From Mahart where Innovation, Money and power Collie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and ed Love Love.
Live from New York. This is Bloombo Technology.
Coming up.
We sit down with the CEOs of AMD, T Mobile and Pinterest. Is tech earnings hit full send Wow plus Microsoft Azure growth tests, investors, patients, as AI spend ramps and the US sparing ASML and Tokyo Electron From chip Curbs. We bring you the details. What a morning I woke up to this morning. This is what the earnings that have gone before last night looked like in terms of the shehare reaction. Many different stories. A lot of it's centered around AI. Microsoft down one point three percent off
session lows. The story slower than expected Azure growth an eight percent contribution from artificial intelligence, but investors look at the capex and go, we don't see the growth or the money coming out the other side of that equation.
AMD a different story.
They actually boosted modestly the guidance for the outlook for the Mi three hundred AI Accelerator family sales for this year. And as you guys know, we're going to be speaking to Lisa sue really soon, so many important questions. Lastly, Intel up more than one percent. Bloomberg is reporting, citing sources that they are going to cut thousands of jobs to respond to the lagging earnings and get focused back on getting that foundry or fab business off the ground.
Here's another one that I'm really interested in. T Mobile really coming in strong. The stock has kind of bounced around this morning on T Mobile, but is now up around three to four percent, And the story is so interesting.
It's those monthly subscribers that are coming in well.
I looked at the industry and I think the industry as a whole has done really well on that front. Delighted to bring in the president and CEO of Tea Mobile, Mike sever who joins me on set in New York City.
Good morning, that's great to be here, Thanks for having me. Really interesting.
That number to subscribe a number because I look at your peers and competition who also seem to be doing well. So it raises the question, where are your gains coming from from them? Or is there just like this new generation of customer that's appeared.
Well, we're seeing nice organic growth in the industry, so everybody did pretty well. Both my principal competitors I think had net gains that were a little better than expected.
But T Mobile took the prize.
I mean, this was the biggest Q two for postpaid net phone editions ever in our history, and we.
Took took the price from who is what I'm trying to.
Well, we took more than AT and T and Verizon combined. So this is still a share taking story for us. And you know, of course the industry is growing. That's healthy, that's positive it but T Mobiles the disproportionate winner in the growth game. Our post paid service revenues up seven percent year over year, more than twice the pace of the principal competitors.
Mike back in California, we're a T Mobile householder and I use Verizon for my kind of work business line. But it's the technology story that I'm most interested in. You know, I think back to when the I fifteen
Pro generation came out. I went there because of incentive a credit back on a new handset, the incentive of having multiple lines on one account, And I always want to know how much of a factor that still is for you guys to kind of think, well, what can we do on the incentive side to either renew existing customers or bringing new ones.
Customers have always trusted T Mobile to be the best value in the industry. That's our legacy, that's our heritage. And what's interesting is now that we're the best network in the industry. Also, some would expect us to give up that value position, but we're not gonna. You know, we have the best promotions, we have the best overall value.
We give you more, we ask.
Less of you, and we have the balance sheet and the cost structure to defend that value position for the long half.
It's great to have you on Bloomberg Technology here in New York and one of the technology stories with T Mobiles Fiber KKR Loomas. I think you've talked about the importance of that in the ramp, but I wondered if you just give me some specifics why and also how you grow your investment and why you did it.
Last week, we announced our second transaction in the space. The first one was Loumos a couple months ago. Last week we announced that we are combining collaborating with KKR to purchase metro Net and Metronet is the fastest growing pure play fiber company in America and arguably the most important. And so it's really terrific to be collaborating with KKR.
Our joint business plan for this asset and this team is to grow at past six and a half million homes passed within the planning period NOWTAL twenty thirty and to do so without further capital calls.
Is the long time opportunity for you. Bundling.
So you look at your subscribe to customers, you look at what the household does with you.
You want them to do more. Is that the idea?
Well, it's the current opportunity.
Remember, T Mobile's a major broadband provider today. In fact, we have five point six million broadband customers through our fixed wireless product. This quarter Q two, T Mobile took our highest percentage share broadband net ads ever in our history, seventy five percent. When you add up all fiber, all cable, and all fixed wireless one brand, T Mobile took seventy five percent.
With over four hundred thousand net editions.
And so our value proposition is resonating with people, and part of it is sure they trust our brand and they want to buy wireless from US and broadband from.
