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Norma, Linda, Paul Sweeney.
We're live here in on our Bloomberg Interactive Broker's studio. We're streaming live on YouTube as well as to check us out there as John's just reporting met a big, big earnings numbers last night after the close, stock up eleven and a half percent here today, all time high, fifty two week high, whatever you want to look at it. We're on a two trillion dollar market cap watch here one point ninety five trillion as we speak. Let's check in with Kurt Wagner, tech reporter for Bloomberg News. He's
in Denver callout and he's worked out this scam. I have no idea how he did it, but it's a good gig for Kurt. Kurt talked to us about Meta here. Some people feel like, you know, it might be a little late to the AI party.
I don't think that, and I.
Don't know Zuckerberg was talking pretty guestly about the spending there.
What'd you take away.
I don't think they're late at all. I don't think that they have offered some of the same products that some of their rivals like open Ai and a topic have at Google. So they have been building AI models for you know, basically a decade.
They mostly kept them in house.
They use them, you know, in this case, they've been talking a lot about how they're using them to improve their own ad targeting and their own content recommendations. And so while they're not out selling access to their models and the way that rivals are, they're still building them.
And you know, clearly the street's very happy with what's happening here, which is that their ads business, which is powered by Instagram and Facebook, is just a cash printing machine and they are taking all the profits from that and they're you know, funneling them into AI. And yesterday we saw that the ads business is doing better than expected and they're spending even more on AI, and that is a combination that people seem very happy with right now.
Well, Kurt, even if there are people saying that Meta is late to the AI party, if you look at shares year to date, and you compare it against the others in the mag seven we are seeing it as the best performing stock, the second best performing stock, right behind Nvidio. What do you think is really propelled it forward to that magnitude here?
Well, I think there's a couple of things. One, there's the Mark Zuckerberg factor of this. You can love him, you can hate him, but Mark Zuckerberg has a pretty strong history of you know, quite frankly, reaching the largest audience with his products. That is something he's done repeatedly throughout Meta's history, and he has sole control of this company. So if you are a believer in him, you are a believer in Meta right now. And I think that's
one factor. And then I think the other is you know that reach matters a lot when you're talking about AI because when you build in this case, Meta AI is the name of their chatbot. They have put it into Facebook, Instagram, WhatsApp. It already has a billion monthly users simply because they have that existing audience. So where a lot of companies are building these AI products and then trying to find the audience for them, Meta already
has the audience. So when they figure this out when they know if they're ray Ban Glasses, for example, take off in the way that they hope they will. They have the built in online audience already for these tools, and I think that that's something that a lot of people are optimistic about.
Kert. You mentioned WhatsApp wall.
I think I was covered in stock when they bought WhatsApp seven eight years ago. Are they finally starting to monetize whatsappen?
So how are they doing it?
They are starting to monetize what's up? They announced in June that they're going to start running ads and WhatsApp for the first time. If you're a history buff in terms of following Facebook history, you'll know that that's been a long time coming and there's been a lot of bumps and bruises along the way and get in there. But I will say the CFO, Susan Lee, she did warn yesterday in the earnings call that even though they are putting ads into WhatsApp, this is a long road.
It is not going to be a material impact for the business in terms of revenue or ad impressions for the next few years. They're going to start slow. I think that makes sense for a couple of reasons, the first being that WhatsApp is popular in a lot of regions that aren't necessarily lucrative in terms of advertising. You know, India, Brazil,
places like that. And then a second you're kind of trying to convince advertisers to shift budget perhaps from more lucrative things like Instagram or Facebook, and so I think it's going to be slow for people to maybe move over their money towards WhatsApp. But again, fast forward a few years from now, I think there is obviously potential here. That app has multiple billions of users globally.
Kurt, It's hard to be a bear here on this stock. I'm looking at Wall Street ratings right now, seventy four people have a buy. We have five holds on the stock and then one cell and that's coming from BNP Paaraba. But if you really had to dig in and see what the overhas could potentially be here for this company, what would you stay or some areas that investors are looking to see a bit more of a push forward.
Well, I do think the spending is a lot and so while the ads business continues to chug along, people are going to say, Okay, that's fine. If there is a stumble in this ads business, you know, heading into the holiday quarter or something like that. Suddenly people might start wondering why are they spending so much if the ads business isn't delivering.
So that's one.
The other is their reality labs division, that's the Quest VR headsets, things like that. That is a loss leader. I believe four point five billion dollars in losses just last quarter alone. They also mentioned on the call that Quest sales were down year over years, so that's a concern I would imagine for some people.
