Bloomberg Surveillance TV: February 26th, 2026

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This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and Amrie Hordernt. Join us each day for insight from the best in markets, economics, and geopolitics from our global headquarters in New York City. We are live on Bloomberg Television weekday mornings from six to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always on the Bloomberg

Yeah, John, there has never been anything like this in US corporate history. Eighty percent year over year earnings growth. The estimate was fifty seven percent, and a five trillion dollar company like this is just so remarkable. And then you look, you wake up this morning and you look at the relative winners again, and it's it's the cost By, it's you know, Europe, it's the CAC, it's everything else

We've been talking about.

This sort of idea of march madness coming up to us. It's momentum madness that we're watching. And you think about the brackets. It's Spain, it's the cost By, it's Europe, it's Silver, and that's really where the focus is been. And the markets are really not all that impressed by Navidia. Pretty remarkable to us, given the strength of the earnings, the margins, the revenues there.

I mean, as soon as the year started, straight out of the gang, the Costpe off to the racis. South Korean equities are up by close to fifty percent today. We're not even two full months into the year. You talk about the momentum, the team's gonna have plenty of questions about tech and what's happening state side, but the momentum that's happening gusewere do you really want to fight that right now?

I mean, momentum, as we know, is a really powerful force. Matt Miskin and I've been watching the COSPY for about a year now. It's up one hundred and sixty percent over a one year basis, and we're always trying to square that with what the fundamentals look like and what the economic picture looks like in some of these countries, you know. You look, for example, at Europe, the estimate for earnings growth this quarter was three percent. They barely

It's zero.

They just missed a technical recession. So it's just hard to really square this momentum, this sentiment, the technicals that are driving these markets with what's really happening underneath the service. We want to participate in this, but investors might want to think about right sizing positions in a market that's been driven by momentum.

At the same time, Emily, the US markets have already benefited from momentum, right, I mean you look at video shares, They've gone from three dollars essentially at the beginning of twenty nineteen to almost two hundred dollars today. I mean, it's been a tremendous blowout in terms of market capitalization.

Yeah, absolutely, and the earnings engine is on in the United States, So when we think about valuations, we really care a lot more about the denominator, and we've seen that, especially in some of these AI beneficiaries. But We just saw so much momentum to your point last year, it's just going to be hard to repeat that, to continue to compound that. So we understand this idea that there's catch up potential in other areas of the market, but

So it's about owning tech.

It's about looking for the earnings, following the profits, but then diversifying from that down in market cap and looking for quality value.

Emily, is it a contradiction to go down in market cap to go to smaller, riskier companies and also like high quality bonds. I mean is there a contradiction here betting on the reacceleration of the economy on one hand, but then on sort of the opposite on the other.

So great question.

So it's a key reason that we're overweight mid versus small cap stocks. We look at small caps their lower quality. You know, forty percent of the Rustle two thousand indexes comprised of unprofitable companies. We really prefer to be up and in cap to mid caps, which are not our parents' mid cap stocks anymore.

These are pretty large companies.

But on the fixed income side, that's an area that we just think is mispriced. You know, with the ten year treasure yields still over four percent, there's opportunity, especially in the intermediate part of the curve here, to lead into that bonds return four to five percent, seven eight percent, like very quietly last year. We think that can happen again. Now there's not as much value on the shorter end

Emily, if investors like utilities, materials and some of these more tangible assets, aren't they also part of the AI trade. You have to have a case that the AI buildout is going to be real.

Oh, that's a huge part of it.

These are traditionally more defensive assets, but they're also benefiting from the buildout of data centers around AI. We're looking at industrial production, automation, robotics as key themes. So these sort of old school, you know, parts of the economy, parts of the market are also you know benefiting from this this AI build out, you know, the lack of supply that's needed in order to build the infrastructure here.

So what didn't the market view that as the AI trade is real and when you see blockbuster results like you have from n Video overnight, that you want to buy into it even more this morning?

Yeah?

Absolutely, And I think in Mari, the challenge is just the size of this. You know, you look at how important that the market has become to the economy, and it's just remarkable. Consumer net worth right now sitting at a record one hundred and seventy six trillion dollars the stock market, it's sixty trillion dollars dwarfs the size of the US economy right now. So we've seen this incredible capital appreciation that's been driven by AI as being.

The most important thing.

The market is like the tail that's wagging the dog of the economy, and it's usually the opposite. So we want to think about diversification given the fact that there's so much wealth it's constant created in AI, and it puts us in a little bit of a precarious position if we do see a challenge here.

You know, there's a lot that's.