US stock's now up four percent and in the session up about fourteenth eight year today. This is Bloomberg Technology. One of the companies that I cover is SpaceX. I'm really interested in the Starling relationship. But when i flew here on a United Airlines flight, I was able to access Wi Fi in flight because I'm a T Mobile customer. You've got different options there. What's the big picture strategy?
Well, first of all, I'm glad you acknowledged that benefit. This is so exciting.
We have partnerships with because United doesn't have starlin is my point a direct, And.
We have partnerships with most of the major US airlines such that T Mobile customers get free Wi Fi on flights and it's so great. And we're doing that through satellite connectivity with a number of partners. But what you're asking about is our exclusive era raingement with SpaceX. We have a technology alliance and we intend to be the first ones to bring satellite connectivity to your day to day usage of your mobile phone. And the vision here
that's joined between us is to eliminate dead zones. The idea that if you can see the sky, you're connected and you can message, text and eventually make phone calls and have some data to be connected to the people and the issues that.
You care about.
An interesting technology conversation and you acknowledge the competition and growth across your industry as well. Might see that T Mobile CEO and all of course president of T Mobile as well. Now, I told you this was a day where you need to buckle up. We have a lot of earnings coming thick and fast. AMD shares currently up
six percent. At one point in the session, we're up eleven percent, putting them on track for their biggest drump since February that following positive earnings results showcasing a boost in sales from the company's AI Accelerate to the family of Mi I three hundred, but also some interesting recovery in the PC business. Joining us now is a d C.
Lisa Sue. Good morning to you, Lisa. You know, I think that's where everyone was looking, right, Am I three hundred, and whether or not you could go beyond the four billion, and you said four point five billion. I wondered if we could start by discussing the factors behind that. What changed, whether it was supply or demand in shipping more of the I three hundred family.
Well, good morning, Ed, it's great to be here with you today. Look, we had a very strong second quarter, very pleased with the overall growth that we saw, really led by the data center business. So our data center business more than doubled year on year in the second quarter, and we see you know, a strong second half there
as well as well as strengthened PCs. So you know, to your question about you know I three hundred and what are we seeing an AI, you know, we're seeing an environment where everybody needs more data center AI infrastructure. You know, computing is really the foundation of what drives you know, sort of all of these AI capabilities going forward.
You know, I three hundred has been.
Well into the qualifications at numerous of our top customers. And you know what we saw over the past quarters, We've passed some very significant milestones in both one, you know, ramping up our supply chain, but also passing important you know, data center customer milestones where customers have moved our product into production.
So it's an exciting time right now.
You know, we did update our full year AI guidance from greater than four billion a quarter ago to greater than four point five billion I think we're seeing great traction in our hardware and software milestone. So overall, I'm feeling really good about the setup going into the second half of the year.
Lisa, I'm really interested in kind of the design and performance differences for all the AI accelerators that are out there. You and I have talked about the technology differences, but on the call you gave the example of Microsoft and its use in the quarter of the MI I three
hundred generation. When you're speaking to a hypers Gala, when might they opt for using m I three hundred over in Video's h one hundred, and I suppose to a lesser extent, GOUDI, what is the specification or performance driver that would make it a better solution in a certain use case.
Yeah.
Well, first of all, you know, i'd like to, you know, say that Microsoft is a phenomenal partner.
They're a great partner for us.
You know across you know the data center as well as you know the client businesses, and when you see in particular, you know how complex these AI systems are.
You know, you want to have, you know, the best technology capability.
You know, I can go into speeds and feeds, but I won't I think it's suffice it to say you need this type of computing for both training and inference. In our case, you know, m I three hundred is the leading inference accelerator today. We have the highest memory, the highest memory, you know bandwidth, and that's really helpful. You know, when you're asking questions to you know, something like you know a chat, GPT or LAMA model, and
you want your answers to return faster. You want the fastest inference accelerator out there, and I three hundred does very very well in that framework. And then when you take a step back and just look at the overall AI market, I mean, the overall AI market is growing so fast there is no one solution fits all. Actually, you know, you do have different workloads will be optimized with different hardware. So I think we have a tremendous opportunity.
I think we're very excited about the overall market growth. And then as more customers get a chance to use our AMD Instinct roadmap, I think we're getting very positive feedback.
Lisa, you address head on the call. I think that the investment cycle for AI has legs, it will continue, but just interesting what you just said can you kind of a portion of how much of that spend or investment is going to training versus inference at this stage.
Yeah.
Absolutely, So when we look at this cycle, ed, you know, you and I have talked about this before. I mean, we're forecasting that the overall market for AI accelerators when you look out and let's call it twenty seven, twenty eight and beyond time frame, you know, will you know, be you know, four hundred billion dollars plus, which is you know, huge market overall.
