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The story that does not have any issues with its network is in Vidia again posted a big print last night as a Nora's just reporting, and everybody was focused on the revenue guidance, and they did not disappoint there given a revenue guidance that was substantially above where the street was yet again, and that's kind of all the bulls needed here. So Emily, let's bring in Kun John Sohani. He's a senior analyst. He covers the semi conductors for
Bloomberg Intelligence. He joins us via zoom. He's in San Francisco. Kunjohn, you're the grizzled veteran. You see these semi conductor companies come and go. What you make of Nvidia last night?
I mean, look for any earning surprise from Nvidia is no longer a surprise. We have come to sort of expect this to be a new norm. But there were a lot of positive reassuring things. On the supply side, we saw supply coming up really strong. More importantly, supply getting diversified and the benefits for which we're seen in
their gross margin, which beat the estimates. But more important was the assurance that demand continues to stay strong and they expected to stay strong in twenty twenty four, and not just from the large cloud players. We all are aware of how much money they're spending, but Remand's strength was broad based across their enterprise customers, across different verticals, so that really reassures us for the twenty twenty four What did you.
Make of the CEO's statement that Generative AI has hit the tipping point. I saw that headline and I didn't actually really understand what that meant. So what did you think of that?
I mean, look, it's really Jensen. If you have been following the company for the past ten years, at every junction, that's what his messaging always is in whatever they're working on. So but apart from that, I would really, you know, ask investors to look into the end data points rather than what just he's saying. I mean, he's a very important person right now, but we look at the end
data points. The customers are really increasing their AI spend. Right, the IT total capex budgets are increasing, but the AI portion within that is also increasing. And it's not just at the chip level. The contracts that they have with their software customers, even those customers are guiding up their revenue targets.
Hey, Kun, John, I love their customer list that they read off.
It's kind of a who's who of Silicon Valley, you know, Facebook, Google, whatever their new names are.
What's the next? Is there a next set of customers out.
There above and beyond kind of the household names that we all know that maybe they're targeting.
Yes, an enterprise segment is sort of the new the next area that they're really targeting. Right, They already have the big large spenders, but now they want to diverse if I and expand the reach across enterprises. And the second big target now is sort of governments and reach
sovereign governments and solign wells. Right, that's what they're targeting that they believe AI will be, you know, because of geopolitical and trade issues will be more regional and every big economy will need to spend on that.
Are there any headwinds that investors need to be looking out for, because I just looked on the A and R function on Bloomberg and there are zero cells for in video. There was one last night from morning Star, and now he's upgraded to a hold.
Yeah.
I mean, look, if you look at just what the data says, usually the stock price follows the analyst price targets. It seems here the price targets are following the stock price. When we look at the fundamentals, right, there was really nothing that to highlight as a risk factor in the earnings and really in the near term for twenty twenty four. But if you were, if we were to form a bare thesis, a couple of things that would you would look at as risk factors for the long term. One
is the China risk. We did see China revenue almost reduced by half versus three q in this quarter, right, and we know this problem is not going away, if at all getting worse. So right now they are easily able to offset what they could have shipped to China while shipping to other customers in the US and other regions. But at some point when the demand supply sort of normalizes and the growth rates become more of a normal
run rate. You know, this is taking a bite out of that opportunity that they could have served in China. So that's one risk factor on the long term. The second being their largest customers, which are the cloud players, have started to design their own ships. So again this is far out, but at some point this still takes a bite out of the apple that n media could have served.
So that's kind of where I wanted to go, Ko John, I mean just the competitive environment. You know, can you explain why these guys are the only game in town? That seems odd to me.
I mean, it's not by an accident. These guys were sort of the inventor, if you will, for the GPU. They have been working on a GPU for decades and out investing everyone, being at the leading edge. So you know, this was the same question when we talked about gaming and when we talked about crypto, right the last two waves which drove the growth for this company. It was
not by accident. They have been at this forefront of these new applications where the application suddenly realized, well, GPU is the best case compute platform, and that's why they adopted GP. Same thing what we're saying with AI so
this was not by accident. If you look at that R and D spend, which they guided to being growing by mid thirties next year, it's a significant amount of R and NE dollars they continue to spend and to keep again being at the leading edge of the next cycle of innovation.