Kurt, thank you for reporting. Appreciated.
Kurt Wagner, Tech reporter, Bloomberg News in Denver, Colorado. I'm never driving I seventy again, up to the downs again. I made that value or so good.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Applecarplay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
All right, let's stuck a little bit healthcare here, Eli Lilly. I mean, it's always about, like the OBCD drugs, who's the winner, who's the loser, How big is the market.
App but there's a lot more to talk about. I don't know Damian Guardet. He joins us here. He's a healthcare reporter.
Eli Lily, the blockbuster diabetes drug Monjaro fell short of expectations that it would do a better job by preventing heart attacks and strokes than its older medicine, Trullicity.
Is that a promiming Dabian It depends on how you look at it, but it does underline I think what you mentioned that the bar is so high for these medicines, both commercially and clinically.
So what we learned today.
Lily ran a study comparing Manjaro, the newer GLP one combination medicine, against its older GLP one called Trullicity, to determine whether it worked as well in preventing heart attacks and strokes. And the good news is the study met its goal. It proved non inferiority as a scientific term, which is to say it did just about as well
as the older drug. The bad news, through the lens I think of a lot of investors, is it didn't prove to be superior, which was kind of the if not expectation, then kind of hoped for outcoming.
So what's the biggest business here for Eli Lilly, I mean, is Manjarro one of their front running drugs that we're talking about here.
It is so Monjarro is it's a little triggy because it's the same basic medicine, but when it's used for diabetes they call the drug Manjarro, and when it's used for obesity they call it zep bound. But it's the same scientific molecule underneath at all. And that combined is by far Lily's biggest growth driver, and.
It's a medicine that is in demand.
It was until relatively recently in shortage officially, and it is definitely paving the path to Lily becoming the most valuable drug company in the world. And it's also outpacing Novo Nordisk, the Danish company that really invented this market that's also had a lot of unfortunate news in recent years. Lily is lapping the competition there and is on pace, it's assumed to kind of dominate this market at least in the near termal So, some imoking.
At the PGeo function in the bloomber terminal, it kind of breaks out kind of where the revenue comes from either by you know, business line or by geography. Cardio metabolic health, that's their biggest revenue line.
Is that the obesity stuff. Yeah, that's inclusive of obesity and DiPT.
I mean look at this, let's go twenty twenty one, that at thirteen billion of revenue.
Okay, good business.
Twenty twenty four it had about thirty billion business expected to be forty three billion this year, fifty two billion next year.
Holy cow, that is out of control growth. No wonder they're so valuable.
Well exactly, and it's I mean, that's what we've demonstrated, what Lily has demonstrated in sales just with the products
that it has on the market. But I think when you look at the company's valuation, what's being priced in is assumed to come oral golp one, So they would have asks what we're talking about that could win approval next year at the earliest, and that is likely to both be a massive commercial product for obvious reasons, but really like democratize this therapeutic category because these are all injectable medicines that we're talking I am as.
The injector of this medicine on another person, which I enjoy. I get a cocktail out, we make a little party of it. But the oral thing that's going to open up the market like crazy, I would think there's probably a lot of people that don't want to don't.
Enjoy doing the shots. I mean, a lot of people don't like needles.
Yeah, and it's also going to probably diversify it. So a lot of the focus on these medicines is what percentage.
Of weight loss do they drive?
It could get it up to twenty five percent, for example, but for a lot of people they don't need to lose twenty five percent of their body weight. The pill seems to have a lower percentage body weight change. But the assumption is that there's a huge demand for that, and that when there's a multitude of these medicines, the heavy duty ones versus the lighter ones, then you could really meet a lot of the demand that people need.
How about all the other stuff in the world, Like, I don't know, cancer, dementia, Where's where are they in that?
Yeah, we're Lily in that type of thing.
Well it Lily particularly does have an approved medicine and for Alzheimer's disease and a lot of drugs for cancer mostly in the pipeline that's been a major investment of THEIRS. But one thing that's notable about the golp ones, not to pull it back there, is that we've seen that in the long term, as this study demonstrates, it reduces
the risk of heart attack and stroke. But likewise, there are observational studies tying it to reduce risk of Alzheimer's and of cancer, which follows reason in that these drugs basically make you eat less and in many cases drink less, smoke fewer cigarettes. These are things that we know our behavioral changes that prevent cancer, heart.
Attack, and stroke.
I think it's funny that these things came out at the same time as gummies came out, just saying.