Been written, of course, as of lead around software companies and the obsolescence potentially there. We think that is overdone, but we've got to think about how much of a risk there is given this massive wealth concentration in the AI trade, and think about other ways other assets to own to diversify from that, whether it's infrastructure, whether it's bonds, whether it's utilities, et cetera.

Stay with us mult Bloomberg surveillance coming up after this in video in the pre market by zero point nine percent. If you have one, Wall Street looks like this. Angela Zeno of Cfira with a twenty six price target of two fifty. Right in the following in video post a JANQ revenue of sixty eight billion, crushing expectations driven by continued AI infrastructure build out and success fault blank while

What's behind it? Angelo?

Yeah?

John, I think it has everything to do with just and it's something we have written about back into summer.

It's this changing AI narrative that you're seeing.

Across the markets right And I think right now the street really more focused about the risk tied to AI more so than the growth of opportunities here long term from AI.

And I think that the street's really trying to.

Grasp the two sides, But right now they're really focused on this the risks tied to the AI side. You're getting this massive AI infrastructure built out, but we have yet to really see that AI monetization story really play out to the extent that I maybe that maybe others.

Had hoped it would play out to this.

At this point in time, it's going to take time in terms of this AI monetization store, and I think, you know, there might be others out there that are just taking this weight and see approach.

So we're getting these beaten raises.

The reporter really didn't tell us anything new with many respects in the sense that we expected a beaten raise, in the sense that we just had a cute war earning season with these hyperscalers all significantly you know, ramped up their capex. Then, So twenty six is going to be good. I think that's pretty much baked in a sack. Twenty twenty seven, I think at this point also looks the

To put simply what you just said, Angelo, is it a case of fear porn trumping any kind of fundamental performance, because ultimately I don't know where the risk factor was in the earnings that were reported by Nvidia.

Yeah, I mean, you know, I think when you look at here, yeah, I mean I think you're right.

I mean, you look at Nvidia, and I don't think.

You're going to necessarily see, you know, anything that that's going to cause you a to raise an eyebrow. Would be concerned about the story here this quarter, next quarter, the quarter thereafter. I think again, it is just monitoring the markets at this point in time. I think on the software side of things, there's definitely some concern. You know, you look at what bet and you guys just you know,

Conviction level there. You look at what open ai and Rowick are doing. We need to monitor all of that.

We need to see this agentic AI inflection really start to pick up in the second half of this year into twenty twenty seven. I think you see that, you see those new use cases emerge. I think then, you know, in video also starts to work alongside that.

One thing that Salesforce did seem to point to is agent force his idea of actually using agents AI agents to try to monetize this exactly what you're saying that in video needs to see and frankly, what Jensen Wong was talking about that he is seeing that inflection point where you are seeing a monetization. What will it take to prove to Wall Street, to analysts that the monetization is taking place? And ultimately this is kind of the.

Stick in the whole story.

Is it vast layoffs to justify the expense? Is it efficiencies that get born out in other ways that could potentially be punitive to the overall economy.

I mean, you need to see it in the numbers from the hyperscalers.

You need to see it in the numbers from and you have seen it to an extent from the hyperscalers, right, You've seen them be able to monetize AI to an extent, maybe not to the degree that.

Wall Street has wanted them to.

But when you look at the AI inflection thus far, it really has been dominated on the on the consumer side, and really you really can't monetize the consumer at this point in time because they're getting this stuff for free. On the enterprise side, I thinks that's where you need to see those applications really start to pick up. You need to see a number that you don't need to see the entire SaaS community really start to benefit from it.

But you need to see some you know, some big wins there.

You need to see that that inflection in the second half of this year in terms of revenue acceleration something that Benioff had had talked about last night. So you need to see some of those use cases really start to pick up in terms of the token count, the increase in tokens that's going to that's going to play out.

But again, we need to see the revenue really tied.

To that and be demonstrated, uh, you know, for Wallstreet to really like the story here and to warm up to AI again.

Angel on China, it's the largest market for chips. Do you think at any point this year in video will be able to make some revenue from Beijing?

I mean, listen, personally, I'm starting to lose hope on the China story, right.

I Mean, it's hard to really.

You know, continue to pound the table on China just on the fact that you've got.

These geopolitical uncertainties out there.

The hope would have been at this point in time we'd start to see at least some sort of incremental revenue tied.

To China, given that we haven't seen it yet.

You know, I'm just on the on the sidelines and saying, hey, listen, if we see it. If not, you know, at least in Nvidia continues to find ways, you know, to see their revenue trajectory continued to increase. But you know, if you're Jensen, you continue to want to and to some extent, need China participation more because of the developer compute community there and for those developers to really build on China's

I'm glad you brought up am D though they are making some money off of China. What's the difference between what they're doing versus Jensen long, you know, it's hard to say.