Can you talk a little bit also about the gaming revenue here, because I'm looking at your report you said gamings better than seasonal top line, But what was really driving that? Because I actually don't really know if I know anything about in Video's gaming involvement.
Yeah, so the last quarter was if you look at typical seasonality, it would be we expected it to be a down quarter at least by mid single digits, but it came in flat right. So and the strength the reason driver for there was better demand for their RTX products. These are their gaming cards you know in dex stops and what gamers get. So this is what came in better than they had expected due to the holiday season.
Now this is again a temporary move and sort of not no longer a big focus for investors, but that was still good to see that in a typical down seasonal quarters they were still able to do better than seasonality.
Could John talk to me your your investment research channels. You care about valuation, It's not just all hype for you. Give us a sense of how this stock is valued. It's up a good jillion and one percent. Don't we have like concerns about value here?
Yeah, we do. Just like any other stock which has a premium valuation. We do one thing that gives us a little bit comfort. Now, like when you look at the valuation multiples now versus as it says six months ago, they have come down to a sort of now it's a reasonable premium above socks and in sort of in line or slightly better than it's peers. And look, it is still the fastest growing story in same as it is at this size. It is still the de fact
on name when it comes to AI. As of today, it is taking almost entire wallet share of AI spending, so it does deserve that premium.
We're about to speak to the executive director of the Port of Los Angeles YEP in just a few minutes, Gene Soroca. So I imagine we're going to be talking about the supply chain. Could you give us a sense of how Nvidia is dealing with the snirled global supply chain, any challenges there.
They have done an absolutely amazing job at bringing up supply right the last year, for every quarter, the biggest concern was not demand but supply, because usually when you try to bring up supply so fast so quick, you do run into hiccups. We didn't see any hiccups throughout every quarter last year. In fact, you know the gross margin upside. A key driver for that was lower component cost. And what we did from that is that they were
able to get more suppliers online. They were they were able to expand and diversify supply and enjoyed the benefits of the pricing that comes with it. So they've done an absolute amazing job bringing up supply this quick.
All right, So in a chip space, the play here for AI is in Vidia. Is there a number two play that I can try to, you know, jump onto?
I wouldn't. I cannot commend of regarding the valuation, But from the fundamental point of view, A couple of other names we really like in terms of AI and Semi's are a MD and Broadcom and to some extend, Marvell.
All right, Kunjohn, thanks so much for joining us quon John Sabani, Senior analyst on semiconductors for Bloomer Intelligency, joins us on Zoom from San Francisco, and again, just a great print out of in video and that's something that the stock had to have because it's up over two hundred and forty percent over the last year, and it's up, you know, fifty percent.
Year to date, So that was a high bar.
Of expectations for the street. And stock's up fifteen percent on the print. So market's tonya. They like what they heard last night.
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It's all about Nvidia today, up fifteen percent, taking the markets high. Our next guest had this name on our list, so I'm guessing a good good day for her. Shana Sissel, president and CEO of Van Ryan Capital Management, joins us via that Zoom thing also the Internet in Chicago, Illinois. So Shana, thanks so much for joining us. I know in your notes, you had up in videos one of your names A y. I think I understand now, but what do you make of the quarter last night?
So I've followed in video my entire career. When I first started in the business, it wasn't even in the s and P five hundred, but it traded in a very like predictable pattern, So it was just a stock I kind of clung on to when I was learning
the ropes, and I've followed it ever since. In twenty seventeen, I attended a private equity conference where every single speaker talked about how important in video was for you know, artificial intelligence, autonomous vehicles, data centers, and I thought at that time, like I should own this stock. And I've
been a bull ever since. So I've been pretty happy with how the stock's done, and I keep trying to come up with a barecase because I'm one of those people that if it's too good to be true, there's got to be something wrong. And I still haven't been able to come up with a really solid barecase for the stock. I'm not surprised by their killer earnings last night. They've been doing this now for several quarters, and it seems like they are the rocket ship that's keeping the market, you know, afloat.