Well, I mean I think that there's there's well maybe there's a correlation there right, just need to find it. But I mean, when we think about this company, how are they in comparison to competitors right now? I mean, this is a massive company here.
Yeah, Lily, I think HAS this is a long term, dating back about a century investment in diabetes research that Lily Has and the GLP one medicin grew out of. They began as diabetes streatments before they were discovered to have such profound effects on obesity. So I think Lily would say this is them carrying on the tradition, and their market cap and all of these kind of superlatives we can fix to them are just the markers of a success that they set in motion in years past.
I would say other major American drug makers look at them with some envy and perhaps occasionally resentment, because they and Novo Nordisk are the leaders in GLP WAN Pfizer, Johnson and Johnson, Bristol, Myers.
Squib Merk.
All of the heavyweights of this sector missed out on that first wave of BCD drugs that have really driven the success of the industry in.
Recent Here and I'll tell you this is how you see it, nor you ask that question kind of where do you see the difference here? How about valuation on twenty twenty five estimates. This is on the BQ function, folks, And this comp sheet is curated by Bloomberg Intelligence, so you know it's right. It's the right comps and the right numbers. That's what the bi folks do. Four on
twenty twenty five numbers. ELI Lilly Stock is trading at thirty four times earnings, the rest of the peer group fifteen times, so more than twice the valuation Wall Street is giving to Eli Lilly versus the other big cap names like you know, Johnson and Johnson at ev Murk. So just extraordinary there, Damian, thanks so much for joining us.
Really appreciate the reporting there.
Damien Gardeve, healthcare reporter our Bloomberg News, joining us live here in our Bloomberg Interactive Broker studio.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Applecarplay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube paulcom.
The company reported earnings a little bit disappointing. The stock is down five point eight percent today, down two and a half percent for the year. Let's break down what happened in that quarter with an expert. Con John Savanni joins the CEIs of Senior analysts cover semiconductors for Bloomberg Intelligency joins us via zoom from San Francisco, Coujohn, you to do this stuff for a living. You see all these companies break down the Qualcom earnings.
What did you see?
Yeah, there was nothing hugely wrong with these results. In fact, there were a few positives, namely the beat on the IoT due to better smart glass chip sales to Metti and others. Auto is still continuing to be on track despite the automotive end market seeing weakness. The handset guide for next quarter which is for to come in in line which to typical seasonality, which is actually surprisingly positive despite given that they're going to have significant Apple share
law starting next quarter. That means that the gains they're gaining in Android and Android continues to get better for them for their chip sales. But all of this goodness is still sort of near term or one time. The
big questions in investors' mind don't disappear from these this goodness. Unfortunately, you know, there is going to be that big Apple loss this year, this calendary and the next calendar year that is going to weigh on their top line revenue, and there is no offset to completely offset loss, so
that's going to stay. The diversification efforts in IoT and Auto and the PC and the XR, etc. Is moving on track, but it's not sexy enough or new enough for in the near term to get investors excited about this name.
And that's what I'm seeing the rest of the street saying as well. I mean, the CEO just said in the interview with Ed Ludlow that they see content in the automotive space accelerating here. But then we see the print that we just are analyzing right now in the street is saying that weakness in the handset and automotive chip sales sector, that all coming in weaker has really kind of put a damper here for investors. How much runway do you think that the company has here?
I mean, you know, they've been pitching this diversification story for a while now. They have to give them credit. They have made meaningful progress in a lot of these avenues. The automotive and IoT still looks to be on track to get to that twenty two billion dollars target that they've promised. You know, once you get there, it will be enough to offset all the Apple losses. It's just it's just moving very slowly, which is good. It is
still moving consistently, but slowly. And in the times that we are in right now, and an investor in Semi has the optionality to look at all the fast growing AI names where most of the spending is coming. It's just very hard to get people excited very quickly about still investing in a company which is still primarily to dat driven by handset revenues.
Ku John, what is what is Qualcomm? And maybe some of your other chip names, What are they saying about tariffs about thirty seconds?
Well, most of the companies in our coverage are not calling out tariff impact directly. You know there some companies have you know, decided to take a step forward and call some kind of pollons. We heard from Christiana where and Qualcom is saying this, haven't seen no pollons. It's very hard to DeLine it because you know, initially from our channel checks, we believe they're where some pols pullions
because of tariff fears. But as the discussions and the news have sort of died down, the risk for that has reduced, so the consumers which we are initiating politics might have normalized. So we're not seeing a lot of impact on the semi space for the most part from tariffs, except for this movement between two Q and three Q demand.