I mean, at this point in time, it's really just about the type of licenses they're getting approved for. I mean, clearly am D is a much smaller skill type company relative to in Video, but at this disappoint in time, it's all about getting the necessary licenses approved there.

Stay with us more Bloomberg Surveillance coming up after this, Andrew Bishop of Signum Global writing, President Trump is not eager to go to war with Iran. This means that even doubt about whether diplomacy can still succeed, he will continue to give it a chance. Andrew joined us now for more. Andrew, welcome to the program. The US has already demonstrated superior military capability, and the Iranian government has

So, frankly, in terms of getting to an actual agreement,

So when do you think this could start if Trump had to use this option of a strike.

Yeah, we've said since January thirteen that the most likely is after April fourth, so essentially after he returns from China.

But then that would be going into the summer, which is peak driving season here in the United States. Andrew, how does the president weigh potentially what a spike in oil would be Tyler was talking about the Iranians being willing to close the Strait of Horrormuz to gas prices in the United States ahead of a midterm election.

Yep, that goes exactly back to both why we think he's so reluctant overall, and then on your question about timing, that gets to the issue of the fact that the Iranians are so hardheaded. I guess my point, and I do mean the government in this instance. What I mean by that is, I think the President would like to get a deal before April, but if we don't get a deal, then he will act. I mean, what you see is what you get in terms of this government's

At the same time, Andrew, you could look at the troop build up in Iran and around Iran, and you can look at the fact that a lot of people are saying that if there isn't some sort of military encourasion here, it's just going to be kicking the can down the road, because ultimately Iran's not going to get rid of their ballistic missiles. I mean, at what point is is that a real pressure point that challenges the thesis that calls for dragging this out and a lack of a conflict.

The argument makes perfect sense.

But if you follow you know, open source intelligence accounts and the like, you can points to about one hundred or two hundred signals since mid January that suggested in them in an attack. Right sort of, Yes, we're prepositioning twenty four f thirty fives, and then the following week it's forty eight, and then really we needed forty eight all along, so twenty four should not have been the signal.

We think is a little later.

And this is very similar to what happened with Maduro back in September, I believe of last year, we wrote that President Trump was likely to take out Maduro, but he would take a lot of time, he would not be rushed into it. And by November December, people were saying it has to happen now because we've deployed all this firepower. The truth is the president can afford to run the tab and even from an operational standpoint, he does have the several weeks that he wants Andrews.

You know, Tehran and the Iranian economy right now is really strong. Like how well funded Iranian proxies in the region right now? What are the capabilities to cause disruption if Iran needs them to.

So their funding went through a hard period following the major strikes and not just referring to the June war of last year, but Israel's overall operations across the region. But they have really recovered quite well, if you'd think has love. For example, the smuggling routes for bringing in cash had to be reject but they have been rejected.

The issue, though, is to be very transparent.

I don't think that the reaction function of these proxies is going to depend that much on funding.

I think it's going to be much more of a political decision.

And we have a slightly nuanced position at signum, which is we think that Iran will retaliate extremely forcefully. So the President's sort of scenario of a limited strike limited retaliation is off the table, but not necessarily in fact, not with its proxies. I think the proxies will largely set this one out for political self preservation reasons.

Andrew, could you describe what forceful retaliation would look like then?

Yeah, it's very simple.

It's trying to kill Americans and Israelis, which is very different than what happened in June. Entering the prior operations, where the main goal was trying to demonstrate capability and sort of, you know, show symbolic symbolic action. Here, we think that they will try to kill as many as possible, and from the military experts we speak with, it is statistically extremely improbable that.

We will have a war with Iran and no US casualties.

Andrew, this is a serious conversation, and I think it's a question we need to ask. When you say kill is Rieties and Americans, are you talking about in the region around Iran or beyond both.

I think they'll have less success beyond just because their capabilities are less good beyond.

I'm well aware that you know, HAS and.

Other groups have had success as far as out as Latin America and like, so that's not inconceivable. But I do think that there's a case to be made that short range ballistic missiles have a better chance of killing American troops, for example, than Iranian operators have aed conducting a successful terrorist operation in the US, which has been largely at the table for the past twenty five years.

This is the Bloomberg Savannans podcast, bringing you the best in markets, economics, an gio politics. You can watch the show live on Bloomberg TV weekday mornings from six am to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always, on the Bloomberg Terminal and the Bloomberg Business app.