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Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Karin, the market continues to react to big tech earnings we got after the closing bell. This morning's shares of Meta platforms are surging seven and a half percent. The Facebook owner top projections for holiday quarter revenue and gave a strong forecast for the current period. That's offsetting concerns about plans for unprecedented spending on artificial intelligence this year. Here's met A CEO, Mark Zuckerberg on the earnings conference call.
I think that twenty twenty six is going to be the year that AI starts to dramatically change the way that we work. As we navigate this, our north star is building the best place for individuals to make a massive impact. So to do this, we're investing in AI native tooling so individuals at Meta can get more done. We're elevating individual contributors and flattening teams. We're starting to see projects that used to require big teams now be accomplished by a single, very talented person.
Mark Zuckerberg says Meta plans to spend as much as one hundred and thirty five billion dollars this year on AI.
Meanwhile, Nathan at Microsoft, spending surge to a record high while cloud sales growth slowed. That has shares a Microsoft down more than six percent this morning. Capital expenditures for the fiscal second quarter hit thirty seven and a half billion dollars. That's up sixty six percent from a year ago. And your CEO Satya Nadella on the company conference call.
We are in the beginning phases of AI diffusion and its broad GDP impact. Our TAM will grow substantially across every layer of the tech stack as this diffusion accelerates and spreads. In fact, even in those early innings, we're built an AI business that is larger than some of our biggest franchises that took decades to build.
CEO Satya Nadella says total sales increase seventeen percent and more than eighty one billion dollars in the quarter.
Man Karen, we're watching shares of Tesla this morning. They're up more than two and a half percent in early trading. The ev maker reported earnings above analyst estimates, and in Tesla's call with analysts CEO Elon Musk said the company is discontinuing the Model S and X.
It's time to basically bring the Model S and X programs to an end with an honorable discharge because we're really moving into a future that is based on autonomy.
Elon Musk says Tesla plans to spend twenty billion dollars this year to streamline its electric vehicle lineup and shift resources toward robotics and AI.
Nathan more news this morning on the AI front. The information is reporting in video Microsoft and Amazon are in discussions to invest as much as sixty billion dollars in open ai as part of a major new funding round. This could help alleviate investor can concerns about Open AI's cash burn and.
Karen and Vidia CEO Jensen Wang says his company has not yet received any orders from Chinese customers for H two hundred AI chips. Jensen Wang spoke with reporters earlier today in Taipei.
I'm hoping that also the Chinese government would allow Nvidia to sell in H two hundred.
So they have to decide, and I'm.
Looking forward to to a favorable decision. I think that H two hundred is very good for America. Technology leadership is also very good for the Chinese market.
I wasn't Video CEO Jensen Wang. Chinese officials recently told the country's largest tech firms, including Ali Baba, they can prepare orders for h two hundred chips. Suggests Beijing is close to formally approving imports of components essential to powering artificial intelligence.
Nathan Big tech earnings continued this afternoon, and that's when Apple reports its latest quarterly results. We get a preview with the Bloomberg's Tom Busby.
Apple is boys to deliver its big sales quarter ever, thanks in large part to expected blowout sales of its iPhone seventeen lineup, especially for the higher end models, but investors are still concerned about rising costs for components, especially memory chips, and what sales look like in China, which
declined just three months ago. Bloomberg consensus calls for revenue to jump eleven percent higher to one hundred and thirty eight point four billion dollars, the biggest quarterly growth in four years, on earnings per share of two dollars sixty eight cents. Tom Busby Bloomberg Radio.
Okay, Tom, thank you now let's turn from the markets to get you to the latest from Minneapolis. The new man in charge of immigration enforcement in the city, Tom Holman, is set to hold a news conference later this morning. President Trump sent his Borders are to replace Border Patrol Commander Greg Bevino in a bid to cool the uproar over the shooting deaths of two US citizens by federal agents. The two officers involved in Alex Pretti's killing have been
placed on administrative leave. Meanwhile, President Trump is warning Minneapolis Mayor Jacob Frye he is quote playing with fire for saying he won change his city's immigration policies. In Minnesota, Democrat Ilhan Omar held another town hall last night after a man charged at her with a liquid during an event earlier this week.