I think in.
That you're gonna need a lot of training and you're gonna need a lot of inference. You know, today I would say that, you know, most people would say that you're building foundation with training. So training is a place where you know, you want the largest models uh to really be capable of uh uh you know, of using all of the large data infrastructure. But going forward, you would expect that, you know, inference demand will actually surpass training.
Most people believe that, and you know, I think this isn't this. You know, we'll see how this plays out over the next couple of years. But you're going to need technology for both training and inference. And at the end of the day, You're also going to have a very diverse set of models and a very diverse set
of needs. So you have the largest found national models out there, but then you also have you know, many enterprises our training on their own data and they'll use you know, sort of a different type of infrastructure for that.
Lisa, what's actually being done to address the supply constraints such as they are that the impact your abilities with I three hundred, Well, you know.
I would say overall, when you look at the semiconductor supply chain, it's been amazing. I mean, we have substantially increased the overall capacity as an industry to address this very high AI demand. We've also addressed from an a MD standpoint, our supply chain has been expanding every quarter. You know, we announced in the second quarter that we did over a billion dollars of revenue in you know
AI accelerators, which is a fantastic number. We see that increasing every quarter as we go into the second half of the year. The supply chain will continue to be tight as we go into twenty twenty five, and that just says a bit of about just how.
Much demand there is out there.
We have great partnerships with our supply chain partners, and we're working on expanding that as fast as possible.
Lisa that the dominant player in the market for AI accelerators that go in Stata centers is committed to this cadence of essentially a new generation of chip annually. What does AMD do to compete with that and develop new products going forward?
Well ed, what we see in the market, you know, spending time with you know, the industry leaders, is this market is moving so fast that you have to be on an annual cadence. So we announced last month that we have accelerated and expanded our roadmap.
You'll see us later this year.
We're going to launch our MI I three twenty five series, which is the next next step in our roadmap. Next year in twenty twenty five, will launch our Mi I three fifty series, which is a brand new architecture. And we're already well on our way to four hundred series, which we'll launch in twenty twenty six. So we are on an annual cadence. Not only that, it's not just about the accelerator, you know, you know, CPUs continue to be very very important. We see that overall networking continues
to be very important. Overall system capability is also very important, and we are investing in bringing all of those capabilities together to really help our customers with the best infrastructure, you know, for their AI workloads.
Lisa, what I love about the Bloomberg Technology audience is there's gonna be a big body of people out there who think a MD and they think PC and gaming. You know, that's kind of the reality of it. You painted this kind of positive picture for PC, at least for your company in the second half of the year. Is that a story of a market recovery and broadly the market doing well or is AMD doing something specific to outperform in that environment.
Yeah, we see a couple of things.
Ed.
First of all, the PC market is a good market. You know, the second half of the year is typically strong than the first half. Anyways, from a market standpoint, we see some positive signs in the market. I will say I'm very excited about AIPCS. I view AIPCS as an inflection point for what PCs can do in all of our daily lives, whether you're talking about a corporate environment or a consumer home environment. So that's a positive. I think we are also just launching a whole new
generation of chips. You know, we call it our Zen five family, both notebooks and desktops. They are fantastic. We're really happy with the reception for those, and so we see that as an opportunity. That is, you know, our product roadmap. Launching usually gives us a lift into the second half of the year and then you know, in the medium term, you know, going into twenty twenty five, you're going to see a lot more aipcs. You're also going to see you know, we believe in enterprise refresh cycle.
So I think there are positive indicators for the PC market, you know, going forward.
Would you be able to give me some sort of forward looking commentary on the gaming business, in particular when that might see some improvement.
Yeah, I mean, let me talk a little bit about gaming. You know, first of all, the gaming segment is a great segment. You know, we truly you know, value the strong partnerships we have with the market leaders like Microsoft and Sony in the in the console cycle.
Now, typically these console cycles.
You know, do have an EBB and a flow, and so we're in the second half of the console cycle, let's call it the fifth year, and so we do we have seen a decline in revenue. I think that was very much as expected. We would expect that, you know, it would take until the next refresh cycle for you to see a substantial change in that.
But this is very much a market that.
We know, we love, and we believe has you know, great you know, long term alignment.
You know, with our roadmap and our.
IP Lisa, I acknowledge you've kind of had a very busy twenty twenty four. You spend a lot of time on aeroplanes. I think about computex in particular.
All day.