So what do you tell someone that, unlike you, has not owned in Vidia and is just looking at the stock now and the earnings now and thinking, oh my gosh, should I should I buy this stock right now? Is this a time that you know, people can be adding more to Nvidia and maybe entering the position, or is it more a time to be holding on to what you already have.
Well, I've always people ask me this all the time, and I'm always hesitant to say, yes, buy it at this entry point because it feels really frothy. I know I'm personally not adding to it, but my cost spaces is like two hundred and fifty dollars, so you know, and that you know, I have no reason to at this point. It's hard to say. The momentum is there, and I don't think there's anything that's going to be
a headwind to the stock in the near future. We're really early in this artificial intelligence trend, maybe second inning, and so I think that there's a real possibility this stock could be, you know, twelve hundred dollars a year from now. So I don't think it's a bad idea if you don't have a position to enter it now. But I would be careful and maybe look for buying it on weakness, like I would have bought it ahead of earnings when it was at six fifty as opposed
to today where it's really benefiting from the news. I might look to find some good entry points. But it's hard because every time I say that, the stock just keeps going up, and then people get mad at me because they missed the opportunity to buy in when it was cheaper.
Shane, how about Cisco.
That's kind of what I consider kind of a you know, old school tech name here, and I look at the over the last five years and it's had a compounded annual growth of about only about two and a half percent, with S and P up about fourteen and a half percent compounded. What's been the story at Cisco in terms of its underperformance from your perspective.
Well, primarily it's been that they just haven't kept up with the trends. The technology that they provide isn't relevant to a lot of the latest and greatest trends like artificial intelligence. But they're trying to pivot and become more
relevant and the stock is really cheap. So in my opinion, it's a stock that I've looked at and I own a small position, and it is a stock that I do like, but it is a stock that I don't know if I'm completely a bull, but it's just so cheap and they are trying hard to become more relevant in the space that I think they have an opportunity to at least improve their growth rate going forward, which
should help the stock. It's trading at an ridiculously cheap multiple, especially when you consider tech as a whole, So I don't think there's a ton of downside in the stock, but you know, I'm still not sure it's a go to the moon like Nvidio kind of thing, But I do think there is an opportunity with the management chain really looking to focus and pivot the business to be more relevant in current trends today.
What are you looking at in the pharmaceutical sector?
So I really like Novartis and Veritex's pharmaceuticals. You know, one of the things that I find really interesting is if you haven't figured this out yet, I like looking at what the new emerging trends are, what's going to be the thing that you know, changes the world going forward. And when you look at drug development, there's really interesting things going on right now, especially in things like cancer research. So Novartists in particular has some absolutely groundbreaking oncology drugs.
And the speed at which we're seeing new drugs come to the market that are really changing the game and cancer, where it's changing cancer from you know, a terminal illness to more like a chronic illness is remarkable. Novartis is kind of at the forefront for that. In the case of ver attacks. They have a very strong cystic fibrosisline which really doesn't have any competitors, and they really are trying to focus on those key areas where they have a true edge. So those that's why I like those
two stocks in particular. But you know, we have like Nova Noordis and Eli Lilly who are benefiting from, you know, the ozembic trends, and Eli li also has some great oncology drugs. It's just a little pricey right now, which is why it's not on my list.
How about energy here, I'm looking at WTI crude oil at seventy eight dollars per barrel. How do you think about the energy space here. The stocks have been quite good over the last several years. Hey, what do you think going forward here?