I wouldn't be where I am at today, having to pay for security, having the government to think about providing me security if Donald Trump wasn't in office, and if he wasn't so obsessed with.
Me, Democratic Congresswoman il Han Omar. Again, we expect to hear from White House Borders our Tom Holman in a news conference from Minneapolis. It's set for eight thirty Wall Street time, and we will bring it to you live on Bloomberg Radio and on the Bloomberg podcast page on YouTube.
Well, Nathan, we're hearing signs of progress and avoiding a government shutdown over the Minneapolis crackdown. A source style's Bloomberg News that talks between the White House and Senate Democrats are moving closer to Democrats demands. To Minnesota, Democrat Amy klobaschar laid out her demands for federal agents on the Senate floor.
The mass should come up, and the body camera should go on, and there must be throw a objective and independent investigations into these killings.
Along with Minnesota is Amy Klobuchar, Senate Minority Leader Chuck Schumer has insisted that homeland security funds be stripped from the massive spending package that'll keep the government open after tomorrow night. Senators from both parties say they're open to a stopgap measure for homeland security to allow more time for negotiations on immigration enforcement.
Guardrails's turn of the weather Now, Karen, we have more frigid temperatures and the possibility of another winter storm this weekend. Let's get the latest now from Bloomberg meteorologist Craig Allen.
Craig, Good morning, Good morning Nathan, and good morning Karen. New York City right now is at thirteen Boston fourteen, Washington fifteen degrees. So yes, the first thing that we've mentioned here is the coal. The suburbs of all these cities have readings that are in the single digits and the wind chills are also in the single digits to near zero. So you're absolutely right. We are starting off with bitter, bitter coal temperatures again, and this isn't going away.
That's lasting through the weekend for sure. Now, let's break this down by region for the upcoming possibility of a snowstorm. There's definitely going to be a snowstorm across the South Carolina, North Carolina, southern Virginia. How close is this going to get to Washington, d C. Well, there are winter storm watches in effect as far north as the southern parts of Virginia. I think DC could get grazed by this.
I think New York City, especially east of the city across Long Island and the eastern sections of New England will get grazed by it as well. And definitely Boston will be in the works, especially out towards Cape cod so heavier amounts east and south based on last night's weather maps, and lighter amounts off to the west and north. It's still wobbling, guys, so there is still the chance
of going back and forth on this forecast. We'll have more on that as we go through the morning, Nathan, Karen own's good.
All right, Craig Allen, thank you, and of course we will be checking back in with you throughout the morning. As you said, we want to turn to the economy now. Where as I expected, the FED held rates steady, and Bloomberg's John Tucker joins us with the very latest John, good morning.
Good morning Karen. This marks the first rate pause since July, and at his news conference after the decision, heard here live on Bloomberg Radio, Fed shared jer impalaces they're still waiting to see the impact of tariffs before committing to rate cuts.
The expectation is that we will see the effects of tariffs flowing through goods prices peaking, and then starting to come down.
With a decision to hold state rates steady yesterday was approved on a ten to two vote, with the governors Christopher Waller as Stephen Myron dissenting in favor of a cut. Waller's descent in favor of a rate cut seen as keeping him in the race to replace pal As Cheer of the Federal Reserve in New York. I'm John Tucker, Bloomberg Radio.
All right, John, thank you for seeing commodities rally this morning. In fact, gold is up for ninth straight day, surging above fifty five hundred dollars and outs. The rally's been fueled by a week or dollar and investor flight from sovereign bonds and currencies. Spot gold has risen by nearly thirty percent this year.