You were on stage with a number of partners, and we talk just now about the sort of legacy gaming and PC business. I just wondered if you have any sort of evidence or data you can give me that those partners are putting a MD into sales channels where you might not have any experience, for example, like in the public sector or selling your technology to governments rather than just the hyperscalers.
Yeah.
Yeah, that's a great question. First of all, you know, we love our partnerships, ed. I think partnerships are you know, what makes this industry truly special. Right, every company has their secret sauce, their great product. But when you put it together and really bring the best of you know, the the industry together. Is when you get the you know, the great payoff when you look at our business. First of all, you know, let me talk a little bit
about our enterprise server business. I'm super pleased to see the progress that we're making there. When you think about you know, the server CPU market, let's call it, you know, outside of AI, there's a whole set of workloads that need the best you know, general purpose computing. That's what we have with our you know, fourth generation EPIC, and we just launched our fifth generation you know EPIC. Previewed our fifth generation EPIC as well, very very important you
know foundation for you know, these enterprise data centers. We made substantial progress here in the first half of the year. I would say one third of our new design wins are actually from customers that I've never used a m
D before. So this that's exactly what you said is, you know, as we introduce a m D more to the broader enterprise, you know customers, we're seeing great traction primarily because we have you know, the best performance per dollar and the best performance per WAT you know out there. So we do see a tremendous opportunity in the enterprise market, both on the traditional compute side as well as AI as well as a I p C.
So all of those are great opportunities.
Lisa, I know you've got to go to your next meeting, so very quickly. What's the talent story for AMD in getting the best people?
We are very very happy with the talent story, and we have a tremendous engineering team. They're doing great things on hardware and software. And we just announced our intent to acquire a fantastic AI company, Silo AI, that's based in Europe that also adds great talent to the company.
So this is a war for talent, and I would say we're very happy.
With the great engineering capabilities that we have to move the road map forward.
AMD CEO, Lisa, So it's great to have you here. Back on Bloomberg Technology, Thank you. Okay, let's get back quickly and check in on Microsoft. This is what shares look like. Top line growth of twenty nine percent for Azure missed estimates of thirty one percent. There was an eight percent contribution from AI, but there's a concern about the spend they had to make to get there. We're also going to get a look at meta results tonight
after the market close in the United States. The stock kind of buoyant, and you think about the read through. Let's see what happens. Coming up on the program, We're gonna have more on earnings. We're going to discuss a story about Uber and BYD's new partnership, and a whole lot more. Take a break, take a breath, will be right back. This is Bloomberg Technology. Uber and China's BYD are teaming up to bring one hundred thousand electric vehicles to the ride heiling app, starting off in Europe and
Latin America before expanding elsewhere, not the United States. Joining US is Bloomberg Intelligence analysts Man Deep saying, I find this fascinating. The idea in the first instances EV availability to gig economy drivers on the platform.
What did you make of it?
Yeah, I mean, look, Uber has so far done a great job of establishing a network outside the US, and obviously they don't have access to the China market. So these are the parkets where it has the number one position, and you know, moving to the the EV side makes a ton of sense. So clearly Tesla is in partnering with them. I mean, we know Tesla wants to go to robotaxis through their own app. They're not looking to
use one of these right sharing guys. And I think it makes sense for Uber to collaborate with all these OEMs, whether it's BYD or Kia or anyone or.
Just real quick collaborate.
No financial terms between the two companies disclosed. I found the autonomous paragraph very important. You know, BYD's future autonomous capabilities on the Uber platform, you know about my reporting on robotaxi with Tesla. That seems like a response, right, This is acknowledging the market state of affairs.
It is, but I mean, look, all these companies are behind Tesla and veim or when it comes to developing the software capabilities for autonomous driving. So I would still say Uber doesn't have the platform to have, you know, robotaxis, because all these companies just aren't there when it comes to the software development.
Mande. Let's talk about Mike.
I think we know the Microsoft story right, Slower than hoped for growth on asual cloud services in AI and Capex. There was something Amy Hood said on the call that I just saw straight away that I don't see being discussed, which is a fifteen year time horizon to monetize the CAPEX. That's a bit of a clue of how long this is going to take to be real, right, Yeah.
And look, all these chips are changing. So with Nvidia coming up with their latest architecture, they talked about shipping Blackwell. Imagine if you are a consumer of these AI services, you want access to the latest chips, and so that automatically drives a compression to you know, your cloud workloads that are that are using the earlier version of the chips. So I think that's what we saw in the print.