Well, inflation has helped energy stocks, and if you looked at the latest PPI and CPI numbers, energy was one of the main reasons why some of those numbers are one of the only areas that we saw decline in inflation if you look at it with energy and food. So obviously gas prices have come down. That's good for
the consumer. And so I don't know if there's a huge till end to the entire sector, but I do like a stock like saying like Diamondback Energy because they don't need oil to be one hundred dollars a barrel to have good revenue and good profitability. I think their break even is fifty dollars a barrel, and so there's quite a bit of opportunity for a stock like Fang to do well in an environment where other energy companies aren't doing as well.
Paul, I don't know if you know this, but Shana actually has a nickname. It doesn't have to deal with single stocks. She is also known as the Queen of Alternatives. Oh nice, So let's get your perspective on the outlook for alts in twenty twenty four. Is there anything in particular that jumps out to you as attractive for this year.
Yeah, I think that. You know, we've spent a lot of time over the last couple of years being really excited about that venture capital and private equity space, and we're not seeing as much of a tailwind in either one of those spaces right now. Private equity has not performed as well as the overall public markets, and venture capital has a ton of headwinds to it. So you
gotta think a little bit outside the box. And there's areas in the alternative space that I think are really interesting, some of the more diversifying kind of names in the hedge fund space, like equity market neutral, some event driven things of that nature. But also if you look at private credit and private debt in the environment we're in now,
where I think we're at peak interest rates. I'm not saying that I think the Fed's going to cut anytime soon, because I don't think that, but I do think there's better opportunity for yield than some of the private credit and private debt markets because banks as a whole are not as open to smaller businesses and to startups and things of that nature. So they're going to other markets, and the biggest beneficiary of that are private debt, debt and private credit.
Yeah, that's certainly been just a tremendous area of growth really over the last ten to twelve years, private credit. As you know, the banks have kind of pulled back after the posts after the financial crisis. So a big, big market there. Shanna Sisso, thanks so much for joining us. Shana is president and CEO fan Ryan Capital Management. She joins us via zoom from Chicago, Illinois.
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Ye boy, it is Nvidia day.
To say, the leases impacting not only at stock that sector, any overall market.
Here.
Let's get some perspective on it as only one b rid Holts can do. Barry Ridolt's host of Masters in Business on Bloomberg Grit. It's a little podcast like a jillion people will listen to every week. He gets great guests but his day job, he's a founder of a rid Holt's Wealth Management. Barry, I mean you and I we've been in this market a long time. I'm struggling to find a stock that had such an impact for such a period of time as in video.
What do you make of it?
Well, you know, I'm always perplexed when I see people sort of shrugging off new technology, new companies, shifts in how we operate. We should just stick with the you know, imagine someone in the nineteen twenty saying, what's with these new fangled you know, telephone and radio and aueomobiles. Let's just stick with the steam and leather belt companies. They've done great for so long. Hey, you know, technology is how wealth is created, how society moves forward, how humans
dominate the planet. And it's pretty clear. Yeah, there's a lot of hype. I'll go back to computer companies in the eighties or automobile companies in the twenties. I can't tell you which of those companies are going to be the winners. And there's always hundreds of them, remember Gateway Computing. But somebody out of that complex is going to be a big winner, and it's going to drive a lot of the economic activity that takes place.
Barry, what have you learned from in Video's earnings in terms of whether Nvidia is going to emerge as one of those winners. Paul's been asking pretty much every guest on this show today, you know what makes in video so different? Why are their chips attractive to so many corporations versus IBM's broad cooms. So where are we right now in terms of assessing weather and video is really going to emerge as one of these winners?
Aig so caveat. I'm not a semiconductor analyst. However, if we look at the history of chips and how they've developed over time, at one point it was all Intel and nobody else had a whole lot to say. Then
we started looking at more complex calculations. We went from reduced instruction sets to more complex to floating point, and then it was graphic generators and games and then mobile and so there's this been this progression, and along that progression in Vidia has been extremely innovative and ahead of the curve from their bigger competitors, or at least once bigger competitors. You can't can't say that anymore. And so
this is all about GPUs and cycles. I'm going to tell you what I think a lot of people are afraid to say. I have no idea if Nvidia is ultimately going to be the winner ten or twenty years from now. The technology changes so quickly, the upstarts come along and disrupt the environment so much, it's very difficult to make that be that said, go back. You don't even have to go back twenty five years. Go back
five years, and video was that disruptor. I can't tell you who might be the disruptor to in video or if they're going to dominate. Very few companies dominate for decades. Look at Microsoft as an example. That's the exception, not the rule. We've gone through Armholdings and AMD and Intel and Qualcomm and one semi company after another. So it's really really difficult to make that bad.