Time now for a look at some of the their 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. Former New York Mayor Eric Adams is responding to criticism about the budget from current mayor zoron mcdone. The newly sworn in Democratic Socialist mayor argues additional money from the state is necessary because the city faces a fiscal crisis created by Adams and by a push from former Governor Andrew Cuomo to shift costs from the state onto the city.
We did not arrive at this place by accident. This crisis has a name and a chief architect. In the words of the Jackson five, it's as easy as ABC. This is the Adams budget crisis.
And Donnie says over two years, New York is steering at a twelve point six billion dollar budget gap. Adams refuted the claim, saying the city was upgraded by bond rating companies and had ample reserves Under his leadership. President Trump warned Iron to make a nuclear deal with the US or faced military strikes far worse than the attack he ordered last June. Ron said it stands ready for dialogue based on mutual respect and interests, but warned that
it will defend itself and respond if pushed. Police a man repeatedly crashed his car into the Habbad Lubovich World headquarters in New York City. The incident happened last night while people were gathered for prayer of the acidic Jewish site. No one was injured, Police Commissioner Jessica Tish.
This incident is.
Currently investigated as a game crime by the Nypolice Gate Crimes Task Force.
The driver was arrested. Global News four hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr, and this is Bloomberg Karen.
Thanks Michael.
Time now for our Bloomberg Sports update, and for that we bring in John Stashauer.
Thanks Darren.
Fifty nine year old Todd Monkin named the new coach of the Cleveland Browns. He was an assistant once with the Browns, then went to Georgia. Last three years he's coached the offense in Baltimore. The NBA trade deadline next Thursday in the Milwaukee Bucks was eighteen and twenty seven. Their star Giannis So to the compo, currently out with
a calf injury. The Bucks are said to be open to listen to trade offers involving Giannis Lebron James back at Cleveland, maybe for the last time, and the Cavs blew out the Lakers by thirty at your Bloomberg Sports Update.
Stay with us more from Bloomberg day Break coming up after.
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Good morning on Nathan Hager, the AI spending boom is in full swing and the biggest names in big tech are being rewarded for it if they can show it's paying off. This morning, investors seem to think that's the case for Meta platforms. For Microsoft not so much. Joining us this morning is Man Deep Saying, Global head of technology research for Bloomberg Intelligence.
Man Deep.
We heard Meta says it's going to spend up to one hundred and thirty five billion on capex this year. Microsoft just this quarter thirty seven and a half billion Meta shares up, Microsoft shares down. What gives.
Well, So in the case of Meta, I mean, the core business seems to be accelerating, and what they highlighted last night was, look, I mean, we are spending all this money, but we already see some return in terms of our ad conversions, better recommendation systems, and eventually we will be launching separate products in terms of, you know, having an AI assistant that will work within the apps
content generation tools. So the investors seem to have given them a green light in terms of, you know, investing upfront with the hope that they will launch new products that can that they can monetize you know later in the year, So clearly that core business acceleration was key in the case of Microsoft. I mean, it was a
fine quarter. The Azure growth was thirty eight percent instead of thirty nine percent, and what they said is, look, we are using a lot of the GPUs internally to develop our new applications instead of renting them out, you know, on Azure. And from that perspective, they are supply constraint like all the other companies are. And you know, I kind of feel like everyone is, you know, compute constraint
right now. So that's where memory prices are having an impact, and all the things that are going on in terms of the price this is are having an impact around you know, what these companies are able to do around creating that infrastructure. So overall, it was a very good quarter for Microsoft. It's just expectations were slightly higher, and that's where probably the investors stand. Like that Azure print.
So in just thirty seconds, man, deep, how does that set us up for when we're going to hear from Apple later on today?
I mean memory prices. So Microsoft called out how memory prices are having an impact on their Windows sales. So I do expect Apple to acknowledge memory prices impacting their gross margins, and we'll find out if it's if it had an impact on their hardware sales during the quarter.
This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.
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