lot of growth issues nowhere in AI, but it feels like now they're starting to really turn around, which I think that's why, like you know, four trillion, I think we're going to be looking at five trillion dollars mark cap in the next year.
Of course, in Vidio just hit a five trillion dollar market cap just this week, and Jensen Wang, the CEO, is trying to make a lot of deals at the APEX summit in South Korea. What do you make of some of the latest announcements this, for example, a billion dollar investment in Poolside.
Look, I love everything the Godfather of AI Jensen's done, because they're planting flags around the world. This is we're still in the second inning of where this is all heading and it all starts in the video they're foundation to where everything is heading, and they're making the smart moves and that's exactly what they need to do at the right time. And there's one there's one ship in the world viewing the AI revolution and it's in video.
And there's still talk, including from Jensen Wong himself, that he'd like to be able to sell Blackwell chips into China. Do you see that as a possibility that that could be coming.
Oh yeah, I think that's going to be the biggest chip in the poker table when it comes to Trump making sure Nvidia could sell back into China. That's significant. Look, they're not going to go from ninety five percent market share to zero and China big tech wands in Vidia chips. That continues to be the gold standard in terms of where it's all heading.
Our last thirty seconds, Dan, Overall, from what we've seen from the mag seven so far, we've got Apple and Amazon on the rise. This morning, course, Microsoft and Meta fell after their earnings. How do you see how these companies have shaken out so far?
They met the hype and even with Meta selling up, they're sewing up because they're spending more on cap backs, which is ultimately bullets for the AI revolution. Look, the reality is is that this is a tech bow market and the bears in hibernation mode can see AI in the spreadsheets. But the reality is this, this is a market going much higher, led by big tech, and I think that's really the head one that receive from earners.
This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.
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