So Barry, I would say, you can correct me here on the number of years here, But it seems like for the last twenty plus years tech has been leading this market.
Is there any scenario why why shouldn't that be overweight Tech long term? And just no scenario is there?
So first let me correct you. It's not twenty years. It's forty years, right, go back to the nineteen eighties.
Well you're a lot older than me Berry's.
So you move from from mainframe computing to desktop computing and the rise of software with that, and then eventually you moved to gaming and mobile, and now AI is a software that's driving a lot of this. You know, what we think of as a separate space of technology. I love to look at the books about investing from like the early twentieth century, and they talk about telegrams and telephones and rails the way we talked about chips
and software and internet. You know, in the nineteen thirties, forties, fifties, there were no telephone companies other than ma Bel. Everybody used a telephone. So the way we describe internet companies, I think that's going to fade and everybody's going to be an Internet using company. Everybody is going to end up being an AI company. The question is are you
providing the picks and shovels? Like, it wasn't the the you know, the gold miners who got money, who got wealthy, It was the company selling them dungarees and picks and shovels. And so we kind of think of Nvidia that way, that's the appeal, But that's a long way to answer. I'm not uncomfortable being overweight technology. You want to be a little you know, advantageous in the way you purchase it. The one thing that is so counterintuitive about all time
highs that we just reached. All time highs tend to be very bullish and historically have done well.
Before we let you go because of your extension age.
The Nike all time high since nineteen eighty nine, that's perspective.
Isn't it that that's bullish and and you know people have a tendency to look at last year is a perfect example. Oh my god, the nasdak up fifty percent, the SMB of twenty five percent. You have to have context and say over two years, twenty two and twenty three, those in the seas are flat. So as much as it looks like we've come too far, too fast, you're really just making up. Kind of reminds me of you know, the rally in nine to ten, making up the losses
from seven oh eight. So Japan is a whole nother world.
Our friends until could deserve a shout out. I mean, it's been nineteen eighty nine.
Good for them. Remember Barry, back early in our career.
You had to be a part of that whole Japanese market and then boy for just nothing for a long time. Barry Ridolts, host of Masters in Business on Bloomberg Radio. Great podcast, go check it out. His great guests every week, some of the leaders in finance. It's also founder of rid Holts Wealth Management. Some good stuff there.
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You know, during the pandemic Emily, one of the economic issues that really became apparent is supply chains and how you know, susceptible supply chains are to disruptions and boy shutting down the world's economy and then reopening it creates some disruptions. And one of the people we leaned on for kind of analysis and explanations about how this whole thing works is Jeene Soroca. He is the executive director of the Port of Los Angeles.
Yes, that port.
The Port of Los Angeles is one of the world's busiest seaports and the leading gateway for international trade in North America. So Gene was so good to us during the pandemic and the logistics and all the stuff you had to worry about supply chain during that period. So we appreciate getting some of Gene's time. So, Jean, I know we're back to normal. I know you guys in the Port of Los Angeles settled your labor issues last year.
Talk to us about global trade. What's it like in a day at the Port of Los Angeles? Died these days? How's business Paul Emily, Good morning.
Business is really good. We're running it about seventy five to eighty percent of full capacity at the Port of Los Angeles. Anything butt normal though around the world, with issues in the Panama Canal, with respect to drought in the Middle East, with concerns around safety and security, and broader looks at how this US economy is going to continue to propel itself thanks to the American consumer. So
let's start off with where we're at right now. Six consecutive months of growth, the second best January ever up eighteen percent compared to last year, and our first quarter outlook is it about two point two million containers or twenty percent year on year increase compared to Q one of last year.