Good John, thanks so much for joining Uskunjohn, So, honey, he's a senior and I's covering of semiconductors for Bloomberg Intelligence based out there in San Francisco.
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Comcast reported results here.
I guess they lost fewer subscribers, and that's kind of a net wind that stocks up one point six percent for the day, down twelve percent for the year. It just feels like there's a lot of headwinds for this industry, the cable TV slash broadband industry. Keitha Ranganath, and she covers all the media stuff for Bloomberg Intelligence.
Keitha.
What you see from Comcast numbers today?
Yeah, thanks so much, Paul. So, what happened really was last week we had Charter, which is the second largest cable or the second largest broadband operator reporting. They reported broadband subscriber numbers that were extremely weak. Losses were much higher than what you know the investment community was expecting. That triggered a thirty percent lunge in Charter stock price and generally spooked Comcast investors as well. So there was a lot of kind of panic and nervousness coming into
today's report. And Comcasts did lose subscribers. They in fact lost the most number of subscribers that they ever have lost in their broadband business. But it was still better than what the street was fearing, and that's why we're seeing a little bit of what you know, you can call a relief rally here for Comcast.
Absolutely.
I mean, what is the broader market looking like right now? I mean, you've compared it against Charter, But how are we thinking about broadband right now?
Yeah, So broadband really has been, you know, at least over the past few years, NARA has been completely dominated by the cable industry. So just you know, even up to two or three years ago, cable had almost a sixty seven percent share of the you know, home broadband
what we call the fixed broadband market. But with the telecoms, so with AT and T, Verizon and T Mobile coming in and becoming extremely aggressive in terms of two of their product offerings, so one which they call fixed wireless, which is basically you know, also called five G home Internet and the other being fiber, and with both of those on the fixed wireless really from a pricing perspective, because they're only charging about fifty dollars or so a month,
so they're really competing with cable on the low end. And then if you want a superior product a cable in terms of both upload and download speeds, you go for fiber. So they're really attacking cable from both ends. And that's where we're seeing kind of this intense competition for the cable operators like a Charter Don Comcast that have been losing subscribers and losing subscribers really at a
pretty you know, alarming pace. The problem is that they're going to continue to lose subscribers, and that's you know, that's kind of how we're framing it for the cable investors right now.
All right, KEITHA. Comcast is a big company. It's a diversified company.
It also owns NBC Universal, but that's also a challenging part of the business. Where are we in terms of that company maybe selling or splitting off some of their cable network businesses.
What's the status?
Yeah, so they are spinning off their cable network's business that is their most challenged portion of the whole NBC portfolio. They are spinning it off into a company called Versuent that should happen a little bit later this year. So once that happens, then you're left, you know, as far as the NBC asset mixes concerned, you have the broadcast network, which is you know, the NBC Broadcast network. You have Peacock, which is their streaming platform, and then you have the
slightly higher growth assets. So remember they are investing very big in their theme park business. They just opened Epic Universe reported some really stellar results today in terms of revenue growth thanks to Epic. And then of course there's studio business. You know, I don't know if you saw the news, but they already have one of their movies, Odyssey, which is a Chris Nolan movie for which they're pre selling tickets a year in advance. So their studio business and really shape as well.
So executives have acknowledged that competition in broadband still remains quote unquote intents, especially when we think about other wireless companies like AT and T for instance, and we're seeing shares down for Comcast down about eleven percent year to date. Here, how are we thinking about competition as it relates to Comcasts.
Yeah, competition is going to be a huge factor for Comcast down the road. So you know, Paul talked about Comcast being a diversified company. Yes, they have exposure to you know, the cable systems, but they also can diversify a little bit with NBC. But still cable brings in eighty to eighty five percent of the company's EBITDA, so it's really important for them to have some kind of visibility into their broadband business. So again, competition is intense.
You know, both Comcasts and Charter refer to this. It's going to continue to be intense just because we're seeing very, very aggressive fiber rollouts from all of the telecom operators. So we don't necessarily expect the cable broadband business for Comcast to return to growth. However, they are trying desperately to kind of really cub SHN and so we're seeing them kind of really you know, go very aggressively after promotions,
kind of tweak their pricing and packaging strategy. So that's kind of going to help them defend their turf a little bit. But I'm not necessarily sure, it's going to be a game changer, so competition is a huge issue for them.
Have you been to Epic Universal yet?
Not yet?
We got to get her over there to Yeah, so we'll see, all right, Keitha, thanks so much for joining us. Kethan Rogennathan us media anasts form Bloomberg Intelligence.
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