Like you know, there was some sort of substitution going on in terms of CPU to more GPUs and also the pricing compression from the latest.
Version of the chips.
I don't know who badged out of Bloomberg's world, like quarters first last night, me or you, but we got another long day today and I think Meta probably the focus. What's the Bloomberg Intelligence expectation for this quarter?
I mean, you want to see top line growth in excess of twenty percent, and remember the comps get tougher in the second half.
So this is the last quarter which is they had such a great year last year exactly.
In the second half, and so clearly you want to see ad pricing continue to trend higher. Pinterest wasn't very convincing last night in terms of that ad pricing, and given Meta has the most GPU allocation, they should They are the biggest deployers it.
That's the thing, just real quick.
We know they're buying that volume of h one hundreds, we know the capex commitment. So what is it they're going to have to do to tell the market with this is a success for us in AI and.
They don't have a cloud revenue.
That's five billion dollars rounder it coming from AI, So it has to reflect in that ad pricing and AD revenue and you want to see that. Woman, I'm the twenty percent plus growth rate.
Man Deep saying, senior analyst of Bloomberg Intelligence. It's so awesome to be here next to you in.
New York City.
Welcome back to Bloomberg Technology, Ed Lovelow in New York City. This is what the names reporting after market clothes are currently doing. Chip stocks are buoyant, partly because of AMD's earnings, partly because in Vidia's a top pick at Morgan Stanley and that stock is going off like a rocket this morning. But there are some other stories. You just got the lowdown on meta from Bloomberg's man Deep Singh.
Basically, how does all.
The investment in AI infrastructure translate to advertising pricing, Because at the end of the day, they don't have a cloud business. There's still a social media platform with a lot of other stuff going off. One mover to the downside in earnings is Pinterest. It's off by more than thirteen percent. They gave this guidance on revenue R sales for the third quarter, top end of the range nine hundred million, but even the top end of the range
was below street estimates. Now, what's also interesting about pinterest is the size of its user base, so many stories within that. It's bringing CEO Interest Bill ready for more and Bill, good morning to you. Thank you for joining us here on Bloomberg Technology. Let's start with that guidance, get it done. What were the factors behind the range, which again it's below street estimates.
Sure, yeah, I mean if you look at Q two, you know we put up record user growth.
We hit a new all time high end users.
We came in above our guidance on revenue twenty one percent plus revenue growth with six inser basis points of margin expansion. So Q two is a really strong quarter. As we look ahead to Q three, we have a five point tougher comps. We're laughing lapping much tougher comps, and you saw that from some of our larger peers as well. But when you step back from that, you know we're growing faster than our larger peers that have already reported. We're seeing our best product market fit in years.
Gen Z's our largest fastest growing audience, and we're winning share of wallet with some of the largest, most sophisticated advertisers out there. So the fundamentals of the business are all really sound and we feel great about those and as we guided forward, it's relatively consistent growth with where we've been once you adjust for currency fluctuations, despite the fact that we have a five point tougher comp So I think you saw that in some of the reactions
on our larger peers. I think you're seeing some of that here as well. But if you pull back from it, the fundamentals of business have never been better. For Pinterest Bill.
Something you told my colleagues at Bloomberg News is that historically Pinterest is a great place for windows shopping. But I think the quote is that all the stores were closed helped me understand that.
Yeah, so, you know, I came in two years ago and at that time Pinterest was primarily about browsing and there weren't a lot of clicks and conversions to speak of for advertisers. We've made tremendous progress in making it so that users can actually take action on the things they find on Pinterest, and this has been right at the core of how we've accelerated user growth. Last time I was on the show last quarter, we talked about
seven consecutive quarters of accelerating user growth. We put up consistent performance to that on users again this quarter, and at the core of that is that actionability. And not only do users love that actionability. You know, Pinterest is where gen Z goes to shop, but it's great for advertisers.
This is our third quarter in a row of more than doubling the number of clicks we sent to advertisers year on year, which is why you see us gaining share with the largest, most sophisticated retailers out there that are increasing share of wallet with Pinterest, and we're seeing that start to take hold across retail, which we cited as a place of broad strength for us and a driver of our really strong result in Q two, and the we're excited by as we look ahead, Bill.
Just really quick, because you're talking about your user base, right, So we've just shown a graphic that shows the scale. Forty percent of that is gen Z And there's always a question about the actions that audience takes, right, do they actually buy anything having spent time on the platform.
Yeah.