So how would you assess then, the overall health of the global supply chain relative to what we saw during the pandemic, because, like Paul said, it seemed like everyone was suddenly talking about the supply chain and where are we relative to just a few years ago.
Emily, I think we're in a lot better shape. We've learned a lot from what we saw then too, But we're front of mind now to so many people outside our general industry, whether it's us looking for our packages, what's on the store shelves, or just the general consciousness about how this port supply chain and trade business impacts economies and jobs around the world. What we see in Los Angeles is that there are a couple things happening
right now. The stability of that labor contract has given us about a four percentage point boost in market share, So some of that cargo that we lost during the protracted negotiations has started to come back, not all of it. Much more work to do, but good trajectory now with the Panama Canal suffering drought and the concerns of safety
in the Middle East. With respect to the Hoothy going after the ships and the cargo and oil tankers, you're starting to see more cargo shifted our way, not services being collapsed, not new vessels coming in, but higher levels of capacity and utilization, and importers and exporters saying I may not want to take that much time, but the bigger difference is the gap between cargo that's moving east and Gulf Coast versus the West Coast is wider from
a freight cost perspective. That's important because we're right now in the middle of our annual contracting season for freight.
All right, So right on the Port of Los Angeles on the West Coast, you probably have the best of you of anybody trade with China.
What's what's it like now?
What's your expectation for that important route of trade coming from China to your port.
Paul, it's still our most dominant trading partner. Fifty three percent of Port of Los Angeles business is with China.
Now.
That's down from fifty seven percent at the end of year twenty twenty two, and it may drop into the mid forties as many supply chain executives are continuing with their China plus one strategy, looking at other locations to source and produce goods in. But still forty five fifty years of supply chain relationships exist. You don't tear that apart overnight.
Just the other day, the White House said that they were concerned that more than two hundred ship to shore cranes at US ports are manufactured by China and can be serviced and programmed remotely, creating a cybersecurity vulnerability. What did you make of those comments? How legitimate are the White House's concerns?
It's also very important to us. The Port of Los Angeles, Emily was the first in the nation to create a cyber security operations center back in twenty fourteen with the help of the Department of Homeland Security. Today that system is stopping more than sixty million cyber intrusion attempts per month. It also gave us awareness to create a cyber resilient center. Also one of the first in the world to bring in the private sector partners with US that co helped
with the IBM folks. It has now stopped to have a dozen cyber intrusion attempts to private sector interests that they were otherwise unaware of. So this work must continue.
It gives that up there. You mentioned the Panama Canal.
Fascinated by the Panama canaw I read a.
Great book on it. I'll fundy author later.
It's phenomenal how they built that thing. So what's wrong with the Panamac There's a drought and so the water levels are lower, so they're not taking the amount of freight they typically take.
That's exact lead it. And you think about a vessel at full capacity. They can't load to the top, and the transits through the canal are down some twenty three percent according to published reports thus far this year. Now the port authority folks switched on. They're railing cargo from the Atlanta from the Pacific side to the Atlantic for onward carriage to Europe and North America. But it's just not enough. And that's that's why this capacity issue is so important.
The path between the seas. David McCollough, that's the book phenomenal about the history of the Panamakete.
It's a weekend.
It's more than a weekend, it's a beast all right, So, Gene, so is your business, I mean it's a GDP business? Is that how you kind of plan it out here? And so do you get a sense of are your customers are they telling you? What are they telling me about their sense of the economy?
Broadly speaking, most are upbeat. Seventy percent of our GDP is tied to you and me buying goods now. Although the consumer purchasing was down a little bit of Jamanuary, it was not unexpected. Great sales for the holiday season nearly a trillion dollars up three point eight percent last year. There was going to be a little bit of a
lull in January, but the forward look is strong. The Atlanta Fed is currently estimating first quarter GDP around two point nine percent, healthier than SIT expected, and fourth quarter GDP came in beyond expectations. Again, what we see and the forward look is an order cycle that runs about six months ahead of when we actually buy things in the store online. That inventory flow is a leading economic indicator. Appears good.
So, Geene, I'm the captain of this big monstership. I got my containers all over the place.
At how they don't fall off?
I have no idea I come into your port, how long am I there before I get back on my way.
I look at these vital statistics as I call on Paul every morning, and we're at or better than when we were pre COVID. The largest ships that come into the Port of Los Angeles average twelve thousand containers on and off, best in the industry. Every call four and a half days is the amount of time a ship is in port working. That's right where it should be.
All right, So I just I think those things.
All my bucket list is to go on a cruise on one of those big things. And then when every time I say that, every time I say that, people will email in says that you.
Do not want to go in one of those strips because it's not like.
You're going on to the Queen Mary or anything. It's tough conditions for those folks that work on their ships. Gene Sroka, thanks so much for joining us.
Geen S.
Troka is the Executive Director of the Port of Los Angeles. Joining us live here in our Bloomberg Intreactive Broker Studio. Appreciate getting some of his time. He was critical and helping us kind of understand the global supply chain back in the day when that was front.
Of mine for everybody.
Everybody kind of had to get smart on that.
Oh yeah, I mean even just friends and family were bringing.
The first time I noticed it during the pandemic because when I went in to get a bicycle and then Guy's like, no, they all come from Asia. Done, it can't get them.
So I recently ordered a couch and it still took like two months.
To get to Yeah, exactly, exactly, so global supply chain.
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There is another big company out with a really good print on their release that was Moderna. mRNA, the pharmaceutical company put out some good number. Stock is up about nine percent today. This is a thirty billion dollars thirty six billion dollar market cap stock and this is important company. It's one of the companies that delivered the COVID nineteen vaccines. So always have a special place in my heart for sure, along with a couple of others. Sam Fizzelli, he covers
his stock, he covers his sector. He's a director of research for Global Industries. He's a senior farmer analyst, one of the best in the city of London for Bloomberg Intelligence. So Sam, looks like a really good quarter for Moderner. What stood out for you.
In Nvidia stood out for your pole.
After two days of shenanigans in the walket's about how high numbers? Well, but anyway, we're not talking at any video has nothing to do with me.
Well, they're not.
Clearly they beat in four Q. I mean were they were? They given guidance and LISTA followed the guidance. They were looking for a certain number and then four Q beat as like I said on the terminal in MDL twelve point four percent, right, and they turned the profit a small one in four Q.
So that was particularly good. The thing is it's just one quarter.
It doesn't really change the dynamic of what's going on in twenty twenty four to twenty twenty five and beyond.
Tell us a little bit about that dynamic as you look ahead for Maderna, how exactly are they pivoting away from being a company that people see the name Maderna and they just think COVID.
Yeah, so they've got a lot going on.
They have one more COVID sales potentially coming up, you know. Apparently they've told us today that the European Union is looking for contracts for thirty six million doses per year in the next few years. You know, that's a lot of doses. And this is always the question here right this European Union. They don't like to pay for much, as we all know. So then they've got a vaccine for RSV, which is another respiratory virus pretty much a major issue in younger kids and older adults. Then you
have a flu vaccine that's in development. They have a CMV vaccine, which is not an infection we talk about very often, but it's an issue for newborns, particularly if the mother's got the virus. And of course in the oncology setting in cancer, they've got a trial that has been successful. Now they're trying to figure out whether they want to they'll be able to file it this year for melanoma. So quite a lot going on. Twenty twenty four is a pretty important year.
For this company.
So I want to go to that cancer angle, sayings, I know you've talked about that before. Is this something where the mRNA technology can be which works so well for delivering the COVID vaccine, maybe this technolo you can be used to deliver other therapeutics, like perhaps for cancer.