Absolutely. I think this is you know two things I'd say about gen Z. One, they're the taste makers for you know, the next generation. So pinterst is really unique. And it's not just the people shop on Pinterest. People curate their taese on Pinterest. It's a completely unique behavior on Pinterest relatives to the rest of social media, where people are planning outfits and planning what they're going to
buy long before they do it. And so that gives us really rich signal to feed our AI for recommendations, and so that taste making that happens is not just good for gen Z, but they're the taste makers for the next older generations, where we deliver more relevant recommendations there.
And then to your point on gen Z buying, Yes, Penterest is where gen Z goes to shop and we see that same behavior that you know gen Z. Yes, it spans teenagers, but also spans all the way up through you know, recent college grads and people that are in their first jobs and their first apartments, and so we see a lot of shopping behavior there and it's really consistent across demographics on the platform.
Bill Pinterest does not sell political advertisements. Are you able to kind of quantify the impact of that policy in terms of a missed opportunity?
Yeah, it's a great question.
You know, we've done a number of things to invest in the positivity of the platform that if you look at them on a short term optimization, you know, like political ads, you could say, Okay, there'll be a lot of money spent on political ads over the over the coming quarter. However, we don't take that money because we see that that's an investment in the long term health of our platform.
As we're winning with gen Z.
One of the top reasons gen Z sites as why they come to pinterest is they see it as an oasis away from the toxicity they experience elsewhere on social media. So as we've done things like making Pinterest private only for under sixteen, we've actually seen that come through and drive user growth and engagement for us, and we're seeing it cut through with advertisers too, where advertisers also want
to be in a brand safe environment. Brands are built on positivity, and brands don't want to show up next to negative, polarizing content. And so you know, yes, there'll be a lot of money spent on political ads, but we're consciously choosing not to take those because we think that's in the long term interest of our platform for both users and advertisers.
Bill, let's talk about osificial intelligence, but I think some granularity is important. So wah large language models or partners and you're building on top of and you're able to give a sense of the specific AI spend that's related to kind of add targeting and add improvement, bit pricing or something else.
Yeah, this is AI is a core competency for us.
I've talked about on prior earnings calls where when you look at the fact that we're not only growing users at record levels, we're actually deepening engagement per user. A big part of that is on the increasing relevancy of our recommendations, and so I shared on a prior call that through large language models, we saw a ten percentage point lift and the relevancy of our recommendations.
That's really really encouraging.
It is why users are coming back to finding more of what they're looking for on pinterest. But to your question on spend, we've also delivered really great margin expansion this past quarter, even as we were investing in AI, we delivered six hundred basis points of margin expansion and you've seen that consistently over the last two years. And the reason for that is that we're delivering great user engagement from the AI, but it's user engagement that is
highly monetizable. More than half the users on pinterests are there to shop, so we're turning that AI investment into really great return through higher engagement, and then advertisers want to meet those users where they're shopping, and that's driving acceleration and AdSpend for us.
And so you've seen that in the results.
But we're really finding that we can deliver great return on our AI investments, and we have really unique signal. I think this is one thing that is underappreciated across the industry, and so much like cloud commuting.
Much like cloud computing, I.
Think everyone have access to basic building blocks, but who has really unique signal? And the curation of shopping behavior on Pinterest gives us really unique signal to feed our AI bill.
The stock's down significantly in the session. It's down sort of twelve percent year to date, that big year last year, I think more than fifty percent gain in the stock. You're two years into this job, So what's the biggest action you've taken and one that you want to take.
Yeah, so it's a great question, and I think you know, I certainly you don't like to see volatility, but we've seen volatility before. If you step back from it, we have consistently over the last two years or demonstrated steady progress and improving the overall health of the business on on top line, on bottom line, on user growth and engagement. You know, so that the fundamentals have are sound and improving, and we've delivered a say do ratio one on these things and we'll look to continue.
To do that. The things have been the biggest drivers in the business.
I would say one really investing in AI and the actionability on the platform via that AI, so relevancy, actionability, and then positivity in terms of delivering a safe space for our users. State is simply, you know, our users go to pinterest because it's a place they can invest in themselves without the sort of comparative performative nature you know that they experience on the rest of social media, and that's why they're there for that commercial intent. So
we're going to continue to invest in those things. They're really working well for us. When you zoom out over the multi quarter period, you know, it's been a fundamental change introductory of the business, and we're going to keep investing in those things that are working because again, our fundamentals have never been healthier than what they are.
And right now, CEO Bill Ready, thank you for coming back on Bloomberg Technology.
Thank you.
Okay.
The other big story, of course is Microsoft and its cloud revenue slightly missing expectations, but my goodness, it's testing the patients of investors who are anxious to see that investment in AI payoff. That includes Miszuo his analysts. They're saying they're less excited about the near term and favoring a few other services like service Now or Oracle over the next couple of quarters, though the firm still reiterates
a price target at four hundred and eighty dollars. On Microsoft, I want to bring in Daniel o'reagan, TMT Equity Trading MD and Missuo Americas. You know, I want to go back to what I was talking to man Deep sing about that comment on the on the call from cfo Amy heard at Microsoft saying to monetize all the investment in data center is a fifteen year timeline.
How did you react to that?
Well, thanks for having me.
I actually thought they did an excellent job of really threading the needle, especially on the CAPEX side. I think what they did over and over again is really emphasize that this spending is going to be very, very meticulous, and what they did is it's predicated on demand. They constantly look for signals and spend accordingly. And again, a lot of these signals are near term, but a lot of them are very long term, with north of ten
to fifteen year parameters. I think they're spending for the future, and I think they're going to maximize the opportunity.
Management has said over and over again that.
The risk of missing out on the AI trade greatly outweighs the risk of overspending. And I think they're excellent stewards of capital obviously, and I would trust them with whatever capex plans they have.
Just really quick on Microsoft, you know, they seem a victim of you better not miss estimates at all in this environment.
Is that fair?
Yeah, it was definitely fair.
So Azure grew thirty percent year of the year, which is absolutely tremendous for most companies, But considering that Microsoft is probably the second most crowded long and all of tech outside of Nvidia, it was a price to perfection even on this recent pullback, So again it was a the low end of guidance. They put out thirty to thirty one. We heard that the byside was closer to
thirty one to thirty two. Initially the stock did sell off eight percent as a knee jerk reaction, but really as the conference call started to get underway, they really did an incredible job of explaining exactly where the weakness came from, and they aped too exactly Europe. Given the geopolitical risk there and the economy, that was a great spot to point out and then two more importantly, and this is when the stock really started to rebound.
It's a capacity issue. This is not a demand problem.
They simply don't have enough chips in infrastructure to satisfy this AI demand. So I think once they alleviated that, the stock really rebounded and it's almost back to flat. And then one other thing that when you go a little deeper, made a lot of sense.
This really stood out.
AI demand actually helped grow azure by eight percent this quarter. Last quarter was seven percent, So you're actually seeing an acceleration in AI demand that's really are owing to provide real ROI, which I don't think is going to start anytime soon.
Daniel Vaging, TMT Equity Trading Managing Director and Zoo America's great command of the numbers, really appreciate it. I think we have to go back to Nvidia. Look at the performance of Nvidia shares in the moment, considering AMD and considering Microsoft, this is a stock almost twelve percent. The catalyst is that Morgan Stanley has raised Nvidia back to being its top pick after what it sees as a sell off, giving an attractive point of entry. But that's
a really big jump. It impacts markets more broadly, I think we should just keep an eye on that throughout the day. This is Bloomberg Technology. This is Bloomberg Technology, and you're looking at a liveshot of the principal room. Check out the Bloomberg Technology podcasts. You can find it on the terminal so as online at Apple, Spotify and also iHeart this is Bloomberg. It's time for talking tech and first up, Samsung ramps up its fifth gen high
bandwidth memory chip production. The electronics giant says it's set to start mass producing its Lady's chips this year and expects it to contribute sixty percent of HBM total sales. Plus Intel plans to eliminate thousands of jobs. That's according to sources, who say the chip maker is set to announce the job cuts as early as next week.
Is it looks to reduce costs.
And fund an ambitious turnaround, and sources also tell Bloomberg the Biden administration is planning to exempt chip making equipment makers from Japan and the Netherlands from upcoming export restrictions to China, adding that the plans are fluid and may change, and I want to get to that story with Bloomberg's Ian King, who's standing by in San Francisco. You look at some of the names that are impacted in ASML, in Tokyo Electron. This is significant peace of Bloomber reporting.
Yeah. I mean, there's a lot of reporting going on around this, from US and from our rivals. It's an unclear situation right now. What we do know is there are more rules coming. There is going to be more
pressure put on China via those rules. What has been in flux as how impactful that would be on some of the companies around the world, whether the Biden administration would go full in on trying to force the allies to follow suit, or whether, as we're seeing now from our reporting, they're going to get a pass on this, and perhaps those rules may not be quite as comprehensive and as effective as we had thought, or as Dutch or Japanese investors had perhaps feared.
Let's talk about the Intel story. The reporting is that according to our sources, you know, it's a significant reduction in headcount. Intel's a company that has one hundred and ten thousand staff approximately around the world. The point of difference is it's bab or foundry business, right that's kind of accounts for the size relative to peers. What do we know about this and why is it significant?
Okay, so there are a couple of things that work here. Obviously, Intel has had significant erosion in its revenue base based on losing market share and the fact that its products just haven't been as strong. What it's trying to do in the to turn itself around is to spend a lot of money on new fabs, new technology, new R and D to get back in the game, but also to expand its business. Something doesn't quite fit there, right.
You know, you have a need for resources and you have staff that they're essentially in place to support a bigger business. So what we understand that's going on and maybe announced as early as tomorrow when they report earnings, is that they're going to have to get rid of some of this staff to basically save money to give them money to spend on these fight back efforts.
Bloomberg z and King out of San Francisco, Thank you very much. NBC Universal says AD revenue for the Paris Olympics has surpassed the record one point two five billion sold for Tokyo's twenty twenty Games. A source that the companies, who's familiar with the company's ad spend told Bloomberg that strong ratings have translated into greater demand for the unsold
inventory that NBC brought into the games. Primetime viewership so far has averaged thirty three point eight million viewers, up seventy seven percent from Tokyo, likely due to favorable US time zones. And the Paris Olympics is not all about sports, It's also about business. Today, the Chinese tech giant Ali Barber and its B to B platform Alibarber dot com is announcing a partnership with the International Olympic Committee for an initiative aiming to help athletes start their own businesses
become entrepreneurs. The campaigns called same player, new game for more. Let's bring in Kor Jung, president of Ali Barber, come Whies in Paris. Good afternoon to you. Why make this arrangement with the IOC.
Actually, Alibaba Group is working partners with i WOC as a global partner since twenty seventeen, seven years ago, and at first we are committing to transform Olympic Games into digital area.
And now we are working.
With IOC for the new athlete the Stistics file program. Since we meet with many of the athletes, we can feel that the successful entrepreneurs and athletes actually share the same of the common characterisms. Of the common qualities from passion to resilience okay, self discipline, push the boundary and has a goal set a very very clear goal under. These are the kind of characteristics for the successful entrepreneur which you see a lot of entrepreneurs on Aliaba dot com.
Hello, yeah, mister John, I went think we haven't much time and I wanted to ask you about the other initiative, which is an AI enhanced e commerce search. So Alibaba dot com is a B to B platform merchants selling to other businesses. Why is an AI powered or enhanced search important?
So today we launch the new product.
We think it's bigger than Alibaba dot Com itself. So previously the search is a kind of a passive mode. You key in the keywords and then come up with the links with the different kind of pages. And now we use the AI technology, we can empower the search engine to be a proactive one. So the expertise of the human and the technology can work together, helping them to generate the more ideas, more original kind of products and help them to fee ters of the selection product
and suppliers. And in the end we can use our solution technology, our digital supply chains, combiners of search eendinge.
Together to fulfill their dream.
So the f list can use their kind of expertise in the ideas in their innovations and we can use the technology to help to help them to transform their ideas into reality.
Quote young president Valibarba dot Com joining us from Paris, thank you so much for being on boombog technology. I've got to go back to Nvidia. This is what the state of players in the session up twelve percent. The catalyst probably is Morgan Stanley's making it its top chip or AI pick once again. But there's probably read through from AMD's earnings, right, AMD's AI accelerator, the mi I three hundred.
They upgraded the kind of sales forecast.
But it's a market where Nvidia dominates, so maybe there's upsides that maybe the market saying okay, if AMD is so positive about the continued spending on AI infrastructure in video gets feel through as well. There's a lot of other things going on in the market, right. We're keeping an eye on Meta, which reports later today after the US market close. It is up two point three percent, buoyant ahead of the earnings.
Why hard to know? Maybe there's some read through from Meta. One investor I was speaking to is making the point.
Meta trades at around twenty one times forward earnings. Microsoft, by comparison thirty one times forward earnings. They're different beasts, maybe metas something you look at slightly differently in this environment to some of the other megacaps that are in aiplay. It has the infrastructure spend, doesn't have a cloud business though, Okay,
that does it For this edition of Bloomberg Technology. Don't forget an incredible episode with a number of CEO interviews recap on the podcast you know where to find it, Apple, Spotify, iHeart, and everywhere in the bloom Averse from New York City.
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