Yes, so in this case it's still being used in a kind of a vaccine setting. They used to call it personalized cancer vaccine, where they changed it to I and T individualized the neo antigen therapy. I think they wanted to get away from the word vaccine, but in reality, what they're doing is they're using bioinformatics and systems that they've been doing. And I just want to plug a podcast that my colleague Man Deep saying and I did talking to the head of AI at moderna and as
the Tech Disruptors podcast. I was honored to be invited first time RAPP for the first time. Yeah, and then so we had that conversation. We talked about what they're doing, and one of the thing that they do is that they identify new things in the tumor of the patient and use that to create an m R and I injected back in just as if it was a COVID vaccine shot to.
Raise any new in response.
And that's partner with with merk sorry, and you know it's it's shown some really interesting data in first phase two, so the hope is that it will continue to show strong data in phase three.
So, Sam, did you just say that Moderna is leveraging AI. I'll definitely have to listen to that podcast. But they're using AI.
Is there a company that's not? I mean, isn't that why n video is going to the sun? Forget the move We passed the moon already, right, you know, is there a single company if you do a search for you know, we have a function on terminal which is quite cute, which is nt that you can look.
At mentions of words.
I think you'll find that AI in transcripts from calls earning scolls is I don't think there is an earning scoll during a year that hasn't mentioned AI.
Every company is using it.
Sam, let's step back from just Moderna per se and just say what in your space is kind of really the most exciting for you?
Is it?
Is it cancer therapy, is the dementia? What are some of the big areas that you're seeing a lot of money being spent and you're spending some time looking at.
Yes, So Paul, I think with what's going on in pharmaceuticals and drug development and drug discovery and the pace of science, frankly, I can pick any area.
Maybe CNS.
The nervous system is a little bit more more because of the black box and the complexity that has. But even that is seeing very interesting developments. As you've heard about Alzheimer's is from ELI lily from biogen.
In cancer, there isn't a single cancer that.
We're now, as you know, we're doing deep dives in cancer across the board that I look at that there isn't some innovation coming and more innovation coming. Then you go to immune inflammation and immunology, you know, XMI, et cetera. A whole bunch of this is all the fruits of two things, genomics and the ability to sequence the you know, really cheaply, really rapidly.
That's what's come together.
And then of course you got bioinformatics next to it that enables you to analyze that massive data set.
We don't have a ton of time left, but I am curious when you compare the results that we got from MODERNA. How are you thinking about MODERNA versus its competitors, I'm thinking.
Piser, Yeah, so you're thinking Pfizer, BioNTech. I mean the you know, Pfizer obviously has a lot more going on than just COVID vaccines. Biontic is probably the one to look to look at, So it'd be interesting to see.
What they report, Bob.
We kind of know already what they're going to report because they get the revenues from Pfizer, and Pizer has already reported, so I don't expect any fireworks there. Of course, with biontach is a slightly different approach to taking a challenge at tackling their future.
They've gone much more broad than MODERNA.
MODERNA is pretty much stuck with its m r n A capabilities. Biontic is expanding rapidly.
Emily sam is a well known wine enthusiast who lives in France.
He's usually not impressed with the wine I drink, but I think I got him last time. Are you foot thousand Chateau Rothchild? How good was that?
Yes?
Shield well done? I mean and drinking it out of a plastic cop Yes, at a.
Brooklyn Nets game of all places. So that's kind of how I roll. Not quite in the circles that Sam rolls in in London, in the rare confines of France, but that's kind of how I do it. Sam Fazzelli, thanks so much for joining us. Sam Fazzelli is the director of Research for Global Industries. He's also a senior pharmaceuticals analyst for Bloomberg Intelligence. He's becoming a pharm of
space in the city of London for decades. He was absolutely instrumental during the pandemic pandemic helping us understand the virus and then just as importantly, maybe more importantly, understanding the vaccines and the companies and what they were doing there. So that was a critical so we appreciate his time today.
This is the Bloomberg Intelligence podcast, available on Apple, Spotify, and anywhere else you will get your podcasts. Listen live each weekday ten am to noon Eastern on Bloomberg dot Com, the iHeart Radio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal